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Video Gaming Technologies, Inc. v. Castle Hill Studios LLC

United States District Court, N.D. Oklahoma

January 3, 2018

VIDEO GAMING TECHNOLOGIES, INC., Plaintiff,
v.
CASTLE HILL STUDIOS LLC d/b/a CASTLE HILL GAMING; CASTLE HILL HOLDING LLC d/b/a CASTLE HILL GAMING; and IRONWORKS DEVELOPMENT, LLC d/b/a CASTLE HILL GAMING, Defendants.

          OPINION AND ORDER

          GREGORY K. FRIZZELL, JUDGE.

         This matter comes before the court on the Motion to Dismiss Complaint [Doc. #29] of Defendants Castle Hill Studios LLC (d/b/a Castle Hill Gaming), Castle Hill Holding LLC (d/b/a Castle Hill Gaming), and Ironworks Development, LLC (d/b/a Castle Hill Gaming).[1] For the reasons set forth below, the motion is denied.

         I. Background

         This matters relates to the development, manufacture, and distribution of class II bingo-based player terminals.[2] The allegations of VGT's Complaint are summarized as follows:

         VGT is a developer, manufacturer and distributor of class II bingo-based player terminals in North America, and owns more than two hundred (200) federal trademark registrations and applications in connection with its class II bingo-based games (collectively, “VGT Marks”). VGT's class II game terminals are three (3) reel mechanical games. VGT also possesses common law rights to the trade dress in connection with its three-reel mechanical games, including the following package features: game cabinet, game play sound, award sound, bingo play and pays, red screen free spins, and themes (collectively, “VGT Trade Dress”). In addition to the VGT Marks and VGT Trade Dress, VGT owns trade secrets relating to the development and operation of the three-reel mechanical games, including secrets related to the math underlying the games, the specifics of the manner in which the bingo game is played, and the source code used to operate the games (collectively, “VGT Trade Secrets”).

         Castle Hill is operated by former VGT employees, including VGT's former vice president of engineering, director of software, and treasurer/director of operations/director of hardware development, who are currently members of Castle Hill's executive team. Additionally, twelve other VGT employees have left VGT to work for Castle Hill.

         Although Castle Hill originally manufactured class III games, sometime between March 2015 and June 2016, Castle Hill began developing and offering class II games that closely resembled VGT's class II games. Since March 2015, Castle Hill has launched at least twenty-four (24) class II bingo-based games that use features including three mechanical reels and the same cabinet as used by VGT's three-reel mechanical games, and incorporate marks and themes confusingly similar to the VGT Marks and themes. Further, Castle Hill has utilized the VGT Trade Secrets in the development of Castle Hill's games.

         Based on these allegations, the Complaint asserts six counts: (1) federal trademark infringement in violation of the Lanham Act (specifically, 15 U.S.C. § 1114); (2) unfair competition and trade dress infringement for product packaging in violation of the Lanham Act (specifically, 15 U.S.C. § 1125(a)); (3) unfair competition, trade dress infringement, and trademark infringement in violation of the Oklahoma Deceptive Practices Act (78 O.S. §§ 51-56); (4) unfair competition, trade dress infringement, and trademark infringement under common law; (5) misappropriation of trade secrets in violation of the Oklahoma Uniform Trade Secrets Act (78 O.S. §§ 85-94); and (6) misappropriation of confidential business information in violation of common law. See [Doc. #2]. Castle Hill moves to dismiss all counts. See [Docs. ## 29-30');">30');">30');">30].

         II. Documents Considered

         In support of its motion to dismiss, Castle Hill asks the court to consider over 2, 600 pages of documents, most of which are records of the United States Patent and Trademark Office (“USPTO”). Castle Hill requests that the court take judicial notice of the USPTO records pursuant to Fed.R.Evid. 201. See [Doc. #30');">30');">30');">30, pp. 14-15]. Additionally, VGT's Complaint attaches six (6) exhibits, which are referenced in VGT's Complaint. Thus, prior to considering whether the claims are adequately pled, the court will first determine the threshold issue of what documents it will consider in ruling on Castle Hill's motion.

         In the Tenth Circuit, when considering a Rule 12(b)(6) motion to dismiss, the court may consider “not only the complaint, but also the attached exhibits . . . .” Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Registration Sys., Inc., 680 F.3d 1194, 1201 (10th Cir. 2011). This is because, pursuant to Fed.R.Civ.p. 10, “[a] copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” Fed.R.Civ.p. 10(c). The court may also consider documents incorporated into the complaint by reference. Commonwealth Prop. Advocates, LLC, 680 F.3d at 1201. Here, plaintiff's 6 exhibits are both attached to and referenced in the Complaint. Thus, the court will consider the 6 exhibits attached to VGT's Complaint.

         Castle Hill attaches twenty (20) exhibits to its motion to dismiss, as well as a declaration of Dale Jensen. Exhibits 1, 2, 16, and 20 consist of USPTO filings of VGT and its parent company, Aristocrat Technologies, Inc. Only exhibit 16 relates to a trademark cited as relevant to the dispute in VGT's Complaint-“Countin' Cash.” The marks that are the subject of exhibits 1, 2, and 20 are not referenced in VGT's Complaint.

         Exhibit 19 is USPTO filings of Castle Hill, and relates to marks that allegedly infringe the VGT Marks identified in the Complaint-specifically, “New Money, ” “Double Hotness, ” “Genie's Gems, ” “Mr. Martini, ” “Mr. Martini Vegas Baby, ” “Nugget Mountain, ” “Arctic Cash, ” “Arctic Ice, ” “Dublin Your Luck, ” “Coin Slinger, ” “Aces and Hogs, ” “Amazing Ca$h, ” “10, 000 Diamonds, ” “20, 000 Diamonds, ” “Captain Bacon, ” and “Amazing Cherry.”

         Exhibits 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 14, 15, 17, and 18 are primarily composed of USPTO filings of third-parties, but also include spreadsheets created by Dale Jensen, Castle Hill's attorney, purportedly intended to “aid to explain in a summary fashion information about the trademarks lists in the pages after each exhibit's spreadsheet.” [Doc. #30');">30');">30');">30-1]. These exhibits are not referenced in the Complaint.

         Federal Rule of Civil Procedure 12(d) applies when a party requests the court to consider matters outside of the pleadings. Rule 12(d) provides:

If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.

         No conversion is required, however, “if [the court] takes ‘judicial notice of its own files and records, as well as facts which are a matter of public record.'” Rose v. Utah State Bar, 471 F. App'x 818, 820 (10th Cir. 2012) (quoting Tal v. Hogan, 453 F.3d 1244, 1265 n.24 (10th Cir. 2006)). Pursuant to Fed.R.Evid. 201, a court “may judicially notice a fact that is not subject to reasonable dispute.” Fed.R.Evid. 201(b). “When presented with a Rule 12(b)(6) motion, the district court has broad discretion in determining whether to accept materials beyond the pleadings.” Brokers Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017).

         With regard to the USPTO documents, the court first notes that situations may exist when judicial notice of USPTO documents would be proper. See Anderson v. Kimberly-Clark Corp., 570 F. App'x 927, 932 n.3 (Fed. Cir. 2014) (as relates to patent documents). However, the court must consider the purpose for which judicial notice is sought. For example, although the court may take judicial notice of the authenticity and existence of public documents, judicial notice of the substantive validity of those public documents is improper. See Tal, 453 F.3d at 1265 n.24 (noting that, although a court may take judicial notice of matters of public record, “‘[t]he documents may only be considered to show their contents, not to prove the truth of matters asserted therein'”) (quoting Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002)). See also Port-A-Pour, Inc. v. Peak Innovations, Inc., No. 13-cv-01511-WYD-BNB, 2015 WL 292913, at *3 (D. Colo. Jan. 20, 2015) (“I also agree . . . that a court may take notice only of the authenticity and existence of public documents, not the validity of their contents.”); VirtualAgility, Inc. v. Salesforce.com, Inc., 30');">30');">30');">307');">759 F.3d 130');">30');">30');">307, 1312-13 (Fed. Cir. 2014).

         Here, Castle Hill requests that the court take judicial notice of exhibits 3, 4, 5, 6, 7, 8, 9, 10, 11, 14, 15, 17, and 18 to demonstrate that VGT's trademarks and themes are ubiquitous in the industry such that there is no likelihood of confusion. See [Doc. #30');">30');">30');">30, pp. 15-20]. In essence, Castle Hill is seeking an evidentiary ruling on the substantive merits of the claims. However, the effect of the information contained in the third-party USPTO filings on VGTs claims in this litigation is subject to “reasonable dispute” and therefore is not the proper subject of judicial notice.[3] See Port-A-Pour, Inc., 2015 WL 292913, at *3; VirtualAgility, Inc., 759 F.3d at 1312-13. Nor make the court such an evidentiary ruling without converting Castle Hill's motion to dismiss into a motion for summary judgment. See Navajo Nation v. Urban Outfitters, Inc., 935 F.Supp.2d 1147, 1157 (D.N.M. 2013) (refusing to consider USPTO records, reasoning “[o]ther portions of those same [USPTO] records may support Plaintiffs' interpretation of the file histories, and thus the evidentiary value of the materials submitted by Defendants is subject to ‘reasonable dispute, ' and thus not best suited for judicial notice. This evidentiary consideration is exactly the type of analysis suitable for summary judgment, not a motion to dismiss.”); Midwest Innovative Prods., LLC v. Kinamor, Inc., No. 16-CV-11005, 2017 WL 2362571, at *2 (N.D. Ill. May 31, 2017) (refusing to take judicial notice of USPTO documents for use in comparing plaintiff's product to allegedly infringing product, as such inquiry was typically resolved at motion for summary judgment stage); Facebook, Inc. v. Teachbook.com, LLC, 819 F.Supp.2d 764, 771-73 (N.D. Ill. 2011); ContourMed Inc. v. Am. Breast Care L.P., No. H-15-2769, 2016 WL 1059531 (S.D. Tex. Mar. 17, 2016).

         This court will not convert Castle Hill's motion to dismiss to a motion for summary judgment. Accordingly, the court will not consider exhibits 3, 4, 5, 6, 7, 8, 9, 10, 11, 14, 15, 17, and 18.[4]

         For the same reasons, the court will not consider exhibits 1, 2, and 20 to Castle Hill's motion. The exhibits are neither referenced in VGT's Complaint nor the proper subject of judicial notice as the effect of the records on VGT's claims may be reasonably disputed by VGT.

         In contrast, exhibit 16 relates to a trademark that is referred to in the Complaint. However, the trademark history is not referred to in the Complaint. Further, the exhibit is not central to the plaintiff's claim and therefore is not incorporated by reference into the Complaint. See GFF Corp. v. Associated Wholesale Grocers, Inc., 130');">30');">30');">30 F.3d 1381, 1384 (10th Cir. 1997) (“Notwithstanding these general principles, if a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiff's claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss.”) (emphasis added). Exhibit 16 is an examiner's amendment, not the trademark issued to VGF or even the entirety of the application itself. Further, VGT asserts common law claims, which are independent of the federal trademark statutes. Although the exhibit may have some evidentiary value later in the proceedings, the exhibit is not of the type of document generally considered at the motion to dismiss stage (like the governing contract in a breach of contract claim). Because the trademark history is not referred to in VGF's Complaint and the examiner's amendment is not central to VGT's claims, exhibit 16 is not incorporated by reference into VGT's Complaint.

         Castle Hill, however, requests that the court take judicial notice of the USPTO document in exhibit 16 for the purposes of establishing that VGT has disclaimed the word “cash.” See [Doc. #30');">30');">30');">30, p. 10]. The court may not notice public records for the truth of the matter asserted. See Tal, 453 F.3d at 1265 n.24. Thus, exhibit 16 is not the proper subject of judicial notice for the reasons requested by Castle Hill, and the court will not consider it.

         The court also declines to consider exhibit 19, USPTO filings of Castle Hill. Although the filings relate to allegedly infringing marks, the trademark history is not referred to in the Complaint, nor is the trademark history of the marks central to VGT's claims. Further, the court declines to take judicial notice of the documents for the truth of the matter asserted as requested by Castle Hill. See [Doc. #30');">30');">30');">30, p. 11].

         Based on the foregoing, the court will not consider any matter outside the pleadings[5], and will consider Castle Hill's motion as a motion ...


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