In an opinion filed by a panel of judges in the Seventh Circuit Court of Appeals on Tuesday, PartyGaming, the parent company of Party Poker, may be liable for up to $287.4 million in damages. The suit, which was filed by WMS Gaming, Incorporated, alleges that PartyGaming infringed on WMS trademarks “Jackpot Party” and “Super Jackpot Party.”
The lawsuit seeks monetary compensation for “an equitable accounting of the profits PartyGaming reaped from its use of WMS’ marks in the United States,” according to the opinion filed by Judge Manning Wood on Tuesday. It continues, “Despite receiving proper notice, the defendants have opted to ignore WMS’ lawsuit entirely. The result was a default judgment for both monetary and injunctive relief entered in WMS’ favor. Believing that it was entitled to additional relief, however, WMS appealed, arguing that the district court applied the wrong standard to its claim for an accounting of profits. We reverse.”
The suit claims that WMS Gaming has used the Jackpot Party trademark since 1998 and the Super Jackpot Party trademark since 2004. The trademarks were registered by WMS Gaming in 1997 and 2002, respectively. Between 2004 and 2006, Party Poker “used approximate and even exact reproductions of WMS’ marks for that business, throughout the world and in the United States. Its use of WMS’ marks is well-documented.”
Once PartyGaming discovered that WMS Gaming held the Jackpot Party trademark, the company attempted to register the trademark “PartyJackpot,” but was rejected because the U.S. Patent Office “found that the mark was ‘confusingly similar’ to WMS’ prior registered mark,” according to the official opinion filed in the case. Nevertheless, PartyGaming continued to use the trademark and, according to Judge Wood, even “expanded its use.” PartyGaming recorded $977 million in revenue in 2005, which the suit claims was largely revenue generated from the United States.
WMS Gaming was awarded $2.7 million in damages as well as an injunction by a U.S. District Court in 2007. WMS had originally asked for $287 million, which was based on the revenue PartyGaming brought in from its U.S. customers during the time the trademark infringement occurred. Judge Wood concluded, “We agree with WMS that the district court, despite mentioning in passing the proper standard for an accounting of profits, made a fundamental error of law by failing to distinguish between WMS’ right to the defendants’ profits and its right to its damages.”
The opinion adds, “In this case, PartyGaming has not come forward with any evidence suggesting that deductions are warranted from the revenues that its own annual reports reflect… WMS is entitled to the revenues supported by its evidence.” New legal proceedings between WMS Gaming and PartyGaming will be underway after WMS Gaming’s successful appeal.
Party Poker is home to a $300,000 Guaranteed tournament that takes place every Sunday on the online poker site. It begins at 12:45pm ET each weekend and boasts a buy-in of $215. Party Poker abandoned the U.S. market shortly after the passage of the Unlawful Internet Gambling Enforcement Act in 2006 in deference to its shareholders. PartyGaming is a publicly traded company on the London Stock Exchange and can be found under the symbol “PRTY.”
