UPDATE: SHFL has released a statement indicating the Court decision involves a non-electronic live dealer table not sold in Macau, and is not related to other litigation between SHFL and LT Game over SHFL’s electronic Rapid Baccarat games. “This is a standalone issue regarding the validity of a proprietary table games related patent we are opposing, not to be confused with our separate eTable issue.”
US gaming device maker SHFL Entertainment has lost a patent fight with Macau-based gaming maker LT Game over a disputed table game. In a decision made Feb. 7 but only made public late last week, Macau’s Court of Second Instance rejected the appeal by SHFL’s Macau-based subsidiary SHFL Entretenimento (Asia) Lda of the granting of a patent to Jay Chun, LT Game’s boss, that SHFL claimed infringed on its own patent.
The Court ruled that SHFL’s subsidiary had failed to prove it had been “directly and effectively harmed” by LT Game’s patent, in part because SHFL’s subsidiary is registered in Macau as a retailer and distributor of electronic gaming tables and card shufflers, but not as a manufacturer. The court thus determined that the “material interests” of the two companies were “not necessarily conflicting, as … one is on the creative pole; the other on the services sector.”
The legal animosity between SHFL and LT Game dates back to 2007, when Chun filed for the patent in question with the Economic Services Bureau (ESB). Three years later, SHFL asked China’s State Intellectual Property Office to review the filing, but the patent was eventually granted in July 2011. SHFL argued in court that it had not been given a chance to plead its case before the patent was awarded, but the Court rejected this argument, saying SHFL had been notified of all official communication between Chun and the ESB. Macau Business Daily reported that the Court therefore determined that SHFL “was given the opportunity to deliver an opinion” but “did not speak up because it did not see fit to do so.”
The electronic Rapid Baccarat patent dispute between SHFL and LT Game peaked last summer, when LT Game convinced Macau Customs officials to serve SHFL with an injunction at the G2E Asia confab, forcing SHFL to cover up machines LT Game claimed infringed on its patent. The very next week, Macau Customs officials filed a criminal complaint against SHFL for not observing the terms of the injunction. In December, SHFL won the right to appeal the injunction, but Macau casino operators like Sands China have removed SHFL’s Rapid Baccarat games from their gaming floors while the matter was pending.
Ironically, news of SHFL’s defeat comes just as Union Gaming Research analyst Bill Lerner tipped the Asian market as a prime growth opportunity for SHFL. SHFL’s Duo Fu Duo Cai – Fu slot machine is reportedly knocking ‘em dead in Macau, and Lerner believes the next four years will see Asia add 23,600 slot machines, 8,500 of which will be destined for Macau’s Cotai Strip once all the new casinos now in development are up and running.