Five Las Vegas casino resorts defend against patent infringement claims brought by Acacia subsidiary

Client(s) Treasure Island LLC, Wynn Resorts Ltd., MGM Resorts International, Caesar Entertainment Corporation, and Hilton Worldwide, Inc.

Jones Day successfully defended five Las Vegas based casino resort companies in a patent suit against Email Link Corporation, a subsidiary of Acacia Global Acquisition LLC ("Acacia"). The patent, claiming methods for sending email containing internet links, was issued by the U.S. Patent and Trademark Office after its owners filed a terminal disclaimer. The terminal disclaimer shortened the term of the asserted patent to co-expire with a prior patent in the same family, adding the requirement that it would be enforceable "only for and during such period that it and the prior patent are commonly owned."

Jones Day argued that Email Link's parent Acacia violated this agreement by assigning the asserted patent to Email Link, while assigning the prior patent to another entity. Email Link responded that because Acacia owns both Email Link and the company owning the prior patent, the two patents were commonly owned by Acacia, and thus did not violate the terminal disclaimer. The U.S. District Court for the District of Nevada agreed with the defendants.

Noting that "it is a basic tenet of American corporate law that a parent does not own the assets of its subsidiary," Judge Edward C. Reed found the asserted patent and the prior patent were not owned by the same corporate entity. Thus, the patents were not commonly owned as required by the terminal disclaimer, and the asserted patent was held unenforceable. Because the patent was unenforceable, Judge Reed then dismissed the case in the pre-answer stage, thus saving the defendants the expense of discovery.

Email Link Corp. v. Treasure Island, LLC et al., No. 2-11-cv-01433 (D. Nev.) (Judge Reed, Jr.)