A Federal District Court judge on Friday dismissed GeoComply’s patent infringement lawsuit against competitor Xpoint. Barring a successful appeal, the ruling by Judge William J. Bryson of the Delaware Circuit frees up one metric of the industry that has not had much competition as online gambling and sports betting explode state by state across the U.S.

The basis of the ruling is that GeoComply’s patent was never valid in the first place because it tries to patent subject matter that is not subject to patent law.

Geolocation services are critical for regulators and operators as it is the only currently accepted way of determining with a guaranteed high level of certainty where a player is located when they access a casino or sports book that is only allowed to operate within a state’s borders.

100 Million Geolocation Checks for Super Bowl

Once that is determined data collection and analysis can occur as well as was seen Monday when Geocomply announced that it had logged over 7.4 million account holders for Super Bowl Sunday and had completed over 100 million geolocation checks for sportsbooks, casinos, and regulators, logging a 25% increase over the previous year’s activity.

In the course of the lawsuit, Geocomply had asked the court for an injunction against Xpoint which would have prevented them from providing geolocation services until the litigation was concluded. Xpoint won a stay on that issue prior to Friday’s ruling.

GeoComply was forced to reveal its hand last month, indicating it had no first-hand evidence of patent infringement when it asked the court to compel a third party to provide evidence that Xpoint used “identical code processes” to GeoComply’s.

Part of a filing in the case stated: “Absent reviewing XPoint’s source code, it is not possible to articulate precisely how claim 1 of U.S. Patent No. 9,413,805 is met by XPoint’s accused geolocation service.”

Chief executive officer of Xpoint, Marvin Sanderson commented on Friday’s ruling stating: “From the beginning of this litigation Xpoint has maintained that it has conducted its business legally and appropriately.”

The case was filed with the court late last year when GeoComply claimed that Xpoint had been violating its intellectual property rights by utilizing geolocation engine technology purportedly invented by GeoComply founders.

GeoComply asked for an injunction in September 2022 “to protect GeoComply’s investment-based risk” and to stop Xpoint from using the “invention”.

However, a quick once-over of the method, without direct access to the code, seems to show a process rather than a coded engine with multiple avenues to achieve the process.

In the initial lawsuit, it was stated by GeoComply thus:

“A method for determining a geo-location, the method comprising:

transmitting a request to a first server by a first device;

collecting geolocation data associated with the first device in response to the request, the geolocation data collected by a module stored in memory and executed by a processor on the first device, the first device in communication with the first server which provides a service over a network;

identifying that one or more selected programs are present at the first device;

transmitting the geolocation data and programs and a list of the present selected programs to a second server;

receiving a geolocation message from the second server, the geolocation message generated at least in part from the geolocation data and a list of the present selected programs;

providing the received geolocation message to the first server.”

Xpoints response was that the suit was without merit.

A Monopoly Busted?

After the circuit court victory Friday, Sanderson commented: “As a company, we remained confident that we would prevail in this matter as GeoComply’s allegations were false, meritless, and a thinly veiled attempt to improperly maintain its monopoly on the gaming geolocation marketplace.”

GeoComply saw a greenfield advantage with the legalization of online casino gambling in the first states and took advantage of that to capture most of the market. The service is unique in that it essentially came about as a response to the need for it so by capturing the market, GeoComply may have inadvertently created a monopoly for itself with no fair and free competition.

To that thought, GeoComply had stated:

“We welcome healthy competition and new ideas in the marketplace and the ability to distinguish our leading solutions and technology from others. We also respect and expect others to respect, the valuable intellectual property that companies like ours spend a lot of time, effort, and money developing. We are confident in the merits of our case.”

Source: GeoComply’s Patent Infringement Case against Xpoint Dismissed, Gambling News, February 13, 2023

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