The two companies have had earlier legal tangles. Lightning Poker filed suit against PokerTek in July of 2006, alleging antitrust violations including unfair competition, civil conspiracy, trade slander and defamation, but voluntarily dropped that action in December of 2006, a month and a half before Lightning Poker announced its own distribution agreement with leading casino-equipment supplier Shuffle Master, Inc. The latest action resumes the legal animosity between the two firms, with the war of words already underway.

“Although Lightning Poker recognizes and respects the constant innovation in gaming technology, we cannot permit willful infringement of our valuable intellectual property. PokerTek has exploited the innovations covered by our patent for its own benefit in the face of our patent,” said Lightning Poker CEO Brian Haveson. “Lightning Poker is a pioneer in automated poker and annually invests millions of dollars in research and development to create technologies that bring significant value to our customers and players. We are determined to remain a leader by leveraging our superior functionality and high reliability, and by vigorously defending our intellectual property,”

PokerTek CEO Chris Halligan responded in kind. “After consulting with our attorneys, we believe this suit is without merit. This is not the first time Lightning Poker has sued us. Its last lawsuit was unsuccessful, and we will work to ensure a similar outcome here. We remain focused on growing our business and extending our lead in the marketplace.”

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However, iMEGA’s claims that implementation of the UIGEA would be a First Amendment, “free speech” violation for its members was held to be without merit, in part because iMEGA’s action identified no aggrieved parties by name, either as part of businesses offering online gambling or of aggrieved customers demanding the right to spend their income how and where they choose. Six different points were raised by iMEGA in the original complaint, and each was dismissed in turn by Judge Cooper. In dismissing one of the free-speech points, Judge Cooper noted that, “UIGEA does not have any adverse impact, much less a significant one, on the ability of the plaintiff and its members to express their views on Internet gambling.”

Also dismissed was the iMEGA argument that by passing the UIGEA, the US put itself in violation of its own World Trade Organization agreements. That argument was dismissed because such a challenge may be brought only by the government itself, not by any individual or private group.

In a footnote to the dismissal of one of iMEGA’s motions, a states-rights challenge based on the Tenth Amendment, Judge Cooper noted that “UIGEA exempts purely financial entities from criminal liability.”

iMEGA chairman Joe Brennan, Jr. expanded on that in a statement published on the iMEGA website in the wake of the decision. “Judge Cooper found that banks, credit card companies and other payment system instruments are exempt from criminal sanctions under UIGEA,” said Brennan, “significantly undercutting UIGEA’s enforcement mechanism. Her ruling echoes the growing consensus of opinion that UIGEA is a fundamentally flawed statute.”

However, the statement as issued by Cooper does not address the “overbroad” payment-blocking concerns that trouble the online industry regarding UIGEA, and in fact, Cooper specifically mentioned in her decision that the UIGEA in its current form was not overbroad. Her decision, though, could be construed as being narrow in scope, given its conclusion, which reads in part:

“The plaintiff’s claims express a fundamental disagreement with Congress’s judgment that Internet gambling should be controlled legislatively, and pose questions as to whether UIGEA, given its exceptions and conjectural enforcement problems, will be successful in accomplishing its desired ends. But it is not the Court’s role to pass on the wisdom of a Congressional act or speculative on its effectiveness.”

iMEGA’s official statement expressed pleasure over the granting on legal standing in the matter. iMEGA also announced tentative plans to appeal to the Third Circuit Court of Appeals. It also appears that the decision as rendered was the outcome iMEGA expected. Days prior to the release of Judge Cooper’s decision, iMEGA’s Ed Leyden commented on the pending decision to PokerNews as follows: “We remain hopeful that the government’s motion will be denied so that even if our own motion (for a prliminary injunction) is also denied, we’ll still be teed up to fight these vital issues of digital civil rights.”

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