Court Dismisses Trademark Suit Brought By Racetracks Against Gaming Company Referencing Historical Races

from the and-they're-off dept

Mon, Apr 25th 2016 11:23pm — Timothy Geigner

We don't see nearly enough good trademark rulings, especially concerning Fair Use, that it's worthwhile in highlighting those that do occur. A nice recent example of this is a court tossing a trademark action started by several horse racing tracks against a gambling gaming company over the latter's use of track names. To get just a bit of background on this, Encore Racing Based Games makes electronic gambling games, including video slots and video poker. You see these types of machines in bars and restaurants wherever this type of gaming has become legal. But they also make a more innovative type of game in which players are presented with historical races and given the option to bet on them in a parimutuel fashion. The results, as best as I can tell, are based on the real-world outcomes of what I assume are obscure enough races that people aren't able to simply look up the results on their smartphones in whatever the allotted time is that they're given. Those results and races, naturally, include the names of the venues in which they were run.

Some well-known racetracks, such as Oak Lawn, sued over this, claiming trademark infringement. The court didn't buy it, apparently.

The Court dismissed the suit in its entirety, stating that Encore is “fully within their rights to describe where an event took place in their wagering system without implying the owners of the racetrack are sponsoring the game…[Encore is] protected by the fair use defense when describing where an event took place, even when the location described is most commonly conveyed using a registered trademark…Plaintiffs have failed to allege plausible facts which would justify this matter proceeding beyond this motion to dismiss…Therefore, the Court grants Defendants' motion and dismisses Plaintiffs' claims in their entirety.”

And it's quite easy to see the court's side of things in this case. The use of a trademark primarily to portray historical fact is certainly Fair Use. A race run at Oak Lawn can be described as having been as such. Still, I'm somewhat surprised at the ruling. These electronic games are a form of gambling, after all, and it isn't hard to understand why horse tracks, which are largely struggling nationally, wouldn't want potential bettors to find themselves betting on historical races in this way. Still, the fact that these games are dealing with matters of factual history means Fair Use does indeed come into play.

And, honestly, it's not like what Encore does is necessarily harmful to the tracks in the way they might think.

“We are grateful that the Court once again dismissed a lawsuit that would have severely limited growth in the historic horse racing market,” commented Encore President Jeremy Stein. “Encore is committed to the long term health of the racing and breeding industries, and we are proud that the Encore system and games continue to generate record handle numbers and significant revenue for the horse industry in Kentucky and Wyoming. Monday's ruling will allow us to continue growing while looking to bring historic horse racing revenue to new racing jurisdictions.”

For those of us that love horse racing, anything that brings more people into the fold is a good thing. If people playing these electronic games like them enough to then go out to the actual track, it's a building block for the industry. There's no substitute for going to a nice track, after all, least of all by sitting in front of a glowing machine.

Regardless, it's nice to see a court get a Fair Use question right.

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Filed Under: facts, gambling, gaming, racetracks, trademark
Companies: encore racing based games, oak lawn

9 Comments

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PaulT (profile), 26 Apr 2016 @ 12:04am

"Still, I'm somewhat surprised at the ruling. These electronic games are a form of gambling, after all, and it isn't hard to understand why horse tracks, which are largely struggling nationally, wouldn't want potential bettors to find themselves betting on historical races in this way."

Not really a surprise to me. Maybe it's because I'm not really a fan of the sport (like many British people, I tend to watch and bet on exactly one race per year, the Grand National, and I've never bothered going to a live race meeting).

But, it's interesting how much kind the tone is here to the typical such story commented upon here. After all, it's the same old story - a struggling legacy entertainment provider choosing to use legal threats to shut down potential competition. Even though it seem they might be able to innovate and work together in order to make the irreplaceable aspects of the legacy experience more valuable, they tried the courts first.

I'm glad the courts didn't accept an attempt to block history like that, I just hope that we're not in a situation where some industries get a pass on criticism just because the author like them :)
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Chris-Mouse (profile), 26 Apr 2016 @ 4:48am

I'd say that this is not a case of "fair use" but rather a case of trademarks working as intended. The trademark holder has created an association between the trademark and a particular venue. Using that trademark to refer to that venue is exactly what trademarks are intended to protect. Having someone else use the trademark to refer to that same venue does not harm the association created by the trademark holder. If anything, it reinforces it.
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Anonymous Coward, 26 Apr 2016 @ 6:05am

"The results, as best as I can tell, are based on the real-world outcomes of what I assume are obscure enough races that people aren't able to simply look up the results on their smartphones in whatever the allotted time is that they're given."
I would imagine that they aren't using the actual final results of a particular race but generating new results probabilistically based on the original races' bookie odds. Even if people can't look em up quickly, I imagine they don't want one old horse racing fan to be able to come in and fleece them.
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Anonymous Coward, 26 Apr 2016 @ 6:08am

Re:
The problem for trademark holders is that these are examples of trademarks working too well. At the point where other brands or similar products are being called by their trademark "with impunity" because of course that's what everyone knows that thing by, anyway, they have lost control.
This case isn't too severe, since it references the actual races or tracks specifically for being themselves, not a sort of off-brand construction by the developer. And since the races, having occurred at those tracks and with those results are a matter of historical fact, I don't really see the opportunity for any trademark claim. Unless the tracks want to turn into some sort of Voldemort and never be mentioned by name, except by themselves.
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PaulT (profile), 26 Apr 2016 @ 6:31am

Re:
I would have thought that not using the historical result of the game would have lost them the fair use argument as they're no longer dealing with historical facts at that point. It's more likely that they are protecting themselves in other ways.

I took a quick glance at their FAQ page and they say the following:

"Q. DESCRIBE THE ENCORE RACING-BASED GAMES SYSTEM.

The EncoreRBG System means game-playing terminals that offer pari-mutuel racing games based on the results of previously run horse races. EncoreRBG uses a Triple Race Method™ to create its game-playing challenge: Players predict the outcome of sets of three races and receive payouts based on the number and sequence of correct selections. For each “spin” the races are randomly drawn from a database of over 100,000 officially documented races."

So, in short, players are presented with a set of 3 races rather than one. It's probably this, along with the number of races involved in the dataset, that make it unlikely enough that anyone would be able to recall all 3 results in the betting period for them to make a profit.
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Anonymous Coward, 26 Apr 2016 @ 6:46am

Re: Re:
> make it unlikely enough that anyone would be able to recall all 3 results in the betting period for them to make a profit.

This will only last until the pot gets big enough to justify gathering all that data in a suitable form. Once that happens, the game will collapse into "he who has the database wins".
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Anonymous Coward, 26 Apr 2016 @ 6:53am

Re: Re:
I would think that using the original betting odds to run simulations of 'what could have happened' would still be covered under fair use.

But yeah, from that reading, you and Tim are probably right.
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PaulT (profile), 26 Apr 2016 @ 7:17am

Re: Re: Re:
The way I understand it, it's one "pot" per set of 3 games, the same with any casino game. If nobody wins, the pot resets. According to a quick result from a calculator I found on Google, there's 166,661,666,700,000 permutations (this might be wrong but I'm happy to be corrected).

If that's true, then while someone could game the system, but it's highly unlikely someone could come in with knowledge because they remember the events. But, the above numbers make it about the same as winning a Powerball jackpot (if not lower, I'm not sure of the maths with the number of horses/balls being different), with a far lower prize. Most won't bother going after that kind of target, and I'm sure there's other safeguards if a single player keeps winning a suspiciously large number of games.
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John85851 (profile), 26 Apr 2016 @ 10:23am

Why not sponsor the game?
I still don't understand why companies are so quick to sue over issues like this. Why doesn't the race track offer to sponsor the betting game and include a statement that says "If you liked betting on this historical game, come see the real thing. In fact, here's a $10 coupon for your first bet."
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