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GC2 Inc. v. International Game Technology PLC

United States District Court, N.D. Illinois, Eastern Division

July 13, 2017

GC2 INCORPORATED, Plaintiff,
v.
INTERNATIONAL GAME TECHNOLOGY PLC, INTERNATIONAL GAME TECHNOLOGY, IGT, DOUBLEDOWN INTERACTIVE LLC, MASQUE PUBLISHING, INC., WD ENCORE SOFTWARE, LLC, DOE DEFENDANTS 1-100, DOE DEFENDANTS 101-2, 000, 000, Defendants.

          MEMORANDUM OPINION AND ORDER

          MATTHEW F. KENNELLY United States District Judge.

         GC2 Incorporated (GC2) has filed suit against 1) International Game Technology PLC, International Game Technology, and IGT; 2) DoubleDown Interactive LLC (DDI), 3) Masque Publishing Inc., 4) WD Encore Software, LLC, and 5) users of those entities' products, alleging that they have infringed GC2's copyrights. International Game Technology PLC (IGT PLC) has moved under Federal Rule of Procedure 12(b)(2) to dismiss all claims against it for lack of personal jurisdiction.

         Background

         The Court takes the facts from the complaint and its exhibits as well as the affidavits and exhibits filed in connection with the motion to dismiss.

         1. Current lineup of IGT defendants

         International Game Technology PLC (IGT PLC) is a public limited company organized under the laws of England and Wales. It is the sole shareholder of International Game Technology, a Nevada corporation. The Court will refer to this entity as IGT (US). IGT (US) is the sole shareholder of IGT, also a Nevada corporation, which the Court will refer to as IGT (NV). IGT (US) is also the sole member of DoubleDown Interactive LLC (DDI), a limited liability company formed in the state of Washington.

         2. IGT (US) and the Georgia / GTECH entities IGT (US).

         IGT (US) is a gaming company that specializes in "the design, development, manufacture, and marketing of casino-style gaming equipment, systems technology, and game content across multiple platforms." Pl.'s Ex. 2 at 17.

         GTECH S.p.A. GTECH S.p.A. (GTECH), which was formed under the laws of Italy, was a business-to-business "provider of lottery and gaming technology solutions and services worldwide." Id.

         GTECH Corporation. GTECH Corporation was a wholly owned United States subsidiary of GTECH, incorporated in Delaware. Id. The Court will refer to this entity as GTECH (US).

         Georgia Worldwide Limited / Holdco. On July 11, 2014, Georgia Worldwide Limited was registered as a limited liability corporation under the laws of England and Wales. Pl.'s Ex. 4 at 7; Pl.'s Ex. 2 at 17. On September 16, 2014, Georgia Worldwide Limited was re-registered as a public limited company under the legal name Georgia Worldwide PLC (Holdco). Pl.'s Ex. 2 at 17.

         Georgia Worldwide Corporation. On July 11, 2014, Georgia Worldwide Corporation was incorporated in Nevada. Id. at 18. It was a wholly owned subsidiary of Holdco. Id. Georgia Worldwide Corporation was formed "solely for the purpose of affecting" a merger between IGT (US) and GTECH. Id.

         3. IGT (US)-GTECH merger

         On July 15, 2014, IGT (US) merged with GTECH. Id. at 17. Specifically, GTECH, GTECH (US), Georgia Worldwide Limited, Georgia Worldwide Corporation, and IGT (US) signed a merger agreement. Pl.'s Ex. 3 at 6.

         On September 22, 2014, an integration steering committee was formed, consisting of senior leaders from GTECH and IGT (US), including Renato Ascoli- former general manager at GTECH and now chief executive officer (CEO) of North America Gaming Interactive (NAGI), an operating segment of IGT PLC. Pl.'s Ex. 5-a at 5; Pl.'s Ex. 8 at 30. The steering committee was "responsible for overseeing and guiding the integration planning" of the merger, which included setting key targets, making final decisions, and eliminating obstacles on the path toward integration. Pl.'s Ex. 5-a at 5. An integration management office was also created, which was "responsible for integration planning and the day-to-day project operations." Id. The office was managed by Fabio Celadon and supported by Victor Duarte, senior vice president and chief product officer of IGT (US). Id.; Pl.'s Ex. 2-a at 37.

         On January 2, 2015, IGT (US) submitted a proxy statement to the U.S. Securities and Exchange Commission (SEC). Pl.'s Ex. 2 at 33. In the statement, under the header, "GTECH's Intentions Regarding GTECH and IGT, " IGT (US) wrote:

Prior to the Closing, GTECH will commence, and following the Closing, Holdco [Georgia Worldwide PLC] will continue, a comprehensive evaluation of the combined company's operations and will identify the best way to integrate the organizations in order to further improve Holdco's ability to serve its customers, as well as achieve revenue and cost synergies. Employees from both GTECH and IGT will be involved in the evaluation, formation and execution of the integration plans.

Id.

         4. IGT PLC and its subsidiaries

         On February 26, 2015, Holdco-which as noted earlier was registered in England and Wales-changed its legal name to IGT PLC. Pl.'s Ex. 4 at 7. On April 7, 2015, GTECH merged into IGT PLC, and Georgia Worldwide Corporation merged into IGT (US). Id. Currently, IGT PLC is the sole shareholder of IGT (US), and IGT (US) is the sole shareholder of IGT (NV) and the sole member of DDI, a limited liability company. IGT Global Solutions Corporation (previously GTECH (US)) is a wholly owned subsidiary of IGT (NV). Pl.'s Ex. 7 ¶ 4(a); Def.'s Reply, Ex. (Def.'s Ex) A (Boccia Decl.) ¶ 7.

         IGT PLC is a public limited company established under the laws of England and Wales. Pl.'s Ex. 8 at 3. It has its corporate headquarters in London, England and its operating headquarters in Rome, Italy; Providence, Rhode Island; and Las Vegas, Nevada.

         IGT PLC describes itself as the "world's leading provider of end-to-end gaming solutions with cutting-edge technology, innovation content, and expertise that drive customer and player demand." Pl.'s Ex. 4 at 3. It has four operating segments: NAGI, North America Lottery, Italy, and International. Id. at 5. NAGI is primarily operated by IGT PLC's wholly owned subsidiary, IGT (US). Boccia Decl. ¶ 5. NAGI's business includes land-based casino games, internet-based interactive wagering games, play-for-fun casino applications disseminated through DDI, commercial gaming research and development, and casino management systems. Pl.'s Ex. 4 at 6. NAGI provides these products in the United States and Canada. Id. at 7. In 2015, NAGI revenue made up 23% of IGT PLC's total revenue at over one billion dollars. Id. at 5.

         5. GC2 and IGT (NV)

         GC2, the plaintiff in this case, develops videos and images for games that are primarily displayed on physical wagering machines, such as slot machines. Am. Compl. ¶¶ 22-23. GC2 licensed its artwork to IGT (NV) from 2003 to 2007. Id. ¶ 81. GC2 granted to IGT (NV) "the sole and exclusive worldwide right and license to make, manufacture, use, market, and sell gaming equipment [] incorporating the GC2 Projects for use in legalized gaming jurisdictions." Am. Compl., Ex. 18 (Agreement) § 3.2. The license applied to stand-alone games on "video gaming devices operated on licensed gaming premises." Id. The license did not apply to certain wagering devices or platforms, such as "devices used for mobile gaming" and "internet gaming." Id., Ex. 20 (Amend. 7) § 1. The license also did not apply to "nonwagering devices, machines and systems such as: (a) pinball, (b) arcade machines, and (c) gaming consoles, including but not limited to general purpose computers, for non-wagered gaming." Id. In exchange for GC2's exclusive license, IGT (NV) agreed to pay GC2 royalty fees. See Agreement § 3.6(a).

         Sometime after IGT (NV) ended its relationship with GC2, IGT (NV) ...


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