Leone v. Ohio Lottery Comm. , 2013 Ohio 3628 ( 2013 )

[Cite as Leone v. Ohio Lottery Comm., 2013-Ohio-3628.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
IGNATIUS J. LEONE
Plaintiff
v.
OHIO LOTTERY COMMISSION
Defendant
Case No. 2010-12338
Judge Clark B. Weaver Sr.
DECISION
{¶ 1} Plaintiff brought this action alleging unjust enrichment arising out of
defendant’s operation of a lottery game that he claims to have developed. The issues
of liability and damages were bifurcated and the case proceeded to trial on the issue of
liability.
{¶ 2} Plaintiff is a self-employed home-improvement contractor who resides in
Parma Heights, Ohio. Plaintiff testified that in early 2003, he developed an idea for a
lottery game. Plaintiff stated that several weeks later, he had an attorney file a
provisional patent application for a “Lottery Number Game” on his behalf with the United
States Patent and Trademark Office. (Plaintiff’s Exhibit 2.) The application is broadly
worded and difficult to understand, but it generally describes an idea that involves a
game administrator arranging an array of numbers in a matrix and then selecting a set
of numbers from within the array; players may win if a previously-determined set of
numbers (the application does not clearly define how these numbers are chosen by the
player or otherwise determined) either matches the set selected by the administrator or
appears in a particular arrangement within the matrix. The size of the matrix is not
Case No. 2010-12338 -2- ENTRY
defined but “five-by-four” and “five-by-six” rectangular grids are identified as
possibilities, nor is the size of the number array or winning number set defined (potential
arrays are identified as 1-20, 1-40, and 1-45, and the size of the winning number set is
suggested as “5, 6, 7 or more”). The application identifies various “embodiments” of the
idea, and notes that the game may or may not be played in a “scratch-off” ticket format.
{¶ 3} In his testimony at trial, plaintiff acknowledged that there are similarities
between his idea and bingo, as well as defendant’s Pick 5 and Pick 6 lottery games, but
he explained that his idea can be distinguished from bingo because its matrix is
comprised of numbers rather than letters. Plaintiff, who has no formal background in
statistics, acknowledged that his preliminary patent application does not set out certain
mathematical details such as the odds, probabilities, or prize structures necessary for
lottery games, and that he had no idea how the odds would be determined.
{¶ 4} Plaintiff testified that he discussed his game idea with several family
members and others, including a friend who had once worked for defendant, and that
the friend advised him to get in touch with Dennis Berg, an employee of defendant.
Plaintiff stated that he telephoned Berg and that after a series of calls and e-mails, they
arranged a meeting at defendant’s headquarters in Cleveland; according to their e-
mails, the meeting took place in May 2003. (Plaintiff’s Exhibits 3, 4.) According to
plaintiff, his intention in meeting with Berg was to market his idea for sale, but they did
not discuss any sales terms. Plaintiff recalled that after showing Berg the provisional
patent application, Berg stated that he would have other employees of defendant
analyze the idea, and that Berg assured him that the idea would remain confidential and
that defendant would not appropriate it.
{¶ 5} Plaintiff testified that he telephoned Berg several weeks later to follow up
and was told that defendant’s mathematicians were evaluating the idea. Plaintiff further
testified that he called Berg a few weeks later and was told that defendant’s
mathematicians found the idea unworkable, and that Berg referred him to GTECH
Case No. 2010-12338 -3- ENTRY
Corporation, a Rhode Island-based gaming vendor with whom defendant regularly did
business. Plaintiff recalled that he gave his authorization to Berg to have defendant
forward his provisional patent application to GTECH. Plaintiff testified that he had
telephone conversations with employees of GTECH, but that he was ultimately informed
that GTECH also found the idea unworkable. Plaintiff stated that he consequently
became discouraged about the idea and let his provisional patent application expire.
According to plaintiff, about one year after his discussions with defendant and GTECH,
he heard a radio commercial for defendant which promoted a game known as Lot ‘O
Play, which he believed to resemble his idea. Plaintiff stated that he contacted his
counsel later that same day, eventually leading to his filing the instant lawsuit.
{¶ 6} The Lot ‘O Play game, in short, involved a player purchasing a $2 ticket that
displayed a square matrix of five rows, each containing five numbers ranging from an
array of 0 to 99; players had the option of choosing five of the numbers or allowing all
numbers to be randomly selected. Twice a week, drawings were held to select five
winning numbers. If the winning numbers were matched in a row vertically, horizontally,
or diagonally within the grid, the ticket was a jackpot winner. Lower-tier prizes were
awarded for tickets that matched two, three, or four of the winning numbers.
Additionally, every hundredth ticket sold throughout the state was an instant $10 winner.
Tickets went on sale on October 9, 2005. (Plaintiff’s Exhibit 17.) The game has since
been discontinued.
{¶ 7} Plaintiff presented expert witness testimony by way of deposition from
Thomas H. Short, Ph.D., a professor of statistics at John Carroll University. Dr. Short
testified that rather than describing a viable lottery game, plaintiff’s preliminary patent
application sets forth a basic, general structure from which many different lottery games
can be generated. Dr. Short opined that Lot ‘O Play is a “specific realization” of the idea
described in the application. Dr. Short acknowledged, though, that hundreds of other
games, including bingo, can be generated from the description set out in the application.
Case No. 2010-12338 -4- ENTRY
Dr. Short also acknowledged that, while lottery games must have prize structures, the
application provides no information in this regard.
{¶ 8} Dennis Berg testified by way of deposition that he has been employed with
defendant since 1991, holding a series of positions beginning with internal audit
manager, then a “policy staff” member assigned to special projects by the director,
finance director from 2004 to 2010, interim director from 2011 to 2012, and now
director. Berg holds an accounting degree and is a certified public accountant (CPA).
Berg testified that he believes he first spoke with plaintiff around the spring of 2003, as a
result of plaintiff calling on the telephone about a game idea that he wanted to share.
Berg stated that he did not agree to meet with plaintiff at that time, but that after
receiving several more calls from plaintiff, he set up the May 2003 meeting. According
to Berg, there was no formal protocol that addressed this sort of unsolicited idea from a
member of the public, but he recalled having similar discussions with perhaps three
such individuals during his tenure on the policy staff.
{¶ 9} Berg testified that when plaintiff shared his preliminary patent application
with him at their meeting, he found its concept to be “very confusing.” Berg further
testified that he does not recall plaintiff suggesting a name for the game, that he did not
have plaintiff sign any documentation at the meeting, and that he did not know what
plaintiff’s intentions were as far as whether he sought to profit from the idea. Berg
forwarded the application to defendant’s Product Development Department for analysis
and through an e-mail expressed his initial thoughts, including potential benefits and
drawbacks of the game idea. (Plaintiff’s Exhibit 4.) Berg recalled that Sharon Murray,
an employee in the Product Development Department, sent him an e-mail stating that
the information provided was not thorough enough to perform a proper analysis.
(Plaintiff’s Exhibit 6.) According to e-mails between Berg and Murray, she contacted
plaintiff in an attempt to obtain more specific details about his idea, but she ended up
Case No. 2010-12338 -5- ENTRY
concluding that his idea was too vague to adequately assess. According to Berg, he
was not actively involved in the development or marketing of the Lot ‘O Play game.
{¶ 10} Dennis Kennedy testified by way of deposition that he was employed with
defendant from 1976 to 1996, and again from 1999 to 2004, including four years of
service as the director from 2000 to 2004. Kennedy, who has a degree in accounting
and is a CPA, now serves as the finance director for the city of Solon, Ohio. Kennedy
testified that during his tenure as director, defendant undertook the process of replacing
its Super Lotto Plus game (which had declined in popularity after the introduction of the
Mega Millions game in 2002) with a different type of game that would appeal particularly
to individuals who enjoyed playing bingo and keno.
{¶ 11} Kennedy stated that, with the assistance of others including Assistant
Director Connie Miller and Darick Cornelious of GTECH, he developed a game that was
conceptually similar to bingo and keno, but still different from those games. Kennedy
recalled that GTECH or another vendor calculated the odds and performed other
mathematical functions. Kennedy explained that the development of this game was
something of a departure from the manner in which games were usually designed,
whereby vendors, namely GTECH for online games and Scientific Games, Inc. for
instant tickets, worked in conjunction with defendant’s Product Development
Department. Kennedy also stated that he believes any unsolicited ideas from the public
would, at that time, have been referred to the Product Development Department.
{¶ 12} Kennedy testified that his tenure as director ended before the new game
was introduced to the public, and that he did not know what would come of the project
upon his departure. He stated that the game was conceptually the same as the version
of Lot ‘O Play that was ultimately introduced to the public, but that some of the details
were different than in the design he worked on. Kennedy acknowledged that
defendant’s chief legal counsel, Quan Kirk, sent him a letter in mid-2005, after his time
as director had ended but before the introduction of Lot ‘O Play, asking for information
Case No. 2010-12338 -6- ENTRY
about the origins of the game and any knowledge he had of plaintiff’s game idea.
According to Kennedy’s response to Kirk, he was not aware of plaintiff or his game idea,
and he explained the process by which Lot ‘O Play was developed. (Plaintiff’s Exhibit
14.)
{¶ 13} Thomas Hayes testified by way of deposition that after many years of
service with several governmental agencies, he was appointed to succeed Kennedy as
defendant’s director in January 2005 and remained in the position until August 2006.
Hayes stated that he was not aware of any member of the public having proposed an
idea for a “similar game,” or any other game for that matter, during his tenure, and that
he had no recollection of Kirk reviewing plaintiff’s game idea vis-à-vis the development
of Lot ‘O Play in the months leading up to its public rollout. Hayes further stated that
although game development was generally performed by vendors and the Product
Development Department, during his time as director he recommended a game that
ended up being used.
{¶ 14} Hayes testified that his involvement in bringing the Lot O’ Play game to
market included submitting the game for approval by the Ohio Joint Committee on
Agency Rule Review. He also acknowledged that defendant and GTECH became
involved in some sort of dispute over Lot ‘O Play which prompted him to send a letter to
GTECH expressing disappointment in an unspecified “patent issue.” Hayes testified
that he could not recall the nature of the patent issue, though, stating that it might have
pertained either to GTECH attempting to use Lot ‘O Play in other states or to plaintiff’s
preliminary patent application. With respect to the discontinuation of Lot ‘O Play in
2006, Hayes stated that he cannot recall exactly why it occurred but he remembers that
the game “wasn’t performing well.”
{¶ 15} Plaintiff’s complaint asserts one count of unjust enrichment. “Unjust
enrichment is an equitable doctrine to justify a quasi-contractual remedy that operates in
the absence of an express contract or a contract implied in fact to prevent a party from
Case No. 2010-12338 -7- ENTRY
retaining money or benefits that in justice and equity belong to another.” Struna v. Ohio
Lottery Comm., 10th Dist. No. 03AP-787, 2004-Ohio-5576, ¶ 22, quoting Turner v.
Langenbrunner, 12th Dist. No. CA2003-10-099, 2004-Ohio-2814, ¶ 38. “A plaintiff
seeking to recover under unjust enrichment or quantum meruit must establish that: (1)
the plaintiff conferred a benefit on the defendant; (2) the defendant knew of the benefit;
and (3) it would be unjust to permit the defendant to retain the benefit without payment.”
Meyer v. Chieffo, 193 Ohio App.3d 51, 2011-Ohio-1670, ¶ 37 (10th Dist.). Additionally,
the court notes that a claim of unjust enrichment may be displaced by the statutory
remedies provided for in the Ohio Uniform Trade Secrets Act if the claim is based upon
the “misappropriation” of a “trade secret” as those terms are defined in R.C. 1333.61.
Columbus Steel Castings Co. v. King Tool Co., 10th Dist. No. 08AP-385, 2008-Ohio-
6309, ¶ 11.
{¶ 16} Upon review, regardless of whether plaintiff’s complaint sounds in unjust
enrichment or misappropriation of a trade secret, the court finds that the greater weight
of the evidence does not demonstrate that plaintiff is entitled to recovery. The court
finds that defendant neither used nor benefitted from plaintiff’s game idea, and that the
idea lacks independent economic value. The idea set forth in plaintiff’s provisional
patent application is confusing, vague, lacking basic details required of a functional
lottery game, and presents a general concept that had already been used in games of
chance; and, when defendant asked plaintiff to clarify his idea and provide more details,
he was unable to do so. As Dr. Short acknowledged, the application does not describe
a game, but rather presents a basic “structure” that can take hundreds of different forms
and actually encompasses existing games of chance such as bingo. Indeed, the
provisional patent application acknowledges that “[s]ome games of chance do employ a
matrix, wherein the location of one or more of the number set determines outcome.”
(Plaintiff’s Exhibit 2.)
Case No. 2010-12338 -8- ENTRY
{¶ 17} Moreover, the court finds that Lot ‘O Play is distinctly different from
plaintiff’s game idea, such as in the way that plaintiff’s idea apparently has the game
administrator arrange a matrix that applies to all players, rather than each player being
issued a different matrix which the player has the ability to partially arrange (plaintiff’s
application, in fact, says very little about the player’s involvement in selecting numbers).
Plaintiff’s idea seemingly has the entire number array arranged in the matrix, while the
matrices in Lot ‘O Play included only 25 of the 100 numbers in the array. While
plaintiff’s application identified four-by-five and five-by-six matrices and 1-20, 1-40, and
1-45 arrays as examples of how the game could be played, Lot ‘O Play had a five-by-
five matrix and a much larger number array of 0-99. Lot ‘O Play also included an instant
win feature (making every hundredth ticket sold an instant winner) and a feature
whereby players would win a prize for matching some, but not all, of the drawn
numbers, and plaintiff’s application makes no reference to such features. And, unlike
the vague, incomplete concept in the preliminary patent application, Lot ‘O Play had
clearly defined instructions, odds, and prize structures which required substantial effort
and mathematical analysis to develop. Further, although plaintiff claims in his complaint
to have suggested the name “Lots of Play,” the court finds that he did not present
credible evidence at trial to substantiate this allegation.
{¶ 18} For the foregoing reasons, the court finds that plaintiff failed to prove any
of his claims by a preponderance of the evidence and, accordingly, judgment shall be
rendered in favor of defendant.
_____________________________________
CLARK B. WEAVER SR.
Judge
[Cite as Leone v. Ohio Lottery Comm., 2013-Ohio-3628.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
IGNATIUS J. LEONE
Plaintiff
v.
OHIO LOTTERY COMMISSION
Defendant
Case No. 2010-12338
Judge Clark B. Weaver Sr.
JUDGMENT ENTRY
{¶ 19} This case was tried to the court on the issue of liability. The court has
considered the evidence and, for the reasons set forth in the decision filed concurrently
herewith, judgment is rendered in favor of defendant. Court costs are assessed against
plaintiff. The clerk shall serve upon all parties notice of this judgment and its date of
entry upon the journal.
_____________________________________
CLARK B. WEAVER SR.
Judge
cc:
Christopher P. Conomy Michael P. Cassidy
Randall W. Knutti 11221 Pearl Road
Assistant Attorneys General Strongsville, Ohio 44136-3344
150 East Gay Street, 18th Floor
Columbus, Ohio 43215-3130
001
Case No. 2010-12338 - 10 - ENTRY
Filed March 7, 2013
To S.C. Reporter August 22, 2013