Federal Circuit Court Turns Down FanDuel Claims in Remote Gambling Patent Infringement Case

The fantasy-sports betting division of Flutter Entertainment, FanDuel, did not manage to convince the Federal Circuit Court that part of a remote gambling patent held by a market rival of the company was invalid. Yesterday, a federal appeals court upheld the part of a patent held by the Cantor Fitzgerald LP’s sports-betting spin-off after the company had accused FanDuel of the patent’s infringement.

The US Court of Appeals for the Federal Circuit issued a 2-to-1-vote decision affirming a previous ruling of an administrative patent court that said at the time that the patent held by CG Technology on a remote gambling system was valid. Both courts rejected FanDuel’s arguments that the technology, which the plaintiffs claimed to have been subject to infringement, was obvious.

The argument presented by FanDuel’s legal counsel, Eric Buresh of Erise IP, that the Patent Trial and Appeal Board breached the Administrative Procedure Act by upholding the technology patent in part, based on obviousness issues, failed to convince the Federal Court of Appeals. CG Technology was represented by James Barney of Finnegan, Henderson, Farabow, Garrett & Dunner.

CG Accused FanDuel and Other Market Rivals of Online Betting Tech Patents Infringement

Cantor Fitzgerald, a popular bond-trading firm, spun off CG after it had inked a $22.5-million settlement with regulatory authorities to resolve allegations of money laundering and illegal gambling operations.

Currently, CG Technology is one of the biggest bookmakers operating in the state of Nevada. The company runs several sports betting services at Las Vegas casino resorts such as the Palazzo and the Venetian and is subject to acquisition by William Hill PLC.

In 2016, CG alleged some of its market rivals, including DraftKings, FanDuel and bwin.party, of infringing a number of its online betting technology patents on several aspects. Those cases have been ended because of some unfavorable rulings to the company, but some of its infringement claims remain unsolved.

The online betting technology patent that was subject to the federal court’s decision announced on July 29th covers a gaming system that allows a casino to communicate wirelessly with users’ mobile devices and provides such punters with the chance to place their bets online. It is known as the ‘058 patent.

Following a request filed by FanDuel, the Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office agreed to once again take into consideration the validity of claims 1, 6 to 9, and 19 of the ‘058 patent. As a result, most of the patent was invalidated by the PTAB that cited obviousness as grounds for the decision, but the validity of claim 6 was upheld.

That aspect of the ruling was appealed by FanDuel to the Federal Circuit, with oral arguments on the case held in February 2020. According to FanDuel’s claims, the Patent Trial and Appeal Board made a mistake in the obviousness analysis and improperly based the ruling on issues that were not raised by CG in its responses to court.

Both arguments, however, were turned down by Circuit Judge Todd Hughes, who ruled that there had been no errors in PTAB’s analysis. His decision was fully supported by Circuit Judge Kimberly Moore. The third Circuit Judge, Timothy Dyk, disagreed that the questionable issue was non-obvious.