Judge throws out RaceTech's suit over patent infringement

A federal judge in Kentucky has thrown out a patent-infringement lawsuit that the manufacturer of Instant Racing machines filed against its only competitor.

The dismissal of the suit closes one chapter in a dispute entangling RaceTech, the manufacturer of the machines, and Kentucky Downs, a track in Franklin, Ky. RaceTech filed the patent-infringement suit last spring, shortly after Kentucky Downs replaced the company’s machines with those manufactured by Encore Gaming, a company that is co-owned by a partner in Kentucky Downs, Ray Reid.

Greg N. Stivers, a judge for the U.S. District Court for the Western District of Kentucky, ordered that the suit be dismissed in a ruling on Monday, stating that the four patents referenced by RaceTech in the suit were “ineligible for patent protection.” The suit had accused Encore of violating the patents when designing its own machines.

In both cases, the devices manufactured by RaceTech and Encore use the results of previously run horse races to generate random numbers determining payouts to bettors. Physically, the devices closely resemble modern slot machines.

“Racetech’s patents allowing customers to bet on recorded races through use of conventional computers do not contain a sufficiently transformative concept to render them patentable,” Stivers wrote.

Although the patent-infringement suit has been dismissed, Kentucky Downs and Encore are also the targets of another related lawsuit filed by AmTote, a totalizator company that provides bet-processing services for RaceTech’s machines. After Kentucky Downs dropped RaceTech, and, by extension, AmTote, the tote company filed a suit against Kentucky Downs and Encore alleging breach of contract and intellectual-property theft. The suit remains unresolved.