IGT files suit against Alliance Gaming

Thursday, Dec. 9, 2004 | 10:58 a.m.

International Game Technology filed a patent infringement suit in federal court Tuesday against competitor Alliance Gaming Corp. over features on slot machines.

The two companies issued separate and competing statements Wednesday that disputed the focus of the suit.

In its statement, Alliance said IGT claims a "Monte Carlo" slot machine made by Alliance's Bally Gaming and Systems unit infringes on a patent recently issued to IGT.

Alliance said the game was introduced in the 1970s and was updated three years ago.

"The company believes there is no merit to IGT's 'new' claim that a game invented and introduced nearly 30 years ago infringes a recently-issued patent," Alliance said.

IGT fired back, saying its suit alleges Alliance is infringing on the new patent as well as five other IGT patents covering "gaming machines and systems that feature additional payout indicators such as bonus wheels and bonus reels, and touch screen display devices allowing for player interactivity."

Several recently introduced Alliance slot machines infringe on the IGT patents, IGT said.

IGT General Counsel Dave Johnson said the company has no immediate plans to seek a preliminary injunction "or other short-term relief" that would affect casino customers.

Deutsche Bank Securities analyst Marc Falcone said the suit was expected because IGT received a third patent Tuesday related to the use of wheels on slot machines. The suit removes a "cloud of uncertainty" for Alliance investors over potential litigation, Falcone said in a research report today.

Alliance's Monte Carlo slots feature a large bonus wheel.

The companies may settle the case in order to avoid costly litigation but a resolution still isn't expected for 18 to 36 months, Falcone said.

Separately, Alliance shareholders at the company's annual meeting Wednesday re-elected two directors to the company's board, approved the distribution of 2,500,000 shares as part of a long-term incentive plan for executives and ratified Deloitte and Touche as the company's auditor.