DCT
1:22-cv-01273
Geocomply Solutions Inc v. Xpoint Services LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: GeoComply Solutions Inc. (British Columbia, Canada)
- Defendant: XPoint Services LLC (Delaware)
- Plaintiff’s Counsel: Baker & Hostetler LLP
- Case Identification: 1:22-cv-01273, D. Del., 09/27/2022
- Venue Allegations: Plaintiff alleges venue is proper in the District of Delaware because Defendant is a Delaware limited liability company and therefore resides in the district.
- Core Dispute: Plaintiff alleges that Defendant’s geolocation verification services, provided to the online gaming and sports betting industry, infringe a patent related to securely determining a user's location and detecting location-spoofing software.
- Technical Context: The technology provides a method for operators of geographically-restricted online services, such as state-regulated online gambling, to verify a user's physical location and block attempts to circumvent these restrictions.
- Key Procedural History: The complaint does not mention any prior litigation or administrative proceedings involving the patent-in-suit. The complaint does allege that the accused infringement began with the public commercialization of Defendant's technology in August 2022.
Case Timeline
| Date | Event |
|---|---|
| 2011-12-15 | '805 Patent Priority Date |
| 2016-08-09 | '805 Patent Issue Date |
| 2022-08-23 | Accused PlayStar Online Casino Soft Launch with XPoint |
| 2022-09-15 | Accused Sporttrade Launch with XPoint |
| 2022-09-19 | Accused Mojo Launch with XPoint |
| 2022-09-27 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,413,805 - "Geolocation Engine"
- Patent Identification: U.S. Patent No. 9,413,805, “Geolocation Engine,” issued August 9, 2016.
The Invention Explained
- Problem Addressed: The patent addresses the need for providers of network gaming services to have a "secure method of geo-locating an end user before they can transact" in order to comply with legal and commercial requirements, such as state-specific online gaming laws (’805 Patent, col. 1:5-14). Users may attempt to evade such restrictions using techniques like VPNs, proxy servers, or screen sharing (’805 Patent, col. 2:8-11).
- The Patented Solution: The invention describes a multi-step method and system to solve this problem. A mechanism on a user's device (e.g., a software plugin or mobile app) collects various types of geolocation data (such as Wi-Fi and IP address data) and also scans for the presence of "selected programs" that might be used to spoof a location (’805 Patent, Abstract; col. 3:23-58). This collected information is sent to a remote processing server, which analyzes the data to determine if the user's location is valid and sends a resulting message back, which can then be used by the service provider to allow or deny access (’805 Patent, col. 4:11-18).
- Technical Importance: The technology provides a layered approach to location verification by combining multiple data sources with a check for known circumvention tools, aiming to create a more reliable and secure determination than single-source methods allow (’805 Patent, col. 2:3-8).
Key Claims at a Glance
- The complaint asserts independent claim 1 and dependent claims 2-3, 7-9, and 10 (Compl. ¶43).
- The essential elements of independent claim 1 are:
- transmitting a request to a first server by a first device;
- collecting geolocation data on the first device using a module, where the first device is in communication with the first server that provides a service;
- identifying that one or more selected programs are present at the first device;
- transmitting the geolocation data and a list of the selected programs to a second server;
- receiving a geolocation message from the second server, which was generated from the transmitted data; and
- providing the received geolocation message to the first server.
- The complaint notes that dependent claims further specify the module (e.g., mobile app, browser plug-in) and the types of "selected programs" (e.g., proxy application, screen sharing program) (’805 Patent, col. 10:33-52).
III. The Accused Instrumentality
Product Identification
- The accused instrumentality is XPoint’s geolocation technology and software, which is offered to online gaming service providers and integrated into their platforms, such as the PlayStar online casino, Sporttrade, and Mojo (Compl. ¶¶18, 35, 41).
Functionality and Market Context
- The complaint alleges that when an end-user attempts to place a wager on a platform like PlayStar, they are prompted to download and install XPoint software (Compl. ¶¶48, 52). This software, operating on the user's device, collects location data (e.g., Wi-Fi, IP address) and detects the presence of "prohibited tools" like VPNs or remote desktop software (Compl. ¶¶28, 49, 56). This information is allegedly sent to an XPoint server for analysis, which generates a message indicating whether the user has passed the location check (Compl. ¶¶29-30). This result is then used by the gaming operator to permit or block the user's activity (Compl. ¶31). The complaint alleges XPoint is a direct competitor to GeoComply and is "aggressively attempting to expand its market share" (Compl. ¶¶34-35).
IV. Analysis of Infringement Allegations
'805 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| transmitting a request to a first server by a first device | An end-user attempts to place a wager at an online casino, which transmits a request from the user's device to the casino's server (the "first server"). | ¶¶24-25, 50 | col. 4:11-18 |
| collecting geolocation data associated with the first device in response to the request, the geolocation data collected by a module stored in memory and executed by a processor on the first device, the first device in communication with the first server which provides a service over a network | XPoint's software module, integrated into the casino's platform and running on the user's device, collects geolocation data after the request is made. | ¶¶27, 51-53 | col. 4:19-24 |
| identifying that one or more selected programs are present at the first device | XPoint's system detects "application spoofing, device tampering, false data and prohibited tools," which allegedly includes VPN or remote desktop software. | ¶¶28, 56 | col. 4:42-52 |
| transmitting the geolocation data and programs and a list of the present selected programs to a second server | The XPoint software on the user's device transmits the collected location data and list of prohibited programs to an XPoint server (the "second server"). | ¶¶29, 57 | col. 4:35-37 |
| receiving a geolocation message from the second server, the geolocation message generated at least in part from the geolocation data and a list of the present selected programs | The XPoint server generates and sends a message (e.g., "Passed," "Fail/Blocked") back to the user's device. A screenshot in the complaint shows an interface with these indicators. | ¶30 | col. 4:25-31 |
| providing the received geolocation message to the first server | The XPoint technology provides the resulting message to the online casino's server to inform its decision on whether to accept the user's wager. | ¶¶31, 60 | col. 4:45-51 |
Visual Evidence Reference: The complaint provides a screenshot of what it alleges is the XPoint software's operational interface, showing a map with user locations and a sidebar listing "Passed," "Warning," and "Fail/Blocked" indicators, which is presented as evidence of the "geolocation message" (Compl. ¶30).
Identified Points of Contention:
- Architectural Questions: The infringement theory depends on mapping the accused system to the claimed "first server" (gaming operator) and "second server" (XPoint) architecture. A potential point of dispute may be the precise flow of data, particularly for the final step: whether the user's device, after receiving the message from the "second server," is the entity that "provid[es] the received geolocation message to the first server," as the claim recites, or if the communication occurs directly between the servers.
- Divided Infringement: The asserted method claim involves steps performed by multiple actors: the end-user (transmitting the initial request), the module on the user's device, and the remote XPoint server. The complaint alleges that XPoint is liable for the user's actions because it "conditions an end-user's participation" on performing the claimed step (Compl. ¶25). The question of whether XPoint "directs or controls" the actions of the end-users sufficiently to be held liable for the entire method under 35 U.S.C. § 271(a) may become a central legal issue.
V. Key Claim Terms for Construction
The Term: "first server" / "second server"
Context and Importance: The claim structure is built around the distinct roles of and communication between these two servers. The definition of these terms and their required interactions will be critical to determining if the accused architecture, which involves a gaming operator's server and XPoint's server, falls within the claim scope.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes a system with a "gaming server" and a separate "location processing server," treating them as logically distinct entities performing different functions (’805 Patent, Fig. 1; col. 2:36-42). This could support an interpretation where any two servers fulfilling these respective roles meet the limitation.
- Evidence for a Narrower Interpretation: The claim recites a specific sequence of communication, including the user's device ("first device") receiving a message from the second server and then "providing the received geolocation message to the first server" (’805 Patent, col. 10:28-31). An argument could be made that this requires a specific data path through the user's device, potentially excluding systems where the location processing server communicates a final result directly to the gaming server.
The Term: "selected programs"
Context and Importance: This term defines the anti-spoofing feature of the invention. Its scope will determine what types of software-detection activities constitute infringement. Practitioners may focus on this term because the complaint equates it with XPoint's detection of "prohibited tools" like VPNs (Compl. ¶28).
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification refers generally to "undesirable programs" (’805 Patent, Abstract) and provides non-limiting examples such as "screen sharing program" and "proxy program" (’805 Patent, col. 3:42-52). This language suggests the term could encompass any software that an operator designates as a potential tool for circumventing location checks.
- Evidence for a Narrower Interpretation: A party could argue that the term is limited to the specific types of programs disclosed as examples in the specification, or that it requires programs actively engaged in location-masking at the time of the check, rather than merely being present on the device. However, the patent's use of phrases like "unwanted software, settings or conditions" suggests a broad scope was intended (’805 Patent, col. 3:54-55).
VI. Other Allegations
- Indirect Infringement: The complaint includes a count for contributory infringement under 35 U.S.C. § 271(c). It alleges XPoint sells its geolocation software knowing it is "made or adapted for use in an infringement" of the ’805 patent and that the software is not a "staple article or commodity of commerce suitable for substantial noninfringing use" because it was created specifically for online gaming location verification (Compl. ¶¶65-66). The direct infringement count also contains allegations of inducement, stating XPoint "causes" end-users to perform infringing steps (Compl. ¶¶27-31).
- Willful Infringement: The complaint does not use the term "willful infringement." However, it alleges that the circumstances warrant "a finding that this is an exceptional case, entitling GeoComply to recover its attorney fees and expenses" under 35 U.S.C. § 285 (Compl. ¶¶39, 73; Prayer for Relief ¶D). No facts supporting pre-suit knowledge are alleged.
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of architectural mapping: Does the operational data flow between the end-user's device, the online casino's servers, and XPoint's servers align with the specific, sequential communication path between the "first device," "first server," and "second server" as recited in Claim 1? The resolution will depend on factual evidence of how the accused system functions.
- The case will also present a question of attribution for joint infringement: The alleged infringement involves actions by multiple parties (the end-user and the defendant, XPoint). A key legal battle will likely focus on whether Plaintiff can prove that XPoint directs or controls the actions of end-users to such an extent that all steps of the claimed method can be attributed to XPoint, thereby satisfying the requirements for direct infringement liability.