Engine Media Holdings, Inc. (NASDAQ:GAME) is suing DraftKings (NASDAQ:DKNG). They claim the online sportsbook operator infringed on patents owned by the Canadian company’s WinView unit.
In a complaint filed in the United States District Court for the District of New Jersey, Toronto-based Engine asserts some gaming services offered by DraftKings infringe upon WinView’s US Patent No. 9,878,243, also known as “the 243 patent.”
Titled “Methodology for Equalizing Systemic Latencies in Television Reception in Connection with Games of Skill Played in Connection with Live Television Programming,” and another patent — “Method Of And System For Managing Client Resources and Assets for Activities On Computing Devices” — appear to have some relevancy to live or in-game wagering.
The inventions claimed in the ‘243 patent’ relate to specific improvements in computer technologies related to distributed gaming and distributed gaming utilizing a mobile device,” according to Engine Media’s legal complaint.
WinView, which holds 80 US patents, provides cash games of skill related to the viewing experiences of esports and standard sports.
In the legal document, Engine Media says the patent inventors solve an important scenario facing operators and bettors alike — lack of synchronization among television signals across the country.
That’s one reason leagues, such as the NFL and NBA, work with outside data providers, and why sportsbooks are often compelled to pay up for premium data. For bettors, however, latency differences and use of various devices mean a gambler in New York may consume data at a different time than a counterpart in California, although they may be watching and wagering on the same contest. The WinView patent aims to level the playing field.
“Recognizing that these latencies in receipt of broadcast content need to be accommodated in order to maintain user enjoyment and fairness for all participants, the inventors described and claimed technical solutions to these problems,” according to Engine’s legal document.
The 243 patent provides a method of equalizing latency differences in games of skill while synchronizing the game with broadcast content and other relevant data.
For its part, DraftKings, and other operators for that matter, has made clear its intent to participate in the rapidly growing in-game wagering market. In 2019, DraftKings rolled out a related product coinciding with Wimbledon, while inking a live wagering accord with the NBA.
Realizing that live betting is a massive revenue generator in mature gambling markets such as the U.K. and Europe, DraftKings wants to make it a bigger part of the US wagering lexicon, sensing an opportunity with slower-moving sports such as baseball and golf.
Engine claims DraftKings is infringing on its patents in New Jersey, the largest sports betting market in the US.
“DraftKings infringes literally and/or under the doctrine of equivalents, in violation of 35 U.S.C. §271(a), by, among other things, making, using, offering to sell, and/or selling within this District and elsewhere in the United States, without authority or license, DraftKings products and services falling within the scope of one or more claims of the 243 Patent, including but not limited to claim 1,” says the plaintiff.
The Canadian company claims the sportsbook operator is synchronizing data for live betting, indicating it could be infringing on “one or more claims” covered by the 243 patent.