PrizePicks Bid To Dismiss Suit Countered By Fantasy Sports Tech Provider

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A fantasy sports company suing PrizePicks for allegedly ripping off its pick ’em software defended its claims in a new filing with the Northern District of Georgia.

On Tuesday, Vetnos LLC, a business-to-business fantasy sports software provider, responded to PrizePicks’ motion to dismiss the lawsuit, which seeks interest on lost profits and royalties from allegedly stolen trade secrets.

Vetnos says its predecessor, Game Sports Network, invented the software that powers the app’s player vs. house fantasy contests where users predict athlete stat outcomes in return for fixed prizes, otherwise known as pick ’em games. PrizePicks has characterized those claims as “open-ended and boundless.”

Vetnos cites protected info

PrizePicks claims Vetnos’ “patent-protected trade secrets” are either pubic information or “too vague” to sue over. Vetnos says the U.S. Patent and Trademark Office already addressed those claims and that PrizePicks is on the record saying the opposite.

“During prosecution of the Asserted Patents, the PTO considered the very arguments that Defendant raises in its Motion before determining that the Asserted Patents were directed to novel, patent-eligible subject matter. Specifically, the PTO agreed that the ‘fixed payout format claimed in the Asserted Patents has no counterpart in the prior art’ since, before the Asserted Patents, a ‘workable game of skill with fixed payout odds,’ and associated computer-based tools for deploying and managing the same, simply did not exist,” Vetnos said in its response.

It goes on to cite arguments PrizePicks made in relation to its own patents:

“During prosecution of its own patents related to electronic gaming, Defendant made various arguments to the PTO that belie the positions in its Motion. Specifically, Defendant argued that: A human cannot host an interactive electronic game…. In the context of interactive electronic gaming, a human being simply could not perform the various [required acts] sufficiently fast from a remote location in a manner that is at all relevant for … practical application.”

PrizePicks employee involved in trade secret suit

Vetnos claims that PrizePicks head of company relations and market intelligence Steven Kerstein sent confidential information owned by its predecessor to his personal email before leaving his risk analyst role at GSN.

It refuted the company’s claims that he did not do so simply because he was prohibited and that the information in question had not been adequately specified.

“Defendant’s argument that Mr. Kerstein “was prohibited from disclosing” the Vetnos Trade Secrets to Defendant is not compelling because ‘[c]ontractual prohibitions against disclosure of trade secrets are routinely rejected as insufficient to prevent inevitable disclosure or use,” Vetnos said. “Contrary to Defendant’s argument, courts in this District routinely deny motions to dismiss trade secret misappropriation claims, even when they are based on far fewer facts than alleged here.”

Both companies have history

Vetnos claims it repeatedly warned PrizePicks CEO Adam Wexler of the potential copyright infringement involved with its product, including during an alleged meeting between Orlow and Wexler at the SBC Summit in New Jersey in 2021.

Meanwhile, Wexler’s company has characterized the lawsuit as retaliation for years of Vetnos attempting to sell the fantasy operator its IP. Jason Barclay, the company’s chief legal officer and head of public policy, has promised to defend against the lawsuit aggressively.

The court has until December 4 to decide on the motion to dismiss.