PrizePicks has had a rough go as of late. Along with fellow fantasy sports companies Betr and Underdog Fantasy, they got slammed with cease and desist letters from Florida and some nasty words from the New York State Gaming Commission.
In the latest setback, Vetnos LLC has filed suit against PrizePicks, claiming the company ripped off its pick ‘em software. In response to these back and forth allegations, PrizePicks filed a motion to dismiss the lawsuit.
Vetnos LLC, a business-to-business fantasy sports software provider, seeks interest on lost profits and royalties from allegedly stolen trade secrets. The company’s predecessor, Game Sports Network, invented the software which 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.”
PrizePicks claims Vetnos’ “patent-protected trade secrets” are either public 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.
You got the gist of these legal maneuverings?
“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 a statement.
Makes sense doesn’t it?
Vetnos claims that Steven Kerstein, PrizePicks’ head of company relations and market intelligence, sent confidential information owned by its predecessor to his personal email before leaving his risk analyst role at GSN, according to LSR.
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.
Defendants’ argument that Kerstein “was prohibited from disclosing” the Vetnos Trade Secrets to defendant is not compelling because contractual 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.”
Vetnos claims it repeatedly warned PrizePicks CEO Adam Wexler of the potential copyright infringement involved with its product, including during an alleged meeting 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.
