Xpoint wins geolocation dispute as GeoComply patent lawsuit tossed

GeoComply’s lawsuit aimed at geolocation newcomer Xpoint for alleged patent infringement has been dismissed by a judge in the US District Court of Delaware.

On Friday, Judge William Bryson issued a 43-page order to dismiss the suit, first filed by GeoComply in October 2022 over infringement of US Patent No. 9,413,805.

This patent governs technology used to determine a user’s location when accessing an online gambling service, something which Xpoint provides to US casino brand PlayStar, allegedly infringing on GeoComply’s patent rights.

This technology has propelled GeoComply to a position of dominance in geolocation technology, which is deployed in many igaming and sports betting states across the US to confirm whether players are physically located in states which legally permit either vertical.

In the order for dismissal, Judge Bryson highlighted one specific area on which the decision rested, namely claim 10, which suggested that a “non-transitory computer readable storage medium” was a necessary part of the geolocation tracking of users.

In considering this claim in this respect, the Judge asserted that different technology  groups were responsible for the nuts and bolts of the geolocation process.

In this case, the transmission and all intermediate steps in the geolocation process took place on servers belonging to PlayStar, with only the program responsible for the geolocation on Xpoint servers.

Judge Bryson suggested that a lack of response on the part of GeoComply to this claim constituted its concession that there was no patent infringement, at least in respect of the claims made by the firm.

GeoComply also filed a motion to amend the complaint should the Judge deny any part of an Xpoint motion to dismiss the lawsuit, a mechanism which was ultimately denied by Judge Bryson on the grounds it would be a futile effort.

“As previously discussed, the allegations of infringement in GeoComply’s complaint fail to allege facts sufficient to show that Xpoint infringes claim 10 of the ’805 patent under the theory set forth in Count II of the complaint,” Judge Bryson wrote.

“And GeoComply’s proposed amended complaint, Dkt. No. 41-1, does not supplement the allegations relating to claim 10 under that theory of infringement.

“Leave to amend the complaint would therefore be futile with respect to the portion of the complaint that has been dismissed both for forfeiture and for failure to plausibly allege infringement,” the Judge concluded.

With leave to amend denied, and GeoComply not asserting a counterargument to Judge Bryson’s claims regarding the presence of other entities in the geolocation process, the Judge ultimately dismissed claim 10 of the lawsuit on ineligibility grounds.

However, attempts by Xpoint to have the remainder of the claims made by GeoComply were denied by Judge Bryson, potentially leaving the door open for a renewed effort by GeoComply to assert its rights in respect of the technology concerned.

Responding to the ruling with a statement, GeoComply’s comments suggested that the fight between the two geolocation firms might not be over.

“When we embarked on this process, as with any serious litigation, we did so with full awareness that there would be twists and turns along the way. So far, it has not failed to deliver on those fronts,” GeoComply said.

“Many questions have been exposed that remain unanswered, including the publicly available 2022 third-party report which concluded that XPpoint is ‘directly copying’ the [GeoComply] code.”

The statement continued: “It is important to note that today’s decision only concerns technical patent matters. It does not address any of the various other troubling matters identified in the 2022 report and elsewhere.

“All of those questions will be answered. We respectfully disagree with this particular decision and are evaluating next steps in all available forums,” GeoComply added.

Issuing a statement of its own, Xpoint expressed its gratitude for the court’s “well-reasoned dismissal of GeoComply’s meritless allegations” and acknowledgment of its counterclaim.

“By granting Xpoint’s motion to dismiss, and invalidating GeoComply’s only United States patent in the process, Judge Bryson ensured that the United States geolocation market remains open for competition and soundly rejected GeoComply’s anti-competitive lawsuit,” Xpoint said.

“The court’s decision reiterates what Xpoint has maintained all along: GeoComply’s lawsuit was simply a desperate attempt to stifle competition and innovation in order to maintain its market position.

“Xpoint has and will continue to innovate, expand, and disrupt the geolocation marketplace.

“Disruption and change of any industry usually leads to attacks like the one we experienced from GeoComply, and Xpoint will continue to aggressively defend its rightful place in the market,” the firm concluded.