PrizePicks Battles Patent Infringement Lawsuit Filed by Vetnos

The legal spotlight is back on PrizePicks, as it faces a second patent infringement lawsuit from Vetnos.

Accusations include copying daily fantasy sports concepts and misappropriating trade secrets, allegedly with help from a former Vetnos employee.

With added infringement claims, this high-stakes lawsuit could shape the future of intellectual property in the DFS industry.

Dive into the details of this unfolding legal battle and its potential implications for daily fantasy sports operators.

PrizePicks Faces Second Patent Infringement Lawsuit in Georgia Federal Court

Key Points

1. Vetnos’ Allegations: PrizePicks is accused of infringing patents and misappropriating trade secrets in its daily fantasy sports platform.
2. Expanded Claims: Vetnos adds five new infringement claims to its original lawsuit, intensifying the legal battle.
3. Legal Proceedings Move Forward: A court denied PrizePicks’ Motion to Dismiss, allowing the case to proceed toward trial.

PrizePicks Faces Escalating Legal Battle Over Patent Infringement

In a significant development for the daily fantasy sports (DFS) industry, PrizePicks has been hit with its second patent infringement lawsuit in Georgia federal court. The suit, filed earlier this month by sports gaming supplier Vetnos, alleges that PrizePicks unlawfully copied its DFS concepts and misappropriated trade secrets.

Background of the Dispute

The legal tensions between the two companies date back several years. According to Vetnos, PrizePicks initially engaged with Vetnos co-founder Dan Orlow, the co-inventor of the disputed patents, in 2018. During a phone call that summer, former PrizePicks CEO Adam Wexler allegedly told Orlow, “We liked your game so much, we decided to copy it.”

Vetnos claims that it attempted to resolve the matter amicably over several years but was forced to pursue legal action after PrizePicks allegedly continued to infringe on its intellectual property rights.

“PrizePicks refused to respect our IP rights, leaving us no choice but to seek help from the court,” Orlow stated in 2023.

Expanding the Lawsuit

Vetnos’ latest lawsuit builds on its initial case filed in June 2023, adding five new infringement claims to the original three. The expanded allegations also include misappropriation of trade secrets, further complicating the legal proceedings.

Vetnos alleges that PrizePicks hindered efforts to amend the first lawsuit by limiting the scope of patents included and imposing unnecessary conditions. This resistance, Vetnos argues, forced it to file a separate lawsuit, adding unnecessary complexity to the case.

In the complaint, Vetnos’ attorneys stated:

“PrizePicks’ actions resulted in further vexatious and unnecessary multiplication of the proceedings, burdening both Vetnos and the court system.”

PrizePicks’ Defense and Legal Challenges

PrizePicks previously filed a Motion to Dismiss the initial case, arguing that the patented concepts were too abstract and lacked evidence supporting claims of misappropriated trade secrets. However, in a major setback for the DFS operator, a Special Master appointed by the court recommended denying the motion in March 2024.

The court upheld this recommendation in July 2024, clearing the path for the lawsuit to proceed. This decision affirmed the validity of Vetnos’ patent claims, with Greenberg Traurig SVP Scott Bornstein stating:

“The court recognized the inventive nature of Vetnos’ patent portfolio and denied PrizePicks’ effort to invalidate the patents. We look forward to moving the case forward to trial.”

What’s at Stake?

The outcome of this legal battle could have significant implications for the DFS industry. Patent disputes are not uncommon in tech-driven sectors, and this case underscores the importance of protecting intellectual property in an increasingly competitive market.

Vetnos, which supplies Class II Sports Gaming technology to clients including two California tribes, is seeking damages and injunctions to prevent further infringement. For PrizePicks, the stakes are equally high as it defends its platform against allegations that could potentially disrupt its operations.

The second patent infringement lawsuit against PrizePicks marks an intensification of the legal conflict with Vetnos, highlighting critical issues surrounding intellectual property and trade secrets in the DFS industry.

As the case proceeds, both companies face a pivotal moment that could redefine the boundaries of competition and innovation in gaming. For PrizePicks, the legal challenges could shape its future strategy, while Vetnos continues to fight for the protection of its patents.

This unfolding battle serves as a reminder of the complexities and high stakes involved in intellectual property disputes within emerging industries. With trial preparations underway, the DFS world will closely watch the outcome of this landmark case.