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This week, DraftKings scored a victory in its ongoing patent dispute with Colossus Bets, with its previously dismissed petition potentially set to be reheard. 

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US Patent and Trademark Office (USPTO, pictured) director Kathi Vidal opted to send the case to a Delegated Rehearing Panel after receiving a request for her to review the case from DraftKings subsidiary DK Crown Holdings.

This panel will decide on whether to grant Crown Holdings a full rehearing. The case itself relates to a claim that a Diogenes Limited patent is “unpatentable”. Diogenes is the Colossus Bets division which has challenged seven DraftKings patents in Delaware Chancery Court. 

Cash-out patent

These patents all relate to a sportsbook feature that allows a user to withdraw a bet to receive at least part of the original stake before the end of a sports game. 

In legal proceedings Diogenes has argued DraftKings’ “cash out” button on its sports betting platform represents a patent violation. 

The US sports betting operator argued that a 2012 patent beat Colossus Bets to the punch, therefore making its 2021 US Patent No. 11,200,779 invalid.

However, in August, a USPTO three-judge panel dismissed DraftKings’ claim, arguing that it failed “to establish a reasonable likelihood that [Crown Holdings] would prevail in showing the unpatentability of any of the challenged claims.”

The court’s opinion was divided two to three, with administrative patent judge Sean P. O’Hanlon filing an opinion for the majority. O’Hanlon’s colleague William V. Saindon dissented in a separate opinion. 

In its petition for a director review, DK Crown Holdings highlighted the “rare split decision” rested on an attenuated construction of the word “continuously”.

DK Crown Holdings further argued the majority’s interpretation failed to follow the basic tenets of patent law and “abused its discretion”. 

The Delegated Rehearing Panel will now review the original decision and decide whether to grant DK Crown Holdings a rehearing.  

Lawsuit background

The order is the latest twist in the 2021 patent infringement case.

In 2018, Colossus Bets notified DraftKings by email and letter that its patents covered DraftKings’ “cash out” feature. 

“Plaintiffs are informed and believe, and on this basis allege, that the court should award increased damages… for willful and deliberate infringement, and find this to be an exceptional case which warrants an award of attorney’s fees to plaintiffs,” said Colossus Bets in its original filing.