San Antonio software writer in suit over computerized poker table

Nick Trout bet he would get rich creating software for a fully automated poker table.

Things didn’t work out that way.

Instead, Trout, who runs Tellis Software Inc. out of his San Antonio home, now is embroiled in a lawsuit with PokerTek Inc., based in Morris, N.C. He moved his company here a few years ago from the Houston area.

„I was supposed to get 2 percent equity in the company and up to about USD 800,000,“ Trout said. „At the end of the day, I only got USD 30,000 out of them.“

Earlier this year, Trout sued PokerTek and its former CEO and current president, alleging they broke a software development contract with Trout and did not compensate him properly for his work.

Trout’s lawyer, Adam J. Loewy of Barry & Loewy LLP in Austin, filed the lawsuit in February against PokerTek and its former CEO, Gehrig „Lou“ White, and President James Crawford, in Texas. In August, Loewy transferred the case to the western North Carolina U.S. District Court.

PokerTek denies the claims and has countersued Tellis.

The company wouldn’t comment on the suits. PokerTek does not comment on pending litigation, said Daniel Lascell, the company’s lawyer.

Trout alleges that PokerTek broke a 2004 software development agreement in which PokerTek contracted with Tellis to create specialized software for an electronic poker table. Trout says he worked 15 hours per day, seven days a week for nine months on the project.

„They got what they wanted from Nick and Tellis,“ Loewy said. „Nick’s company is a small Texas company, and that is what makes Texas great. It really upsets me that this company from North Carolina can treat him like this.“

PokerTek creates electronic poker tables and sells them to casinos. The tables‘ specialized software allows them to host a fully automatic poker game without a live human dealer, paper cards or plastic chips.

By touching cards and chips on a computer screen, each player can make all the normal poker moves such as raising a bet, passing or folding. The computer screens all interact and allow the game to be played without a human dealer.

PokerTek has sold dozens of the tables to casinos nationwide.

Trout alleges the tables would not work without his software. Trout also says PokerTek and its officers filed a patent application on his software. He is seeking millions in damages against the firm.

„In our view, PokerTek took Tellis‘ software without fully paying for it,“ Loewy said.

PokerTek, which is publicly traded on the Nasdaq under the symbol PTEK, denied the claims in a previous filing with the Securities and Exchange Commission.

„We, Mr. Crawford and Mr. White believe we each have meritorious defenses to all claims that have been asserted by Tellis Software, but there is no assurance that we will be successful in our defense of this or similar lawsuits or that such lawsuits will not have a material adverse effect on our business, financial condition or results of operations,“ according to the SEC filing.

The case is set to go to trial next year, Loewy said.

Trout says he is continuing to develop software, but he cannot go into details about what the programs are until they are ready to launch. He does say that they are not focused on poker.