Mr J Duffy's evidence
249 I found Mr J Duffy's evidence persuasive in many respects. He is highly experienced in game design and development. Although he was not a sales person, it is apparent that he has considerable experience on the sales side through contract negotiations with larger operators and in accompanying sales staff on customer visits. And while I am not persuaded that all of his conclusions should be adopted, I should note that I found him to be an excellent witness. Much of his training and experience is in the field of mathematics and computer science which is reflected in the mathematical nature and style of his analysis. The fact that I have not accepted some of his conclusions does not diminish my confidence in the overall quality of his evidence.
250 Mr J Duffy sought to assess the importance of the 689 trigger to the player of an EGM on which a 689 Game had been installed. He did this on the basis that game performance, traditionally measured by average turnover per day, was the most important factor operators consider before determining whether to purchase an EGM. This is consistent with other evidence as to the importance of turnover in determining purchasing decisions, although I think Mr Spencer overstated matters in claiming that a 10% performance premium would be "completely determinative in terms of the purchasing decision". If that was correct it would mean that a manufacturer could charge whatever it wanted for an EGM (i.e. without reference to competitors' pricing) if its EGMs were generating turnover to that level. I consider that inherently unlikely. I also consider it to be inconsistent with evidence that shows there was, at relevant times, a significant market for EGMs that included a standard game only, which EGMs were likely to generate considerably less turnover than those that included a progressive feature.
251 Mr J Duffy's evidence shows that there are a number of factors outside the game itself which will influence purchasing decisions including the relationship between the manufacturer and the operator, the price, the availability of payment plans, the terms of performance warranties, and the availability of trade-in options. Of various considerations identified by him, price plays an important part in the purchase of a game while the other matters he mentioned play only a small part. In Mr J Duffy's opinion, the recent game performance is the most important factor driving sales. He considered that it accounts for 80% of an operator's purchase decision. By that I understood Mr J Duffy to mean that of the considerations weighed up by a purchaser in determining whether or not to purchase an EGM, recent game performance would be the primary driver of the sale.
252 Mr J Duffy explained that a game was a combination of a large number of attributes put together into a package to create a particular gaming experience. These attributes include the math, art, sound, software, algorithms or other components that are part of the game package. The number of resulting combinations of attributes that can be achieved is extremely large. Manufacturers may re-use math and other attributes of games that have been successful or they may try something that is new. But the decision made in relation to the selection of attributes is based on performance. And if certain games are performing well, then the manufacturer will tend to re-use their attributes when designing other games. According to Mr J Duffy, the goal of the manufacturer each time it designs and develops a game is to select and combine attributes with a view to making the playing of the game an enjoyable experience. It is the attractiveness of the game to players that drives performance.
253 In his report Mr J Duffy describes base games, features (games played separately from the base game but excluding progressive features) and progressive features. A progressive feature is a feature played after a positive trigger (including a positive 689 trigger) that either awards dollar jackpot values or free games. Virtually every game reviewed by Mr J Duffy for the purposes of his report included a base game, a feature and a progressive feature. His report included a detailed analysis of some Konami games that included a 689 Game, and a description of the display configuration, the denomination, the number of play lines, hit rates, reel structures, base game features, triggers, themes and other attributes. In Mr J Duffy's opinion, there are many things to be considered by a player when choosing to play a particular game and it is never the presence of any single attribute that determines which game he or she will play.
254 Within progressive features themselves, including those with the 689 trigger, there are a range of important differences. For example, while all of the 689 Games include the 689 trigger, their triggers incorporate differences in the way the feature is triggered and how this is represented (e.g. symbol or mystery driven) to the player, the number of jackpot levels, and whether the jackpots are contained in one machine (standalone) or a number of them (linked). In Cash Carriage, the feature game appears to be triggered by three scattered overlay symbols while in Catch Me, the feature game appears to be triggered randomly. In the case of Cash Carriage, when the feature game is triggered, an animated train travels along the track to reveal either a maxi, major or mini jackpot without the need for any further interaction with the player. In the case of Catch Me, a player who has triggered the feature game must "fish" in order to win one of four levels of jackpot. In the case of the various Rapid Fire games (both standalone and the linked progressive Rapid Fire Grand Prix), any three or more rapid fire symbols will trigger the feature to win either the maxi or mini jackpot and, when the feature is won, the rapid fire engine on the LCD "… revs up to display the winning jackpot". This is merely a visual presentation that does not require player interaction.
255 According to the brochure for Rapid Fire Grand Prix, there is a wide selection of Rapid Fire jackpot parameters available with the operator's chosen denomination and game. In the example depicted in the brochure, Rapid Fire Grand Prix is combined with Wild Tiki. There are 10 base games referred to in the brochure with which it may be combined. All but one of these has their own associated features, leading to an award of free games. For example, Arabian Gold has an associated feature called "the Arabian Gold Feature" and Dragons Return has an associated feature called "Dragon Feature" each capable of awarding up to 25 or 20 free games respectively.
256 Mr J Duffy's evidence shows that the return to player of a progressive feature (including those incorporating the 689 trigger) vary from one game to another. The various components of the RTP also vary including the reset values, upper limits, start-up % and increment %. These numbers will in turn determine the average jackpot win and the turnover to jackpot. For example, the average level 1 jackpot win on Caribbean Jackpot is in excess of $1,000, while the average jackpot win for Cash Carriage is less than $150. In general, the size of these average jackpot wins is directly related to the "turnover to jackpot" meaning that, in the long run, it will require much more turnover on Caribbean Jackpot for the average jackpot to be triggered than is the case for Cash Carriage. These are all attributes (which Mr J Duffy refers to as "the math") which manufacturers of games use to differentiate products. Mr J Duffy's analysis of the RTP data for the various 689 Games shows that there are significant differences between the math for the different progressive features.
257 Mr J Duffy conducted an analysis using turnover data collected over a period of 56 months in respect of 91 games which included Cash Carriage, Wizard's Wish, Lucky Garden, Double Dynasty and Free Spin Festival. He analysed the data to evaluate the performance of the various games and after doing this he was able to draw a number of conclusions. First, progressive products in general perform better than products that do not incorporate a progressive (regardless of the trigger mechanism). Secondly, games without a progressive, although not performing as well as those with one, were still able to generate reasonable performance (i.e. turnover) showing that other factors are involved in generating performance.
258 In its submissions Aristocrat contended that Mr J Duffy's analysis showed that the standalone version of the game Wizard's Wish (i.e. with no progressive feature) underperformed its infringing counterpart, Wizard's Wish Cash Carriage (with progressive feature), in average daily turnover by 26.58%. There are two points I would make in relation to that submission. First, it is important to recognise that the comparison drawn by Mr J Duffy was between the standalone game without any progressive feature and the corresponding game with the Cash Carriage progressive added. The 26.58% difference calculated by Mr J Duffy between a machine that has a progressive feature and a machine that does not have any progressive feature is consistent with other evidence indicating that the inclusion of a progressive feature is likely to increase turnover significantly. But the point made by Mr J Duffy was that, while the progressive version was very strong, the non-progressive version was strong but not very strong. From this he reasoned, correctly in my view, that there are many other factors affecting the performance of a game apart from the inclusion of a progressive feature.
259 Mr J Duffy's analysis also shows that most new games attract a reasonable level of play when they are first released but, if players decide they do not like a game, the numbers will start to decline relatively quickly. According to Mr J Duffy, most strong games (meaning those that generate relative high turnover) continue to perform well, indicating that the game has "… a math model that resonates, and this model is presented in a way that creates an enjoyable overall play experience for a broad player pool".
260 Mr J Duffy's analysis of turnover data showed that performance varied from game to game. Among a number of games achieving performance levels that were "strong" or "strong to very strong" were the progressive features Double Dynasty and Lucky Garden. The instructions provided to Mr J Duffy indicated that neither of those games included the 689 trigger. In his oral evidence he expressed the opinion that the performance of Double Dynasty was very strong and that, in the case of Lucky Garden, it performed at similar levels to Cash Carriage. At the very least, that evidence tends to confirm that the use of the 689 trigger was likely to be one of many factors contributing to the performance of the 689 Games and that a progressive feature that used a different trigger mechanism could still perform very strongly.
261 Mr J Duffy performed another analysis aimed at determining the contribution made by the 689 trigger to the performance of each of the 689 Games. For this purpose he performed a calculation on the basis that 80% of performance (i.e. turnover) is attributable to the attributes of a game (regardless of whether it includes the 689 trigger). He then sought to determine similar weightings for the base game, the features and the progressives. He took as a starting point the assumption that base games, features, and progressive features should all be equally weighted (i.e. 33.33% for each) but recognised from the outset that this was not true. His prior analysis showed, as mentioned previously, that games that did not include a progressive feature would perform, on average, worse than games that did have a progressive feature and that average turnover on a game increased by 18.77% where it included a progressive. He reasoned that this showed that, on average, players were 18.77% more attracted to games with progressive features. He then adjusted the weighting for the progressive feature by increasing it by 18.77%. In the result, he concluded that a weighting of 39.59% which he called the ("Progressive Segment Attraction") should be attributed to the progressive feature.
262 Mr J Duffy then made further adjustments to his calculations in recognition of the fact that the progressive feature includes various components. The first of these was the "Math" (including start-up dollar amounts, increment percentage, hit rates, average jackpot, average turnover to jackpot) but excluding the 689 trigger math which he referred to as the "Mechanic", and non-math components which he referred to as the "Presentation" (including themes, animations, and sounds). He considered that the Mechanic had to be fair and, if it was, then from a player's perspective, it achieves the required result. He considered that the Presentation, which he described as the packaging for the other components, had to be visually appealing and to present the Math for the game in an easily digestible form. He regarded the Presentation as key since it must resonate with the players and must facilitate rapid learning of the math model. Mr J Duffy assumed that each of the Math, Mechanic and Presentation components of the Progressive Segment should be weighted equally (i.e. 33.33% each). In order to then calculate the weighting of the Mechanic component of the Progressive Segment, Mr J Duffy took 33.33% of the Progressive Segment Attraction, which is 13.20%. He then took 13.20% of the overall player attraction (80% of turnover) i.e. 13.20% of 80%. He therefore concluded that the 689 trigger contributed to performance (i.e. turnover) to the extent of 10.56% with the balance accounted for by other attributes. I will refer to the method by which he arrived at this figure which he referred to as the "Weighted Mechanic Attraction" as DM-1.
263 Mr J Duffy also performed another calculation using a different methodology which assumed that the Math, Mechanic and Presentation should each be weighted at 33.3%. He then adjusted the weighting for the Mechanic by reference to the average RTP for a progressive game. I refer to this method as DM-2. The resulting calculation produced a figure of 2.66%, which is much lower than the 10.56% obtained using DM-1. It appears he used this method for the purpose of performing a cross-check in relation to his first result, and he did not suggest in his report that it was likely to be more accurate than his first result or that it raised any significant doubt in his mind as to the accuracy of the 10.56% obtained using DM-1. The figure of 10.56% was said by Mr J Duffy to represent what he considered to be the upper bound in terms of the attractiveness to players of the progressive's Mechanic and, at least implicitly, that the 2.66% figure represented the lower limit.
264 I will return to the percentage figures obtained by Mr J Duffy but it is convenient at this point to address some of Aristocrat's criticisms of Mr J Duffy's methodology which were developed in Aristocrat's closing submissions but not in any expert evidence specifically addressing Mr J Duffy's report or his methodology.
265 First, Aristocrat submitted that Mr J Duffy's methodology had "no theoretical or logical support" and that he accepted that it was not based on any industry methodology. Mr J Duffy did not dispute that his analysis formed the basis of what should be understood as an opinion held by him as to the relative significance of various attributes of a game. And he did not suggest that his calculations were based on any industry methodology. I did not find that surprising. The exercise performed by him was no doubt novel, but that is likely due to the novel nature of the question he was asked to answer. While I approach Mr J Duffy's methodology on the basis that it is not tested, it reflects what is in my opinion a logical analysis undertaken by a person with extensive experience in the gaming industry.
266 Secondly, it was contended that Mr J Duffy's selection of the 80% figure for the purpose of determining the role game performance plays in accounting for an operator's purchase decision was arbitrary and unsupported. I do not agree with either of those criticisms. Mr J Duffy's figure takes into account, the price which he regarded, and I accept, is an important consideration that would influence an operator's purchase decision. However, as will be seen, I propose to make an adjustment to his figures that attributes more weight to game performance and which in my opinion more than adequately addresses Aristocrat's criticism of Mr J Duffy's 80% figure.
267 Thirdly, Aristocrat also submitted that the allocation of an equal weighting for all Math, Mechanic and Presentation was "intuitively contrary to common sense, and the evidence as to the importance of the jackpots speaks for themselves [sic]". This overlooks the fact that in Mr J Duffy's weightings the components most relevant to the "jackpot" are given a weighting of 66.66% (Math + Mechanic).
268 Fourthly, there were criticisms made about the underlying data used by Mr J Duffy and that his calculations required amendment more than once during the course of the trial. This is a reference to the fact that his original report specified a range of 2.77% to 10.56% which was later amended to 2.66% to 10.56%. The errors that gave rise to the need for this amendment were not shown to be significant and they do not affect my assessment of Mr J Duffy's evidence. This is also true of a small number of typographical errors in his report.
269 Fifthly, it was suggested by Aristocrat that Mr J Duffy did not understand the invention, that he had mischaracterised it, and that he had overlooked the language of the claims, including, in particular, claims 3 and 4. I do not think there is any substance to this criticism. The proper characterisation of the invention is a matter for the Court. It is clear from Mr J Duffy's evidence that he considered the substance of the invention was the proportional trigger. But I regard his evidence as helpful whether one is assessing the value of the invention as either a proportional trigger or a random prize awarding feature with a proportional trigger.
270 Mr J Duffy's cross-examination was robust and searching. It was put to him in cross-examination that it is the feature outcome that drives the sale of an EGM and to give it a weighting of anything less than 100% or 90% "is just divorced from reality". In referring to the "feature outcome" in this questioning, the cross-examiner may have been intending to refer to the progressive feature (i.e. the feature game) which is not necessarily the same as the feature outcome (e.g. a free game or a jackpot awarded in the feature game). In any event, the exchange between the cross-examiner and Mr J Duffy is instructive because it highlights exactly why Mr J Duffy was not willing to accept what was put to him.
271 Mr J Duffy's attention was drawn to the figure of 39.59% appearing in his report which he calculated as the "Progressive Segment Attraction" which he arrived at in the manner I have previously described. The cross-examination with regard to that figure went as follows:
MR BANNON: All right. Can I suggest to you that an outcome of 40 per cent attraction should demonstrate to you that your methodology is unsound? Do you agree with that?---No.
See, what I want to suggest to you - a fair allocation to the - a sensible allocation to the feature outcome is 100 per cent because that's the thing which tips the manufacturer into adding the feature outcome. Do you agree with that?---No
Because, as I said, a broad range of players will play these games. So it's just - it's -it's another component. It's like adding a free games and a pick bonus to a game and saying that that makes the game more attractive now because it has got two discrete features on it.
And if you added 90 per cent or only applied 90 per cent to the feature outcome, that would be the bare minimum which you would bottom out at if you're going to get any attraction to the base game. Do you agree?---No. I think the base game and the associated features of the base game have to be popular with the players.
272 After some discussion concerning the form of a question being put to the witness, the following exchange occurred:
HIS HONOUR: Well, sorry. I don't think it's clear. So you're suggesting that in terms of what contributes to the attractiveness of the console to the player - - -
MR BANNON: Yes. It's 90 per cent.
HIS HONOUR: - - - it's 100 per cent or perhaps 90 per cent - - -
MR BANNON: Yes.
HIS HONOUR: - - - that resides in the - the progressive.
MR BANNON: Correct.
HIS HONOUR: All right. That's what is being put to you. So what do you say about that?---I don't agree. You know, Aristocrat was successful with this product when it came out because they re-used base games that were popular. The reason for that was they knew that players who enjoyed those games would come across and try the new games with the jackpots in them. If it was just all the progressive the player was playing for, then every single progressive product would perform at a high level and that's not the case. When you change base games, you will get a spectrum of performance from high down to the low. So if the base game is not attractive and the features associated with the base game is not attractive then that won't get the level of performance simply by adding a progressive on it. And it's not about just categorising one type of player. What you're trying to do is take the player that used to enjoy the existing base game into another experience adding another component on that game. It's not about saying - okay, these guys are going to stay there. I want a whole new player pool. It's about just progressing the player pool because players are looking for something - something more all the time. So re-using popular base games was a key strategy in these links performing well.
And would any player in your assessment not be attracted to the progressive feature?---There might be some, yes.
Rather than - sometimes they would play that notwithstanding they weren't going to be - they prefer that to the base game without the feature? Is that what you're saying?---No. There might be some that - that - there's all different types of players out there. So there might be some that don't want to - to play progressive. But if you look at what has happened in the market and predominantly through this period, virtually all game development headed towards incorporating some sort of progressive feature on the games.
And what do you talk - when you mentioned before about the advantage of using a known base game - I think, as you've indicated, Konami was selling base games on their own - - -?---Yes.
- - - previously. And continued to do during this period?---Yes.
And I think you agreed before lunch that employing the features of claims 1 to 4 of the invention enabled them to integrate the - integrate the feature outcome - the progressive feature outcome - into the single unit?---For - for the infringing games, yes.
Yes?---They did do some games that didn't infringe and other manufacturers did progressive games very similar that didn't infringe the patent.
And to the extent that the base game had an attraction to a player in an integrated unit, which I think is what you're suggesting?---Yes.
That was an attraction as part of the integrated unit?---That was part of the whole - the whole package.
(Although the transcript is less than clear, all but the first of the questions asked of Mr J Duffy in that passage of evidence were asked by Mr Bannon SC.)
273 Mr J Duffy was also cross-examined in relation to the importance of what was referred to as presentation. On that topic he gave the following evidence in cross-examination:
And that was part of what you would agree is part of the presentation?---Well, the presentation is your theming, your colouring, how you put it together - you know, is it the train coming past, is it reels spinning - you know, how - they can - you can construct that in many, many ways that, you know, wouldn't be covered - covered by a patent.
What are your chances of getting which truck as part of the presentation?---Well, they should, by regulations, have some visual relationship to the probability.
Yes?---So they wouldn't be able to show maxi-mini-maxi-mini on the trains, because that's just not realistic to the player, because that's showing a 50/50 chance, which wouldn't be the case.
No. But the fact is the simplified - well, the type of presentation which you see once the outcome is triggered is a matter of reality. The player will soon learn that their chances of winning something in that presentation are, well, certain, although they don't know how much they're going to win?---Yes. They will soon learn that - what outcome - what possible outcomes there are as part of a feature, but the presentation itself might not be very simple. A lot of effort actually went into the artwork for these feature games. Much more effort than went into the actual - the base game. So in terms of the actual presentation, you know, you wouldn't say that the - they were always simple.
And what I want to suggest to you is that the - if there's any element of presentation which is other than the notion of it being a simplified game with a higher probability of success, it's bells and whistles which you wouldn't give more than a few per cent to, in terms of significance for a player; do you agree with that?---In terms - yes, well, in terms of making the quality of the presentation attractive - so picking a theme that you think resonates, picking a presentation that would resonate with the players, and then designing the artwork over the top that. And the sounds as well. Sounds is part of your presentations, too, because they're a key part of the gaming experience.
What I'm suggesting to you is that the key for the player is the win they're going to get, and bells and whistles - colours, sounds - you wouldn't attribute more than a couple of per cent for that, if you gave it anything, in terms of attraction?---No, absolutely not. Presentation is key. Some themes - and you can see that with clone games. You put a different set of artwork on a math model that has worked well and it just - it doesn't work. So having a theme and a presentation to the player that resonates, and that they like, is absolutely a critical part of game design and game development.
And so that - what, winning a thousand credits from a machine from a train is something which some people might find acceptable, but not if it comes out of a box; is that your position?---Possibly, yes. Yes. So that's why manufacturers try lots of different presentations.
274 I found Mr J Duffy's evidence persuasive. It demonstrates that there are many attributes of an EGM on which a base game and a progressive feature is installed, that affect the EGM's performance. Leaving aside the differences in progressive features themselves, the base game and other features associated with it are important attributes of an EGM that directly contribute to its performance.
275 Aristocrat also submitted that Mr J Duffy's evidence was inconsistent with the evidence given by Mr Wohlsen, who was said by Aristocrat to have accepted that the 689 trigger had an "influential" and "material" impact in generating sales and to have considered "jackpot structure and perceived chances of winning" as of high importance to players. I do not think there is any force in this submission. On the contrary, if anything, I think Mr Wohlsen's evidence provides some support for Mr J Duffy's conclusion, at least with respect to the 10.56% figure obtained by him using DM-1.
276 Mr Wohlsen prepared a detailed report that addressed a number of questions. One question he was asked was whether it was possible to identify whether the 689 trigger played a role in sales of the affected games. In answering this question he said he was able to qualitatively describe the relative importance of the 689 trigger but could not do so quantitatively. His ultimate conclusion was as follows:
In my view, considering the various markers examined through this report, I am not able to isolate and quantify the level to which the patented trigger, on its own, influences the attractiveness of the game to the player nor am I able to quantify the level to which the patented trigger, on its own, influences the attractiveness of the game to venue owners and operators as a game to be made available on the gaming floor of venues. I am able to conclude presence [sic] of a jackpot and the way that the jackpot is anticipated and celebrated is an influential factor. However, the patented trigger, alone, forms only a part of this aspect of the game.
The presence of the patented trigger is only one of many influences on the attractiveness and performance of a game. The patented trigger's direct relationship to the size of the bet is more likely to be influential on more regular players and for this reason it may be more influential in some games and venue environments that [sic] others that appeal to a more regular player market.
277 Aristocrat objected to parts of Mr Wohlsen's report that directly related to that conclusion on the basis that they were outside his expertise. The relevant parts of the affidavit were admitted but on the basis that I would consider what weight to give them. Although Mr Wohlsen's report contains the results of a great deal of data analysis which he was eminently qualified to undertake, it also contained a number of opinions relating to the behaviour of venue operators and consumers which were two areas in which Mr J Duffy had greater experience and expertise. For that reason I have given less weight to Mr Wohlsen's evidence concerning the behaviour of market operators and consumers. However, with respect to Aristocrat's criticisms of Mr J Duffy's evidence, I do not accept that Mr Wohlsen's conclusion is inconsistent with Mr J Duffy's conclusion. Both agreed that there were many influences on the attractiveness and performance of a game apart from the proportional trigger.
278 There is material in Mr Wohlsen's report that may usefully be contrasted with aspects of Mr J Duffy's analysis. In New South Wales, the games sold by Konami with the proportional trigger (what Mr Wohlsen referred to as "the affected games") performed about 10% better than the non-affected games (those using a different trigger) across the period 2008 to 2015. However, while the data shows that the affected games performed better than the non-affected games, it also shows that one of the best performing games Konami released was Dragon Fury, a non-affected game released in 2014. Similarly, Lucky Garden (another non-affected game) in the year of its 2009 release appears to have achieved the highest turnover of any of the Konami games (both affected and non-affected) for New South Wales in the entire period including Cash Carriage (an affected game). The figures for Cash Carriage show that it performed well in 2008 and 2009, but that its performance steadily declined in each of the following years as new games were released.
279 The data for the Queensland market is, as Mr Wohlsen explained, problematic due to the very small number of non-affected games sold by Konami in that state. The data shows that Dragon Fury performed strongly in the first year of its release, but its performance faded in the second year. That said, Mr Wohlsen's evidence does show that some of the non-affected games performed very strongly even if (as might be expected) their performance declined over time.
280 It is necessary to return to Aristocrat's contention that none of the EGMs or conversion kits which incorporated the 689 trigger would have been made or sold without it. The correctness of that contention depends on an assessment of the importance of the patented invention in the venue operator's purchasing decision. The evidence establishes that the primary driver of such decisions is performance (i.e. turnover) which is itself a function of a game's popularity with players. Progressive features are an important driver of a game's popularity, but so too is the base game and any associated feature. The mathematics of the base game (jackpot levels, hit rates, start-up values etc) play a key role in determining the popularity of an EGM with players. Animations, sounds, artwork and the overall presentation of the game are also important.
281 The evidence shows that the sense of anticipation and excitement created by a progressive game is an important factor and that it is in turn influenced by the timing of announcements (i.e. that a feature outcome has been awarded) and by the use of attractive animations, sounds and artwork that all contribute to the anticipation and excitement generated during game play, including from the moment at which a feature outcome is triggered until the size of the jackpot or other prize is announced. But accepting that performance (i.e. turnover) is a function of game attractiveness, the question is whether it should be inferred that a feature game with a proportional trigger is of such importance to players, and therefore venue operators, that Konami would not have sold any of the relevant EGMs or conversion kits incorporating a feature game that did not use a proportional trigger. In my opinion the evidence does not support the drawing of that inference. In that respect this case is fundamentally different from Dart.
282 That is not to say that Konami is not liable to account for any of the profits it has made. The profits for which Konami is liable are confined to those profits which are attributable to the use of the patented invention which is something less than the total profits made. Konami does not dispute that it made some profits as a result of its use of the patented invention. But the total profits made by Konami are those that are attributable to a wide range of attributes identified by Mr J Duffy and other witnesses. I am satisfied that there must be some apportionment made which excludes from the scope of the account those profits which have no reasonable connection with Konami's appropriation of the invention.
283 I do not accept Aristocrat's contention, developed in its submissions but not in the evidence of its own witnesses, that even if some apportionment is justified, then 90% or more of Konami's profits are attributable to the use of the invention. Aristocrat's submission is based on a mischaracterisation of the invention. I do not see any support in the evidence for that extreme position. Similarly, I do not accept Konami's submission that no more than 5% of its profits should be attributable to its use of the invention. Konami's submission is also based on a mischaracterisation of the invention.
284 In my opinion, Mr J Duffy's DM-1 provides useful guidance as to how the Court might arrive at an appropriate figure. That said, I am not bound to apply the particular figures adopted by him if I consider that these underestimate, or contribute to the underestimation of, the value to be attributed to the invention. In that regard, DM-2 produces a result that does not sit well with the whole of the evidence in that it seems to me to attribute to the proportional trigger an altogether insignificant role in generating performance (i.e. turnover). While I accept, as Mr J Duffy recognises, that the RTP of a progressive game has a definite effect on the "overall play experience", the evidence demonstrates that there are many other factors that generate performance. Accordingly, I do not think a methodology that focuses on RTP is useful when seeking to measure the importance of the invention. In any event, Mr J Duffy did not suggest that DM-2 should be preferred to DM-1, only that the former was useful in providing the "minimum" contribution made by the proportional trigger.
285 Konami also relied on the evidence of Mr G Duffy concerning the amount of time spent on the development of a progressive feature relative to the base game and (non-progressive) features. Konami submitted that the figure of 10% attributed by Mr G Duffy to the development of the progressive feature provided support for its contention that, on the evidence as a whole, a fair and reasonable apportionment was no more than 5%. I do not accept that submission. Firstly, I do not consider time spent on the development of a progressive feature is of any assistance in attributing value to the proportional trigger. Moreover, the analysis based on Mr G Duffy's evidence which happened to arrive at a figure of 5% is based on the calculation of an average of five different weightings for the trigger ranging from 20% to 80% (i.e. 20%, 33%, 50%, 66% and 80%) of the 10% attributed to the progressive feature. The critical question is what weighting should be given to the trigger and to simply take an average from a range of those five figures does not appear to me to reflect a logical approach. For that reason, I do not find Konami's analysis based on Mr G Duffy's evidence of any real assistance.
286 Returning to Mr J Duffy's analysis, there is one specific issue I have with his calculations which in my opinion justifies some adjustment to his numbers. It concerns Mr J Duffy's 80% figure which Aristocrat submitted was "arbitrary". As I have explained, I do not accept that characterisation, but I do consider that it attributes excessive weight to matters that are not related to game performance. I therefore propose to use a figure of 90% in lieu of Mr J Duffy's 80%. The resulting "Weighted Mechanic Attraction" arrived at using his formula after making that adjustment is (after rounding) 12%. If I were to apportion Konami's profits on the basis that the substance of the invention was, as Konami submitted, nothing more than the proportional trigger, then that is the figure I would use.
287 However, if the substance of the invention is, as I have found, a prize awarding feature with the proportional trigger then the figure to be used for apportionment purposes is Mr J Duffy's "Progressive Segment Attraction". When that figure (i.e. 39.59%) is weighted for player attraction (i.e. 90%) by taking 39.59% of 90%, the adjusted figure is (after rounding) 35%. In my opinion this broadly represents the weight that should be attributed to the prize awarding feature with the proportional trigger relative to all other attributes of the infringing EGMs and conversions sold by Konami during the relevant period.
288 In arriving at that conclusion I have had regard to the relative significance of the use of a progressive feature with a proportional trigger in the relevant EGMs and conversions and the extent to which this was likely to have contributed to their performance and their overall attractiveness to venue operators who purchased them. In my opinion the 35% figure on which I have settled is an appropriate one which will produce a just and equitable apportionment of profits between those fairly attributable to Konami's appropriation of the invention and those attributable to other factors.
289 In the context of an appropriate apportionment figure, Konami did not in its submissions contend for different figures for EGMs and conversions. Nor did Aristocrat contend that different figures should be used for EGMs and conversions. In my opinion the apportionment figure on which I have settled is appropriate for both EGMs and conversions.
290 The accounting experts were agreed that any relevant apportionment could be made by determining an appropriate percentage figure and applying that to the net profit attributable to Konami's sales of infringing EGMs and conversions. Accordingly, the profit which Konami must disgorge is 35% of its relevant net profit, i.e. 35% of its revenue from infringing sales less any allowable deductions and subject to any related adjustments. For reasons explained below the net profit should be calculated on a pre-tax basis but with the tax component discounted to take account of contingencies.