More Trouble for DraftKings and FanDuel in the Form of a Patent Lawsuit

Los Angeles – Yet another lawsuit has been filed against DraftKings, FanDuel, and Fox Sports. This time the legal battle is over technology that Virtual Gaming Technologies, LLC claims these organizations use in violation of the patents it holds.

Virtual Gaming Technologies, DraftKings, FanDuel, and Fox Sports all operate fantasy sports games. These virtual games allow individuals to create teams made up of current athletes and receive points based on these athletes’ performances in weekly games. These organizations are a part of the $15 billion a year fantasy sports industry.

The first Virtual Gaming Technologies patent, issued in 1999, is United States Patent Number 5,860,862 titled “Interactive systems allowing real time participation.” The patent centers on the ability for players to interact in the virtual game, such as trading players, while the sport event is occurring in real time.

The second patent, issued in 2001, is United States Patent Number 6,193,610 titled “Interactive television system and methodology.” The patent focuses on the ability of players to compete in the virtual game while the sporting event is aired on television.

The lawsuit states, “Virtual Gaming depends on patent protection to effectively license its innovative technologies and build its business.” The claim of the lawsuit is that the companies use the patented technology without attribution or compensation. Virtual Gaming Technologies seeks an award of damages in the form of royalties in accordance with 35 5 U.S.C. § 284.

Virtual Gaming Technology is trying to get jurisdiction in the Eastern District of Texas federal court based on Fox Sports’ use of the Texas federal courts previously and the partnership of DraftKings with the National Football League which has a team there, namely the Dallas Cowboys. In the past, the East Texas courts have favored plaintiffs in patent infringement cases, making it a desirable location for Virtual Gaming Technology.

This lawsuit is one of many filed against these fantasy sports companies in recent years. A class action lawsuit was filed against DraftKings and FanDuel alleging employees improperly used insider information when playing fantasy sports games against non-employees. A lawsuit against FanDuel was filed by Washington Redskins wide receiver Pierre Garcon for using his image and likeness without consent in commercial activity. The total number of lawsuits filed against DraftKings and FanDuel since October 2015 has reached more than 25.