VGT And Castle Hill Gaming’s 2-Year Case Settled

Elouise Spencer - 12 September 2019

After the US District Court in Tulsa, OK, dismissed 19 out of the 20 registered trademark claims against startup company Castle Hill Gaming, Castle Hill settled the remaining claim with funds from its insurance policy. The land-based and online gaming brand is thrilled at the outcome, lauding a David vs. Goliath result.

The Settlement

The case was filed in 2017 by VGT, a subsidiary of Aristocrat, who is one of the largest pokies manufacturers in the word, and concerned alleged infringements of IP rights. Under the terms of the settlement, Castle Hill can no longer use certain trademarks. They will have to change, and no longer use, the casino game titles New Money, Arctic Ice, Arctic Cash and Welcome to Nugget Mountain, along with all associated artwork, characters and variations of these games. In addition, they must remove and no longer use certain machine features and certain paytables. All changes to machines and games need to be made by April 1, 2020.

Castle Hill has also agreed to pay VGT $3m.

In spite of this, they are happy, stating that the penalty was paid with insurance money, and the changes required were minor, even insignificant, to some of its class II games. With the majority of the claims thrown out, it is a clear win.

Interestingly, VGT feels that they too have secured the upper hand. They feel the case played out the way it did due to their determination to protect their intellectual property and market-leading class II portfolio. Hector Fernandez, president of the Australian company Aristocrat Technologies that bought the brand in 2014 said they would continue to be proactive and aggressive in defence of their assets.

Market Share

A report on market share in Oklahoma, where both Aristocrat and Castle Hill compete, shows that Aristocrat has 47% of the market share for all leased games. Castle Hill does not appear in the report, as they do not yet have enough market share to make the list.

VGT’s lawsuit claimed that CHG infringed on 20 of their registered trademarks. 19 of the 20 were dismissed on summary judgement. In terms of trade secrets, they first claimed that Castle Hill had copied their software source code. This was disproved, and they abandoned this claim and made claims based on algorithms used and ‘negative know-how.’ None of the trade secret claims were part of the settlement.

CEO for Castle Hill Arthur Watson believes that VGT and its parent company Aristocrat wanted to put the privately owned startup out of business as they saw them as a threat. Their casino games were just as good as VGT’s in some of the casinos at which they compete.  Furthermore, VGT spent millions of dollars on attorneys’ fees over the 2 years of litigation. The money from the settlement was a tiny amount in comparison