High 5 Games v. Gimme Games - video game trade secrets.pdf

Case 2:13-cv-07161-JLL-JAD Document 67 Filed 11/06/14 Page 1 of 18 PageID: 1913 NOT FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY PTT, LLC, a Delaware Limited Liability Company d/b/a High 5 Games, Civil Action No.: 13-7161 (JLL) OPINION Plaintiff / Counterclaim Defendant, V. GIMME GAMES, et al., Defendants. LINARES, District Judge. This matter comes before the Court by way of Defendants Gimme Games, an entity; Daniel Marks, an individual; Joseph Masci, an individual;
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  NOT FORPUBLICATION UNITEDSTATES DISTRICTCOURTDISTRICT OFNEW JERSEY PTT  LLC, a Delaware LimitedLiabilityCivilAction No.: 13-7161  JLL  Company d/b/aHigh   Games, OPINION laintiff / Counterclaim Defendant,   GIMMEGAMES, etal Defendants. LINARES, District Judge. This matter comes before the Courtbyway of DefendantsGimmeGames, an entity; Daniel Marks, an individual; Joseph Masci, an individual;BrianKavanagh, an individual;MarksStudios, LLC,an entity;and AristocratTechnologies, an entity;  collectively, “Defendant” ’smotion to dismiss Plaintiff PTT LLC  a Delaware LimitedLiabilityCompanydib/aHigh   Games  “Plaintiff’ ’s First Amended Complaint “FAC”, ECF No. 32  pursuant to FederalRule of CivilProcedure   2 b 6 .  ECF No. 51 . TheCourt has consideredthe parties’ submissions in support of and in opposition to theinstantmotion and decidesthis matter without oral argument pursuant to FederalRule of Civil Procedure 78  Forthereasons set forth below,theCourtdenies in part and grants in partDefendants’motion. I. BACKGROUNDS   hefacts set forth therein are  epted as true so y for purposes   this motion Case 2:13-cv-07161-JLL-JAD Document 67 Filed 11/06/14 Page 1 of 18 PageID: 1913  In or around summer 2009, Plaintiff created a newconcept of the unique functional experience, also called a game play mechanic for the player of a slot machine game. FAC   14 . Thefunctional experience involved the appearance of slot machine reels having theidentical symbol shown in everysymbol position on top of one another in perpetuity Id.  The concept of putting symbols ontop of one another in a continuous series is known in the gaming industry as “stacks” of symbols.  Id. at   15 . Plaintiff’s game play mechanic provides a uniquemethod of taking simple stacksand throughsubstituting fixedsymbols on thereel with thedesired stacksymbol.  Id. at   16 . Through Plaintiff’stechnology  thereels themselves do not have to bemodified to include fixedstacks to createthe appearance of an infinite symbol stackthrough mathematical manipulation of theappearance of thereels.  Id. . Plaintiff called this game play mechanic “Super Stacks.”  Id. . Plaintiffs allegethatone unique aspect of their SuperStacksfeature is that thealgorithmsdesigned by Plaintiffs also comply withthestrict regulatoryrestrictions utilized by various state and international agencies regulating gaming laws.  Id. at   17 . Defendants Marks,Masci, and  v n gh knewaboutthese confidentialformulationsduring their time as Plaintiff’s employees.  Id. . Plaintiffs considered its method of making games whichutilize theSuper Stacks feature to be a trade secret and have complied with all lawful requirements to ensure its tradesecrets are adequately protected.  Id. at   18 . Plaintiffs also invented a concept of oversized symbols occupyingmultiple positions across multiple rows and/orcolumns  called “Super Symbols”.  Id. at   19 . On May 27, 2014 SuperSymbolswas givenPatent Protectionby the United States Patent and Trademark Office when it issuedPatent No.8.734,223  the “  Patent” .  Id. at   20 . Similar to Super Stacks, Plaintiff also considered it method of making games utilizing its methodology to create the SuperSymbols feature to be a trade secret, and took the appropriate protectionmeasures accordingly.   Case 2:13-cv-07161-JLL-JAD Document 67 Filed 11/06/14 Page 2 of 18 PageID: 1914   Id. at   21 .In 2011, Plaintiffsbuilt its first game with theSuperSymbolsTradeSecret, entitled “Ocean’s Glory”.  Id. at 22 . Defendant Masciwas Plaintiffs Art Director at thetime and was in charge or creating and/or overseeing all art forthegame, including creation of the SuperSymbols art work. Id. . Subsequently, Plaintiff created numerous games incorporating the SuperSymbolsfeature; many   whichwere sold to one   Plaintiff’s licensees, Bally Technologies  “Bally”  under the premise that such feature was unique to Plaintiff’s games created for Bally.  Id. at   23 . Because Plaintiff and Ballybelieved theSuperSymbols feature was likely to be popular within the industry, both parties agreed to keepthegames containing the feature confidential.  Id. at   24 . Confidentiality ceased when such games becamepublicly known at an industry trade show,G2E,from September  4   6 h  2013, inLas VegasNevada.  Id. . Defendant Marks  “Marks” worked for Plaintiff from September 1998 until his resignation on February 4, 2010, where he served as Plaintiff’s legalcounsel and worked closelyunder Plaintiff’s CEO Anthony Singer developing casino game and slot machine type software.  id.at   25-26 . Following his resignation Marksentered into a Separation, Severance,and TransitionAgreement  the “Marks Agreement” , in which Markswas obligated to, inter alia, return any andall   Plaintiff’sconfidentialinformation, was required to forever maintain the confidentiality   Plaintiff’sconfidentialinformation, and Plaintiff would beentitled to injunctive relief for a breach of any   thesecovenants.  Id. at   26 . Defendant Masci  “Masci” worked for Plaintiff from August 1999 untilhis termination on June 7, 2012, where he was subject toa Separation Agreement.  Id. at   28 . In exchangefor Masci’ s ongoingobligationsrelated to confidentiality,non-competition, and non-solicitation, Masci was granted a severance payment equal to one-year’s salary andhisstock appreciation   Case 2:13-cv-07161-JLL-JAD Document 67 Filed 11/06/14 Page 3 of 18 PageID: 1915  rights, originally granted in November 2011, were accelerated and fully vested uponseparation fromPlaintiff.  Id. . Defendant Kavanagh  “Kavanagh” worked for Plaintiff from January 2009 until 2011, where heserved asa Motion Graphics Designer andeventually, Animation Manager.  Id. at   30 . Similar to the previouslymention individualDefendants, as a condition of his employment, Kavanaghexecuted numerous contracts with Plaintiff regarding confidentiality,noncompetition,assignment of IP, and similar obligations.  Id. . All individualDefendants either contributed to the creation or were privy to many, if not all of Plaintiff’sconfidential and proprietary methods of making games and features in development, including Super Stacksand Super Symbols.  Id at   32 . As early as October 2012,Marks entered into an agreementwith one of thelargergame distributors in the gaming industry, Aristocrat, asa third party game contentprovider name “Gimme”and/or “MarksStudios”.  Id. at   33 .In December 2012, Markshired Kavanagh as Gimme’sDirector of Motiongraphics.  Id. at   34 . Before his non compete period expired in June 2013,Masci begandiscussions with Marks regarding Masci’s potentialinvolvementwithGiinme andwas eventuallyhired as ChiefCreative Officer in July 2013.  Id. at   35 . Gimme’ s games were featured at Aristocrat’s booth at G2E, includinggames with features namedMega Symbols andMaxStacks.  Id. at   38 . Plaintiff alleges that Gimme’s Mega Symbols and Max Stacks features, whenembodied in a slot machine game,are a result of misappropriatedinformation derived from Plaintiffs SuperSymbols and Super Stacksfeatures.  Id. at   39, 40 . Marks,Masci, and Kavanaghallegedly worked collectively to create each of the Mega Symbols and Max Stacksgames, with theactual knowledge of the origination of such features and trade secrets associatedwith Plaintiff and thosecontained in the ‘223 Patent.  Id. at   Case 2:13-cv-07161-JLL-JAD Document 67 Filed 11/06/14 Page 4 of 18 PageID: 1916
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