Pilot Gaming Systems Inc v. Pollard Banknote Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Pilot Gaming Systems, Inc. (Delaware) and Pilot Games, Inc. (Delaware)
  • Defendant: Pollard Banknote Limited (Canada) and Three Diamond Corporation (Minnesota)
  • Plaintiff's Counsel: Alan Anderson Law Firm LLC
• Case Identification: 0:26-cv-02747, D. Minn., 05/22/2026
• Venue Allegations: Venue is alleged to be proper for Pollard Banknote, a Canadian corporation, in any judicial district. Venue for Three Diamond Corporation is based on its residence and alleged acts of infringement within the District of Minnesota.
• Core Dispute: Plaintiffs allege that Defendants' "Diamond Game" electronic pull-tab gaming platform and associated games infringe a patent related to methods for revealing prizes using watermarks and animated sequences.
• Technical Context: The technology concerns electronic pull-tab games, a digital version of traditional paper-based lottery games, which are a significant component of charitable and regulated gaming markets.
• Key Procedural History: The complaint notes that Plaintiffs have marketed and sold electronic pull-tab games practicing the patent in Minnesota since December 2024 and have complied with patent marking requirements.

Case Timeline

Date	Event
2024-12-15	Plaintiff Pilot begins marketing patented products in Minnesota
2024-12-18	Priority Date for U.S. Patent No. 12,367,737
2025-07-22	U.S. Patent No. 12,367,737 Issues
2026-01-01	Approximate launch of Accused Products in Minnesota
2026-04-27	Plaintiff begins pre-suit field investigation
2026-05-22	Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 12,367,737 - "Watermarking for Electronic Pull-Tab Gaming"

• Patent Identification: U.S. Patent No. 12,367,737, "Watermarking for Electronic Pull-Tab Gaming," issued July 22, 2025 (the "'737 Patent").

The Invention Explained

• Problem Addressed: The patent addresses a desire to make electronic pull-tab games more entertaining than traditional versions, which simply reveal a payline and a final prize ʻ737 Patent, col. 1:43-52 The invention aims to build player anticipation and overcome regulatory challenges in certain jurisdictions ʻ737 Patent, col. 1:49-52
• The Patented Solution: The invention is a multi-stage prize reveal process for a server-based gaming system ʻ737 Patent, col. 7:18-35 For a winning ticket, the gaming device first displays winning symbols that include a unique "watermark" but does not yet show the prize value ʻ737 Patent, col. 5:28-44 The device then displays an "intermediate graphical representation," typically an "animated roll-up," which reveals the final prize value ʻ737 Patent, col. 5:45-53 Finally, the device displays a screen showing the winning symbols, the watermark, and the final prize simultaneously ʻ737 Patent, col. 6:11-16
• Technical Importance: The claimed method separates the display of winning symbols from the immediate display of the prize value, inserting an animated sequence to create suspense and enhance player engagement ʻ737 Patent, col. 6:35-40

Key Claims at a Glance

• The complaint asserts independent system Claim 1 and independent method Claim 8 Compl. ¶31 Compl. ¶35
• Claim 1 (System) Essential Elements:
  • A wagering system that generates electronic pull-tab decks containing both zero-prize and non-zero-prize tickets, where at least one winning ticket includes a "watermark identifier."
  • A plurality of gaming devices coupled to the wagering system.
  • A gaming device configured to request a ticket from the system.
  • The wagering system configured to transmit a winning ticket containing the watermark identifier and a final prize.
  • The gaming device configured to display payline symbols, with at least one symbol having a watermark depicted on it.
  • The device then displays an intermediate GUI, including an "animated roll-up that reveals the final awarded prize."
  • The device then displays a final GUI showing the payline symbols, the watermark, and the final prize together.
  • The device is also configured to display a paytable that links watermarks and symbols to prize values.
• The complaint notes that Claim 8 is a method claim with steps that parallel the system elements of Claim 1 Compl. ¶33
• The complaint reserves the right to assert additional claims, including dependent claims Compl. ¶31

III. The Accused Instrumentality

Product Identification

• The "Accused Products" are a series of electronic pull-tab games, including "Treasure Valley Saloon," operating on the "Diamond Game electronic pull-tab gaming platform" Compl. ¶23 Compl. ¶24

Functionality and Market Context

• The accused platform is a client-server system, comprising a centrally-managed wagering server communicatively coupled to tablet-based gaming devices at various licensed venues in Minnesota Compl. ¶24 The complaint alleges this architecture was confirmed through a pre-suit investigation involving gameplay analysis at a licensed venue Compl. ¶¶27-29 One screenshot from the complaint shows the "DiamondGame" mark on a paytable, identifying it as the platform manufacturer Compl. p. 9, Screenshot A
• The complaint alleges the Accused Products have been approved for use in Minnesota by the Minnesota Gambling Control Board Compl. ¶26

IV. Analysis of Infringement Allegations

'737 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
a wagering system that generates an electronic pull-tab deck that include[s]... a plurality of non-zero prize electronic pull-tab tickets, wherein at least one... includes a watermark identifier	The Diamond Game wagering server allegedly generates a finite-pool deck for each game containing zero-prize and non-zero-prize tickets. A "watermark identifier" is alleged to be a data element in the ticket that determines which dot-pattern watermark is rendered on the symbols.	¶34	col. 19:55 - 20:5
a plurality of gaming devices communicatively coupled to the wagering systems... each gaming device includes a processor and a memory	The system allegedly uses a plurality of tablet-based gaming devices (e.g., device PT13877) communicatively coupled to the central wagering server. These devices contain a processor and memory to execute game software and render graphics.	¶34	col. 7:18-35
the wagering system is configured to transmit, to the first gaming device, a first non-zero prize electronic pull-tab ticket having the watermark identifier and a final awarded prize	The complaint alleges that the central wagering server is the sole authority for outcome determination and transmits the ticket data, including the watermark identifier and final prize value, to the tablet device after a player initiates a game.	¶34	col. 9:36-43
the first gaming device is configured to display... a plurality of payline symbols... including at least one payline symbol having a watermark depicted thereon	After receiving the ticket data, the gaming device allegedly displays winning payline symbols (three crossed-pistols) bearing a specific dot-pattern watermark. One visual provided shows these crossed-pistol symbols on the bottom row with a visible dot pattern Compl. p. 16, Screenshot F	¶34	col. 5:28-36
the display device... is configured to display an intermediate graphical user interface (GUI) representation... including an animated roll-up that reveals the final awarded prize	After displaying the watermarked symbols, the device allegedly transitions to a "Shooting Gallery Extended Reveal" sequence, which is an animated scene where a prize counter increases to the final awarded value. A screenshot shows the beginning of this animated sequence with a counter at $0.00 Compl. p. 20, Screenshot G	¶34	col. 5:45-53
the display device... is further configured to display a final GUI representation after the animated roll-up... including the plurality of payline symbols, the watermark, and the final awarded prize	After the animated roll-up, the device allegedly displays a final screen that simultaneously shows the crossed-pistol symbols with their dot-pattern watermark, a banner stating the final prize, and an updated WIN meter. A screenshot documents this alleged final state Compl. p. 23, Screenshot L	¶34	col. 6:11-16
the display device... is further configured to display a paytable that presents a plurality of final awarded prizes corresponding to one or more watermarks and payline symbols	The game's "Info" screen allegedly displays a paytable that explicitly maps different dot-pattern watermarks on the crossed-pistol symbols to different prize values. A provided screenshot shows eight different prize tiers, each with a distinct dot-pattern watermark Compl. p. 11, Screenshot B	¶34	col. 6:21-27

Identified Points of Contention

• Scope Questions: A primary question may be whether the "watermark identifier" required by the claim, which the patent describes as part of the ticket data, reads on the accused functionality. The defense may argue that the dot-patterns on the accused symbols are merely graphical assets and not the output of a "watermark identifier" as contemplated by the patent.
• Technical Questions: The analysis may focus on the sequence of events. The claim requires displaying the watermarked symbols first, then an animated roll-up that reveals the prize, and finally a GUI showing all three elements together. The defense could argue that its "Shooting Gallery Extended Reveal" is not an "animated roll-up" in the patented sense or that it does not "reveal" the prize in the manner claimed, potentially arguing it is a bonus game rather than a prize reveal mechanism.

V. Key Claim Terms for Construction

The Term: "watermark identifier"

• Context and Importance: This term is central to the infringement theory. The complaint alleges it is a data element within the transmitted ticket data that dictates which visual pattern appears Compl. p. 11 The definition will determine whether a mere data-to-graphic link is sufficient or if the patent requires a more specific type of data structure or functionality.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification states that the non-zero prize ticket "includes a watermark identifier" and that this identifier is used to generate a watermark on the display ʻ737 Patent, col. 2:50-56 This could support a broad interpretation where any data element causing a specific graphic to appear qualifies.
  • Evidence for a Narrower Interpretation: The detailed description of the ticket data structure in the patent specification provides a specific JSON-based example where the watermark is encoded as a suffix to a symbol name (e.g., f1_2) ʻ737 Patent, col. 21:40-45 A defendant may argue this embodiment limits the term to a specific data encoding method.

The Term: "animated roll-up that reveals the final awarded prize"

• Context and Importance: The infringement allegation hinges on classifying the accused "Shooting Gallery" feature as the claimed "animated roll-up" Compl. p. 20 The construction of this phrase will determine if the accused animation, which simulates a bonus game, performs the same function as the patented prize reveal.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes the roll-up as a "transient graphical representation" that "builds anticipation" and in which "simulated intermediate prizes are also awarded" ʻ737 Patent, col. 5:39-43 ʻ737 Patent, col. 5:55-60 This language may be broad enough to encompass animations that resemble bonus games.
  • Evidence for a Narrower Interpretation: The patent distinguishes between a "standard animated roll-up" and an "extended animated roll-up" that simulates awarding additional prizes ʻ737 Patent, col. 6:17-20 ʻ737 Patent, col. 7:3-14 The defense could argue that the accused feature is a separate bonus game, not a prize "roll-up," and therefore does not "reveal" the prize in the manner required by the claim.

VI. Other Allegations

• Indirect Infringement: The complaint does not contain counts for indirect infringement.
• Willful Infringement: The complaint alleges that both Pollard and Three Diamond had "actual or constructive notice" of the '737 Patent prior to the lawsuit and acted "knowingly and intentionally and in reckless disregard" of Plaintiffs' rights Compl. ¶¶46-47 The basis for this pre-suit knowledge is not specified.

VII. Analyst's Conclusion: Key Questions for the Case

• A core issue will be one of definitional scope: Can the term "watermark identifier," described in the patent as an element of the ticket data structure, be construed to cover the mechanism that renders different dot-patterns on symbols in the accused game, or is it limited to the specific embodiments described?
• A key evidentiary question will be one of functional identity: Does the accused "Shooting Gallery Extended Reveal" feature function as the claimed "animated roll-up that reveals the final awarded prize," or does it represent a technically distinct bonus game that falls outside the claim's scope? The case may turn on whether this accused animation is merely a prize reveal mechanism or a separate interactive game.
• A third question relates to system architecture and control: The complaint alleges a system where a central server transmits a complete, predetermined outcome to a client device. The case will require evidence confirming that the client device merely displays this outcome through the claimed sequence, rather than performing any independent logic that might break the chain of infringement.