HOME GAMING NETWORK TAKES HO FAMILY MEMBERS TO FEDERAL COURT

Molnick's "live over the Internet" patent at the centre of dispute

The LV Business Press reports that Mel Molnick of Home Gambling Network (HGN) is exercising his "268 Patent" on "Live Casino Gambling" over the Internet against members of the famous Ho gambling interests family. The report unveils an intertwined series of business arrangements that at one time involved Casino Web Cam, which sub-licensed some 15 or more "live over the Internet" gambling sites.

Angela Ho, daughter of Asian gambling tycoon Dr. Stanley Ho will this week appear in the Lloyd George Federal Courthouse to be deposed as part of a U.S. District Court case being heard in Las Vegas. The litigation involves the DrHo888.com Web site, of which she is president.

Her husband, Peter Kjaer is both a plaintiff and defendant, because of his role as CEO of certain DrHo888.com-affiliated entities. Ms. Ho herself is among the defendants in a parallel case filed last fall in Nevada's Eighth Circuit Court, in Clark County.

It is the software used on the Internet gaming site that has brought Angela Ho and her husband Peter Kjaer into federal court, reports the LV BUsiness Press.

The interlocking disputes centre on gambling software developed and licensed by Home Gambling Network (HGN) and its owner, Mel Molnick, of Henderson. He holds the so-called "268 Patent," which enables live casino gaming from remote locations via the Web.

Kjaer and his Caribbean- and Virgin Islands-based companies, Silver Arrow and Profit Networks, assert that Molnick assigned them the rights to the 268 Patent. Molnick's countersuit contends that Kjaer's Web sites have no such prerogative.

What is not in dispute is that HGN licensed the patent to Kjaer's Antigua-based Caribbean Online in the course of settling a 2002 patent-infringement lawsuit. The accord states, in part, that Caribbean Online "shall have no right to sublicense the 268 Patent to any third-party manufacturer, casino or operator."

Another clause in that agreement released Stanley Ho's Sociedade de Turismo e Diversoes de Macau from liability, as well as his Shun Tak Holdings, run by his daughter Pansy, who is the managing director of Shun Tak. Pansy is also MGM Mirage's joint-venture partner in MGM Grand Macau.

According to Kjaer's original complaint, Molnick's HGN and his own Profit Networks were to go 50-50 on a Costa Rica-based corporation, Home Gambling Network International, with Kjaer having veto power over any sublicensing of the 268 Patent. At this point, a disgruntled licensee - CasinoWebCam (CWC) - served papers on HGN, asserting that it still held the patent's rights. Kjaer claims that Molnick, to be rid of CWC, gave it a sublicense, thereby breaching Kjaer's exclusive control.

Another sore point between the two adversaries is a series of online wagers that Molnick placed from various Nevada computers, between March 21 and May 8, 2005, with DrHo888.com and affiliated Web sites, including NudeCasino.com and MonteCarloLive.com. On the basis of these bets, Molnick filed suit in Clark County, charging various Ho/Kjaer companies with sundry felony and misdemeanor violations of Nevada law.

Molnick's Web bets, although illegal under the Federal Wire Act, were conducted "(w)ith the State of Nevada Gaming Control Board Enforcement Division's knowledge and consent," according to several of Molnick's court filings. The Gaming Control Board did not return a phone call from the Business Press.

In his filings, Molnick argues that Kjaer's exclusivity was contingent upon payment of a $10 000 deposit and that Kjaer ponied up only half, thereby voiding their pact. The side deal with CWC, Molnick continues, was forced on him by a Nevada court, as a form of litigation settlement.

Last February, Molnick's attorney, Craig Marquiz, offered to release Kjaer as a defendant, in return for a deposition. "Forgive me," responded David Enzminger, one of several attorneys for Kjaer, "but Molnick took a lot of money from Kjaer's company for a patent license, and then turned around and claimed that the license is illegal and sued for infringement, I note that he hasn't returned the money he received as a royalty from this allegedly illegal conduct."

Although Kjaer is seeking exclusive rights to the 268 Patent, plus court costs, Molnick's response is that the statute of limitations (or "doctrine of laches") has lapsed. He added that DrHo888.com's "unclean hands" further undermine Kjaer's standing.

Molnick appears to have been further alarmed by an e-mail received last October from "eGaming Review" magazine, informing him that Ho Gaming Solutions was planning to sell off the source code for the 268 Patent to any interested party for $500 000. On Nov. 3, in return for a $25 000 bond, the Eighth Circuit placed a temporary restraining order on Kjaer, Ho and DrHo888.com, enjoining them from bartering away the HGN software. In the long run, Molnick is seeking compensatory and punitive damages, but not an adjudication of the rights to the 268 Patent.

Although Molnick, in his countersuit, accuses Kjaer of "evil, intentional, grossly improper" conduct and his company of "knowingly, intentionally, fraudulently, carelessly and/or negligently" misrepresenting its rights to HGN's technology, the Web site for Molnick's i2corp.com still carries a link to DrHo888.com on its "Licensees" page. Attorneys for Molnick, Kjaer, Ho and related entities did not respond to multiple Business Press requests for further information.

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