Harrah’s to appeal ruling on patents

Tuesday, June 22, 2004 | 10:41 a.m.

Harrah's Entertainment Inc. intends to appeal a federal court decision in Las Vegas last month favoring rival Station Casinos Inc.

Harrah's Entertainment sued Station in July 2001, claiming that Station's "Boarding Pass" slot club loyalty program infringed on three patents held by Harrah's that govern its competing "Total Rewards" system. Both companies have spent millions to pursue the case, which has implications for the industry because many major casinos now have loyalty cards that work across multiple properties.

U.S. District Court Judge David Ezra last month granted Station Casinos' motion for partial summary judgment, ruling that Harrah's "customer recognition" patents and part of a patent involving the activation of the program through the use of a reward card were invalid, Harrah's said. In his ruling, Ezra said the patents weren't specific enough in their claims.

Harrah's, which will appeal the ruling to the 9th Circuit Court of Appeals in San Francisco, said Station has additional motions pending to fight claims related to the reward card portion of the patent but will dismiss those claims against Station.

"We expect the dismissal of our remaining claims relating to the ... patent will enable us to expedite an appeal of the trial court's ruling on our customer recognition patents and resolve our claims as promptly as possible," Harrah's Senior Vice President Stephen Brammell said. "We are confident that we will prevail on appeal and that our patents will be found to be valid and enforceable."

"We will continue to vigorously protect our patents against infringing parties," he said.

Station Casinos filed a counterclaim against Harrah's in 2001 that denied the company had infringed on Harrah's patents and claimed the patents were invalid and unenforceable because Harrah's deceived U.S. Patent and Trademark Office investigators when the company originally obtained its patents. Harrah's failed to disclose previous patents for similar systems, Station claimed. Harrah's has denied those claims.

Ezra last month did not rule on counterclaims by Station that Harrah's deliberately hid information from patent officers. In a separate order also issued last month, Ezra said Station could pursue such issues at trial.

Station officials could not be reached on whether they will continue to pursue those claims against Harrah's.