Shuffle Tech International LLC et al v. Scientific Games Corporation et al

MOTION by Defendants Bally Gaming, Inc., Bally Technologies, Inc., Scientific Games Corporation for judgment / Defendants' Motion for Judgment as a Matter of Law

Northern District of Illinois, ilnd-1:2015-cv-03702

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Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 1 of 19 PageID #:16638 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION Shuffle Tech International, LLC, et al., Civil Action No. 1:15-cv-3702 Plaintiffs, Honorable Matthew F. Kennelly v. Scientific Games Corporation, et al., Defendants. DEFENDANTS' MOTION FOR JUDGMENT AS A MATTER OF LAW Craig C. Martin David Jiménez-Ekman Timothy J. Barron Rachel S. Morse JENNER & BLOCK LLP 353 N. Clark Street Chicago, IL 60654-3456 Tel: 312.222.9350 Attorneys for Defendants August 1, 2018 Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 2 of 19 PageID #:16639 TABLE OF CONTENTS I. PLAINTIFFS HAVE NOT PRESENTED A PRIMA FACIE CASE OF LIABILITY. .........................................................................................................................1 A. Plaintiffs Have Not Proved Fraudulent Patent Procurement. ..................................1 1. Plaintiffs Have Not Proved Defendants Failed to Disclose Prior Art. ...............................................................................................................2 2. None of the Omitted References Was "But For" Material. .........................5 3. No Individual Substantively Involved in the Patent Applications Knew of an Omitted Reference's Materiality. .............................................6 4. There Is No Evidence of Specific Intent to Defraud the Patent Office. ..........................................................................................................7 5. There Is No Evidence that Any SHFL Decision-Maker Knew of Any Fraudulent Procurement when SHFL Sued DigiDeal. .........................9 B. Plaintiffs have not proved sham litigation. ..............................................................9 1. SHFL's Suit Against DigiDeal Was Not Objectively Baseless. ..................9 2. SHFL Did Not Sue DigiDeal Solely with the Subjective Intent to Harm DigiDeal Through Misuse of Litigation. .........................................10 II. PLAINTIFFS HAVE NOT PROVED THEIR CLAIMED DAMAGES. .........................11 III. PLAINTIFFS HAVE NOT PROVED ANTITRUST STANDING OR THAT CARD SHUFFLERS ARE A RELEVANT ANTITRUST MARKET. ............................13 A. Plaintiffs Failed to Prove Antitrust Standing. ........................................................13 B. Casino-Grade Automatic Card Shufflers Are Not a Relevant Market. .................15 i Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 3 of 19 PageID #:16640 Defendants (collectively, "SHFL") respectfully move for judgment as a matter of law because "a reasonable jury would not have a legally sufficient evidentiary basis to find" for Plaintiffs, even when viewing the evidence in the light most favorable them. See Fed. R. Civ. P. 50(a)(1); Zimmerman v. Chi. Bd. of Trade, 360 F.3d 612, 623 (7th Cir. 2004). I. PLAINTIFFS HAVE NOT PRESENTED A PRIMA FACIE CASE OF LIABILITY A. Plaintiffs Have Not Proved Fraudulent Patent Procurement. In denying the motion for summary judgment, this Court permitted Plaintiffs to go forward with their claim that Defendants (1) failed to disclose the Block Patent in connection with the '982 Patent and (2) failed to disclose information from the Disk in connection with the '935 Patent. This Court applied the Federal Circuit's standard for a Walker Process claim, which requires that "the omission alleged to be fraudulent must evidence a clear intent to deceive the examiner." It is the plaintiff's obligation to "provide independent and clear evidence of deceptive intent." Dkt. 165 at 27-28. The Court noted this standard was "largely the same" as for inequitable conduct under Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011), Dkt. 165 at 27, in which the court elaborated that the plaintiff must "prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it." Therasense, 649 F.3d at 1290. As this Court has explained in its preliminary instruction to the jury, "[i]nformation is material if it would have resulted in the denial of a patent" had the patent office known of it. The Therasense court held there can be no inference of intent from materiality. The court must weigh evidence of intent to deceive independent of its analysis of materiality. "Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive." Id. No reasonable jury could find Plaintiffs proved their Walker Process fraud theory by clear and convincing evidence. Plaintiffs failed to present a prima facie case. 1 Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 4 of 19 PageID #:16641 1. Plaintiffs Have Not Proved Defendants Failed to Disclose Prior Art. No reasonable jury could find Plaintiffs proved by clear and convincing evidence that any omitted reference is a "material" omission because it does not qualify as prior art. In relevant part, an invention is prior art under the applicable pre-AIA version of 35 U.S.C. § 102 only if: "(a) the invention was [publicly] known or used by others in this country, or patented or described in a printed publication ..., before the invention thereof by the applicant for the patent, or (b) the invention was patented or described in a printed publication ... more than one year prior to the date of the application for patent [or] (g)(1) ... the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it." 35 U.S.C. § 102 (2002) (emph. added). Each feature of any prior art must be independently corroborated by an anticipating reference; testamentary evidence will not suffice. See Juicy Whip Inc. v. Orange Bang, Inc., 292 F.3d 728, 737-38 (Fed. Cir. 2002); Black & Decker Inc. v. Robert Bosch Tool Corp., 476 F. Supp. 2d 887, 894 (N.D. Ill. 2007). To be a public use under § 102(a) or (b), a reference must be either "accessible to the public" or "commercially exploited." Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380 (Fed. Cir. 2005); Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1348-51 (Fed. Cir. 2016). To be a printed publication, a reference must be publicly available such that "persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence" can locate it, and must also be enabling, such that one of ordinary skill in the art could practice the invention without undue experimentation. SRI Int'l, Inc. v. Internet Sec. Sys., Inc., 511 F.3d 1186, 1192–94 (Fed. Cir. 2008). To meet § 102(g), the device cannot have been abandoned or relinquished prior to the date of the patent application. An abandoned reference does not constitute prior art. Judged by these legal standards, Plaintiffs have failed to present proof of prior art. Nicoletti. Plaintiffs have not proved a public use of the Nicoletti prototype. First, Plaintiffs 2 Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 5 of 19 PageID #:16642 cannot establish the date of the alleged public use—Steven Gola testified he does not remember the exact date, despite testifying "dates are very important" because prototypes "have an evolution" and change features over time, and his testimony offers dates from 1990 to 1995. (Tr. 645-46.) Second, the photo on which Plaintiffs rely, PX 17, was not taken at a casino where it was publicly used, but rather somewhere not open to the public, and the shuffler shown "never saw the light of day again." (Tr. 651.) Third, Plaintiffs have not corroborated the Nicoletti shuffler's features at the alleged public use—the only arguably contemporaneous article does not describe the claimed features. (PX17.) Fourth, Plaintiffs have not refuted that the alleged public use was "experimental"—the "test" failed. (PX17; Tr. 647-48.) See EZ Dock, Inc. v. Schafer Sys., Inc., 276 F.3d 1347, 1353 (Fed. Cir. 2002) ("experimentation negates a bar when the inventor tests claimed features of the invention"). Plaintiffs likewise have not proven the newspaper articles regarding the Nicoletti prototype were reasonably accessible to persons interested in shufflers—the articles appeared in a local newspaper in New Jersey, and Plaintiffs present no evidence of that newspaper's reach. (Tr. 609.) More importantly, the articles are not an "enabling" disclosure—they do not describe the invention claimed in SHFL's patents in sufficient detail to enable a person of ordinary skill in the art to carry it out. For example, the photo (PX17) does not show a cover, an elevator, or the shuffling mechanism—the features Plaintiffs contend were present in the prototype. (Tr. 653-54.) Finally, the prototype does not qualify under § 102(g) because the Plaintiffs did not show that the device was not subsequently abandoned, suppressed, or concealed. In fact, there was testimony that the prototype was abandoned—it never saw the light of day after its failed test. (See Tr. 651.) Roblejo. No reasonable jury could accept Plaintiffs' contention that the Roblejo prototype is prior art under § 102. First, Plaintiffs have not established the date of the alleged prior public use. (Compare PX120 (trade show in 1998) with PX1005 at 126:9-127:1 (same show occurred in 3 Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 6 of 19 PageID #:16643 1997).) Second, Plaintiffs do not corroborate with documentary proof the features the Roblejo shuffler had at the alleged public use. The Casino Concepts brochure (PX99) does not describe the claimed features included in the Roblejo shuffler, and the video (PX 96) is undated with no indicia of when it was created. As for "printed publication," the Casino Concepts brochure did not provide an "enabling" disclosure—it does not describe the invention claimed in the '982 or '935 patents in sufficient detail to enable a person of ordinary skill in the art to carry it out. See CNET Networks, Inc. v. Etilize, Inc., 584 F. Supp. 2d 1260, 1274–75 (N.D. Cal. 2008). As for § 102(g), Plaintiffs have not proved the Roblejo prototype was not abandoned. It "[s]at in [Mr. Gola's] garage for many years" and was disposed of. (Tr. 666.) Luciano. A reasonable jury could not find that the Luciano prototype is prior art under § 102(g). First, Plaintiffs have not established by clear and convincing evidence that the Luciano prototype disclosed the invention of the '935 claims. Mr. Luciano and contemporaneous documents establish the prototype was still under development. (Tr. 551-61.) Every document in the Luciano declaration describes that device as not final and needing further development, i.e., not reduced to practice. (Tr. 554-55.) See Cummins-Allison Corp. v. Glory, Ltd., 2007 WL 487564, at *5 (N.D. Ill. Feb. 12, 2007) (existence of machine does not show invention was reduced to practice). Second, Plaintiffs have not established the Luciano prototype was operable—Mr. Luciano admitted it had never had its randomness tested. (Tr. 555-57.) Third, Plaintiffs have failed to establish by clear and convincing evidence that the Luciano prototype was not abandoned, suppressed, or concealed. Mr. Luciano admitted he did not seek a patent for the device, the device was not displayed publicly, that it was abandoned, and that he "lost track of it." (Tr. 562-66.) Further, a reasonable jury could not find public use of the Luciano prototype. Plaintiffs contend that materials describing the device were sent selectively to industry participants, but even such a disclosure would not constitute public use. See Minnesota Mining & Mfg. Co. v. Chemque, Inc., 4 Case: 1:15-cv-03702 Document #: 279 Filed: 08/01/18 Page 7 of 19 PageID #:16644 303 F.3d 1294, 1307 (Fed. Cir. 2002) ("evidence in the record that samples. . . were sent to various corporations" insufficient to invalidate by prior use). 2. None of the Omitted