Aristocrat Technologies, Inc. et al v. High Impact Design and Entertainment, S.A.

Filing 56

ORDER Denying 42 Motion to Dismiss. Denying 45 Motion to Dismiss. Signed by Judge Brian E. Sandoval on 6/22/09. (Copies have been distributed pursuant to the NEF - AXM)

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UNI ED STATES DI TR I T CO UR T T SC
DI TRI T OF NEVADA S C

# ARI TO C R AT TECHNOLOG I S,l C . a S E N,
Nevada Cor or ton,and ARI TO C M T p ai ' S 9 TECHNO LO G I S AUSTIA LI P'' E RAI Y LI I ED LTD. an Austal n cor or ton, MT , ri a p ai
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HI H I PA CT DESI N & GM G

1 ENTERTAI M ENT,a Nevada cgr gq ton' 3 N p ai ,

W I LI M RANDAL ADAM S ,an I dll ual LA n vd ' , 1 RAFAEL ACO STA ?an i di i ual HI H 4 n v d =' G I PA CT DESI N AND ENTERTAI M E NT, M G N 1 S. . a Venezuel n Cor or ton , 5 A, a p ai
1 6
17 18 19 20 21 22 23 24

Def ndant . e s

Pr s nty bef r t e Cour i Def ndant Hi h l pact Desi n & Ent rai m ent of ee l oe h ts e sgm g et n

Nev d (HI E Ne ada'andW iim Ran alAdams (Adam s'Mot nt Dim isCas no aa' D S v' ) la l dl '' ; ' i oss )o et Co m enc d wi i Thr e Year ( 2)fld Febr al 1 ,200 . Def nd ntRaf e Ac sa m e tn e h sR i e u 7 9 ea al ot
(Acosa' fld anientcal i nt Dim isCasenotCommencedwihi Thr eYear ( 5) ' t 'i ' )e d i Moto o s s tn e sM

o Feb uar 24, 20 9. Plit f Ar t cat Tec n lge , lc. (ATI) and Ars oc a n ry 0 a n is i o r f s h o o is n ' ' .' it r t Tec n lgisAu tal (ATA' ( ol c iel ' l it s'fldt eioppost nst t e emot ns h o o e s r i i ' c l tv y ' an i ' i h r ai ) e p f le io o h s i i o ( 8,49)on Mar h 9, R c 2009. HI E Neva a, D d Adams an Ac sa fed t ei Repl ( 5 )on , d ot i h r l y#2
M ar h 23,2009. c

25 26 27 28

1 BACKG RO UN D . Thi m aterarses ou of sal of gam i g m achi es and t e al gedl unau horzed s t i t e n n hl e y ti
r gitaton oft e Ars ocr ttadem ar i Venezuel . Pl itfs ar m anuf ct r r ,I ensor , e sr i h it a r kn a a n if e a ue s i c s

1 and wordw i e diti ut r ofel ctoni gam i g m achi es,Pl i tfsow ntadem ar rght and l d s rb o s er c n n a n if ' r ki s
2 r gitatons i t e Arst cr twor m ar and t e Ars ocr tdesi n m ar i t e Unied St t s e sr i nh io a d k h it a g knh t ae

3 an o her u iditon t r ugh u t ewor .( m . d t j rs ci s h o o t h l A Comp. #2 ) 1 9) On orab u De em ber d l( 4 ,1 . ot c 4 11,2000,HI E Nevadaagr edt pur hasevarouselcr ni gam igmachiesfom ATI L=. D eoc i e to c n nr .d 5 $20.Ov r h c ur eo t en xtwoy ar ,h parisen e e it se er l eem ensun er e t e o s fh e t e s te t e t r d n o v a agr td
6 whi h HI E Nevada agr ed t l ase and pur has ATl gam i g m achi es f rpl c m enti c D e oe ce ' s n n o ae n

7 v r u Ic t ns i Vene u l .L= W 21 23.The ag eemens al ge l icld d pr vso s a i s o ai n o o z e a d. r t l dy n u e o iin e
8 st tng t at -l et i ed alrgbt , il and i t r sti istadem ar s,and HI E Nevada had no a i h A r r an l i s tte ne e n t r k D
9 such rght . 1 . is. 1
.

1 0

On oraboutJune 5, 2003, t outPl i tfs'know l dge orc nsent Def ndant appl d wih a n if e o ,e s i e

l1 f rr gitaton ofArst cr tsdesi n mar and tade name i Venezuel .L=. o e sr i i o a' g k r n a d $26, Plitfs a n if '
1 bel ve t atHI E Nevada, 2 i eh D Acos a,and/ rAdam sown, t o contol r and/ rdiec HI E Venezuel . o rt D a
13
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$= $25. l December2003,Pl itis I ar ed ofHI E Venezuel ' appl aton t r git r . n ani e n D as i i o e se c

1 Arst cr ts desi n m ar and tade name i Venezuel ,and alegedl dem anded t atHI E 4 i o a' g k r n a l y h D 1 Venezuel wihdr w t e appl aton. $-W 2 - 8. I r sp ns , 5 atah ii c u 7 2 n e o e Acost explied t atHI E a an h D
.

16 Venezuel woul assi n t e tadem ar and I go t Pl i tfs, a d ghr k o o a n if and t atiwoul be a m i t k t ht d sa e o

17 wihdr w t e fl g because iwoui cos t e paristm e and money. It $28. Al gedl i t a h ii n t d th ti e J. l e yn
18 r l nc ont ese r pr sent tons, ai tfs di nott ke any ac i n att attm e t oppose HI E ei e a h ee a i Pl n if d a to hio D
1 Venezuel ' appl aton t r git rt e Arst cr tnam e and tadem ar i Venezuel . The 9 as i i o e se h c io a r kn a

2 tad m ar an tad name r gita inwasgr nedt HI E Ven zu l i J l 200 .L . 0 r e k dr e e srt o at o D e e a n uy 4 d $29 =
21 3O.

22

AferHI E Venezuel wasgr nt d t e tadem ar and tade name r gitaton, aitfs tD a ae h r k r e s r i Pl n if '

23 r ques ed t att e Def ndant assi n t e Arst cr ttadem ar and tade nam e t t em ,but e thh e s gh io a r k r oh

1$ an i s s l e h t i y 6 HI f e z ea 24 Def ndan s r f sedt do so.1 . 31.Plit f aloal g t a ,nMa 200 , DE Vene u l e t eu o
. -

25 asked t e Ser i o Naci nall t gr do de Adm i itaci n Trbut ra ofVenezuel t or er h vc o ne a ns r o i ai ao d

26 Venezuel n cus om saut ortest r stitt e i pod ofPl itfs' oduc s i t Venezuel .L= a t h ii o e rc h m a n if pr t n o a d.

2 %32.Addion l , ait smait i t a De en an sha ec n i u l r f s dt payt em t e 7 t a l Pl n i iy s na n h t f d t v o tn a l e u e o y hh
2 mon yATIi du un er h paris v r u a r em ent .L u 4. 8 e s e d te t ' ai s ge e o s d $3 2

1

Plit f fldsuii t i Coud ( 1 a ais HI E Venez el onAu u t 2 07al gig a n is i fe tn hs # ) g nt D ua g s 3, 0 ln e

2 br ac ofc n r c , eac o t e i pl d c v n n o goo f i an f id aig,r u , j s e h o ta t br h f h m i o e a t f d at d ar e l fa d un u t e h n 3 en ihment ndr qu s igdeca a or r l f ( om pl( 1 W 2 . 7) Du t Hl E ven zu l' rc a e et n lr t y e i . C e .# ) 4 4 . e o D e eas
4 f iur t r spond,t e Coud Cl r ent r d def ul agai sti on M ay 27,2008. O n June 23, al e o e h ek ee at nt 5 2008,HI E Venezuel fl d a m oton t setasi e t e def ul whih t i Coud gr nt d on D ai e io dh a t c hs ae

6 Febr ar 1 , 09. ( r er( 1 1 ) l addion, Augu t1 , 8,Pl itfsfld a Fis u y 0 20 O d R ) 2. n t on i s 8 200 a n i i e rt
7 Am ended Com pl itr nam i g Hl E venezuel , addig HI E Nevada, an e nD a and nD Adam sandAcost . a

8 ( m .Co pl ( 24 1 . Def n an sfl d a mo i nt dim ist e Amen ed Compl itf rlc A m .# ) ) ed t i e t ossh o d an o a k

9 o su j c mat r u idit nwhc t i Cour d ned on Fe r ar 1 , 9.( r er( 41)1 ) f be t te j rs c i o ih hs te i b u y 0 200 O d # 2.
1 Shodl afert e Cour isued t i O r er Adam s,HI E Nevada,and Acos a fl d addii nal 0 yth ts hs d , D ti e to

1 Mot n t Dim is ( 42,45) HI E Vene u l fed an An wert t e Fi tAmen ed 1 iso s s # o .D z ea i l s oh r s d
1 Complit( 4)on Febr ar 24,2009. 2 an M uy
1 3 I. LEGAL STANDARD I

1 4

I consi erng a m oton t di m i s f rf iur t s at a cl i underFed.R.Ci .P. n di i o s s o al e o t e am v

1 1 ( )6) t e c ur m u tac ep a tue aImat ral lga i n i t e co plitaswelasaI 5 2 b ( ,h o t s c t s r I e i al to s n h m a n e ll
1 r asonabl if r nc st atm ay be dr w n fom such al gatons.LSO.Lt . Stoh,205 F. d 6e e ne e e h a r li e d v. r 3

1 11 6,11 O ( t Ci. 74 5 9 h r 2000 . Th alga in o t e co pi italo mu tb c n tu d i t e ) e l to s f h m a n s e s e o sre n h 1 I h mos f v r bet t e n nm o igpary.Sh ar v. t dSt t s, F.d428, 5 ( t 8 i t t a o a l o h o vn g t w z Uni e a e 234 3 43 9 h 1 Ci.2 00) Th pur os o a mo i n t dim is un erRul 1 ( )6) i t t s t e lgal 9 r0 . e pef to o s s d e 2 b( s o e t h e 20 s fii n y o t e c m plit Na aro v.Blck 250 F. d 72 , 2 ( t Ci. uf e c f h o an. v r c o, 3 9 73 9 h r 2001 . Ho ev r ) w e,
21 t er i a s r ng pr sum pton agai stdim isi g an ac i n f rf i r t st t a cl i . See h e s to e i n s sn to o a l e o a e u am

2 Giianv. amc De . n. 1 8 F. d 2 6, 49 ( t Ci.1 9 )(ia in omied) A plit f 2 lc l J o v Cor , 0 3 4 2 9 h r 9 7 ct t o t . ani t f
23 m ustm ake sufii ntf ct alal gatons t es abl h a pl usi l enttem entt r l f Bel fc e a u li e oti s a be il o ei . e l

2 At n i Cor . . m bv 1 7 S. .19 5,1 65 ( 0 7) 4 l tc D v Two l, 2 a Ct 5 9 2 0 .
25 11 D I C U S S I N 1. S O

2 6

De en ans HI E Nev da, fdt D a Adamsan Ac s a (t e Movn Def n an s' ar ue t a d o t 'h i ig e d t ) g h t

27 Pl i tfs' ai f rtadem ar i fi gem entunder he Lanham Actwasnottm el com m enced a n if cl m o r k n rn t iy

28 an sh ul t er f r b dim is d.( ef' Mo .R 2)1 .Sp cic l ,he Movn Def n an s d o d h eoe e s s e D . t( s ) e f al t iy ig e d t
3

1 ar ue t att e docti e of I ches shoul appl t bar Pl itfs'cl i s because t er was ghh rn a d yo a n if a m he
2 al os a f uryeargap bet eent e dat t atPl i tfs I ar ed oft e Def ndant ' m tow h eh a n if e n h e s appl aton ii c 3 f rtadem ar r gitaton i Venezuel and t e dat t atPl i tfs fl d sui. The M ovi g or k e sr i n a h eh ani i e tl n

4 Def ndant ar ue t att e anal gous st t t ofl i tons underNev da I w i t r e year , e sg h h o a ue i t i ma a a s he s
5 and because Pl i t f wai d m or t an f uryear t fl sui,t ei suishoul be bared as a n is t f e eh o so i e thr t d r

6 untm el. L- at2- . I r sponse,Plitfs ar ue t att e appl abl sat t ofl iatons i y du 3 ne a n if g h h i e t ue i t i c m

7 perodi f uryear andt er f r t eisuiwastmel fld.( l' Opp' ( 8)4- ) Pl itfs i so s h eo e h r t i yi e P .s n> 5 . an if
8 f dherar ue t ateven i t e t r e- earst t t ofI iatons perod i appl d, hei sui i not u gh fh he y aue i t i m is i t r ts e 9 bared by t e docti e of I ches gien t att e Movi g Def ndant have notshown eiher r h rn a vhh n e s t

1 un e s nabe delyorpr j die.1- at7- . 0 ra o l a e u c J. 8
11 ' aches i anequiabl tm e I i ton on a pady' rghtt brng sui. Jarow For ul s. ' L s t ei it i ma si o i t' r ' ma

1 I c. Nutii n Now.Ic.304 F.d 829,835( t Ci. 2 n v. rto n, 3 9 h r2002) Ii welest bl hed t atlches . ts l a i s ha
1 i a val def nse t Lanham A c cl i s. - ( i t n omied) A padyasserig lc esmus 3s i de o t am , ct i s t . . ao t tn a h t
.U

1 s o t a is fer d prj dieasar s lof h plit f un eas n bl d lyi fl gs i L4 h w h tt u e e u c e ut t e a n i' r o a e e a n in ut du fs i .
1 Specii al ,t e Ni t Cicui has appl d I ches t bartadem ar i fi gem entcl i swher 5 fc l h y nh r t ia e o r k n rn am e

1 t etad m ar h ler' no igl al wed t e ifigig mar t b u ed wi o tobeci nf r 6 h r e k od ' w n y l k o h n rn n ko e s tu jt o h o
1 a I ngt y perod oftm e. Br okfel Com m uniatons.l c.v.W est Coas Ent dai m ent 7 eh i i ' o id ' ci n ten

1 Cor . 1 4 F.d 1 3 ,1 61( t Ci.1 99 . 8 n, 7 3 0 6 0 9 h r 9 )
1 9 W hi I ches and t e st t t ofI iatons ar ditnctdef nses,i t e pl i tf fl d a la e h aue i t i m e si e f h a n if i e

20 Lanham Actcl i w ihi t e analgous I iatons perod underst t Iw ,couds stongl am t n h o iti m i ae a ry
21 pr sum e t atI ches i i applcabl . Reno Ai Raci c Ass' .I c. M cc or , e ha sn ie r n n n v. d 452 F. d 11 6, 3 2

22 1 3 - 9 ( t Ci 200 ) It e plit fld s iousie t e a algou per d,c u s ha e 1 8 3 9 h r 6 . f h an i i ut t d h n o s i o d v . fe o
23 ofen pr sum edt atlchesi appl abl .L=. 1139.Because t e Lanham Actcont isno te ha s i e d at c h an 24 explci st t t of I iaton, c urs S orow' t e anal gous sat tme perod. L- I i t aue iti m o t ' r 'h b o te i i d. n
25 det r i ig t e pr sum pton f rI ches,t e l iatons perod r nsfom t e tm e t e pl i tf e m nn h e i oa h iti m i u r h i h a n if '
26 27

2 wa ga tdtet d mak n t d n mergsrt nfrh Ar tca d sg makile e u l.A . mp. 8 s rne h r e ra dr e a e itai ote io rte in r n n z ea (m co l a a o s
( 1 )$ 2 - 0) Plitf fe s ii t i Co r onAu u t3 20 7. # 8 $ 7 3 . anis i d utn hs u t fl gs , 0
4

l ccor igt Pl itfs' A d n o a n if Amended Compl it Pl itfsIar edofHI E Venezuel' appl atont r git r a n , a n if e n D as i i o e se c t e Arst cr tdesi nm ar and tade name i Venezuei i December2003.OnJul 30 2004,HI E Venezuel h io a g k r n an y D a

1 knew orshoul have known abouthi caus ofac i n. $d s e to .
.

2

As not d above,t e M ovi g Def ndant ar ue t att e Cour shoul l ok t NRS e h n e sg hh t do o

3 j11.90( ) odet r ie t e pr su p inf rIch si t i c s . ( e s.Mo . #4 )2) NRS 1 3 t e m n h e m to o a e n hs a e D f ' t ( 2 . 4 j11.9O( )pr vdesf rat r e y arsat t ofl i ton f ra ton ivoligfaud, d t e 1 3 o i o h e - e t ue i t i s o c i s n vn r an h ma
5 Movi g Def ndant r l on Reno Ai t suppor t ei posii n t att e t r e- ears at t of n e s ey ro th r to h h h e y t ue 6 I iatons shoul appl . I Reno Ai,as her ,t e Pl i tf al ged tadem ar i fi gem ent iti m d yn r eh a n if l e r k n rn

7 u d r1 U. . . 1 ( )a)aswel s un ai c m p t i n un er1 U. . . 2 ( ) Reno n e 5 S C j11 4 1 ( la f r o e io d 5 S C j11 5 a . t
8 Ai, r 452 F. d at1129.The Def ndantasseded t att e docti e ofI ches shoul appl t bar 3 e hh rn a d yo 9 t e Pl i tf' cl i ,and t e coud speciial not d t att e pari s i t atcase had agr ed h a n ifs a m h fc l y ehh t nh e e

1 t a t e t r e-ear I i ton p ro i NRS jl1.90( ) s o l ap l t de er ie t e 0 h t h he y i t i e id n ma 1 3 h ud py o t m n h
11 pr sum ptonf rIches,L- at1139. Not bl,asPl itfsi t i case poitout t e c ur i e i oa d. ay a n if n hs n , h o tn
1 Reno Ai di notspeciial hol t att e appl abl st t t oflm iatons f ra Lanham Ac 2 rd fc l d h h y i e a ue i t i c o t

1 cam i t r e y a s un erNRS jl1.904 ) L= Ra her t e Reno Ai c ur ac eped t e 3 li s h e e r d 1 3 . d. t , h ro t c t h
1 padi s' 4 e under t ndi g w ihoutdicussi n, undedook i analsi oft e I ches isue based sa n t s o and t s ys h a s 1 on t e f ctt att e padi s agr ed t att e t r e- earperod shoul appl . (5 hahh e e h h he y i d y #. .
.

1 6

By cont as ,Pl i tfs i t i case ar ue t att e Cour shoul I ok t t e f ur year r t a n if n h s g hh t do oh o -

1 s a ue ofI i ton i NRS â1 . 04 )f rac ins iv lig dec p ie tade pr cies i 7 ttt iti sn ma 1 19 2 o t o n ovn et r v a tc n

1 volt n o NRS 559 . 90 t 598.999. ( ls Oppn ( 48)4) Th y ar u t a bo h t e 8 i ai f o 80 3 o 0 P. ' '# . e g e ht t h
1 Lanham Act and Nevada' deceptve tade pr c ies st t t ar ' esi ned t pr vent 9 s ir a tc aue e ' g d oe 20 consum erconf si nanddecepton i t e m ar et l cew ih r spect ot esour e, uo i nh k pa te th c sponsor hi , sp 21 appr valalii ton, o , l i connec i n, associ ton ofgoods and ser i es' t er f r Nevada' a to or ai vc and h e o e s 22 f uryearst t t ofl i tons f rdeceptve tade pr ctces i t e m ostcl sel anal gous. oa ue iti ma o ir ai sh oy o

23 l at5. Thi Coud agr es. A r viw oft e Lanham Actpr vii ns r gar ig tadem ar . i s e ee h o so e d n r k
24 i fi gem entand Nevada' deceptve tade pr c ies s at t r veal t att e t o ar i deed n rn s ir a tc t u e e sh h w en
25 anal gous and appeart addr ss si i r wr ngs i cl di g t e f le or deceptve use of o o e ml a o n u n h as i 26 anot ers m ar orpr ductz Ther f r , t e Cour w i appl t e f uryearI iatons perod t h' k o . eo e h tl l yh o iti m io
27 28 a I

ncomp r on. a i NRS j1 1 0()a d e s smoegen r l ai sr garigfa d o mit k . s 1.9 3 d r s e r e a cl m e dn r u r sa e
5

1 det r ie w het erl ches i appl abl i t i case. em n ha s i e n hs c 2 Accor i g t t e Ni t Cicui,t e I iatons perod r ns fom t e tm e t e pl i tf dn o h nh r t h i t i m iu r hi h a n if

3 ' new orshoul have know n abou .. i cause ofacton. Jarow ,3O4 F. d at838. l hi ' k d t.h s i' 'r 3 's T

4 prnci l i gr unded i t e f ctt atlches penal esiexcusabl di t r behavir' L=.l i pe s o nh a h a in z e l oy a o. d n '
5 t i case, i i not cl ar fom t e Am ended Com pl i t w hen Pl itfs di c ver d t at hs ts e r h an a n if s o e h

6 Def ndant had been i pr peryusi gt e m ar or hen Pl i tfs knew ofshoul have known e s mo l nh kw a n if d
7 aboutt ei cause ofac i n. However even acceptng t e Movi g Def ndant ' hr to , ih n e s asseri n t at to h

8 Pl i tfs dicover d t e ofendi g use i Decem ber2003,t e sui was fl d on August3, a n if s eh fn n h t i e
9 2007, ihi t e f ur yearst t t ofI iatons perod . Based on t e f r goi g,t e C our w i wt n h o a ue i t i m i h oe n h tl l

1 pr sum e t at l ches i i appl abl . 0 e ha sn ie c 11 Even t ough t e Cour has pr sum ed t atPi i tf s sui was tm el fld,I ches m ay h h t e h a n ir t i yi a e

1 s i ap l i t e Mo ig Def n ans c n s o t ey s ser d pr j die as a r s l o t e 2 tl py f h l vn e d t a h w h u e eu c e ut f h
1 Pl itf s unr asonabl del y i fl g sui, See Jarow ,304 F. d at835. I t i case,t er 3 a n ir e e a n ii n t r 3 n hs he
1 i no evi ence t atPl itfs knew ofDef ndant ' l ged i fi gem entuntlDecem ber2003, 4s d h a n if e s al e n rn i 1 when Pl i tfs dicover d t atDef ndant had appl d i Venezuel t r git rArs ocr ts 5 a n if s eh e s in e a o e s e it a '

1 ta e n m e a d desgn mar . ( m . Compl ( 24) $27 . l r s on e t Plit f' 6 rd a n i kA .# ) n e p s o an is f
17 com m uni atonsr gar i g t i appl aton, endant al gedl r pr sent d t att eywoul ci e d n hs i i Def c sl e ye e ehh d

1 as int etad m ar t Pl it' on eiwa gr ned.L-$28.TheVen z el ngo er m en 8 sg h r e k o a n is c t s a t d. f f eu a v n t
1 di not gr nt t e r gitaton untlJul 30,2004,and Pl i tfs appeart have becom e 9 d a h e sr i iy a n if o

20 com pl t l awar oft e i fi gem enti M ay 2006, eey e h n rn n when t e Venezuel n gover m entbegan h a n

21 t r sr tt e i p r o Plit r p oducs it Venez el .L- 1 3 - 2. Pi it f t en fld o e ti h m o t f a n i s r t n o c f u a d. 1 0 3 $ an is h i f e
22 sui i August 2007. These f c s i di at t at any pur ored del y i flng sui was not tn at n c e h pt a ni i t

23 unr asonabl as Pl i tfs wer al gedl gien assur nces by Def ndant t att ey woul e e a n if el e yv a e sh h d
24 as i n t e t adem ar once i was r git r d. Addional ,t e M ovi g Def ndant have not sg h r k t e se e t i lh y n e s

25 s o nan p e u ie asa r s lo t e al geddely.Bas dont e f r goig, h Coudfnds hw y rjdc e ut f h l e a e h oe n t e i
26 t att e Movi g Def ndant have notshown t att e docti e ofI chesappl st barPl i tfs' hh n e s hh rn a io e a n if

27 com pl i tand t ei m otonst di m is ar t er f r deni d. an h r i o s s e h e oe e
28

6

I . CO NC LU SI N V O

I I HEREBY O RD ER ED t atHI E Nevada' and Adam s'M oton t Di m i s Case TS h D s i oss

n tCommen ed wi i Thr e Ye r ( 2)i DENI D. o c t n e as M s h E
I I FURTHER ORDERED t atAcost ' M oton t Di m i s Case notCom m enced TS h as ioss

wi i Thr e Year ( 45)i DENI D. tn e h s# s E
DA TED :Thi 22nd day ofJune,2009. s

U TED STATES DI T R I T JUDGE SC

14 15 16
17

1 8
19 20 21 22 23 24
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7