THE PRIMARY JUDGMENT
5 The primary judge identified the case as, essentially, being limited to the two issues referred to in [3], namely, first, whether Mr Kafataris should be regarded as an inventor, within s 15 of the Patents Act and, secondly, whether there had been misuse of his confidential information by the respondents, Mr Cory Davis or Mr Rowland Thomas, either directly or through their patent attorney, Mr John Walsh.
6 On 3 April 2012, Mr Davis filed a provision patent application with IP Australia (Provisional Application) for the invention entitled "Baccarat Game with Supplementary Betting Option". The Provisional Application was prepared by Mr Walsh with Mr Thomas being described as the sole inventor of the invention the subject of the Provisional Application.
7 The Provisional Application was in these terms (annexures omitted):
BACCARAT GAME WITH SUPPLEMENTARY BETTING OPTION
BACKGROUND
The present invention relates to games of chance and more particularly relates to a game feature whereby a player can play a primary game and exercise bet options on a secondary or auxiliary game either separate from the primary game or in co-operation with the primary game. The present invention also relates to an alternative to the known baccarat games which provides increased betting options and increase [sic-increased] actual or perceived opportunities for a win.
The invention also relates to gaming games of chance in which a player is provided with an increased opportunity to bet during a primary game of chance. More particularly the invention relates to improvements in the gaming game of baccarat. The invention relates to providing such game improvement in real or electronic form.
PRIOR ART
[This section sets out the existence of special game features to attract player interest, such as jackpots and features associated with an increased probability of winning, and an extended description of the rules of baccarat. The final paragraph of this section says: 'Third card selections are known in the prior art but it has hitherto been unknown to provide a baccarat game in which primary and secondary wagers are operating concurrently or sequentially.']
INVENTION
The present invention provides an alternative to the known baccarat game regimes whereby a player can play a primary game and exercise bet options on a secondary or auxiliary game either separate from the primary game or in co-operation with the primary game. The present invention provides increased betting options and increases actual or perceived opportunities for a win during a primary game of chance. The invention also provides the above features in real (table gaming) or electronic form. The invention further provides a betting regime for allowing a player to bet on a third card which is dealt depending upon the [sic]
In its broadest form the present invention comprises:
A method of playing baccarat comprising the steps of:
a) dealing at least one player a first card;
b) dealing a banker a first card;
c) dealing said at least one player a second card forming a hand with the first player card;
d) dealing said banker a second card forming a hand with the first banker card;
e) prior to dealing the above hands, placing a bet/wager on the first or second of said hands in favour of a player, the banker, a pair or a tie;
f) depending upon the totals of the two cards in the first hands, allowing a player to receive a third card or allowing the banker to receive a third card;
g) prior to receiving the third card, placing a bet/wager on an outcome based on the effect of the player or banker's third card on the outcome; and
h) determining a "wins status" from the outcome of the third card.
According to a preferred embodiment, if the banker draws cards totalling less than 6, the banker will be issued with a third card which he must take. If the Player draws cards totalling less than 6, the player will be issued with a third card which he must take.
According to a preferred embodiment, if the two cards drawn by player total less than 6 and the banker draws two cards totalling 6 or 7, then a third card will be issued to the player. The player must accept this card and the banker must stand on 6 or 7. Prior to the dealing of the third card to the player, an opportunity exists to place a second (double up) bet on either the player or the banker. The third card deal is compulsory once first hand criteria are met.
In another broad form the present invention comprises:
a game of baccarat in which a player is allowed a bet/wager on the effect of a third card dealt after predetermined criteria are met on a first hand dealt to a banker and player.
According to a preferred embodiment the dealing of the third card to the banker or player allows an opportunity to a player to place a first or second bet on the outcome of the effect of the third card whether the third card is dealt to the player or banker. According to one embodiment a player may decide not to be on the first hand but may elect to bet on the second or auxiliary hand including the third card.
In its broadest form the present invention comprises:
A baccarat game in which at least one player and banker are dealt a first hand and contingent upon the outcome of the first hand and subject to the first hand meeting game criteria, a player or banker wagers on a hand which includes a third card dealt to either the banker or player subject to game criteria being met.
According to a preferred embodiment if game criteria based on the first hand are met a compulsory third card is dealt, prior to which a player or banker has the opportunity to bet on the effect of the third card on the second hand.
The present invention provides an alternative to the known prior art and the shortcomings identified. The foregoing and other objects and advantages will appear from the description to follow. In the description reference is made to the accompanying representations, which forms a part hereof, and in which is shown by way of illustration specific embodiments in which the invention may be practiced. These embodiments will be described in sufficient detail to enable those skilled in the art to practice the invention, and it is to be understood that other embodiments may be utilized and that structural changes may be made without departing from the scope of the invention. In the accompanying illustrations, like reference characters designate the same or similar parts throughout the several views. The following detailed description is, therefore, not to be taken in a limiting sense, and the scope of the present invention is best defined by the appended claims.
BRIEF DESCRIPTION OF DRAWINGS
The invention will now be described in more detail according to a preferred but non-limiting embodiment and with reference to the accompanying illustration.
Figure 1 shows a plan view of a BACCARAT table layout according to a preferred embodiment.
Figure 2 shows a plan view of a baccarat table according to an alternative embodiment.
DETAILED DESCRIPTION
According to one embodiment of the invention a player is dealt the first card, followed by one to the banker. A second card is then dealt to the player followed by second card to the banker. These four cards form the initial hand and first bets can be placed prior to dealing. Bets at this point can be placed on player, banker, tie or pairs according to conventional methodology. Ace counts as one. Tens and all picture cards count as zero as per usual criteria.
If the two cards drawn by either player or banker total 8 or 9, this is called a natural and no further card will be issued on the game. If both player and banker have a total of 9, this is deemed a tie. Bets placed on the tie would be paid at 8 to 1. Bets placed on player or banker are refunded. Bets placed on pairs are forfeited.
If player totals 9 and the banker totals 8, the player wins.
If player totals 8 and the banker totals 9, the banker wins.
If player and the banker total 8, this game is deemed a tie and all bets placed on player or the banker are refunded. IF the 8 is made up of 2 X fours in either or both hands, pairs will be paid at 11 to 1.
If the two cards drawn by the player total 7, the player must stand and no third card will be issued to player. If the banker draws cards totalling less than 6, the banker will be issued with a third card which he must take. The double up draw on the third card is once relevant criteria are satisfied compulsory.
Currently there is no regime to allow betting on an outcome generated by the dealing of the third card. Prior to the dealing of the third card to the banker, an opportunity is provided to a player to place a second bet (irrespective of whether the player has bet on the outcome of the primary game - i.e. dealing of the first two cards) on the outcome of the effect of the third card whether the third card is dealt to the player or banker. Any bets on the initial hand or primary game will stand and can be made independent of the outcome of the secondary betting on the third card or contingent upon the outcome of the betting on the first two cads [sic-cards]. The betting regime can be adjusted as required within the framework of the original bet if made or at least as a consequence of the initial card deal to player or banker.
If the two cards drawn by the player total 6, the player must stand and no third card will be issued to the player. If the banker draws 7, the banker wins. If the banker draws 6, tie will be paid at 8 to 1. The player and the banker bets will be refunded if the tie is paid.
If the two cards drawn by the player total less than 6 and the banker draws two cards totalling 6 or 7, then a third card will be issued to the player. The player must accept this card and the banker must stand on 6 or 7. Prior to the dealing of the third card to the player, an opportunity exists to place a second (double up) bet on either the player or the banker. Initial bets stand.
If the player and the banker draw cards totalling less than 6, both the player and the banker will receive and must accept a third card. Prior to the dealing of these third cards, an opportunity exists to place a second (double up) bet on either the player or the banker. Initial bets stand.
If the player draws two cards of the same denomination (eg 2 x 2,2 x KING, 2 x ACE), then the player pair bets will be paid at 11 to 1, irrespective of the final outcome of the game. If the banker draws to cards of the same denomination (eg 2 x 2,2 x 6,2 x 10), then the banker pair bets will be paid at 11 to 1, irrespective of the final outcome of the game. If both the player and the banker draw two cards of the same denomination, then both the player and the banker pair bets will be paid at 11 to 1, irrespective of the final outcome of the game. Pairs do not affect this issuing of third cards when appropriate. This second bet allows patrons to make a more informed decision for investment in the game.
Figure 1 and 2 show baccarat tables in alternative forms on which the game regimes according to the invention may be played in casino environments.
The above described game play methodology and third card betting regime according to the invention in all its forms, is also adaptable to on line [sic-online] and internet gaming, gaming on electronic hand held devices and on devices such as computers, ipads, iphones and gaming machines. In each case the game rules may be altered to suit regulatory requirements or device capability provided each allows the capacity for a player to wager on a third card separately or in addition to a previously laid wager on a first hand of two cards.. [sic]
It will be recognised by persons skilled in the art that numerous variations and modification may be made to the invention broadly described herein without departing from the overall spirit and scope of the invention.
Dated this 3rd day of APRIL 2012
CORY DAVIS
By His Patent Attorneys
WALSH & ASSOCIATES
8 Following the filing of the Provisional Application, assistance was sought from a mathematician on the topic of calculating playing odds that casinos might adopt for the invention, the subject of the Provisional Application. This was not particularly productive and the respondents were introduced to Mr Kafataris. Mr Kafataris has extensive experience in the wagering and gaming industries, and he is an experienced businessman. It was in this regard that Mr Kafataris was introduced to the respondents.
9 It was common ground that Mr Kafataris and the respondents met on several occasions, but a great deal of what was said and done in these meetings was in dispute. In large measure, the primary judge resolved those disputes and made specific credit findings in relation to the parties and witnesses. But in the end, the content and substance of those exchanges was of little direct relevance in determining whether or not Mr Kafataris had in fact contributed to the invention, a question capable of being determined objectively. Certainly the history does show that, as a result of these meetings, the assistance of Mr Kafataris was sought and obtained. What is also clear is that Mr Kafataris was pressing for a form of commercial relationship which would see him substantially recognised as a contributor and to have financial rewards as a result. These negotiations, however, broke down as the respondents were not willing to agree to his terms. Much of the case for Mr Kafataris as originally, but not ultimately, crafted related to the claimed legal and equitable consequences following from the contributions that he contended he made during these unsuccessful negotiations. There were some relatively modest changes, his Honour found, in the ultimate PCT Application, which claimed priority from the Provisional Application.
10 Many matters were excluded from the debate at trial, not least of which was the question of whether a supplementary betting option for any card game can be an invention. (That question may be part of the examination process and any opposition hearing or in any future infringement action.) There was no challenge to the description of the invention in the PCT Application and the primary judge concluded (at [56]) that when the PCT Application was considered as a whole, the invention as described is a method of wagering, whereby a player is able to exercise a betting option on a second or auxiliary game, either separate from the primary game or in cooperation with the primary game. It is also made abundantly plain in the PCT Application that although the invention is described with reference to baccarat and blackjack, it is asserted that it can be adapted to alternative card games, again, however, without further examples. His Honour said (at [56]) that when one considers the claims which are set out in some detail in the PCT Application, it is even clearer that what is being described, albeit by references as examples to baccarat and blackjack, is "a method of wagering on a card game in which a player has a secondary bet or wage option."
11 The primary judge noted that s 15 and s 16 of the Patents Act relevantly provide as follows:
15 Who may be granted a patent?
(1) Subject to this Act, a patent for an invention may only be granted to a person who:
(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
…
…
16 Co-ownership of patents
(1) Subject to any agreement to the contrary, where there are 2 or more patentees:
(a) each of them is entitled to an equal undivided share in the patent; and
(b) each of them is entitled to exercise the exclusive rights given by the patent for his or her own benefit without accounting to the others; and
(c) none of them can grant a licence under the patent, or assign an interest in it, without the consent of the others.
…
12 His Honour noted authority suggesting that if the PCT Application could not be said to be fairly based on, or reasonably disclosed by, the Provisional Application, that might suggest that Mr Kafataris did make such a contribution. His Honour stressed (at [77]): "However more importantly as I have already said it is crucial to analyse previously what steps the [Mr Kafataris] took."
13 The primary judge then described the games of baccarat and blackjack, emphasising in particular the supplementary betting option. In the case of baccarat, he described it in these terms (at [103]-[104]):
103 The supplementary betting opportunity adds an extra element to the rules described previously. It only applies when there is a requirement for a third card for one or both hands. At that point, certain information is available to any participant (namely, the four cards consisting of the two cards dealt to the player hand and the two cards dealt to the banker hand). However, whether a third card is drawn is prescribed by the rules of punto banco baccarat.
104 The supplementary betting opportunity allows both participants and third parties (i.e. persons who did not place an initial bet before the cards were dealt) to place a bet, at certain odds that are not static but depend on the cards already revealed, on what the outcome of the game will be. It is anticipated that those odds would be displayed on a screen to enable participants to decide whether to take the supplementary betting opportunity.
And, in relation to blackjack, his Honour described it in these terms (at [113]-[116]):
113 In blackjack, the supplementary betting option is not available on the outcome of the game, as was the case for baccarat. That is because in blackjack the player could place a large bet on the dealer winning and then choose to simply draw additional cards until they go bust. The bet is placed, not on the outcome of the game itself, but on whether the dealer will go bust. This point was heavily relied on by counsel for the plaintiff to draw a distinction between the two games.
114 In the PCT application at [0060], it is suggested that each player is dealt an initial hand of two cards visible to the people playing on it, and often to any other players. Later in the same paragraph it is suggested that the players' initial cards may be dealt face-up or face-down.
115 The blackjack dealer bet rules provided to Mr Walsh on 18 March and Mr Davis on 20 March (Exhibit P2, Tab 20) suggest that the wager is placed on whether the dealer will bust or not at the point when only the dealer's card is visible. The odds at page 103 are only calculated in relation to that face-up card. That would seem to suggest that it is only feasible to place a supplementary bet when the player cards are face down.
116 It would seem to follow that that the side bet is available at an early point in the game, rather than being available only once the dealer is required by the rules of the game to draw an additional card or cards.
14 His Honour considered the credibility of key witnesses, notably, Mr Kafataris, Mr Thomas, Mr Walsh and Mr Davis. He accepted that Mr Kafataris was largely a truthful witness, although he had exaggerated the extent of his analyses, especially on odds, and was unable to clearly satisfy his Honour as to what exactly he had done in devising various odds or in consideration of the game of blackjack. His Honour noted (at [123]):
He of course did not conceptualise in any respect the idea of a supplementary betting option, and his activities as explained in detail later were entirely devoted, it seems to me, to identifying whether and if so when a supplementary bet could be placed within the existing rules of blackjack.
15 The primary judge was, however, quite critical of both Mr Thomas and Mr Walsh in terms of the evidence they gave. Specifically, his Honour rejected any suggestion, contrary to the evidence of Mr Thomas, that he had ever thought of the supplementary bet being available to any other card game prior to Mr Kafataris raising it. His Honour said (at [126]): "I regard his assertion that he intended prior to the filing of the provisional application that a person could make such a bet in all table card games as opportunistic and untruthful."
16 In relation to Mr Walsh, his Honour observed that Mr Walsh was in the difficult position of fulfilling the role of both lay and expert witness. His Honour found his evidence somewhat unsatisfactory and contrived. He concluded that he was advocating a position.
17 His Honour found that baccarat was the only card game discussed between Mr Walsh and Mr Thomas in early 2012 for several reasons (at [149]). First, Mr Walsh had no note to the contrary. Secondly, Mr Thomas had no contemporaneous note suggesting he in fact raised card games other than baccarat. Thirdly, all of the documentation pointed only to baccarat. Fourthly, the terms of the Provisional Application made it abundantly clear to him that only baccarat was the subject of consideration.
18 The primary judge concluded (at [152]) that in drafting the Provisional Application, Mr Walsh approached it as an "ambit claim", using general terminology so as to allow his clients latitude to argue ultimately that any additional innovation that might be included in the PCT Application could be said to be fairly based on the Provisional Application. That said, his Honour stressed that he was satisfied that Mr Walsh had no other specific examples in his head beyond baccarat.
19 Although Mr Walsh insisted that baccarat was used at the time of the drafting of the Provisional Application simply to refer to the preferred embodiment, his Honour said (at [154]) that in reality it was the only embodiment identified. At [156], his Honour said:
Mr Walsh's assertion that the provisional application was expressly intended to include blackjack is simply fanciful. I do not consider the language can support that. He had no particular expertise in card games himself and his client Mr Thomas was exclusively focussed on baccarat to the exclusion of anything else. In the circumstances, and given his instructions, he had no basis whatsoever for imagining that the invention as a matter of practical reality could at that time apply to any other card game. That however does not, as is clear from the PCT application, affect the very nature of the novelty identified. There is nothing new about baccarat or blackjack, but what was new was the supplementary betting option and I consider he did have that firmly in his mind at all times. That was the invention he was purporting to describe.
20 The primary judge then turned to consider in detail the involvement of Mr Kafataris.
21 It was significant, according to his Honour (at [170]), that in calculating the two sets of odds (which were described in the pleadings as the First and Second Kafataris Additions respectively), "despite some grandiose claims to the contrary", Mr Kafataris very largely accessed the website "The Wizard of Odds", which provides for both the game of baccarat, and for that matter blackjack, the probability of certain events occurring, and calculated a return based on certain probabilities. Having had that access, Mr Kafataris performed relatively straightforward mathematical exercises by either adding in a 5% margin for the casino, about which he made an assumption, and redoing the calculations in the event that the return provided an odd amount, for example, $2.25.
22 The primary judge concluded (at [171]) that while Mr Kafataris may have spent many hours over a number of days considering the odds and undertaking his calculations, insofar as the odds were concerned, he very largely, if not entirely, relied upon publicly available information from the The Wizard of Odds website (see [170]-[171]).
23 The primary judge accepted (at [182]) that the possibility of usage of the system with blackjack was raised by Mr Kafataris. His Honour undoubtedly found (at [182]) that Mr Thomas had never even considered blackjack, let alone was he in a position to assert one way or the other that his invention would apply to it.
24 His Honour observed (at [200]) that by early 2013 Mr Walsh must have appreciated that Mr Kafataris had been asking questions and raising blackjack in the context of the invention. It follows that Mr Walsh must have thought about it by that time as well. His Honour rejected Mr Walsh's evidence that he told Mr Kafataris that blackjack was another embodiment of the invention. His Honour concluded (at [200]) that there was no doubt that Mr Kafataris clearly requested the inclusion of blackjack in the PCT Application.
25 Mr Kafataris said that over the period between January and March 2013 he "developed a side bet specific to the card game known as blackjack" and that he set out the "specifications of this game" in a document entitled "Blackjack Dealer Bet Games Rules". His Honour accepted this was so (at [206]), but said (at [207]) that it was clear from the email from Mr Kafataris to Mr Davis of 14 March 2013 that he substantially created the Blackjack Dealer Bet Game Rules from the format of the baccarat game rules created by Mr Thomas. In addition, his Honour was satisfied that Mr Kafataris had to make himself familiar with the rules of the game for the purpose of identifying when, if at all, a supplementary or subsidiary betting opportunity might arise.
26 In his Honour's discussion, he reiterated that Mr Kafataris accepted that Mr Thomas created something novel in identifying the possibility of a supplementary betting option within the game of baccarat, but contended that Mr Kafataris also made a material contribution by identifying a supplementary betting operation within the game of blackjack. His Honour did not agree (at [226]). His Honour's assessment of all of the facts discussed in detail in his reasons was that the parties were working closely together in order to forge an ongoing commercial relationship based on the patent application. That collaboration may be an indicia of joint invention, but that indicia could not "trump in and of itself" the need for a court to distinguish between a qualitative, rather than a merely quantitative contribution to the invention as a matter of fact. His Honour (at [227]) described contribution as something that has to be material, tangible or qualitative contribution to the invention. There had to be some contribution to the concept, design or perhaps method. It must be seen objectively as indeed part of the invention (at [227]).
27 The approach his Honour then took was to determine what the invention was in the Provisional Application in fact before resolving the question of whether what was done by Mr Kafataris could constitute a contribution as so described. His Honour said (at [229]) that the PCT Application was an obvious guide, setting up a method of wagering whereby a supplementary betting option could be exploited. While Mr Thomas created the concept of a supplementary wagering opportunity in the context of baccarat, that opportunity was constrained entirely by the rules of that game. His Honour expressly found (at [231]) that Mr Thomas never did advert specifically or at all to the possibility of the opportunity extending to other games.
28 Notwithstanding this, his Honour concluded (at [232]) that the invention or the novelty, which Mr Thomas had identified and which Mr Walsh, on the basis of his instructions, was attempting as broadly as he could to articulate in the Provisional Application, was a supplementary betting or wagering opportunity within the rules and hence the constraints of an existing and very well-known card game, being baccarat. That, therefore, was the inventive step, namely, to conceive of the possibility of such an opportunity and then to undertake by luck, hard work or otherwise the identification of an appropriate point within the rules of baccarat when such an opportunity could be exploited. Mr Thomas addressed a problem and came up with the solution to use familiar terminology so as to conceive of an idea of doing a new thing (that is, exploiting an additional betting opportunity) or perhaps put another way, a new idea of achieving a previously known goal.
29 His Honour said (at [233]) the mere fact that only one opportunity was detected by Mr Thomas within the rules of baccarat did not affect the notion of novelty. The contribution of Mr Kafataris to the concept or idea of a supplementary or subsidiary betting opportunity by Mr Thomas was to approach the rules of blackjack in order to identify whether a similar opportunity arose. Mr Kafataris knew, as a result of the work undertaken by Mr Thomas, that in the baccarat context, the opportunity arose when the dealer or banker was obliged to take a third card. With this information, he then undoubtedly reviewed the rules of blackjack to identify a similar, if not identical opportunity, namely the opportunity of the dealer or banker being placed in the position where they were required by the rules of the relevant game to take a third card. His Honour expressly concluded (at [235]) that the analysis by Mr Kafataris, as it were, did not involve any inventive step at all and should not be seen as a material contribution to the invention. He adopted the language of Justice Aickin in Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253 (at 293), where his Honour said "the opening of a safe is easy when the combination has already been provided". It was the identification of the possibility of a supplementary betting option identified by Mr Thomas which was necessary before Mr Kafataris could identify a similar opportunity in blackjack. "Mr Kafataris was only able to identify a similar opportunity in blackjack after the idea of a supplementary betting opportunity had already been identified in baccarat." At [236], his Honour said:
I do not consider Mr Kafataris' activity to involve a material contribution or to have brought something new or different to the invention. It does not represent a departure from the idea of the invention, but rather what it does is simply to provide an additional opportunity for a supplementary bet.
30 The "broadening" concept for which Mr Kafataris argued as being the contribution was rejected by his Honour (at [237]). His Honour found that Mr Kafataris was able to identify the opportunity in blackjack and, therefore, enable Mr Walsh to draft the PCT Application more broadly and amplify or elaborate on the crux of the invention with the benefit of a second example. The contribution could not properly be regarded as material to the final form of the invention as described in the PCT Application. It did not bring about a change to the invention, rather it merely provided another example (at [237]).
31 His Honour's reasoning turned on the conclusion that the supplementary betting option was the crux of the invention, albeit that only one example could be given at the time of the Provisional Application. All Mr Kafataris did was to provide another example in which the invention could be used. He identified a development along the same line of thought which constituted or underlay the original invention. Rather than being an inventor, he was a competent technician able to solve a problem on the basis of the idea by Mr Thomas and the rules constraining the playing of the game of blackjack (at [239]-[240]).
32 His Honour also rejected that the parties were in a fiduciary relationship (at [245]), and rejected the confidential information case in the remaining passages of his reasons.