PrizePicks is asking a Georgia court to dismiss a lawsuit that alleges its daily fantasy sports app is powered by stolen third-party software.
The company filed a motion to dismiss with the US Northern District of Georgia Court in Atlanta last Tuesday, arguing that Vetnos LLC‘s claims of stolen trade secrets and patent infringement are too vague to hold up in court.
‘Open-ended and boundless’ claims
Vetnos, a third-party DFS provider, claims it has rights for technology to manage financial and performance risk within the fixed-odds format, much like a sportsbook does with the different vig and totals on player prop offerings. It claims that no such software existed before it filed for patents in 2014 and 2015, and seeks interest on lost profits, royalties, and additional monetary damages for allegedly jeopardized trade secrets.
But PrizePicks says most of what Vetnos claims as “secret” is either publicly available, like player data, and/or not adequately specified, like its allegedly stolen formulas and algorithms. It calls Vetnos’ assertation “open-ended and boundless.”
“The Complaint does not specify what ‘data sources, data translation, and formulas and algorithms used to analyze player data’ Vetnos claims as a trade secret or why such information qualifies for trade secret protection,” PrizePicks said in its motion to dismiss.
PrizePicks says it already had tech
Some of the allegations hinge on a former Vetnos employee, Steven Kerstein, who it says helped copy its patented risk-managing DFS software. Vetnos claims he sent confidential information concerning the technology to his personal email before leaving predecessor Game Sports Network breaching a non-disclosure agreement.
But Kerstein came to PrizePicks after it had already developed its daily fantasy sports product and had no nondisclosure obligation, according to PrizePicks:
“Notably, nowhere in the Complaint does Vetnos actually allege that Kerstein executed a non-disclosure agreement with Vetnos. Instead, the Complaint misleadingly alleges that “GSN policy was to require all incoming employees (including Kerstein) to execute a Non-Disclosure, Proprietary Information, Invention Assignment and ‘Non-Solicitation Agreement’. This allegation fails to allege that Kerstein had any duty of non-disclosure as a result of Vetnos’ efforts to protect the Asserted Secrets,” PrizePicks said.
Kerstein currently serves as PrizePicks’ head of company relations and market intelligence.
‘Frivolous’ attempt to do business
Vetnos leases the technology in question to Native American tribes with Class II gaming licenses in California and Oklahoma, according to its website. It said it repeatedly warned PrizePicks of trade secret violations before the lawsuit.
According to Jason Barclay, PrizePicks chief legal officer and head of public policy, the third-party provider attempted to sell its IP to PrizePicks for years. He called the lawsuit a “frivolous [attempt] to change our minds.”
Attorneys for Vetnos did not immediately respond to requests for comment.