GGRAsia – Universal Ent sues Okada firm, claiming patent breach

Universal Ent sues Okada firm, claiming patent breach

Sep 25, 2017 Newsdesk Japan, Latest News, Top of the deck

Japanese gaming conglomerate Universal Entertainment Corp says it is suing a firm linked to its founder and former chairman Kazuo Okada in Tokyo District Court in Japan for JPY100 million (US$890,684). The reason is the alleged failure of one of Mr Okada’s privately held companies – Aruze Gaming America Inc, a maker of casino slot machines and electronic table games – to pay patent licensing fees said to be owed to Universal Entertainment.

The Friday filing to Jasdaq clarified that Aruze Gaming America had “no capital relationship” with Universal Entertainment as the former’s shares were “wholly owned by Kazuo Okada although there are business relationships such as purchase of slot machines”.

Universal added that as well as the claim for allegedly unpaid patent fees, an investigation it had ordered “verified that Aruze Gaming America has continued to use company-held patents without permission, and that there is an extremely high possibility that it is manufacturing and selling products using those patents”.

The group added it would be “demanding an injunction to stop said manufacture and sales activities by Aruze Gaming America”, noting the impact of the alleged patent infringement on Universal Entertainment’s business performance was still under review.

Mr Okada was suspended and then ousted from the Universal Entertainment board in June pending an investigation into allegations of misappropriation by him of some of its funds. The same month it emerged that Mr Okada had also been dropped as chairman of a Hong Kong-registered entity called Okada Holdings Ltd. The company reportedly holds a 67.9-percent stake in Universal Entertainment.

In early September Universal Entertainment announced a company-commissioned investigation had found the businessman was responsible for “three acts of fraudulence” in relation to business dealings with a face value of nearly US$100 million. The Nevada Gaming Control Board confirmed to GGRAsia it was continuing to investigate the allegations against Mr Okada, on the basis that Aruze Gaming America, Aruze USA Inc and Universal Entertainment hold “various gaming licences in Nevada”.

On September 15, Universal Entertainment said in a Jasdaq filing there was “no basis in fact” for a claim reportedly made by Mr Okada at a Tokyo press conference that he had been “reinstalled” as either a representative or director of Okada Holdings, and had “lawfully demanded” that Universal Entertainment convene an extraordinary shareholders’ meeting.