Shuffle Master files lawsuits over patents

Wednesday, Aug. 4, 2004 | 10:53 a.m.

Saying the company intends to aggressively defend patent rights on its products, Shuffle Master Inc. filed a pair of lawsuits in U.S. District Court in Las Vegas, including one against a subsidiary of rival Las Vegas gaming equipment manufacturer Alliance Gaming Corp.

The suits were filed July 15 and July 30 by the Las Vegas-based gaming equipment supplier, best known for developing automatic shuffling machines used with casino table games industrywide.

Shuffle Master took the unusual step of announcing the second suit -- against MP Games LLC, doing business as MindPlay Games, MindPlay official Robert Mouchou and MindPlay owner Alliance Gaming Corp., doing business as Bally Gaming and Systems -- in a statement issued this week.

The second suit alleges that MP Games' MP21 table game tracking system violates two Shuffle Master patents.

"Shuffle Master's intellectual property portfolio is arguably our most valuable asset," Shuffle Master Chief Executive Mark Yoseloff said in the statement announcing the second suit. "We take our intellectual property rights very seriously and will not tolerate the infringement of any of our patents. The MP21 System is in direct and clear infringement of two key patents owned by our company."

Alliance Gaming said today the Shuffle Master suit is without merit and that the company plans to defend itself in court.

"The company firmly believes that the MP21 system does not infringe on any Shuffle Master patents," Alliance said in a statement. "Furthermore, Alliance Gaming has numerous patents in this technological area, which protect its products. Accordingly, as it has in the past with Shuffle Master, the company will vigorously defend against this and any other baseless actions brought against it."

The suit was filed about two weeks after a similar action was brought against Yehia Awada and Gaming Entertainment Inc., Las Vegas, in the same court. That suit is part of a long-standing feud between Shuffle Master and Awada over the development of a multiple-hand poker table game.

Shuffle Master alleges that Awada is in violation of one of its patents in his development of 3-5-7 Poker, a game in which a bettor wagers against a dealer on poker hands of three, five and seven cards.

A similar lawsuit filed by Shuffle Master against Awada in Mississippi was dismissed. Awada said Monday the most recent lawsuit is without merit.

"They (Shuffle Master) are a big company, and they're trying to drain me financially," Awada said.

Awada has filed countersuits against Shuffle Master and said the company is claiming credit for a game he invented.

The second suit may have larger consequences, since it involves relatively new technology introduced to the gaming industry in 2001.

Alliance acquired the assets to MindPlay in February. MindPlay's MP21 system was developed in cooperation with the Eldorado hotel-casino in Reno, company officials said when they announced the acquisition.

The MindPlay system provides real-time data during play using cameras and high-speed image processing systems to recognize chips and playing cards used in a blackjack game. The value of the system is that it provides accurate data instantly for rating and evaluating players to determine appropriate levels of complimentary incentives.

The system can also track dealer and player performance.

But Shuffle Master says in its suit that Mouchou, a Reno resident, collaborated with inventor Oliver Schubert and took his ideas to develop the MP21 system and that Shuffle Master owns the patents for Schubert's ideas.

Shuffle Master's suit seeks a restraining order on the distribution of the MP21 system and the recall of all existing systems, a declaration that Alliance violated Shuffle Master's patent rights, a declaration that Schubert is the rightful inventor of the system and unspecified patent infringement damages and exemplary damages for the misappropriation of trade secrets.

Jerry Smith, senior vice president and general counsel for Shuffle Master, said Tuesday that it was coincidental that the two suits were filed within a couple of weeks of each other and that the move does not represent any new initiatives by the company to step up enforcement of intellectual property rights.