Interactive Systems wins patent infringement action

Interactive Systems is the licensed operator of domain SportsBetting.com and saw an eight-person jury in the United States District Court for the District of New Jersey return a unanimous verdict in its favor last Thursday.

“Over the years, we have all seen the ‘licenses’ exacted by Lottotron, 1st Tech, Home Gambling Network and other tenuous patent owners so I have to say it feels really great to put one of these patents down for the industry,” said Bill Gantz from the Chicago office of law firm SNR Denton US LLP advocating on behalf of Interactive Systems.

Lottotron owns United States patent 5,921,865 entitled Computerized Lottery Wagering System, which claims a method that allows individuals to enroll remotely with a system by setting up an account, establishing a credit balance, selecting a lottery or lottery-like game to play and, finally, placing a lottery wager for a selected game using the balance.

The stated purpose of this system is to permit an individual to place a bet remotely without having to physically go to a lottery agent. However, in a series of lawsuits targeting the online gaming industry, Lottotron has been asserting that this patent covered any remote gaming system offering games of chance.

Interactive Systems disagreed, filed a motion for summary judgment in front of Judge Faith Hochberg, and won after the Court ruled that its casino games did not literally infringe the patent as a matter of law.

All other operators slapped with the same lawsuit settled or were allowed a default but Interactive Systems stated that this ruling ‘helps all operators going forward’ as it forced Lottotron to proceed on the theory that there was infringement under the ‘doctrine of equivalents’.

In 2010 while Interactive Systems was actively fighting this cause, Lottotron filed a Federal court action against 40 additional online gaming operators including PartyGaming, Playtech and 888’s Cassava Enterprises. In this case, Gantz revealed that he intends to replicate the strategies used for last week’s judgment in order to keep defense costs down and the victory quotient high.

“If the defendants in the new case band together, we can follow the same strategy used for Interactive Systems and eliminate this patent as well as others instead of operators taking the proverbial ‘license’.