Bally v. IGT: Should we expect settlement?

Implications: The litigation between Bally and IGT is nearing its conclusion, with all three pending cases now set for trial sometime between October 2008 and February 2009.  The likelihood that any of those juries actually sit, however, is small.  The way the cases have played out, there is tremendous room for settlement as the cases reach the end of the wire.

Analysis: Bally and IGT have three seperate patent disputes underway.  In the main one, IGT is asserting two patent families: one related to wheel-based bonus games, the other related to interface technologies.  In a second, Bally is asserting its own patent related to wheel-based gaming.  In the third, IGT is pressing a set of patents about how to network casino games together.

All three cases have dragged on for years.  But now, due to a combination of delays and adjustments, all three are set to go to separate juries in the months between October and February.  Specifically, the main case is locked in for December; the networking case is currently slated for November; and the lawyers are struggling to place the third case in either October or February.

Could that mean settlement this year?  I think yes.  At a minimum, the main case is ripe for settlement; that one has gone poorly for IGT, and at this point IGT would be wise to jump on any favorable ending rather than taking things to the jury and risking a seriously bad outcome.  But if that case is ready to settle, and the other two are also on the verge of trial, it is easy to imagine a three-way settlement that resolves all the pending cases and lets both firms turn their focus elsewhere.

What's the key next step in a settlement scenario?  In my view, that critical next step will be a set of decisions from the Nevada court wherein the judge will rule on various "summary judgment" motions that are now pending in the main case.  If those decisions net favor Bally, as I expect they will, IGT should see the writing on the wall; and all three cases would on that scenario disappear by New Years.