XPoint Claims ‘Super Bowl’ Victory as Judge Tosses GeoComply’s Geolocation Lawsuit

Posted on: February 12, 2023, 04:40h. 

Last updated on: February 14, 2023, 03:14h.

A company seeking to enter the geofencing market, a service crucial to legal online gaming operators, scored a legal victory on Friday.

XPoint Services sponsors a lounge at SBC Summit North America in May 2022 in New Jersey. On Friday, a federal judge dismissed a lawsuit filed by GeoComply, which alleged XPoint infringed on its geolocation services patent. (Image: XPoint/Twitter)

A federal judge in Delaware dismissed a patent infringement lawsuit filed by GeoComply Solutions against XPoint Services. GeoComply, a Canadian-based company, claimed XPoint leveraged its intellectual property and sought to stop its competitor from offering its solution.

However, after hearing oral arguments on Jan. 31 regarding GeoComply’s request for a temporary injunction blocking XPoint from marketing its geolocation solution, US Circuit Judge William C. Bryson, a visiting judge in the Delaware US District Court, determined GeoComply failed to make its case.

Specifically, Bryson noted that GeoComply “failed to plausibly allege infringement” of a certain claim it made in its case.

“In its opposition to Xpoint’s motion to dismiss, GeoComply did not respond to Xpoint’s argument regarding claim 10,” Bryson wrote in his Friday order. “GeoComply’s failure to respond to that argument constitutes a concession that Xpoint does not infringe claim 10 of the ’805 patent, at least under the infringement theory of Count II.”

Bryson dismissed the case based solely on that count and did so with prejudice, meaning GeoComply cannot refile that claim in the same court. However, it may also appeal the judge’s decision.

CEO: XPoint ‘Just Getting Started’

In a statement to Casino.org, XPoint said it “appreciates the District Court’s well-reasoned dismissal of GeoComply’s meritless allegations” and said Bryson’s decision guarantees the geolocation market will remain open and competitive.

In the United States geolocation market, our Super Bowl took place two days early, and I am proud that Xpoint emerged victorious,” XPoint CEO Marvin Sanderson said. “We feel vindicated that the court recognized GeoComply had no right to monopolize this business-critical service, and we look forward to providing our technology more broadly across the gaming industry in the months to come– Xpoint is just getting started.”

XPoint has been approved to offer geolocation services in New Jersey, Ohio, and Tennessee in the US. It also has been approved by Ontario regulators in Canada.

Geolocation is the technology that verifies the physical location of a user accessing a specific app or website. It’s required for online sports betting and iGaming operators to ensure their customers are placing bets within states where their apps are licensed.

GeoComply Expected ‘Twists and Turns’ in Case

GeoComply filed the lawsuit in September. That was after XPoint announced it was providing geolocation services to New Jersey gaming operators, including Sporttrade’s sports betting exchange. It also provides the same service for PlayStar, which offers iGaming in the Garden State.

In its statement responding to the dismissal, GeoComply said it anticipated “twists and turns” as the case unfolded.

So far, it has not failed to deliver on those fronts,” the company said. “Many questions have been exposed that remain unanswered, including the publicly available 2022 third-party report, which concluded that XPoint is ‘directly copying the [GeoComply] code.’

The third-party report is apparently a document produced by start-up sports betting operator Out The Gate, which is preparing to launch in Ohio. OTG has said that it was an “outdated, confidential report” that used publicly available data for GeoComply and XPoint.

“It is important to note that (Friday’s) decision only concerns technical patent matters,” GeoComply added. “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.”