The Light & Wonder Inc (ASX: LNW) share price has jumped 15% after announcing an agreement with Aristocrat Leisure Ltd (ASX: ALL).
Light & Wonder and Aristocrat Leisure are two of the world’s largest poker machine businesses as well as digital offerings for customers.
Poker machine giants agreement
Aristocrat Leisure and Light & Wonder have agreed to settle their pending litigation in Australia and the US, which Aristocrat brought following the launch of Light & Wonder’s Dragon Train game.
Aristocrat contended the game was developed using Aristocrat’s trade secrets and copyright works. Aristocrat later made similar claims against Light & Wonder’s Jewel of the Dragon game.
The two businesses confirmed Light & Wonder has agreed to compensate Aristocrat US$127.5 million (or A$190 million) in respect of the claims for misappropriation and infringement of its intellectual property.
Aristocrat’s claims against Light & Wonder in Australia and in the US will be dismissed.
Light & Wonder admissions
In the ASX announcement, Light & Wonder acknowledged that “certain Aristocrat math information was used in connection with the development of both Dragon Train and Jewel of the Dragon.”
Light & Wonder has agreed to permanently cease commercialisation of these games globally and to make best efforts to remove existing installations.
Light & Wonder has also agreed not to make any further use of the Aristocrat math information and copyright works at issue in the litigation, and to permanently destroy all documents reflecting that information.
The two ASX shares have also agreed to confidential procedures for identifying and resolving any issues related to using Aristocrat math regarding existing Light & Wonder games and ones in development, including games for which Light & Wonder was ordered to produce math models to Aristocrat in the US litigation.
Management commentary
The Light & Wonder CEO Matt Wilson said:
Light & Wonder is pleased to resolve this matter and move forward. We are firmly committed to doing business the right way – respecting our competitors’ intellectual property rights while protecting our own rights. This matter arose when a former employee inappropriately used certain Aristocrat math without our knowledge and in direct violation of our policies.
Upon discovery, we took immediate action and have since implemented strengthened processes aimed at preventing similar issues in the future. This settlement protects the interests of our customers, employees, and shareholders, and allows us to continue our focus on developing and delivering the market-leading content our customers expect—without distraction or disruption.
Aristocrat Managing Director and CEO Trevor Croker said:
Aristocrat welcomes fair competition but will always robustly defend and enforce its intellectual property rights. As an ideas and innovation company our intellectual property is vital to our ongoing success. We are committed to protecting the great work of our dedicated creative and technical teams.
Final thoughts
Both ASX shares are delivering solid long-term growth. But, the market seems much happier about this agreement for Light & Wonder shares than Aristocrat Leisure shares (which is slightly down).
I’m not looking to buy either ASX share for my portfolio, so it’s hard for me to pick which is the better choice. There are better ASX growth shares out there, in my opinion.
