BYI v. IGT: Markman Decision Announced

Implications: The court in Nevada has issued its Markman order, determining the meaning of the patent at issue in Bally's (BYI) patent lawsuit against IGT.  The result is a mixed one, with BYI prevailing on most claims but receiving an awkward interpretation of claim 19.

Analysis: The main litigation between IGT and BYI is a case where IGT is asserting several patents against BYI.  A secondary case, however, involves one BYI patent that BYI is asserting against IGT.  The Nevada court yesterday announced how it would interpret the claims in that one patent, specifically by issuing a Markman order.

The Order is a mixed result for the parties.  On the bulk of the claims, the court sided with Bally on the argument that, yes, this patent can indeed cover games of chance.  IGT had wanted the patent read to narrowly cover only games of skill -- and had a bit of an argument along these lines -- but the court decided that the patent is better understood as a patent that covers both types of games. 

Claim 19, however, had some special issues, and those went awkwardly for Bally.  Claim 19 used a claiming structure known as means-plus-function claiming.  The idea is that, instead of saying (say) "nail", the patent can specify "means of attaching" and in that way more generally cover nail, screw, glue, etc.  When you use means-plus-function claiming, however, there are unique interpretive rules that apply; and those rules are what seem to have triped Bally up.

What was lost?  On one element, it looks like the court has read the means-plus-function language more narrowly than Bally hoped, which means that fewer games will infringe that language and quite possibly IGT's games already don't.  On another element, the court again read the clause narrowly, again opening up a very real possibility that IGT's current and future games won't infringe.  BYI will still try to argue "close enough" under a legal doctrine known as the doctrine of equivalents; but that road is a difficult one, so the bottom line here is that claim 19 is now less useful to Bally than it could have been.

Where does all that leave us?  Bally received good interpretations on most of its claims, so the loss of claim 19 is only so important.  Moreover, my own view is that this patent is likely invalid anyway -- like the IGT patents in the other Nevada case, I think this is likely too obvious an "invention" to qualify as patent-eligiible; and if I'm right, the Markman decision doesn't matter one bit, because the parties will not ever need to litigate these issues.

Also, don't forget the possibility of settlement.  The main IGT case is moving quickly forward.  If the parties settle that one, it's possible they will at the same time settle the other two, including this BYI case and the IGT case pending in Delaware.