Irish Company Claims Intellectual Property Rights Over Sports Betting Cash Out Option

[Total: 0    Average: 0/5]
binary options affiliate programs

Dublin-based Marketmaker Software Ltd. claims that its cash out patents cover the popular sports betting option that allows bettors to exit a bet before the result is known.

The claim could affect a number of apps in New Jersey sports betting including DraftKings Sportsbook, FanDuel Sportsbook, and Betstars. These apps feature the functionality which Marketmaker claims to own.

How does cash out work?

The cash out option gives bettors a choice to lock in gains or cut losses on a particular bet.

During a game, the odds of a team winning or losing change with the flow of play. A bet on the favorite that looked good pre-game may suddenly look at-risk if the opposing team makes an early score.

In this case, a bettor might throw up his or her hands, and opt to cash out. The amount the operator pays out depends on the new odds of whether the original favorite will win.

The option to cash out of bets early is growing in popularity. Marketmaker states that:

“Regarded as a key revenue and retention driver for in play sports betting worldwide, cash out currently comprises approximately 65 percent of global in play sports betting liquidity. For the US regulated market, cash-out numbers are already at 20 percent of gross revenue for some NJ based providers.”

What do patents have to do with cash out?

Marketmaker owns two patents that it claims cover the cash-out option. Both were filed in 2007:

  • US10115157B2: Exchange for derivative products contingent on odds-based markets.
  • US8510205B2: Exchange for derivative products contingent on odds-based markets.

While the titles and abstract for each are the same, they cover different processes.

The company explains:

“The 2007 filed patents in Marketmaker’s portfolio cover activities related to making ‘one or more, optional divestment bet offers’ … ‘prior to the outcome of a sporting event’ in a ‘user interface identical to that which would be currently available in odds markets’ so as to ‘avoid exposure to the outcome of a sporting event’.”

In other words, Marketmaker says it owns the IP that covers cashing out of bets early.

The US patent system is different

For many years, patents only applied to physical inventions. The US Patent and Trademark Office (USPTO) held that a business method was not patentable.

This rule changed in the two decades ago when the USPTO decided that it was “no longer practical to determine if a particular computer-implemented invention was a technological invention or a business invention.”

After this decision, all the inventor had to prove was that the invention must be:

  • Statutory (subject matter eligible)
  • New
  • Useful
  • Non-obvious

The door was now open to business-method patents implemented on computer systems.

The European standard

In Europe and the rest of the world, slightly different standards apply. The differences might be small, but they mean Marketmaker’s patent could be more enforceable in the US.

Marketmaker states:

“European operators and software providers are coming to realize that the US legal and regulatory environment has certain key differences. Of which, a principle concern is the different treatment of software, user experience, IP and patents. The US carries significant Federal protection for IP and Patents under US law. The cash-out patent grant to Marketmaker Software Ltd., effective until 2029  is the most current high-profile example of how US federal law and patent protection differs from the European environment.”

Patent troll or potential partner?

In 2007, Marketmaker backed the foundation of Oddsfutures exchange.

Oddsfutures’s strategy was to offer sports bettors unique pricing and proprietary features, such as the cash-out option. The company ceased to trade in 2013, beaten by the competitive pressures of the sports betting market.

But there was an honest attempt to use the innovations they patented to build their own business. Patent trolls sit on their IP until they can use it to gain payment from legitimate businesses.

Marketmaker is keen to establish its moral credentials in this space:

“We had a long-term vision as to the value of innovative features and experience, and our drive to own our own IP has been no different to the approach taken by well-known US market leaders and software suppliers that have protected their work by applying for patent protection.”

Nevertheless, Marketmaker is providing an early warning that it plans to defend its intellectual property rights:

“Not owning the ‘Cash Out’ IP, which is protected under US Federal Law, whilst providing a 3rd party ‘Cash Out’ services may put technology providers in breach of contract indemnity warranties with Casino Partners, b2b customers and Operators.”

Marketmaker seeking US partnerships

Marketmaker says that is has kept a “low profile” because until now there has been “so much noise in the new, regulated US space.”

They are coming out of the dark with a plan:

“… to work with a partner group of US-facing operators and software providers that plan to maximise the regulated market opportunity by licensing cash out from us.”

Marc Butterly, director of Marketmaker, told LSR:

“We have kicked off early-stage talks with a number of the most interesting companies in the space and hope to announce a marquee partner soon. We believe that any company that can announce that they are the first company to legally offer cash out IP to US players will have significant competitive advantage.”

Next stage for Marketmaker

On the short-term horizon, Marketmaker expects to receive a third patent grant within a few weeks.

The new patent is for a “graphical-user-interface utility (GUI) patent on a method for sports betting Cash Out.”

The new patent could solidify Marketmaker’s claims to the cash-out process. Butterly explained that the company is now working closely with leading patent attorney firm Finnegan:

“We’ve always made sure to work with the best possible advisors and having counsel as accomplished as Erika Arner of Finnegan onboard, is a critical factor in our IP protection success. The work that Finnegan are doing builds on their previous experience at the PTAB against Betfair, in the Supreme Court with Bilski and in the federal courts with the Trading Technologies cases.”

The post Irish Company Claims Intellectual Property Rights Over Sports Betting Cash Out Option appeared first on Legal Sports Report.

Find world news about amazon cryptocurrency trading