The number of problem gamblers has grown in recent years with an explosion of betting opportunities available at the touch of a smartphone screen. That is particularly true during this month’s annual “March Madness” college basketball tournament. In the digital age, table poker and slot machines are beginning to take the back seat. Instead, online gambling and fantasy sports are becoming more popular. With easy access from a computer, tablet or phone, daily fantasy sites such as New York’s FanDuel and Boston-based DraftKings have become the newer, hipper go-to platforms for people seeking the adrenaline rush that comes with sports betting. FanDuel Inc. dodged a patent infringement suit brought by several gambling technology companies over its daily fantasy sports platform when a Nevada federal judge Tuesday held that a number of the asserted patents were unpatentable under the U.S. Supreme Court’s Alice ruling, while claims regarding other patents weren’t properly alleged. Now the U.S. government and some state authorities, responding in part to a recent scandal involving a DraftKings employee, are taking a closer look at the legality of daily fantasy sports. That’s raising the specter of more regulations and a slowdown in the games’ soaring popularity.

U.S. District Judge Robert C. Jones dismissed five patent infringement claims brought by plaintiffs CG Technology Development LLC, Interactive Games Ltd. and Interactive Games LLC under the U.S. Supreme Court’s Alice decision, which held that abstract ideas implemented using a computer are not patent-eligible, and in accordance with the parties’ stipulation. Judge Jones declined to dismiss under Alice a sixth patent which relates to use of a processor to display video images on a display screen — U.S. Patent No. RE39,818 — instead dismissing the claim for failure to allege sufficient facts, with leave to amend. Infringement claims related to six other patents owned by the plaintiffs were also dismissed for not addressing each element of the respective asserted claims, according to an 18-page order. Those claims can also be refiled in an amended complaint, the judge said. In addition, the judge shot down FanDuel’s request to stay the case pending litigation in New York federal court over ownership of the ‘818 patent, saying he wanted to avoid the risk of holding two trials instead of one. “On balance, the risk of having to hold duplicative proceedings outweighs the risk of wasting some effort in the meantime by analyzing seven patents instead of six until the relevant issue is resolved in the New York litigation,” the judge said.
CG Tech, IG Ltd. and IG LLC sued FanDuel in April, alleging that its daily fantasy sports platform utilized mechanisms that infringed numerous patents relating to such things as a remote server, plurality of game events, display of statistics, and other things. The trio of companies is also pursuing similar litigation against FanDuel’s rival DraftKings Inc. and online game developers Zynga Inc. and Big Fish Games Inc., according to court records.

To address the growing number of people addicted to gambling, the Office of Problem Gambling has invested in training for medical providers, public service announcements, prevention for high school youth and is consulting with nonprofit community organizations to expand education on the dangers of gambling, said Canale-Dalman. Warning signs vary. “This isn’t like alcohol. You can’t smell or see something right away.” Michael Barbosa, 57, of Pleasant Hill, believes the lack of obvious physical symptoms might be a reason why gambling addictions are too often disregarded as a disease. He lost four marriages because of his addiction to card games and poker. He stole money from his mother and at one point ended up on the street. In 2013, he started a rehabilitation program at HealthRight 360, a residential treatment facility in San Francisco. That’s where he learned that being addicted to gambling is not much different than being addicted to a drug. When he attempted to stop cold turkey, he’d get fevers. He also fell victim to depression, which he still struggles with today.

“It all goes hand in hand.”

KEYWORDS: unpatentable, patent infringement,litigation,