Momentum is building for a Georgia court to take up a lawsuit that alleges PrizePicks ripped off its daily fantasy sports technology.
The Special Master for the US District Court for the Northern District of Georgia recommended on Monday that a PrizePicks motion to dismiss patent infringement and trade secret misappropriation claims made against it be thrown out.
Trial or settlement imminent?
B2B sports-tech firm Vetnos is accusing the fantasy sports operator of stealing patented technology to power its DFS games, which helped make PrizePicks the most-downloaded DFS app over the 2023 NFL season. Meanwhile, PrizePicks claims the information is too abstract to sue over and there is not enough evidence to support that it misappropriated trade secrets.
“The Special Master recommendations are usually followed so that is significant for Vetnos. But, it is just one step on a path forward. This is essentially a green light that the parties will begin preparing towards trial on the patent issues and the trade secret misappropriation matters,” gaming legal expert John Holden told LSR.
“One thing to keep in mind is that when you get these Special Master recommendations, it can sometimes spur settlement talks, so that could be a possibility.”
Ideas not too abstract: Special Master
Vetnos claims its predecessor, Game Sports Network, invented the software to power DFS contests where users predict athlete stat lines to win fixed prizes.
The Special Master agreed with Vetnos that its claims were not abstract ideas because there was a factual question of whether managing the games in question could be done without its patented software and in the human mind. They emphasized that the claims should be evaluated as a whole and not oversimplified.
PrizePicks did not respond to an LSR request for comment.
PrizePicks employee found to have violated NDA
Much of the complaint centers around PrizePicks employee Steven Kerstein, who previously worked for GSN. Vetnos claims it was not until PrizePicks consulted with and hired Kerstein that it was able to effectively manage the risk associated with its fixed-odds DFS game. It alleges those were protected secrets under a non-disclosure agreement and company policy.
The Special Master found that Kerstein violated his NDA by sending confidential company information to his personal email before leaving GSN.
It found that Kerstein’s actions, his employment history, and the similarities between each company’s offerings raised concerns about potential misappropriation of trade secrets.
