Dynamite Games Pty Limited v Aruze Gaming Australia Pty Ltd
[2010] FCA 980
FEDERAL COURT OF AUSTRALIA
Dynamite Games Pty Limited v Aruze Gaming Australia Pty Ltd [2010] FCA 980
Citation: Dynamite Games Pty Limited v Aruze Gaming Australia Pty Ltd [2010] FCA 980 Parties: DYNAMITE GAMES PTY LIMITED ACN 102 269 732 v ARUZE GAMING AUSTRALIA PTY LTD ACN 002 907 851 and ARUZE GAMING AMERICA, INC File number: NSD 719 of 2010 Judge: GRAHAM J Date of judgment: 1 September 2010 Date of hearing: 1 September 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 19 Counsel for the Applicant: A Franklin SC and A Fox Solicitor for the Applicant: Middletons Counsel for the First Respondent: N R Murray Solicitor for the First Respondent: Slater & Gordon
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 719 of 2010
BETWEEN: DYNAMITE GAMES PTY LIMITED ACN 102 269 732
ApplicantAND: ARUZE GAMING AUSTRALIA PTY LTD ACN 002 907 851
First RespondentARUZE GAMING AMERICA, INC
Second Respondent
JUDGE:
GRAHAM J
DATE OF ORDER:
1 SEPTEMBER 2010
WHERE MADE:
SYDNEY
THE COURT GRANTS LEAVE:
1.To the Applicant to serve the Amended Application filed in Court on 1 September 2010 and the Amended Statement of Claim filed in Court on 1 September 2010 on the second Respondent, in accordance with Order 8 rule 3 of the Federal Court Rules, in the United States of America by private agent Process Forwarding International of 633 Yesler Way, Seattle in the State of Washington 98104, USA by serving the documents personally on the second Respondent, Aruze Gaming America, Inc.’s resident agent located at 502 East John Street, Carson City in the State of Nevada, USA, namely CSC Services of Nevada, Inc.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 719 of 2010
BETWEEN: DYNAMITE GAMES PTY LIMITED ACN 102 269 732
ApplicantAND: ARUZE GAMING AUSTRALIA PTY LTD ACN 002 907 851
First RespondentARUZE GAMING AMERICA, INC
Second Respondent
JUDGE:
GRAHAM J
DATE:
1 SEPTEMBER 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Dynamite Games Pty Limited, the applicant in the proceedings NSD719 of 2010, is the patentee named in patent number 2004281073. The patent specification includes, as claim 34, the following:
‘34. Gaming software including:
a component for monitoring gameplay;
a component for monitoring the occurrence of a game event; and
an event guarantee component for guaranteeing that a game event will trigger within a set amount of gameplay, the event guarantee component including: a trigger component for triggering a game event when the set guarantee gameplay amount is reached without the monitored event having been triggered, and an indicator component for indicating the amount of gameplay remaining to be played before a guaranteed game event will trigger.’
Section 13(1) of the Patents Act 1990 (Cth) (the ‘Patents Act’) provides:
‘13(1)Subject to this Act, a patent gives the patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention.
(2)The exclusive rights are personal property and are capable of assignment and of devolution by law.
(3) A patent has effect throughout the patent area.’
The word ‘exploit’ in relation to an invention includes:
‘(a)Where the invention is a product – make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or,
(b)Where the invention is a method or process – use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.’
(See section 3 of the Patents Act and the Dictionary contained in Schedule 1.)
By an Application filed 18 June 2010 in proceedings NSD 719 of 2010 the applicant claimed relief as set out therein against the then sole respondent, Aruze Gaming Australia Pty Ltd ACN 002 907 851. By a Notice Motion filed 16 August 2010, the applicant sought leave to add Aruze Gaming America, Inc as a second respondent. Earlier today the Court granted leave to the applicant to add Aruze Gaming America, Inc as a second respondent. The Court also granted leave to the applicant to file an Amended Application and an Amended Statement of Caim. Such documents have now been filed showing the respondents as Aruze Gaming Australia Pty Ltd ACN 002 907 851 and Aruze Gaming America, Inc.
The applicant now seeks leave to serve the Amended Application and the Amended Statement of Claim on the second respondent in accordance with Order 8, rule 3 of the Federal Court Rules.
The evidence on the application for leave filed 16 August 2010, establishes that the United States of America is the foreign country where Aruze Gaming America, Inc is to be served. It establishes that the proposed method of service will be by its engaging the services of the private agent Process Forwarding International to personally serve the Amended Application and the Amended Statement of Claim on CSC Services of Nevada, Inc, as the resident agent of Aruze Gaming America, Inc, at 502 East John Street, Carson City in the State of Nevada, United States of America.
The Australian Government Attorney-General’s Department’s website includes a document entitled ‘Service of Documents Abroad – United States of America’ which provides:
(a)personal service of documents may be effected upon a party by private agent;
(b)the Department of Justice of the United States of America has appointed the private process server Processing Forwarding International to carry out service in the United States of America of documents issued by an Australian court; and
(c)service through an agent does not breach US law and is not considered by the US Government to be a breach of its sovereignty.
The Court has also been provided with a copy of Nevada Revised Statutes, Section 78.090–Business Associations–Securities–Commodities paragraphs 1 and 4 of which provided:
‘1. Except during any period of vacancy described in NRS 78.097, every corporation must have a resident agent who resides or is located in this State. Every resident agent must have a street address for the service of process, and may have a separate mailing address such as a post office box, which may be different from the street address. The street address of the resident agent is the registered office of the corporation in this State.
…4. All legal process and any demand or notice authorized by law to be served upon a corporation may be served upon the resident agent of the corporation in the manner provided in subsection 2 of NRS 14.020. If any demand, notice or legal process, other than a summons and complaint, cannot be served upon the resident agent, it may be served in the manner provided in NRS 14.030. These manners and modes of service are in addition to any other service authorized by law.’
The Nevada Revised Statutes Section 14.020–Civil Practice included:
2. All legal process and any demand or notice authorized by law to be served upon the foreign corporation, limited-liability company, limited-liability partnership, limited partnership, limited-liability limited partnership, business trust or municipal corporation may be served upon the resident agent personally or by leaving a true copy thereof with a person of suitable age and discretion at the address shown on the current certificate of acceptance filed with the Secretary of State.
3. Subsection 2 provides an additional mode and manner of serving process, demand or notice and does not affect the validity of any other service authorized by law.’
I am satisfied that there is evidence before the Court of the matters required by Order 8, rule 3(3), of the Federal Court Rules in relation to service.
Order 8, rule 3, relevantly provides:
‘3(1)Service of an originating process on a person in a foreign country is effective for the purpose of a proceeding only if:
(a) the Court has given leave under subrule (2) before the application is served; …
…
(2) The Court may give leave to a party to serve an originating process on a person in a foreign country in accordance with a convention or the law of the foreign country, on such terms and conditions as it considers appropriate, if the Court is satisfied that:
(a) the Court has jurisdiction in the proceeding; and
(b) the proceeding is of a kind mentioned in rule 2; and(c)the person seeking leave has a prima facie case for all or any of the relief claimed by the person in the proceeding.’
Order 8, rule 2, identified by reference to a series of items in a table the ‘Kind of proceeding in which originating process may be served on a person outside Australia’. Rule 2 relevantly provided:
‘2.Subject to rule 3, an originating process may be served on a person in a foreign country in a proceeding which consists of, or includes, any 1 or more of the kinds of proceeding mentioned in the following table:’
The applicant contends that the current proceedings fall within items 1, 11 and 12 which provide:
‘1 Proceeding based on a cause of action arising in Australia
…11Proceeding based on a breach of a provision of an Act which is committed in Australia
12Proceeding based on a breach of a provision of an Act (wherever occurring) seeking relief in relation to damage suffered wholly or partly in Australia
…’
The applicant alleges that the respondents have each infringed its patent. In the case of the second respondent the applicant contends that the second respondent has exploited the invention the subject of the patent and authorised the first respondent to exploit the invention amongst other things. The exploitation is said to include the disposition by the second respondent of the product by electronically transmitting software into Australia for use in gaming machines on which the game ‘Showgirl’ may be played.
The applicant’s patent attorney, Phillip Pluck, visited the Star City Casino Sydney on 15 April and, again, on 21 April 2010. He says that he observed a bank of gaming machines, each labelled with the ‘ARUZE’ brand which bore prominent signage ‘RESCUE Spin’. Mr Pluck observed that the gaming machine operated with the ‘Rescue Spin’ feature. He annexed to his affidavit sworn 16 August 2010 a bundle of photographs of ‘screen shots’ of the Showgirl game displaying the rules or explanation of this [Rescue Spin] feature which were displayed on the screen of a gaming machine on 21 April 2010. Mr Pluck noted the rules of the ‘Rescue Spin’ feature on the Showgirl gaming machine and in his affidavit detailed 17 such rules.
Mr Pluck’s evidence included:
‘7. During the play of the “Showgirl” gaming machine on 15 April I observed the indicator bar or screen meter (as it is referred to in annexure A and at rule 6.6 above) [6.6 read “the on screen meter will provide an indication of progress towards triggering the rescue spin”] on the screen slowly changing as the game was played. The screen meter operated like a fuel gauge, with a moving blue coloured portion of the bar which progressively increased in length towards the right end of the screen meter where a sign “FULL” appears. The remaining portion of the bar was coloured yellow and it progressively reduced in length as the length of the blue portion increased. During my play of this machine, a feature event, referred to as a “cabaret feature”, occurred on the gaming machine before the blue portion of the screen meter reached “FULL”. At the conclusion of the cabaret feature, normal game play resumed and the screen meter was reset such that the blue portion had substantially no length, so as to indicate “empty”, with the yellow portion constituting substantially the full length of the indicator bar. On annexure A the screen meter I observed appears after the last listed rule on page 1.
…
9. On 21 April, I observed that when the blue portion of the indicator bar reached “FULL” (i.e. when the yellow portion of the indicator bar effectively had no length), a feature comprising a series of special games, called the “Rescue Spin” feature was triggered, after which the screen meter was reset to zero or empty again.
10.In comparing the operation of this Showgirl gaming machine with claim 34 of Australian Patent No. 2004281073, I note the presence of the following features of those gaming machines:
(a) Gaming software
In my knowledge, gaming machines of this type are operated by software;
(b) including:
(i) a component for monitoring gameplay;
The software must have a component for instructing the processor to monitor gameplay (i.e. by tracking the number of games played since the last reset of the screen meter). Given the rules of the game promise that a feature is triggered when the screen meter hits “FULL”, which is when a set number of games have been played (rules set out at 6.2, 6.4 and 6.6 above) [6.2 provided “the Rescue Spin is triggered after a randomly selected number of games have been played” and 6.4 provided “the range of games to be played is from 330 to 430 games”], the software operating the machine must be monitoring the number of spins or games played in order to trigger the feature within the guaranteed amount of play and also to calculate and display the screen meter;
(ii)a component for monitoring the occurrence of a game event.
When I observed the operation of the Rescue Spin feature on 15 April, the screen meter feature reset when the cabaret feature occurred in normal game play (consistent with the rule set out in 6.5 above) [6.5 provided “the number of games to be played is reset if the cabaret feature or the rescue spin is triggered while playing with 50 lines”]. On 21 April, I also observed the screen meter resetting after a rescue spin feature was triggered when the blue portion of the indicator bar hit “FULL” (consistent with the rule set out in 6.5 above). A rescue spin feature or the cabaret feature described in the rules at paragraph 6 above is a game event, and the software operating the gaming machine must monitor for the occurrence of either of these features to ensure that the screen meter is reset upon the feature occurring consistent with the rule set out in 6.5 above.
(iii)an event guarantee component for guaranteeing that a game event will trigger within a set amount of gameplay;
In accordance with the Rescue Spin rules at paragraph 6 above, the software that runs the gaming machine must have a component that instructs the processor to trigger a rescue spin feature within a certain amount of gameplay (between 330 and 430 games – consistent with rule 6.2 and 6.4 above). The rule set out at 6.3 [6.3 provided “the number of games to be played is randomly selected when the first 50 lines game is played”] describes the amount of gameplay required to trigger the feature as randomly set when the first 50 lines game is played. My observation of the game on 21 April demonstrated the feature being triggered after a certain amount of gameplay, which was tracked by the screen meter.
(c) The event guarantee component including:
(i) a trigger component for triggering a game event when the set guarantee gameplay amount is reached without the monitored event having been triggered
I observed on 21 April that when the blue portion of the screen meter hit “FULL”, a game event (i.e the rescue spin feature) was triggered (consistent with the rules set out at 6.2, 6.4 and 6.6 above). I observed on 15 April that the screen meter would be reset if a cabaret feature occurred before it hit “FULL”, consistent with the rule described at 6.5. This cabaret feature event is the monitored event. If it has not occurred since the setting of “the number of games to be played” in accordance with the rule at 6.3, the rescue spin feature will be triggered when the set number of games have been played (rule at 6.2). This must be operated by some “trigger component” of the software which triggers the rescue spin feature at that point in the gameplay, if the cabaret feature has not yet occurred within the guarantee amount of gameplay (set out in accordance with the rule at 6.4).
(ii) An indicator component for indicating the amount of gameplay remaining to be played before a guaranteed game event will trigger
The yellow portion of the indicator bar on the screen meter provides an indication of the amount of gameplay remaining before a feature is guaranteed to trigger. That is, the feature is guaranteed to trigger when the yellow portion of the indicator bar substantially disappears at the right hand side of the screen meter, indicating that there is no amount of gameplay remaining to be played before a guaranteed game event or trigger. This feature is described in rule 6.6 above.’
Under Order 8, rule 3(2)(c), a prima facie case is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed (per French J, as his Honour then was, in the State of Western Australia v Vetter Trittler Pty Ltd (In liq) (Receiver and Manager Appointed) (1991) 30 FCR 102 at 110).
The matter stipulated in respect of which the court is to be satisfied does not call for the kind of scrutiny that would occur in a submission of ‘no case to answer’ following the closure of an applicant’s case at trial. A court may, when confronted with an application for leave, draw inferences more readily in favour of an applicant, bearing in mind, amongst other things, that the applicant will not have had the advantage of discovery, subpoenas and other procedural aids to the making out of a prima facie case at trial (see per Heerey J in Merpro Montassa Limited v Conoco Specialty Product Inc (1991) 28 FCR 387 at 390).
In relation to satisfying the court that an applicant has a prima facie case for the relief claimed by it, such a preliminary question should not call for a substantial inquiry. The kind of evidence adduced on a preliminary inquiry of this kind should be in proportion to the nature of such an interlocutory issue. The purpose of the inquiry is to determine by way of a mini rather than a mega trial whether the applicant has a prima facie case (per Beaumont J in WSGAL Pty Limited v Trade Practices Commission (1992) 39 FCR 472 at 476).
Whatever is required to satisfy the court that there is a prima facie case, that satisfaction should leave open the possibility that a respondent could move to strike out the Statement of Claim or invoke s 31A of the Federal Court of Australia Act 1976 (Cth), which makes provision for orders for, amongst other things, summary dismissal, or provisions of the Federal Court Rules, which provide for the summary disposition of proceedings. To do otherwise may be setting too high a threshold for service out of the jurisdiction.
The substantive relief sought in the Amended Application is set out in paragraph A under the heading ‘DETAILS OF CLAIM’ in 12 numbered paragraphs. In relation to the second respondent, the relief sought is as follows:
‘2. A declaration that the Second Respondent has:
(i) infringed the Patent;
(ii) authorised infringement of the Patent; and/or
(iii)infringed the Patent as a joint tortfeasor with the First Respondent.
…
4.An order that the Second Respondent, whether by itself, its servants, agents or otherwise, be restrained during the term of the Patent without the licence of the Applicant, from:
(a)infringing the Patent by supplying the gaming software described in paragraph 7 of the Amended Statement of Claim [Paragraph 7 provided ‘Prior to assembling the gaming machines, the First Respondent copies and loads software onto the CF Card which provides the gaming machines with a feature the First Respondent refers to as the “rescue spin feature”’] …;
(b)infringing the Patent by authorising the reproduction of the Gaming Software; and
(c)authorising the manufacture, sale, supply, hiring, or other disposal of, or the offer to sell, supply, hire or otherwise dispose of the Infringing Products. [Gaming machines manufactured by the First Respondent in the manner referred to in paragraphs 6 and 7 of the Amended Statement of Claim, with the following titles:
(a) Rock You Queen;
(b) Showgirl;
(c) San Guo Shi Dai;
(d) Giant Panda;
(e) The Last Emperor;
(f) Big Challenge Mammoth;
(g) Wild Hunters Tiger; and
(h) Saber Toothed Tiger]…
6.Delivery up to the Applicant, or alternatively destruction, of all Infringing Products in the possession, custody, power of [sic.] control of the Second Respondent
…
8.An order that the Second Respondent pay to the Applicant damages in an amount to be assessed together with interest thereon pursuant to section 51A of the Federal Court of Australia Act 1976.
…
10.An order that an enquiry be held to determine the nature and extent of the Applicant’s loss and damage by reason of the Second Respondent’s infringement of the Patent and to assess the quantum thereof.
…
12.In the alternative to the relief sought in paragraphs 8 and 10 above, and at the Applicant’s option, an order that an account be taken of the profits made by the Second Respondent by its infringement of the Patent, and an order that the Second Respondent pay the Applicant such profits together with interest thereon pursuant to section 51A of the Federal Court of Australia Act 1976.
…’
I am satisfied that the Court has jurisdiction in the proceeding, as it involves the giving of relief under the Patents Act, that the proceeding is of a kind mentioned in Order 8, rule 2 of the Federal Court Rules and that the applicant has a prima facie case, within the meaning of Order 8, rule 3(2)(c) of the Federal Court Rules, for relief claimed by the applicant in the proceeding.
It is unnecessary to consider whether the applicant has an entitlement to all of the relief, given the terms of the rule. In my opinion, the Court should grant leave to the applicant to serve the Amended Application and the Amended Statement of Claim on the second respondent in the United States of America.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate:
Dated: 3 September 2010
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