Reply 21 Main

Case: 1:10-cv-06679 Document #: 21 Filed: 11/09/10 Page 1 of 29 PageID #:97
UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WMS GAMING INC.,
Plaintiff, CIVIL ACTION NO. 1:10-CV-06679
v.
JURY TRIAL DEMANDED
BALLY GAMING, INC. d/b/a BALLY
TECHNOLOGIES,
Defendant.
DEFENDANT BALLY GAMING INC.’S ANSWER, AFFIRMATIVE DEFENSES, AND

COUNTERCLAIMS TO COMPLAINT FOR PATENT INFRINGEMENT
Defendant Bally Gaming, Inc. d/b/a Bally Technologies (“Bally”) answers Plaintiff WMS
Gaming Inc.’s (“WMS Gaming”) Complaint for Patent Infringement (“Complaint”) and
counterclaims as follows:
I. ANSWER
GENERAL DENIAL
Bally denies each and every allegation, matter, or thing contained in the Complaint that is
not expressly admitted, qualified, or answered herein.
NATURE OF CASE
1. This is an action for patent infringement arising under the Patent Laws of the
United States, 35 U.S.C. § 1 et seq., and particularly 35 U.S.C. §§ 271 and 281.
Response: Bally admits that WMS Gaming alleges patent infringement arising under
the Patent Laws of the United States, 35 U.S.C. § 1 et seq. and 35 U.S.C. §§ 271 and 281.
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THE PARTIES
Plaintiff WMS Gaming Inc.
2. Plaintiff WMS Gaming Inc. (“WMS Gaming”) is a Delaware corporation with
principal places of business at 3401 North California Avenue, Chicago, IL 60618 (i.e., its
Chicago Technology Campus) and 800 South Northpoint Boulevard, Waukegan, IL 60085 (i.e.,
its Corporate Headquarters). (See http://www.wms.com/contact.php.)
Response: Bally admits that WMS Gaming is a Delaware corporation with places of
business at 3401 North California Avenue, Chicago, IL 60618 and 800 South Northpoint
Boulevard, Waukegan, IL 60085. Bally lacks knowledge or information sufficient to
form a belief as to the truth or falsity of the remaining allegations in Paragraph 2.
3. WMS Gaming is engaged in the business of, inter alia, designing, manufacturing
and marketing video and reel-spinning gaming machines.
Response: Bally admits that WMS Gaming is engaged in the business of designing,
manufacturing and marketing video and reel-spinning gaming machines.
4. WMS Gaming is the record owner of U.S. Patent No. 7,458,890 (“the ‘890
Patent”) entitled “Reel Spinning Slot Machine with Superimposed Video Image,” which legally
and duly issued on December 2, 2008. A true and correct copy of the ‘890 Patent is attached as
Exhibit A.
Response: Bally admits that U.S. Patent No. 7,458,890 (“the ‘890 patent”) is entitled
“Reel Spinning Slot Machine With Superimposed Video Image” and that the ‘890 patent
states on its face that it is assigned to WMS Gaming. Bally admits that the ‘890 patent
states on its face that it was issued on December 2, 2008. Bally denies that the ‘890
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patent was duly or legally issued. Bally admits that a copy of the ‘890 Patent was
attached as Exhibit A to the Complaint.
5. WMS Gaming is the record owner of U.S. Patent No. 7,585,220 (“the ‘220
Patent”) entitled “Gaming Machine with Superimposed Display Image,” which legally and duly
issued on September 8, 2009. A true and correct copy of the ‘220 Patent is attached as Exhibit B.
Response: Bally admits that U.S. Patent No. 7,585,220 (“the ‘220 patent”) is entitled
“Gaming Machine With Superimposed Display Image” and that the ‘220 patent states on
its face that it is assigned to WMS Gaming. Bally admits that the ‘220 patent states on its
face that it was issued on September 8, 2009. Bally denies that the ‘220 patent was duly
or legally issued. Bally admits that a copy of the ‘220 Patent was attached as Exhibit B
to the Complaint.
6. Through an agreement with Universal Entertainment Corp. (formerly Aruze
Corp.), WMS Gaming has the right to enforce the following patents and any related patents: U.S.
Patent Nos. 6,937,298; 7,097,560; 7,140,963; 7,159,865; 7,169,048; 7,207,883; 7,219,893;
7,220,181; 7,234,697; 7,281,980; 7,322,884; 7,329,181; 7,355,660; 7,390,259; 7,404,766;
7,465,228; 7,479,061; 7,479,066; 7,485,039; 7,510,476; 7,520,812; and 7,695,364. WMS
Gaming also has the right to enforce any patents that issue from the following applications and
any related applications: U.S. Publication Nos. 2004/0116178; 2004/0147303; 2004/0166925;
2005/0187003; 2004/0192441; 2004/0209666; 2004/0209667; 2004/0209668; 2004/0209670;
2004/0209672; 2004/0209676; 2004/0209679; 2004/0209683; 2004/0214635; 2004/0214636;
2004/0214637; 2004/0224758; 2004/0229686; 2004/0242323; 2005/0032571; 2005/0170879;
2005/0192083; 2005/0192084; 2005/0192085; 2005/0272500; 2005/0282616; 2005/0282617;
2006/0089192; 2007/0060296; 2007/0123348; 2007/0184893; 2008/0020820; 2008/0125210A1;
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2008/0176653; 2008/0261674; and 2009/0247276. Once WMS Gaming has had an opportunity
to conduct discovery, including discovery of Defendant’s infringing games, WMS Gaming may
seek leave to amend its complaint, if appropriate, to assert additional patents.
Response: Bally lacks knowledge or information sufficient to form a belief as to the
truth or falsity of the allegations in Paragraph 6, which are irrelevant and immaterial to
any allegation set forth in WMS Gaming’s complaint.
Defendant Bally Gaming, Inc. d/b/a Bally Technologies
7. On information and belief, Defendant Bally Gaming, Inc. is a Nevada corporation
with a principal place of business at 5th Avenue Station, Suite #420, 300 E. 5th Avenue,
Naperville, IL 60563. (See http://www.ballytech.com/customer-center/contact-us.)
Response: Bally admits that it is a Nevada corporation. Bally admits that it has an
office at 5th Avenue Station, Suite #420, 300 E. 5th Avenue, Naperville, IL 60563. Bally denies
the remaining allegations in paragraph 7.
8. On information and belief, Defendant is engaged in the business of, inter alia,
designing, manufacturing and marketing video and reel-spinning gaming machines.
Response: Admitted.
9. On information and belief, Defendant is doing business in Illinois under the trade
style name of Bally Technologies. (Exhibit C.)
Response: Admitted.
10. On information and belief, Defendant’s registered agent in Illinois is C T
Corporation System, located at 208 S. LaSalle St., Suite 814, Chicago, IL 60604-1101. (Id.)
Response: Admitted.
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JURISDICTION AND VENUE
11. This Court has subject matter jurisdiction over this dispute pursuant to 28 U.S.C.
§§ 1331 and 1338(a).
Response: Admitted.
12. On information and belief, this Court has personal jurisdiction over Defendant at
least because it has used, offered for sale, and/or sold in Illinois, and within this District,
infringing games at issue in this action, it has offices in Illinois, it has sales representatives in
Illinois, it is registered with the Illinois Secretary of State to do business in Illinois, it is
registered with and is licensed as a gaming equipment supplier by the Illinois Gaming Board (see
http://www.igb.state.il.us/Pending/ILSUPPUBweb.pdf), it has a registered agent in Illinois, it
pays taxes in Illinois, it has sales to riverboat casinos in Illinois, and it has a website directed to
customers in Illinois from which customers can enter Defendant’s online parts-ordering system
and can purchase parts online (see https://ecom.ballytech.com/account/login.)
Response: Bally admits this Court has personal jurisdiction over Bally for purposes
of this action. Bally admits that is has offered for sale and sold in Illinois and within this
district gaming machines identified in the Complaint. Bally denies that those gaming
machines infringe any of the patents alleged in this action. Bally admits that it has an
office and sales representatives in Illinois and that it is registered with the Illinois
Secretary of State to do business in Illinois. Bally admits that it is registered with and is
licensed as a gaming equipment supplier by the Illinois Gaming Board. Bally admits that
it has a registered agent in Illinois, that it pays taxes in Illinois, that it has sales to
riverboat casinos in Illinois, and that it has a website from which customers in Illinois can
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enter purchase parts online. Bally denies any and all remaining allegations and/or legal
conclusions contained in Paragraph 12.
13. Venue is proper in this judicial district pursuant to at least 28 U.S.C. §§
1391(b)(1) and 1400(b).
Response: Bally admits that venue is proper in this Court. Bally denies that this
forum is appropriate pursuant to 28 U.S.C. § 1404.
GENERAL ALLEGATIONS
WMS Gaming’s TRANSMISSIVE REELS Technology
14. The ‘890 and ‘220 Patents are directed to WMS Gaming’s TRANSMISSIVE
REELS® technology.
truth or falsity of the allegations in Paragraph 14.
15. WMS Gaming’s TRANSMISSIVE REELS® technology combines the visceral
appeal of mechanical-reel gaming with the visually engaging, interactive animation of video
slots by projecting graphically-rich video content on a display screen (e.g., a LCD) over a
mechanical-reel slot machine. This creates a unique gaming experience unlike anything ever
played before and provides virtually unlimited bonus game opportunities.
16. WMS Gaming’s TRANSMISSIVE REELS® technology is found, for example, in
its BRUCE LEE™ game shown in Illustration 1.
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17. As shown in Illustrations 2, 3, and 4, the BRUCE LEE™ game has a LCD screen
overlaying mechanical reels.
18. As shown in Illustration 5, a player of the BRUCE LEE™ game can see through
the LCD screen in the transparent portions located over the mechanical reels.
19. As shown in Illustration 6, after a player of the BRUCE LEE™ game spins the
mechanical reels, video may be provided on the LCD screen. In this example, the portions of the
LCD screen over the left and right mechanical reels have changed from transparent to opaque
with the word “WILD” superimposed over those reels. Furthermore, video in the form of a red
“pay line” is displayed on the LCD screen in front of the reels.
20. As shown in Illustrations 7, 8, and 9, the BRUCE LEE™ game includes a bonus
feature that is played on the touch sensitive LCD screen. In this example, the player may touch
one of the “stars” at the top of the LCD screen in order to potentially receive a bonus, which is
animated as exploding fireworks.
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Bally’s Interactive/Transparent Reels Systems
21. On information and belief, Defendant has copied WMS Gaming’s patented
TRANSMISSIVE REELS® technology into Defendant’s games, including at least its Cash Spin,
Dragon Dynasty, Twin Tigers, and Sky Spirits games.
Response: Denied.
22. Defendant touts its Cash Spin game as using what it describes as an “Interactive
Reels” system. (Exhibit D.)
Response: Bally admits that Cash Spin features Bally’s Interactive Reels (iReels)
technology.
23. Defendant describes its “Interactive Reels” system as follows: “Unique graphic
animations appear to float in front of the reels during bonus rounds, while the video overlay
fades into the background during normal game play, allowing the mechanical reels underneath to
come to the visual foreground.” (Exhibit E.)
Response: Bally admits that it has issued a press release describing iReels as alleged
in paragraph 23.
24. A video demo of Defendant’s Cash Spin game can be seen on its website at
http://www.ballytech.com/games/premium-games/stepper-slots/cash-spin-1748.html.
Response: Admitted.
25. In the audio portion of the video demo referenced in paragraph 24, Defendant
states “Cash Spin combines the visually stunning V32 video display with innovative, interactive
reels technology . . . in an award winning gaming device like nothing else in the industry.”
Response: Admitted.
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26. Illustration 11 is an annotated excerpt from the video demo referenced in
paragraph 26. As shown in Illustration 11, the Cash Spin game has a LCD screen overlaying
mechanical reels, and a player of the Cash Spin game can see through the LCD screen in the
transparent portions located over the mechanical reels.
Response: Bally admits that the Cash Spin game has a transparent LCD screen in
front of the mechanical reels. Bally lacks knowledge or information sufficient to form a
belief as to the truth or falsity of the remaining allegations in Paragraph 26.
27. Illustration 12 is an excerpt from the video demo referenced in paragraph 27. As
shown in Illustration 12, after a player of the Cash Spin game spins the mechanical reels, video
may be provided on the LCD screen. In this example, the portion of the LCD screen over the
right mechanical reel has changed from transparent to partially opaque and is outlined in yellow.
Response: Bally admits that video may be provided on the Cash Spin LCD screen
after a spin of the mechanical reels. Bally lacks knowledge or information sufficient to
form a belief as to the truth or falsity of the remaining allegations in Paragraph 27.
28. Illustration 13 is an excerpt from the video demo referenced in paragraph 24. As
shown in Illustration 13, the Cash Spin game includes a bonus feature that is played on the touch
sensitive LCD screen. In this example, the player may touch one of the bags of money to
potentially receive a bonus.
Response: Bally admits that Cash Spin includes a “Money Bags Bonus” that is
played on the touch-enabled LCD screen. Bally lacks knowledge or information
sufficient to form a belief as to the truth or falsity of the remaining allegations in
Paragraph 28.
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29. In the audio portion of the video demo referenced in paragraph 24, Defendant
states “[d]uring bonus events, dazzling animations magically float in front of the reels for a
unique, memorable, and captivating gaming experience [and] [p]layers interface with the game
using the touch-enabled LCD screen superimposed over the reels.”
Response: Admitted.
30. Defendant touts its Dragon Dynasty, Twin Tigers, and Sky Spirits games as using
what it describes as a “Transparent Reels” system. (Exhibits F and G.)
Response: Bally admits that Dragon Dynasty, Twin Tigers, and Sky Spirits use
Bally’s Transparent Reels technology.
31. Defendant described its “Transparent Reels” system on its website as a
“breakthrough in visual presentation that adds an entirely new dimension to traditional reel
spinning games” and that “creates a simulated 3-D effect where various special animations are
displayed in front of the mechanical reels.” (Exhibit F.)
Response: Admitted.
32. Defendant further represented on its website that “[t]he key to Transparent Reels
is its unique LCD screen that is superimposed over the mechanical reels beneath. During normal
game play, the reels spin exactly like a traditional stepper, with the Transparent Reels effect
becoming virtually invisible. But whenever a win or bonus event occurs, this amazing LCD
screen comes to life with dynamic animations, captivating effects, and unexpected surprises – all
appearing to magically ‘float’ in front of the reels. In addition, this superimposed LCD video is
touch-enabled, allowing players to actively interface with the game during the bonus round
where animated images appear above the mechanical reels.” (Id.)
Response: Admitted.
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33. Defendant offered a brochure at the 2009 Global Gaming Expo in Las Vegas,
Nevada that describes its “Transparent Reels” system as “[c]ombining the classic appeal of
traditional mechanical reels with the visual impact of cutting-edge video effects.” (Exhibit G.)
Response: Admitted.
34. The brochure referenced in paragraph 33 states, “[t]his unique interactive-reels
technology superimposes dynamic video animations over standard mechanical reels. During
regular play, the mechanical reels are clearly visible through the specially designed, translucent
LCD display. But when a bonus sequence is triggered, or a winning combination occurs, the
superimposed display comes alive with a dazzling variety of special effects for a truly
unforgettable gaming experience.” (Id.)
Response: Admitted.
35. The brochure referenced in paragraph 33 includes an image of Defendant’s Twin
Tigers game, which is reproduced in Illustration 14. (Id.)
Response: Admitted.
COUNT I – ALLEGED INFRINGEMENT OF U.S. PATENT NO. 7,458,890
36. WMS Gaming incorporates herein the allegations of paragraphs 1 through 35
above specifically by reference.
Response: Bally admits that WMS Gaming incorporates the allegations of paragraphs
1 through 35 above specifically by reference.
37. WMS Gaming has never licensed or permitted Defendant to practice any of the
legal rights granted under the ‘890 Patent.
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38. On information and belief, Defendant has infringed, and is infringing, one or
more claims of the ‘890 Patent by making, using, selling, and/or offering to sell games with its
“Interactive Reels” system or “Transparent Reels” system, including at least its Cash Spin,
Response: Denied.
39. On information and belief, Defendant’s infringement of the ‘890 Patent has been,
and continues to be, with full knowledge of the ‘890 Patent and is a deliberate and willful
infringement thereof.
Response: Bally denies infringing the ‘890 Patent, willfully or otherwise. Bally
admits that it has knowledge of the ‘890 Patent at least as early as service of the
Complaint.
40. By reason of Defendant’s infringement of the ‘890 Patent, Defendant has caused
and continues to cause WMS Gaming to suffer damage and irreparable harm.
Response: Denied.
41. WMS Gaming has no adequate remedy at law for Defendant’s infringement of the
‘890 Patent.
Response: Denied.
42. On information and belief, Defendant’s infringement of the ‘890 Patent will
continue unless enjoined by this Court.
Response: Denied.
COUNT II – ALLEGED INFRINGEMENT OF U.S. PATENT NO. 7,585,220
43. WMS Gaming incorporates herein the allegations of paragraphs 1 through 35
above specifically by reference.
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Response: Bally admits that WMS Gaming incorporates the allegations of paragraphs
1 through 35 above specifically by reference.
44. WMS Gaming has never licensed or permitted Defendant to practice any of the
legal rights granted under the ‘220 Patent.
45. On information and belief, Defendant has infringed, and is infringing, one or
more claims of the ‘220 Patent by making, using, selling, and/or offering to sell games with its
“Interactive Reels” system or “Transparent Reels” system, including at least its Cash Spin,
Response: Denied.
46. On information and belief, Defendant’s infringement of the ‘220 Patent has been,
and continues to be, with full knowledge of the ‘220 Patent and is a deliberate and willful
Response: Bally denies infringing the ‘220 Patent, willfully or otherwise. Bally
admits that it has knowledge of the ‘220 Patent at least as early as service of the
Complaint.
47. By reason of Defendant’s infringement of the ‘220 Patent, Defendant has caused
and continues to cause WMS Gaming to suffer damage and irreparable harm.
Response: Denied.
48. WMS Gaming has no adequate remedy at law for Defendant’s infringement of the
‘220 Patent.
Response: Denied.
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49. On information and belief, Defendant’s infringement of the ‘220 Patent will
continue unless enjoined by this Court.
Response: Denied.
II. AFFIRMATIVE DEFENSES
50. Bally asserts the following affirmative and other defenses. Bally reserves the
right to assert additional affirmative defenses as further information is obtained.
FIRST AFFIRMATIVE DEFENSE
(Non-Infringement)
51. Bally has not and does not directly infringe, contributorily infringe, or induce
infringement of any valid and enforceable claim of the ‘890 or ‘220 Patents.
SECOND AFFIRMATIVE DEFENSE
(Invalidity and/or Unenforceability)
52. The claims of the ‘890 and ‘220 Patents are invalid, unenforceable, and/or void
for failure to satisfy one or more of the conditions of patentability set forth in Title 35 of the
United States Code, including without limitation 35 U.S.C. §§ 101, 102, 103, 112, 116, and 282,
because the alleged invention thereof is taught by, suggested by, and/or obvious in view of the
prior art, and/or is unsupported by the written description of the patented invention, and/or
claims unpatentable subject matter, and no claim of those patents can validly be construed to
cover any Bally product.
THIRD AFFIRMATIVE DEFENSE
(Laches)
53. The claims of the ‘890 and ‘220 Patents are unenforceable, in whole or in part,
against Bally under the doctrine of laches.
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FOURTH AFFIRMATIVE DEFENSE
(Estoppel)
54. The claims of the ‘890 and ‘220 Patents are unenforceable, in whole or in part,
against Bally under the doctrine of estoppel.
FIFTH AFFIRMATIVE DEFENSE
(Prosecution History Estoppel)
55. The relief sought by WMS Gaming as to the ‘890 and ‘220 Patents is barred
under the doctrine of prosecution history estoppel.
SIXTH AFFIRMATIVE DEFENSE
(Inequitable Conduct)
56. WMS Gaming’s claims for relief are barred because the ‘890 and ‘220 Patents are
unenforceable pursuant to 37 C.F.R. § 1.56 and the doctrine of inequitable conduct.
WMS Gaming Withheld Evidence from the PTO in Order to Differentiate its Claims
57. During the prosecution of the patents in suit, and the applications to which the
patents in suit claim priority, the attorneys prosecuting the ‘890 and ‘220 Patents, in particular
Wayne Tang, Michael Blankstein, and Daniel Burnham, withheld references from the PTO that
they knew rendered unpatentable claims they were pursuing.
58. Specifically, Messrs. Tang, Blankstein, and Burnham failed to disclose U.S.
Patent No. 6,190,255 (the “‘255 Patent”) to the United States Patent and Trademark Office
(“PTO”) and argued for allowance of the patents in suit on grounds foreclosed by the ‘255
Patent. The ‘255 Patent issued on February 20, 2001 and was filed on July 31, 1998, and is
owned by WMS Gaming. The ‘255 Patent is prior art to the patents in suit under 35 U.S.C. §
102 et seq.
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59. The ‘255 Patent discloses a slot machine having mechanical reels and a video
touch-screen display. The slot machine includes the following bonus game:
In another embodiment utilizing a touch-screen display, the

desired window is selected by simply touching the screen in an
area over the window. The selection of selection element(s) under
player control is a novel concept which enhances the excitement of
the bonus game in relation to other types of bonus games known in
the art. Whereas other bonus game(s) have outcomes which are
determined entirely by the game program, the outcome(s) in the
present game are directly influenced by the player's choice(s) of
window(s).
Prosecution and Allowance of the Application for the ‘890 Patent
60. The claims of the ‘890 Patent are directed to a gaming machine with a plurality of
mechanical reels and a “video display providing a video images overlaying the reels.” The
claims require that the gaming machine provide a “second set of video images” that present a
“special event” with indicia that are selectable by the player.
61. On September 21, 2007, the Examiner rejected the pending claims of the
application for the ‘890 Patent as being unpatentable in light of the prior art of record. In
response to that rejection, WMS Gaming, through its attorney Mr. Tang, amended the
independent claims of the application to require “the first set of video images interacting with the
symbols on the reels.” Mr. Tang argued, “The different uses of sets of video images are neither
disclosed nor suggested by any of the references of record.” Mr. Tang further distinguished the
prior art relied on by the Examiner on the ground that it did not “disclose or suggest using a
second set of video images to present a special event including game indicia selectable by the
player.”
62. Following Mr. Tang’s argument and amendment, the Examiner allowed the
claims of the ‘890 Patent to issue. In his decision, the Examiner stated that the reason for the
allowance was:
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None of the cited prior art references either alone or in combination discloses a
spinning reel slot machine having a mechanical rotatable reels stopping to place
randomly selected symbols as outcome in visual association with a display area, a
video providing video images overlaying reels and disposed in front of reels, a
first set of video images interacting with the symbols on the reels and a second set
of video images representing a special event, the special event including one or
more indicia selectable by the player.
63. The ‘255 Patent, however, disclosed a gaming machine with mechanical reels and
a “set of video images” that present a “special event” with indicia that are selectable by the
player. Specifically, the ‘255 Patent discloses a gaming machine with a set of mechanical reels
and a video display for displaying a bonus game. The bonus game involves video images that
are selectable by the player using a touch screen display.
Prosecution and Allowance of the Application for the ‘220 Patent
64. The claims of the ‘220 Patent are directed to a gaming machine with two images.
The second image is a video image that overlays the first image and includes player-selectable
indicia that affect an outcome of a special event.
65. During prosecution of the application for the ‘220 Patent, WMS Gaming amended
certain of the independent claims to require a “second image” that that was a video image with
“player-selectable elements” and that the game receive “via player input, selections of the player-
selectable elements during the special event of the wagering game.”
66. In a January 9, 2008 office action, the Examiner finally rejected these claims in
light of the prior art of record, including U.S. Patent 6,251,013 to Bennett.
67. WMS Gaming, through its attorney Mr. Tang, appealed the Examiner’s decision
to the Board of Patent Appeals and Interferences. In the appeal brief, Mr. Tang described the
invention of the ‘220 Patent as requiring a “second image [that] overlays the first image during a
special event of the wagering game.”
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68. Mr. Tang stated that the claims of the ‘220 Patent required that “‘player-selectable
indicia are displayed during a special event associated with the wagering game.’” Mr. Tang
explained:
These indicia are included in the second video image that overlays and is spatially
separated from the first image or physical member as shown in Fig. 7 of the
specification. The special event therefore changes the appearance of the game
entirely permitting the player to interact with the screen by selecting indicia such
as the present icons 28 shown in Fig. 7. This creates an interactive gaming
experience using the second video image 18 for the special event part of the
wagering game.
69. In light of that description of the invention, Mr. Tang attempted to distinguish the
prior art relied on by the Examiner. Mr. Tang argued, “It is clear that Bennett does not disclose a
second image with ‘player-selectable indicia that are displayed during a special event associated
with the wagering game.’”
70. Following the filing of WMS Gaming’s appeal brief, the Examiner issued an
office action proposing amendments to the claims. The Examiner’s amendments modified
certain claims to clarity that the player-selectable indicia contained in the video image affected
the outcome of the special event. The Examiner then stated that the claims would be allowed if
the amendments were not objected to, in part because:
None of the cited references either alone or in combination disclose a first display
and a second display overlaying the first display and partially visible through the
second display, first and second display being spatially separated, the second
display interacting with the first display during a special event, the second display
being a video display and including a selectable indicia and upon selection of the
selectable indicia, the selection indicia affecting the special outcome of the event.
71. The ‘255 Patent, however, disclosed a gaming machine with mechanical reels and
a second display. The ‘255 Patent also disclosed that the second display was a video display that
included selectable indicia that affected the outcome of a special event or bonus game.
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WMS Gaming’s Knowledge of the ‘255 Patent and Failure to Disclose
72. Messrs. Tang, Blankstein, and Burnham were aware of the ’255 Patent.
73. The ‘255 Patent was issued to and is owned by WMS Gaming.
74. Mr. Blankstein was at all relevant times WMS Gaming’s Vice President of
Patents.
75. Messrs. Tang, Blankstein, and Burnham have prosecuted at least twenty seven
patent applications in which the ‘255 Patent had been disclosed, including at least the
prosecutions of United States Patents Nos. 6,322,309; 6,358,309; 6,517,432; 6,551,187;
6,592,457; 6,607,437; 6,739,971; 6,746,327; 6,991,539; 7,182,690; 7,361,086; 7,364,506;
7,381,133; 7,390,260; 7,435,175; 7,455,585; 7,628,690; 7,654,897; 7,686,685; 7,731,579;
7,736,222; 7,744,453; 7,771,265; 7,780,511; 7,780,519; 7,811,167; and 7,819,737.
76. Both the ‘890 and ‘220 Patents include a graphical representation of the “Jackpot
Party” bonus game (Figure 7 of both patents).
77. The ‘255 Patent refers to the wagering machine and user-selectable bonus game it
discloses as “Jackpot Party.”
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78. Despite the obvious similarities between the ‘255 Patent and the patents in suit,
and despite the fact that “Jackpot Party,” the subject of the ‘255 Patent, is graphically
represented and relied upon in both of the patents in suit, neither WMS Gaming, its attorneys, or
the inventors disclosed the ‘255 Patent to the PTO during prosecution of either the ‘890 or ‘220
Patents.
79. The ‘255 Patent is material to the patentability of the patents in suit because it is
prior art that discloses a user-selectable bonus game played using a video screen. During
prosecution of the ‘890 Patent, WMS Gaming contended that the prior art did not “disclose or
suggest using a second set of video images to present a special event including game indicia
selectable by the player.” During prosecution of the ‘220 Patent, WMS Gaming distinguished its
invention from prior art by contending that the prior art did not disclose a “second image with
‘player-selectable indicia that are displayed during a special event associated with the wagering
game.’”
80. WMS Gaming could not have made these arguments to secure issuance of the
patents in suit had the ‘255 Patent been disclosed. The ‘255 Patent discloses “using a second set
of video images to present a special event including game indicia selectable by the player” and a
“second image with ‘player-selectable indicia that are displayed during a special event associated
with the wagering game.’”
81. On information and belief, Messrs. Tang, Blankstein, and Burnham withheld this
information with knowledge of its materiality and intent to deceive the PTO.
82. On information and belief, this pattern of intentional misstatements to the PTO is
pervasive, and infects all patents and applications in the family of the patents in suit, including
the ‘220 and ‘890 Patents, through the doctrine of infectious unenforceability.
20
83. As a result, the ‘890 and ‘220 Patents are unenforceable due to inequitable
conduct.
WHEREFORE, Bally denies that any of its products, services, or processes infringes
any valid claim of the ‘890 or ‘220 Patents, and it further denies that WMS Gaming is entitled to
any judgment against Bally whatsoever. Bally asks that WMS Gaming’s Complaint be
dismissed with prejudice, that judgment be entered for Bally, and that Bally be awarded
attorneys’ fees incurred in defending against the Complaint, together with such other relief the
Court deems appropriate.
III. COUNTERCLAIMS
Bally alleges its Counterclaims against WMS Gaming as follows:
PARTIES, JURISDICTION, AND VENUE
84. In its Complaint, WMS Gaming purports to be a Delaware corporation with
principal places of business in Chicago and Waukegan, Illinois.
85. Bally is a corporation organized and existing under the laws of Nevada with a
principal business address in Nevada.
86. This is an action for Declaratory Relief for which this Court has jurisdiction under
Title 35 of the United States Code, as well as under 28 U.S.C. §§ 1331, 1332, 1338, 2201, and
2202.
87. This Court has personal jurisdiction over WMS Gaming by virtue of the
Complaint WMS Gaming filed in this Court, WMS Gaming’s development and manufacture of
infringing games at issue in this action in Illinois, and WMS Gaming’s offices and employees in
Illinois.
21
88. Venue is proper in this District because WMS Gaming asserts a Complaint for
patent infringement in this District, in response to which these Counterclaims are asserted.
Further, WMS Gaming has designed and manufactured the infringing games at issue in this
action in this District. Bally maintains its right to seek a transfer of venue pursuant to 28 U.S.C.
§ 1404. In the event of such transfer, Bally consents to the transfer of its counterclaims set forth
herein. To the extent that this action remains in this District, venue is appropriate because WMS
Gaming has consented to the propriety of venue in this Court by filing claims for patent
infringement in this Court, in response to which these counterclaims are asserted.
89. An actual controversy exists between Bally and WMS Gaming regarding the
unenforceability, validity, and infringement of the claims of the ‘220 and ‘890 Patents by virtue
of WMS Gaming’s Complaint.
FIRST COUNTERCLAIM
(Declaratory Judgment of Non-Infringement, Unenforceability, and Invalidity of the ‘890
Patent)
90. Bally incorporates by reference the responses and allegations set forth in
Paragraphs 56-89 above.
91. By the filing of its Complaint, WMS Gaming has purported to assert claims
against Bally for the alleged infringement of the ‘890 Patent.
92. Bally denies WMS Gaming’s allegations of infringement.
93. The claims of the ’890 Patent are invalid and/or unenforceable for failure to
satisfy one or more of the requirements of Title 35 of the United States Code, including without
limitation 35 U.S.C. §§ 101, 102, 103, 112, 133, 200 et seq., 301 et seq., 37 C.F.R. § 1.56 and the
doctrine of inequitable conduct.
22
94. Accordingly, there exists a substantial and continuing justiciable controversy
between Bally and WMS Gaming as the infringement, validity, and enforceability of the claims
of the ‘890 Patent.
95. Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq.,
Bally is entitled to judgment from this Court finding that the ‘890 Patent is not infringed by any
Bally product, service, or process and that every claim of the ‘890 Patent is invalid and
unenforceable.
SECOND COUNTERCLAIM
(Declaratory Judgment of Non-Infringement, Invalidity, and Unenforceability of the ‘220
Patent)
97. By the filing of its Complaint, WMS Gaming has purported to assert claims
against Bally for the alleged infringement of the ‘220 Patent.
98. Bally denies WMS Gaming’s allegations of infringement.
99. The claims of the ‘220 Patent are invalid and/or unenforceable for failure to
satisfy one or more of the requirements of Title 35 of the United States Code, including without
limitation 35 U.S.C. §§ 101, 102, 103, 112, 133, 200 et seq., and 301 et seq, 37 C.F.R. § 1.56 and
the doctrine of inequitable conduct..
100. Accordingly, there exists a substantial and continuing justiciable controversy
between Bally and WMS Gaming as the infringement, validity, and enforceability of the claims
of the ‘220 Patent.
23
101. Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq.,
Bally is entitled to judgment from this Court finding that the ‘220 Patent is not infringed by any
Bally product, service, or process and that every claim of the ‘220 Patent is invalid and
unenforceable.
THIRD COUNTERCLAIM
(Infringement of United States Patent No. 7,682,244.)
103. Bally is the owner by assignment of U.S. Patent No. 7,682,244 entitled “High
Granularity Promotion-Based Awards and use in Gaming Environments” (“the ‘244 Patent”),
which the United States Patent and Trademark Office lawfully and duly issued on March 23,
2010. A true and correct copy of the ‘244 Patent is attached hereto as Exhibit 2.
104. On information and belief, WMS Gaming makes, uses, offers to sell, or sells
gaming machines under the product category “Adaptive Gaming,” including without limitation
WMS Gaming’s Star Trek and Lord of the Rings gaming machines.
105. On information and belief, WMS Gaming has been and now is directly and jointly
infringing, and indirectly infringing by way of inducing infringement and/or contributing to the
infringement of the ‘244 Patent in the State of Illinois, in this judicial district, and elsewhere in
the United States, by among other things making, using, offering to sell and/or selling within the
United States products under the product category “Adaptive Gaming,” including, without
limitation, WMS Gaming’s Star Trek and Lord of the Rings gaming machines. WMS Gaming is
thus liable for infringement of the ‘244 Patent pursuant to 35 U.S.C. § 271.
24
106. On information and belief, WMS Gaming has caused, and will continue to cause,
Bally irreparable injury and harm by infringing the ‘244 Patent. Bally will suffer further
irreparable injury, for which it has no adequate remedy at law, unless and until WMS Gaming is
enjoined from infringing the ‘244 Patent.
107. On information and belief, Bally has been and continues to be damaged by WMS
Gaming’s infringing activities in an amount yet to be determined.
108. On information and belief, WMS Gaming’s infringement of the ‘244 Patent has
been, and continues to be, with full knowledge of the ‘244 Patent and is a deliberate and willful
FOURTH COUNTERCLAIM
(Infringement of United States Patent No. 6,923,721.)
110. Bally is the owner by assignment of U.S. Patent No. 6,923,721 entitled
“Apparatus and Method for Maintaining Game State” (“the ‘721 Patent”), which the United
States Patent and Trademark Office lawfully and duly issued on August 2, 2005. A true and
correct copy of the ‘721 Patent is attached hereto as Exhibit 3.
111. On information and belief, WMS Gaming makes, uses, offers to sell, or sells
gaming machines under the product category “Adaptive Gaming,” including without limitation
WMS Gaming’s Star Trek and Lord of the Rings gaming machines.
112. On information and belief, WMS Gaming has been and now is directly and jointly
infringing, and indirectly infringing by way of inducing infringement and/or contributing to the
infringement of the ‘721 Patent in the State of Illinois, in this judicial district, and elsewhere in
25
the United States, by among other things making, using, offering to sell and/or selling within the
United States products under the product category “Adaptive Gaming,” including, without
limitation, WMS Gaming’s Star Trek and Lord of the Rings gaming machines. WMS Gaming is
thus liable for infringement of the ‘721 Patent pursuant to 35 U.S.C. § 271.
113. On information and belief, WMS Gaming has caused, and will continue to cause,
Bally irreparable injury and harm by infringing the ‘721 Patent. Bally will suffer further
irreparable injury, for which it has no adequate remedy at law, unless and until WMS Gaming is
enjoined from infringing the ‘721 Patent.
114. On information and belief, Bally has been and continues to be damaged by WMS
Gaming’s infringing activities in an amount yet to be determined.
115. On information and belief, WMS Gaming’s infringement of the ‘721 Patent has
been, and continues to be, with full knowledge of the ‘721 Patent and is a deliberate and willful
JURY DEMAND
116. In accordance with the Seventh Amendment of the United States Constitution,
Bally demands a trial by jury on all issues so triable.
EXCEPTIONAL CASE
117. On information and belief, this is an exceptional case entitling Bally to an award
of its attorneys’ fees incurred in connection with defending and prosecuting this action pursuant
to 35 U.S.C. § 285, as a result of, inter alia, WMS Gaming’s willful infringement of the ‘721 and
‘244 Patents, WMS Gaming’s assertion of the ‘220 and ‘890 Patents against Bally with the
knowledge that Bally does not infringe any valid or enforceable claim of the ‘220 and ‘890
Patents and/or that the claims of the ‘220 and ‘890 Patents are invalid and/or unenforceable.
26
PRAYER FOR RELIEF
WHEREFORE, Bally prays for relief as follows:
A. For a Declaratory Judgment that the ’890 and ‘220 Patents, and each and
every asserted claim thereof, are invalid, unenforceable, and not infringed;
B. That WMS Gaming’s Complaint be dismissed with prejudice, with WMS
Gaming taking nothing;
C. That pursuant to 35 U.S.C. § 285, FEDERAL RULE OF CIVIL PROCEDURE 11,
and/or other applicable authority, WMS Gaming be ordered to pay all of Bally’s reasonable
attorneys’ fees incurred in defending against WMS Gaming’s claims;
D. Pursuant to 35 U.S.C. §271, this Court enter judgment that the WMS
Gaming has been and is currently infringing the ‘244 and ‘721 Patents;
E. WMS Gaming be directed to pay Bally the amount of damages that it has
sustained as a result of WMS Gaming’s acts of patent infringement, and that such damages be
trebled under 35 U.S.C. §284;
F. WMS Gaming be directed to pay an award of pre-judgment interest, post-
judgment interest, and costs of the suit to Bally;
G. That this Court enter a permanent injunction, pursuant to 35 U.S.C. § 283,
enjoining WMS Gaming and their officers, agents, servants, employees, attorneys and all others
in active concert and/or participation with them from directly and/or indirectly infringing Bally’s
‘244 and ‘721 Patents; and
H. Bally be awarded such other relief as the Court deems appropriate.
27
Dated: November 9, 2010 Respectfully submitted,
By: /s/ Kevin A. Smith
Jennifer A. Kash (pro hac vice)

Eric E. Wall (pro hac vice)
Kevin A. Smith (pro hac vice)
QUINN EMANUEL URQUHART & SULLIVAN
LLP
50 California Street, 22nd Floor
San Francisco, California 94111
Telephone: (415) 875-6600
Fax: (415) 875-6700
Christopher R. Freeman (Local Counsel)

QUINN EMANUEL URQUHART & SULLIVAN
LLP
500 West Madison St., Suite 2450
Chicago, IL 60661
Telephone: (312) 705-7400
Fax: (312) 705-7401
Attorneys for Defendant Bally Gaming, Inc. d/b/a

Bally Technologies
28
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing was served upon
all counsel of record via the Court's ECF and pdf e-mail on November 9, 2010.
By: /s/ Kevin A. Smith
29

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Case: 1:10-cv-06679 Document #: 21 Filed: 11/09/10 Page 1 of 29 PageID #:97

UNITED STATES DISTRICT COURT

WMS GAMING INC.,

Plaintiff, CIVIL ACTION NO. 1:10-CV-06679

DEFENDANT BALLY GAMING INC.’S ANSWER, AFFIRMATIVE DEFENSES, AND

not expressly admitted, qualified, or answered herein.

Plaintiff WMS Gaming Inc.

2. Plaintiff WMS Gaming Inc. (“WMS Gaming”) is a Delaware corporation with

its Corporate Headquarters). (See http://www.wms.com/contact.php.)

Boulevard, Waukegan, IL 60085. Bally lacks knowledge or information sufficient to

form a belief as to the truth or falsity of the remaining allegations in Paragraph 2.

and marketing video and reel-spinning gaming machines.

manufacturing and marketing video and reel-spinning gaming machines.

attached as Exhibit A to the Complaint.

6. Through an agreement with Universal Entertainment Corp. (formerly Aruze

Patent Nos. 6,937,298; 7,097,560; 7,140,963; 7,159,865; 7,169,048; 7,207,883; 7,219,893;

7,220,181; 7,234,697; 7,281,980; 7,322,884; 7,329,181; 7,355,660; 7,390,259; 7,404,766;

7,465,228; 7,479,061; 7,479,066; 7,485,039; 7,510,476; 7,520,812; and 7,695,364. WMS

any related applications: U.S. Publication Nos. 2004/0116178; 2004/0147303; 2004/0166925;

2005/0187003; 2004/0192441; 2004/0209666; 2004/0209667; 2004/0209668; 2004/0209670;

2004/0209672; 2004/0209676; 2004/0209679; 2004/0209683; 2004/0214635; 2004/0214636;

2004/0214637; 2004/0224758; 2004/0229686; 2004/0242323; 2005/0032571; 2005/0170879;

2005/0192083; 2005/0192084; 2005/0192085; 2005/0272500; 2005/0282616; 2005/0282617;

2006/0089192; 2007/0060296; 2007/0123348; 2007/0184893; 2008/0020820; 2008/0125210A1;

seek leave to amend its complaint, if appropriate, to assert additional patents.

Response: Bally lacks knowledge or information sufficient to form a belief as to the

any allegation set forth in WMS Gaming’s complaint.

Defendant Bally Gaming, Inc. d/b/a Bally Technologies

7. On information and belief, Defendant Bally Gaming, Inc. is a Nevada corporation

Naperville, IL 60563. (See http://www.ballytech.com/customer-center/contact-us.)

the remaining allegations in paragraph 7.

designing, manufacturing and marketing video and reel-spinning gaming machines.

style name of Bally Technologies. (Exhibit C.)

10. On information and belief, Defendant’s registered agent in Illinois is C T

JURISDICTION AND VENUE

§§ 1331 and 1338(a).

Illinois, it is registered with the Illinois Secretary of State to do business in Illinois, it is

http://www.igb.state.il.us/Pending/ILSUPPUBweb.pdf), it has a registered agent in Illinois, it

and can purchase parts online (see https://ecom.ballytech.com/account/login.)

conclusions contained in Paragraph 12.

13. Venue is proper in this judicial district pursuant to at least 28 U.S.C. §§

1391(b)(1) and 1400(b).

forum is appropriate pursuant to 28 U.S.C. § 1404.

WMS Gaming’s TRANSMISSIVE REELS Technology

Response: Bally lacks knowledge or information sufficient to form a belief as to the

truth or falsity of the allegations in Paragraph 14.

15. WMS Gaming’s TRANSMISSIVE REELS® technology combines the visceral

played before and provides virtually unlimited bonus game opportunities.

Response: Bally lacks knowledge or information sufficient to form a belief as to the

truth or falsity of the allegations in Paragraph 15.

16. WMS Gaming’s TRANSMISSIVE REELS® technology is found, for example, in

its BRUCE LEE™ game shown in Illustration 1.

Response: Bally lacks knowledge or information sufficient to form a belief as to the

truth or falsity of the allegations in Paragraph 16.

overlaying mechanical reels.

Response: Bally lacks knowledge or information sufficient to form a belief as to the

truth or falsity of the allegations in Paragraph 17.

Response: Bally lacks knowledge or information sufficient to form a belief as to the

truth or falsity of the allegations in Paragraph 18.

“pay line” is displayed on the LCD screen in front of the reels.

Response: Bally lacks knowledge or information sufficient to form a belief as to the

truth or falsity of the allegations in Paragraph 19.

animated as exploding fireworks.

Response: Bally lacks knowledge or information sufficient to form a belief as to the