978 F. Supp. 2d 647
S.D. Miss.2013Background
- MGT Gaming, Inc. sues WMS Gaming, Inc. and associated casino operators Caesars, MGM, and Penn, plus Aruze Gaming America, Inc. and Penn's relation, for infringement of U.S. Patent 7,892,088.
- The '088 patent covers a gaming system where a second game is triggered by an event in a first game (e.g., a slot machine).
- MGT alleges direct infringement by manufacture, sale, or use of accused gaming machines; and indirect infringement claims for induced and contributory infringement.
- MGT asserts Mississippi registration and presence of agents by all defendants; WMS and Aruze market and deploy machines in Mississippi casinos; casinos host the accused machines.
- The Court analyzes motions separately for Dismiss, Joinder (AIA §299), Stay/Sever, and Venue; severance involves WMS, Aruze, Caesars, MGM, and Penn relationships.
- The court ultimately grants partial dismissal of indirect claims, partially severs joinder, stays casino defendants, and denies venue transfer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of direct infringement pleading | MGT complied with Form 18; identifies ownership, accused devices, notice, and relief requests. | Form 18 not satisfied; Twombly/Iqbal require more detailed factual pleading. | Direct infringement pleading adequate under Form 18; Twombly/Iqbal do not apply to Form 18. |
| Induced and contributory infringement pleadings | Induced and contributory theories are proper under §271(b)/(c). | Plaintiff failed to plead knowledge/intention; discovery would be required. | Induced and contributory infringement claims dismissed without prejudice. |
| Joinder under AIA § 299 | Defendants’ infringements arise from the same transaction/series with revenue-sharing relationships. | Joinder improper; separate transactions/products; competitors cannot be joined. | Joinder severed between WMS and Aruze; Aruze and Penn stay joined; Caesars and MGM severed from WMS; AIA § 299 governs severance determinations. |
| Severance and stay of casino defendants | Joint use/revenue-sharing justify keeping casino defendants in one action for efficiency. | Casino defendants are peripheral customers; severance and stay appropriate to avoid prejudice. | Motions to sever casino defendants granted in part and stay entered; casinos treated as peripheral. |
| Venue transfer under § 1404(a) | Transferee districts are more convenient for WMS/Aruze; Illinois/Nevada preferred due to witnesses and documents. | Transfer to Illinois/Nevada more convenient; patent-specific factors favor transfer. | Motions to transfer denied; Southern District of Mississippi is not clearly less convenient. |
Key Cases Cited
- McZeal v. Sprint Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007) (Form 18 suffices for direct infringement pleading)
- In re EMC Corp., 677 F.3d 1351 (Fed.Cir.2012) (joinder requires a logical relationship; same-transaction test)
- R+L Carriers, Inc. v. DriverTech LLC, 681 F.3d 1323 (Fed.Cir.2012) (Twombly/Iqbal applicability to patent indirect claims)
- Volkswagen II, 545 F.3d 304 (5th Cir. 2008) (public/private factors; transfer must be clearly more convenient)
- Corry v. CFM Majestic, Inc., 16 F. Supp. 2d 660 (E.D. Va. 1998) (peripheral role of distributors/customers in patent suits)