Bally Gaming International, Inc., Bally Technologies, Inc., and Bally Gaming, Inc. appealed the District Court’s grant of summary judgment for IGT, which found that Bally infringed certain claims of IGT's U.S. reissue patents RE37,885 and RE38,812. IGT cross-appealed the court's decision regarding non-infringement of other claims from these patents. The Federal Circuit affirmed the District Court's decision.
The patents involved describe a networked system of gaming machines controlled by floor controllers that monitor device activity and issue commands to reconfigure the machines. Specifically, the patents outline methods for rewarding players beyond standard payouts, including additional bonuses based on specific player actions, such as betting certain amounts, to stimulate usage during slow periods.
The claims of the ’885 patent involve three steps: tracking gaming device activity, issuing a command upon a predetermined event, and effecting payment based on that command. The ’812 patent includes four steps, with the additional requirement of initially establishing criteria for payouts. IGT accused Bally of infringement based on their promotions, Power Rewards and Power Winners, which utilize a host computer and controller to manage various gaming devices.
Power Rewards incentivizes players through a 'Play X, Get Y' promotional model, where players receive rewards based on their betting activity on specific machines. For instance, a player may receive $10 for every $100 bet. The casino operator defines the promotion's parameters, including eligible machines and timeframes. Players use an identification card to trigger a 'transaction #151' via the host computer, which sends relevant promotional details to the gaming device's controller. Once the betting threshold is met, the device displays a 'Promo' key that players can activate to transfer their rewards.
In contrast, Power Winners randomly selects one player for a bonus during a designated time frame across selected devices. The system divides the promotional period into 125 segments, generating random numbers to determine if a winner is awarded. Only one bonus is given per promotional period, with two payout methods: the ACSC method, which uses a transaction #151 message allowing immediate access to the 'Promo' key, and the SDS/CMP method, which notifies the winner through the casino’s accounting system.
The district court ruled that both Power Rewards and Power Winners infringe on multiple claims of the ’885 and ’812 patents. Specifically, it classified the transaction #151 message as a 'command' and identified the player's completion of the 'Play X' requirement as the 'predetermined event' for the Power Rewards promotion. For Power Winners, the ACSC method was found to infringe due to the random selection process being the 'predetermined event' and the transaction #151 message serving as the 'command'. However, the SDS/CMP method was deemed non-infringing as it only notifies the winner without facilitating payment.
Bally appeals the district court's rulings on claim constructions and the summary judgment of infringement, while IGT cross-appeals on other claim term constructions. The court has jurisdiction under 28 U.S.C. § 1295(a)(1).
Review of a district court's summary judgment is conducted de novo, meaning that the appeals court examines the case without relying on the lower court's conclusions. Summary judgment is warranted when, after considering all reasonable inferences in favor of the nonmovant, there are no genuine material facts in dispute, allowing the movant to win as a matter of law.
In the context of claim construction, the court also reviews de novo. Claims are interpreted using their ordinary and customary meanings as understood by a skilled person in the field, in relation to the specification and prosecution history. Claim 10 of the ’885 patent, under scrutiny, involves a method for operating interconnected gaming devices and includes disputed terms.
The term 'one' is central to the dispute. Bally argues that 'one' means a command must be issued to a single gaming device during a promotional period, asserting that the claim necessitates exclusivity in command and payout. Bally references precedent (WMS Gaming, Inc. v. International Game Technologies) to reinforce its argument that the term 'one' implies singularity, contrasting it with other claims that use terms like 'each' or 'at least one' to denote multiple devices.
IGT counters that the claim does not restrict payouts to only one device but allows for a command to trigger a single payout at one device irrespective of other commands sent. IGT points out that Bally overlooks claim 21 of the ’812 patent, which explicitly requires a command to be sent to 'only one' device, suggesting that the drafters intended 'one' in claim 10 to be broader than Bally asserts.
IGT contends that Bally's interpretation of claim terms, specifically the term 'one,' is incorrect. The phrase "issuing a command over the network to one of said preselected gaming devices" clarifies that 'one' refers to the specific device receiving the command, not limiting the number of commands that can be issued. The claim specifies that a single command is directed to one device, which will then execute the payment. There is no requirement that only one command can be sent to a single device, allowing for multiple commands to be issued to various devices. Bally's proposed interpretation would unnecessarily restrict the claim, which does not preclude multiple devices from receiving commands or making payments simultaneously. The comparison to WMS Gaming is distinguished, as that claim explicitly limited selection to one number, whereas the current claim allows for broader command issuance. The district court's summary judgment in favor of Bally's Power Rewards is upheld, as its operation of paying bonuses at multiple devices does not negate infringement. Additionally, the claim term "transmitting a pay command upon the occurrence of the predetermined event" is interpreted to mean that a pay command does not need to trigger automatic payment. Bally argues that Power Rewards does not infringe because it requires user interaction post-event to effect payment, but this interpretation is contested by the court’s definition.
The district court's claim construction regarding the term "pay command" was upheld, confirming that it simply requires the system to transmit a command when a predetermined event occurs, without specifying a method of payment. The court interpreted "predetermined event" as conditions chosen in advance, allowing for randomness in occurrence. Bally contended that "predetermined event" must refer to a specific time or known occurrence; however, IGT argued that the term's plain meaning suffices, as it encompasses any condition met prior to command issuance, regardless of whether it is finite or random. The court ruled that the specification's examples of non-random events did not redefine "predetermined event," which retains its ordinary meaning. Consequently, the summary judgment favoring IGT regarding the Power Winners promotion was affirmed, as the command correlates with a random selection of a winner. Additionally, the terms "predetermined" and "predefined" were found to have essentially the same meaning, with the latter being interpreted by the court as occurrences based on pre-established criteria. Bally's assertion that "predefined event" is ambiguous was dismissed, maintaining the validity of the claims under 35 U.S.C. § 112, 2.
During the prosecution, applicants stated that "predefined" is broader than "predetermined," leading to an argument that if a predetermined event can be any random event, then "predefined" cannot be broader, rendering the claim term indefinite. IGT contends that the term is clear and can be construed based on its plain meaning, citing an expert who equated the two terms. Indefiniteness is assessed as a legal question, with a claim being definite if it can be understood by someone skilled in the art when read in light of the specification. A claim is indefinite only if it is not amenable to construction or is insolubly ambiguous. The court agrees that "predefined" has a clear meaning of "defined in advance" and that the applicants' assertion regarding its breadth does not create ambiguity or a disclaimer of its ordinary meaning. Bally also argues that a "predefined event" cannot be random, but the court finds the district's interpretation correct.
Regarding "paying," the court determined that this term does not require automatic payment or the absence of player interaction, affirming that it includes making payment available for player acceptance.
For "command," the district court defined it as a "reconfiguration command," indicating it alters the gaming device’s configuration to enable additional payouts. IGT argues this definition improperly introduces limitations from the specification into the claims, suggesting a broader definition of "command" as simply an instruction communicated to or by a computer.
Bally contends that the district court correctly interpreted the term "command" in relation to the infringement claims and that the district court's finding of non-infringement by Power Winners SDS/CMP was accurate. Bally further asserts that Power Winners ACSC should also be found non-infringing, arguing that transaction #151 does not constitute a reconfiguration command. The interpretation aligns with claim language requiring that a command must initiate a payment at the gaming device, which would not happen otherwise, and thus includes the necessity of responding to a predetermined event. The claim emphasizes that the command must directly cause an extra payment, supported by the specification of the patent, which consistently refers only to reconfiguration commands in relation to payment.
The district court's summary judgment on non-infringement for claims 10, 33, and 46 of the ’885 patent concerning Power Winners SDS/CMP is upheld, as the command DM33 merely informs the player of winnings without triggering a payment at the gaming device. Bally's argument regarding Power Winners ACSC is also addressed, with the court affirming that transaction #151 does indeed result in an extra payment, fulfilling the command requirement as it causes a jackpot not available under the machine’s normal pay table. The court's rulings on the infringement claims are thus affirmed, with no costs awarded.
