Colossus Bets files IP lawsuit against DraftKings and Tabcorp over cash-out feature
B2C and B2B pool-betting operator takes aim at US and Australian giants after multiple patent infringement claims go unanswered
Colossus Bets has launched legal proceedings in the US against DraftKings and in Australia against Tabcorp over alleged patent infringements relating to cash-out products.
In respect of the US claim, Colossus Bets has filed a lawsuit with the US District Court in Delaware alleging seven separate counts of US patent infringement.
Colossus Bets founder and former CEO Bernard Marantelli was one of the first to develop cash-out technology.
The patents date back to 2016 and cover “specific improvements in computer technologies related to distributed gaming and distributed gaming utilising desktop computers, mobile devices and specialised kiosks”.
More specifically, these concern cash-out features used in the firm’s sports betting and gaming products. Within its lawsuit, the London-headquartered firm stated there were several instances where it advised DraftKings of the infringements, ranging from August 2018 to July 2021.
On 20 July 2021, Colossus Bets sent a notice letter via certified mail and email to DraftKings confirming the issue of additional patents 10,970,969 and 10,997,822 by the United States Patent and Trademark Office.
This correspondence identified specific features offered by DraftKings which infringed Colossus Bets patents, and while DraftKings did respond to each correspondence, no other actions were taken.
Colossus Bets has claimed DraftKings “wilfully infringed” and is continuing to infringe on its US patent rights and is demanding damages and compensation from the Boston-headquartered operator.
This award claim covers both pre- and post-judgment interest arising during the lawsuit.
In addition, Colossus has asked that the court increase any damages award by up to three times under US law, as well as issuing an order compelling DraftKings to compensate Colossus for any further infringement.
Discussing Colossus Bets’ decision to hit the legal button, Marantelli said: “We attempted to resolve this amicably and we gave them ample opportunity to do so.
“We take our intellectual property very seriously. This is the next step towards protecting our rights and income across the industry in the US,” Marantelli added.
The lawsuit marks the second time in 12 months that DraftKings has been the subject of patent infringement, with the firm currently being sued for damages by Engine Media Holdings in New Jersey over IP violations.
Elsewhere, Colossus Bets has also filed a separate IP lawsuit with the Federal Court of Australia against Tabcorp, over alleged infringements relating to its “Cash Out for Quaddie” feature used by the TAB.
The product allows punters to take a dividend at any point for a quaddie, a bet where you have to select the winners of four selected races, usually for a smaller percentage of the dividend.
It has endured multiple outages and cash-out claims from disgruntled Australian punters.
The patent was filed by Diogenes Limited, a IP company owned by Bernard Marantelli which initially held the Australian patents before licensing them to Colossus Bets in perpetuity. However under Australian law, Diogenes (as the original patent holder), must file any lawsuit on behalf of the licensed entity in order to meet Australian legal requirements.
The firm alleges violations of two Australian patents dating back to 2014 and 2019 respectively, suggesting Colossus Bets has “suffered, and is continuing to suffer, and will in the future suffer substantial loss and damage”.
As with the DraftKings suit, the Tabcorp filing asserts several attempts by Diogenes to enforce its patent rights through correspondence asking Tabcorp to “cease and desist” from using technology related to its patents.
“As a consequence of the above, the respondent [Tabcorp] was aware, or should reasonably have been aware, that by engaging in its wrongful conduct as aforesaid, it was infringing the 319 Patent and the 870 Patent, and if it so persisted, that it would continue to infringe the 319 Patent and the 870 Patent,” the Diogenes complaint states.
The cases continue.
Colossus Bets’ patented products are currently licensed to bet365 in North America and Esports Technologies both in North America and internationally.
The firm has patents in additional jurisdictions including Australia, Japan, South Korea, the Philippines, Indonesia, South Africa, Singapore, Nigeria and Eurasia.