In In the Courts by Clyde Mooney

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Poker machine giants Aristocrat and Ainsworth are headed to Federal Court in a battle over alleged breaches of intellectual property law.

Aristocrat Technologies initiated legal proceedings last week against Ainsworth Game Technology (AGT) for what is sees as strategic theft of proprietary business workings behind its phenomenally successful game Lightning Link.

Aristocrat claims AGT has used elements copied from its game in AGT’s game Jackpot Strike. In 2018 Aristocrat issued demand for documents on the game from its competitor outlining source code, calculations, concept and commercial evolution.

“This case goes well beyond simple copyright infringement and concerns allegations of extensive and deliberate misappropriation of trade secrets, confidential information and intellectual property,” said a statement from the company.

Lightning Link has become a staple in pubs, clubs and casinos around Australia and overseas, having proven a winning formula for the manufacturer in a highly cyclic and competitive industry. 

Aristocrat has been busy hedging its bets, earlier this year securing acquisitions including US-based online gaming business Big Fish for $1.3 billion, to make it global #2 in provision of online casino-style games.

These bolt-ons have seen its digital revenue – made through game sales – jump 220 per cent in FY19 to more than $550 million. 

Baillieu Holst analyst Nick Caley was reported saying in May that Aristocrat’s digital division had clearly become the company’s growth driver.

Both Aristocrat (ASX: ALL – market cap $16.7bn) and AGT (ASX: AGI – market cap $224m) were founded by gaming industry legend Len Ainsworth, now in his 90s.

Len Ainsworth famously sold his majority share in his original company, before going on to launch his namesake endeavour. The two companies still negotiate a complex relationship.

AGT issued its own statement, proclaiming it would by “vigorously defending” claims of impropriety.