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The U.S. Court of Appeals for the Federal Circuit has upheld the dismissal of GeoComply’s claims that competitor Xpoint infringed on a patent that the Vancouver-based company owns to perform its geolocation tracking services for the gaming industry.
Originally filed in September 2022, GeoComply’s lawsuit alleged that Xpoint Services violated its patented method for verifying users’ physical locations to prevent spoofing, a critical requirement in the online sports betting and internet gaming industry under state and federal laws that require players to be in-state to place a wager.
GeoComply claimed its patents included collecting geolocation data on a device, transmitting it to multiple servers, and providing the location back to the initial server, a method that helps prevent the technology from being circumvented by location-disguising efforts such as VPNs.
GeoComply claimed that Xpoint uses a similar method as part of its own geolocation procedures, meaning GeoComply was effectively “forced to compete against its own patented invention”.
The three-judge appeals panel in Washington, D.C., did not provide an explanation for its November 8 decision to uphold the dismissal of GeoComply’s lawsuit.
Judge William Bryson of the U.S. District Court of Delaware initially dismissed the lawsuit with prejudice in February 2023, writing that GeoComply's patent is too broad and general to be applicable.
“Even outside the gaming context, the idea of using multiple sources of information to verify a person’s location is a longstanding business practice,” Bryson wrote in his 43-page opinion.
In a statement emailed to Vixio GamblingCompliance on Monday (November 11), GeoComply said it was disappointed by the court decisions related to patent law technicalities.
“While we respect the judicial process, we stand firm in our belief that this specific innovation within our groundbreaking technology deserves protection from improper infringement,” the company said.
“GeoComply takes pride in championing fair competition in the marketplace and promoting start-up innovators who challenge incumbents and strengthen the industry. However, when we believed our proprietary technology rights were being violated, we could not stand by without defending our innovation. GeoComply remains committed to promoting competition while still protecting our broad intellectual property rights.”
Xpoint released its own statement on Monday saying it was “pleased the court has ruled in our favor, affirming what we have maintained from the start: Xpoint has conducted its business legally and appropriately, and GeoComply has attempted to restrict competition through a patent that is invalid under U.S. law.”
“Both the District Court and now the U.S. Court of Appeals for the Federal Circuit have held that GeoComply’s patent infringement allegations against Xpoint are meritless. The decision means that Xpoint can continue to operate and innovate freely in the geolocation technology space,” the company added.
Furthermore, Xpoint said, “the invalidation of GeoComply’s patent shows that no company can monopolize vital geolocation technology services and force their clients to work with them.” GeoComply’s client list includes U.S. market leaders FanDuel and DraftKings, among others, while clients of Xpoint include Sporttrade and PlayStar Casino.
“Xpoint will vigorously pursue opportunities to create choice for gaming operators and improve the health of the industry,” the company said. “Xpoint’s victory demonstrates its commitment to an open, competitive market that drives forward the capabilities of geolocation technology for the entire gaming industry.”
