DraftKings hit with new patent infringement lawsuit
Engine Media Holdings launches New Jersey damages claim over IP violations in latest legal dispute
DraftKings has been targeted in a lawsuit by sports data firm Engine Media Holdings (EMH) over alleged infringement of US patent law.
The lawsuit, filed in the United States District Court for the District of New Jersey, centers on two separate patents owned by its WinView Inc. subsidiary issued by the US patents office in January 2018.
The first patent, known as patent 243, relates to “specific improvements in computer technologies related to distributed gaming and distributed gaming utilizing a mobile device.”
It covers methods used to maintain real-time content, the elimination of so-called “latency deficiencies” and data used in games of skill and chance during online broadcasts of content.
DraftKings’ existing live in-play betting solution, specifically its use of so-called ‘Flash Bets’, was cited by EMH as potentially infringing WinView’s existing 243 patent.
A second patent, known as patent 543, relates to “specific improvements in computer technologies related to distributed entertainment services with respect to events or programs occurring in various geographic locations.”
This includes consumer location information when accessing sports content via their smartphone or computer.
EMH alleges the infringement of this patent by DraftKings via an ‘activity client’ app included in the DraftKings sports betting app, which is used to identify the location of the mobile user in order to comply with existing state gambling laws.
In both patent infringement claims, EMH argues DraftKings is actively inducing users to violate US patents by offering the services to players, either unknowingly, with full knowledge of what it is doing, or with “wilful blindness.”
“WinView has suffered and continues to suffer irreparable injury as a direct and proximate result of DraftKings’ infringement for which there is no adequate remedy at law,” the claim stated.
“Unless DraftKings is enjoined, WinView will continue to suffer such irreparable injury,” it adds.
As a result, EMH, via its WinView subsidiary, has asked the court to force DraftKings to pay the firm damages as well as prejudgment and post-judgment interest over the infringements.
In a statement concerning the lawsuit, Engine Media executive chairman Tom Rogers said: “WinView is an important operating unit of Engine Media, providing cash games of skill as part of the viewing experience of both traditional sports and esports.
“In addition, WinView has a growing portfolio of 80 issued US patents, many of which relate to mobile sports betting and online gaming technologies.
“We will continue assessing how we can protect our intellectual property,” Rogers concluded.
Shares in EMH climbed by 15% in early trading on the Nasdaq as news of the lawsuit emerged.
DraftKings has not commented on the lawsuit at the time of publication of this article after being approached by EGR.
The lawsuit is the second major legal headache for the firm in the space of two months following the instigation of class action lawsuits by several US law firms in the wake of the Hindenburg Research report into DraftKings-owned technology provider SBTech.
Lawyers allege that DraftKings issued false or misleading statements and failed to disclose pertinent information on its SBTech subsidiary to investors.