Scientific Games not linked to recent Macau court ruling over LMG patent

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A recent decision by Macau’s Court of Final Appeal rejecting an appeal over a patent application for Live Multigame systems technology was not related to Scientific Games (SG), IAG has learned, despite reports to the contrary.

The decision in question, published on 8 February 2021, was handed down against a company that is not part of or related to the SG Group and found that the core of the patent application – a specific technical function allowing LMG systems to swap between a purely virtual and a live environment – did not meet the requirements for granting the patent due to the absence of an “inventive step.” In particular, its invention was not deemed “creative” because it had simply combined in a new way several data technologies that already existed.

The case was taken to the Court of Final Appeal after the original patent application was rejected by the Macau Economic Bureau in 2018, and appeals to both the Court of First Instance and Court of Second Instance were dismissed in 2019.

Media reports following the failure of its latest appeal described the company in question, which cannot be named, as a unit of Scientific Games, however IAG understands the two are not connected.

The technology at the heart of the patent application was developed by SHFL Entertainment (Australasia) Pty Ltd, which was acquired by Scientific Games in November 2014 as part of its US$5.1 billion takeover of slot machine giant Bally Corp. It was SHFL that filed the original patent application in Macau in May 2014, but Scientific Games offloaded the technology to the unrelated third party shortly after the decision taken by the Macau Economic Bureau in 2018.

Scientific Games’ involvement in the case, or lack thereof, is significant given that one of two parties to oppose the patent application was Jay Chun, Chairman and Managing Director of Paradise Entertainment Ltd. Paradise and entities of Scientific Games, including SHFL, have been involved in a series of legal disputes over various patents in Macau for more than a decade now, the most notable relating to allegations by Chun that they are in breach of patents he holds for a Live Multi-Game product developed by Paradise subsidiary LT Game Ltd.

The dispute famously spilled onto the floor of G2E Asia in 2012 when Chun took out a temporary injunction that saw authorities cut the power to SHFL’s booth and cover its products with sheets.

In 2013, Macau’s Court of First Instance found that SHFL’s Rapid Baccarat did not infringe on one of his LMG patents, Patent I/150, by employing what Chun described as “the same or substantially the same functionality.”

A Court hearing on civil proceedings over alleged breach of Patent I/380, which also relates to Paradise’s LMG terminals, were due to start late last year but have been adjourned by mutual agreement. The trial is slated to include the testimony of international IP and patent experts who are currently unable to enter Macau as a result of COVID-19.

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