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Planet Bingo and Video King Reach a $2.99M Settlement
By Jeff Osienya Aug 23, 2021 IndustryAfter more than a decade of legal battles, Nebraska’s Supreme Court has settled the intellectual property rights case between Planet Bing and Video King. Here’s a look into how the lengthy case unfolded.A little over a week ago, the Supreme Court of Nebraska ruled on an appeals case between Planet Bingo, LLC and Video King (VKGS LLC), bringing an end to an 11-year court battle over intellectual property rights. In the verdict reached on August 13th, 2021, the highest court in the Cornhusker State confirmed that Video Kings has to part with $2.99 million as settlement to Planet Bingo. This sum is a reparation to Planet Bingo for the latter’s breaching of contracts and violation of a software licensing agreement the two had inked.
How the Planet Bingo vs. Video Kings Legal Face-Off Started
For context, Planet Bingo is a gaming software developer based in California whereas, Video King is a manufacturer and distributor of electronic bingo equipment headquartered in Omaha, Nebraska. Since 2000, Video King has been doing business with another company, Melange, based in Lansing, Michigan.
Melange developed EPIC Bingo Hall Management System, a software program that Video King entered into a contract to use on its electronic equipment. The two have been staying in touch via electronic and face-to-face communication as they continued their business relationship.
Come 2006, Planet Bingo acquired Melange, and thus, Melange effectively became a subsidiary of Planet Bingo. Somewhere along the way (not specified in the lawsuit records), Video King started developing OMNI Bingo Hall Management System after Planet Bingo bought Melange. OMNI, as it’s popularly known, is a proprietary software suit for the electronic bingo equipment Video King was producing. And this was the foundation of the conflict.
Given that Planet Bingo owned Melange, there were questions about the possibility that Video King had improperly taken advantage of confidential information from Melange’s software to come up with the OMNI product. As a result, planet Bingo took to the courts and sued Video King in May 2011 by filing a federal case in the US District Court for the Western District of Michigan. Video King was accused of breaching contracts, unjust enrichment, and unfair competition. However, the case was dismissed on the grounds of lack of diversity jurisdiction on December 21st, 2011. This meant that the Michigan court had no jurisdiction over the dealings between the two companies.
Lawsuit Dragged Through Two More Federal Courts
Interestingly, before the case was dismissed in the Michigan federal court, Video King had filed another suit on December 13th, 2011, in the Douglas County District Court, Nebraska. Video Kings’ lawsuit was an “action for declaratory judgment” against Planet Bingo, i.e., a case that sought to determine the specifics of the legal agreement between them.
On December 20th, 2011, Planet Bingo also filed a similar ‘action’ suit in Michigan. Three weeks later, on January 13th, 2012, Planet Bingo went to the Douglas County District Court with a motion to dismiss. Planet Bingo argued that the Nebraska court had no jurisdiction over the matter and won, and Video King’s ‘action’ case was subsequently dismissed.
Following the dismissal, Video King appealed the decision in the Supreme Court of Nebraska, arguing that the District Court of Douglas County made an erroneous judgment in dismissing the case. In a March 29th, 2013, verdict, the Supreme Court of the Cornhusker State overturned the district court’s ruling based on communications held between the two companies.
Planet Bingo and Video King Sue Each Other for Breach of Contract
With jurisdictional questions out of the way, Planet Bingo went back to the District Court of Douglas County, accusing Video King of infringing its intellectual property. Planet Bingo accused Video King of reverse engineering its EPIC Bingo Hall Management System to come up with its OMNI Bingo Hall Management System.
The case was heard before a jury that sided with Planet Bingo, resulting in $2.99 million in damages for the defendant. Video King tried to appeal the verdict in the Nebraska Supreme Court, but the highest court of the state maintained that Video King was in the wrong. After the ruling, Dave Forman, the Vice President of Operations at Planet Bingo, said:
Quote“Planet Bingo has always been at the forefront of new technologies and developments within the bingo gaming industry. Protecting our intellectual property is critical to the growth and continued success of our business. We are pleased that the Douglas County jury recognized the importance of our innovations and intellectual property and held video king liable for violating its agreements and undermining our intellectual property interests.”
Meanwhile, Video King had also countersued Planet Bingo for breach of contract in the Douglas County District Court. The jury sided with Video King on this one to award a $558,405 settlement. Planet Bingo had also appealed this decision, but on the same day (August 13th), the Nebraska Supreme Court sided with Video King on this one. Thus, the $558,405 damages will be netted against Planet Bingo’s $2.99 million.
With both cases settled, it's important to note that Video King is still allowed to continue using its proprietary OMNI product that has continuously been improved for the past one and a half decades. Rusty Morin, Video King’s Chief Financial Officer, voiced his opinion after the appeals court ruling saying:
Quote“Moreover, as a pioneer and leader of the electronic gaming industry, Video King will continue to develop and market OMNI as well as other innovative products. While we are not ultimately satisfied with the monetary result of this litigation, we are extremely happy to have this nuisance litigation behind us.”
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