Maryland Bar Bulletin
Publications : Bar Bulletin : March 2011

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 BAR BULLETIN FOCUS: INTELLECTUAL PROPERTY LAW

Dr. Max Stern is a retired pediatrician from Costa Rica. He has also won three gold bracelets in the World Series of Poker®, and his wife has won a WSOP® gold bracelet, too. Dr. Stern is the sole inventor of several patented methods of gambling games and video gaming devices. The patents are not yet licensed.

Ernie Moody is a former stockbroker who is now a successful slot machine designer. He invented and patented a new method to play poker in which a player can simultaneously wager on more than one hand of draw poker, while the cards being held are the same for each hand. Ernie Moody is an inventor for more than 40 patents. His Triple Play Draw Poker® is licensed to IGT Corporation and appears in video slot machines in casinos everywhere. Due to its popularity, Moody has received millions of dollars in royalties.

While both Ernie Moody and Dr. Stern were familiar with the casino industry, neither of them started as an inventor. Nor was John Breeding, a truck driver who invented an apparatus for automatically shuffling a deck of cards, described in U.S. Patent 4,807,884. After several years of development, ShuffleMaster, Inc., started commercializing card-shuffling devices and now is a leading supplier of electronic table games. The point is, all of the games and devices used in the gambling industry began as someone's idea. Not all of those ideas come from someone associated with the industry.

The Bally brand name, long associated with pinball games, now belongs to Bally Technologies, a purveyor of slot machines and casino systems. Bally is the listed assignee of hundreds of patents for games and underlying systems to enhance the gambling experience, including new designs, games and game interfaces.

Similarly, International Gaming Technology, known simply as IGT, specializes in design, development, manufacturing and sales of computerized gaming equipment, software and network systems. IGT, to whom Ernie Moody has licensed his games, has a large research department and is listed as the assignee of more than 1,000 patents dealing with video gaming devices.

While successful casino game inventors have made large amounts of money with their game inventions, the majority of games invented by small inventors never see the light of day. Michael Shackleford, a professional actuary who has made a career of analyzing casino games, says that trying to introduce a new game, whether machine or table game, is a very expensive venture and the probability of ever showing a profit is very small. One could say the chance of earning a large payout is about the same as winning the jackpot from one of the gaming machines.

Sometimes, not all the appropriate protections may be in place and the inventor loses out. In the U.K., a 73-year-old inventor claims that several scratch card games offered by the National Lottery are based on his board game. While thousands of copies of his board game were sold, he made no money after being let down by an intermediary. He spent his life savings trying to further his inventions, but became bankrupt after a series of legal problems. Several years ago, he produced game cards on his original idea and offered them to the Lottery operator. Now, he is claiming they copied his idea and has sued the National Lottery for copyright infringement. His case is still pending.

THE GAMES
and devices used in the gambling industry began as someone's idea. Not all of those ideas come from someone in the industry.

Of course, even when an independent inventor is successful in getting a new game into a casino, the manufacturers would rather own the technology than lease it. Ernie Moody says, "Casinos do not enjoy paying the daily royalty fee, even though the games make more money [than machines that do not require royalties]. Casinos want to buy the game for not a lot of money, keep it on the gaming floor for 10 years, have it make money and then trade it in."

A state itself may get involved in providing technology in some gambling games. For example, in 2008, Maryland was involved in a case involving ownership of part of the technology for the popular Keno lottery game that the state claims it helped conceptualize. A settlement agreement put an end to the dispute over a multiplier option featured in the Maryland Lottery's Keno Bonus Game, which permits players to pay extra and improve their price if they choose the winning numbers in the game. Maryland had claimed that it should own a portion of a patent owned by Scientific Games, the provider of the Keno game, because it had helped the company incorporate the multiplier into the existing game while Scientific Games had a contract with the state. The settlement allows Maryland to continue utilizing the technology and share in some of the profits without giving some compensation to Scientific Games, no matter who utilizes it.

Not all the innovative technology is directed to the games alone. According to patent 7,846,020, entitled "Problem Gambling Detection in Tabletop Games", an establishment may determine the existence of problem gamblers within its facility by monitoring player behavior. The player's behavior is then compared to normal behavior and/or problem gambling behavior to determine if the player is potentially a problem gambler. According to the invention, the detection system uses a variety of behavior patterns such as player movement, player betting patterns, facial expressions, physical clues, nonverbal clues and the like.

A number of patents relating to various gambling games and methods have been issued and more applications are pending. Sometimes, though rarely, one man's dream can turn into a million-dollar success story. If an individual discovers a new way to play a gambling game or, as new and innovative products and methods are developed for casinos and slot machines, it is appropriate to consider appropriate protection.

Jeffrey C. Maynard is an attorney at the law firm of Whiteford Taylor Preston in its Baltimore office. He concentrates his practice in intellectual property law.

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Publications : Bar Bulletin: March 2011

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