Interactive Games LLC v. FanDuel Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Interactive Games LLC (Nevada)
  • Defendant: FanDuel, Inc. (Delaware) and Betfair Interactive US, LLC (Delaware)
  • Plaintiff's Counsel: Walsh Pizzi Oreilly Falanga LLP
• Case Identification: 1:26-cv-03514, D.N.J., 04/02/2026
• Venue Allegations: Venue is alleged to be proper in the District of New Jersey as both defendants maintain a principal place of business in the district, have regular and established places of business there, and have committed acts of patent infringement within the district.
• Core Dispute: Plaintiff alleges that Defendant's mobile applications for sports betting, casino gambling, and fantasy sports infringe five U.S. patents related to foundational technologies for enabling secure and legally compliant mobile gaming.
• Technical Context: The technology concerns device security, user location verification, and fraud detection, which are critical for operating mobile gambling platforms in compliance with state-specific regulations in the United States.
• Key Procedural History: The complaint alleges that Plaintiff's predecessor, Cantor Fitzgerald L.P., sent a letter to FanDuel in 2014 notifying it of a relevant patent portfolio. Plaintiff also sent a specific notice letter regarding the Asserted Patents on April 1, 2026, one day before filing this suit. For U.S. Patent No. 8,974,302, the complaint notes a history of validity challenges, including a denied petition for inter partes review by the Patent Trial and Appeal Board and a successful ex parte reexamination that upheld all claims and added new claims in April 2024.

Case Timeline

Date	Event
2006-05-05	Priority Date for U.S. Patent No. 12,397,226
2007-01-01	Apple iPhone launched
2007-10-09	Priority Date for U.S. Patent No. 12,400,515
2008-01-01	Android devices launched
2008-10-01	First Android phone released
2009-01-01	FanDuel founded
2010-08-13	Priority Date for U.S. Patent Nos. 12,420,181; 8,974,302; 12,434,138
2011-01-01	Cantor Gaming releases its Android sports betting application
2014-01-01	Cantor Fitzgerald L.P. sends letter to FanDuel
2015-03-10	U.S. Patent No. 8,974,302 Issues
2018-01-01	FanDuel launches its first online sportsbook in New Jersey
2020-01-01	FanDuel develops its FanDuel Casino online platform
2020-01-01	FanDuel launches its FanDuel Racing platform
2022-11-01	U.S. Patent Office conducts ex parte reexamination of '302 patent
2024-04-01	Ex parte reexamination certificate for '302 patent issues
2024-04-12	Reexamination Certificate for U.S. Patent No. 8,974,302 issues
2025-04-01	FanDuel launches its FanDuel Picks platform
2025-08-26	U.S. Patent No. 12,397,226 Issues
2025-08-26	U.S. Patent No. 12,400,515 Issues
2025-09-23	U.S. Patent No. 12,420,181 Issues
2025-10-07	U.S. Patent No. 12,434,138 Issues
2026-04-01	Interactive Games sends notice letter to FanDuel
2026-04-02	Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 12,420,181 - "Smart Phone with Gambling Application That Checks for Unauthorized Applications and Processes," issued September 23, 2025

The Invention Explained

• Problem Addressed: In the mid-to-late 2000s, enabling real-money gambling on emerging smartphones posed significant technological problems Compl. ¶1 Regulators required verification of a user's identity and location, but early mobile devices lacked reliable, precise geolocation technology and were susceptible to "rooting" or "jailbreaking," which could allow users to spoof their location or otherwise commit fraud (Compl. ¶¶1; Compl. ¶30; Compl. ¶36). Further, the mobile device market was fragmented, making it difficult to develop a single, secure application compatible with all devices Compl. ¶41
• The Patented Solution: The invention describes a system to ensure a mobile device is authorized for a gambling service by checking both its location and its integrity Compl. ¶57 The system obtains a list of applications installed on the user's phone to help determine if the device has been "rooted" Compl. ¶57 Concurrently, it verifies that the device is in a geographic location where gambling is permitted Compl. ¶61 To address device fragmentation, the patent discloses a "wrapper" that allows a common gambling application to run on different types of hardware and operating systems Compl. ¶41 Compl. ¶57 Figure 3 of the patent depicts a workflow including steps to "check if phone is rooted" and to provide the "actual location of the phone or device" '181 Patent, Fig. 3 Compl. ¶60
• Technical Importance: This multi-faceted approach of combining location checks, root detection, and a cross-platform wrapper provided a foundational solution for the regulatory and security hurdles that made mobile gambling technologically challenging and commercially risky in its infancy (Compl. ¶¶33; Compl. ¶58).

Key Claims at a Glance

• The complaint asserts at least claims 1-30 of the '181 Patent Compl. ¶146 Independent claim 1 is representative.
• The essential elements of independent claim 1 include:
  • Obtaining a list of applications installed on the smart phone.
  • Transmitting the list of applications to a gambling service.
  • Receiving, from the gambling service, a determination of whether the smart phone's geographic location is a location where gambling is allowed.
  • Receiving, from the gambling service, a determination of whether the smart phone is rooted, based in part on the list of applications.
  • Deciding, based on the determinations, whether a user of the smart phone is allowed to gamble.
• The complaint reserves the right to assert additional claims, including dependent claims Compl. ¶146

U.S. Patent No. 12,397,226 - "User Verification for Gambling Application Based on Location and the User's Prior Wagers," issued August 26, 2025

The Invention Explained

• Problem Addressed: Mobile gambling created new avenues for fraud that did not exist in brick-and-mortar casinos Compl. ¶¶42-43 Without the direct supervision of casino employees, users could place an increased volume of bets, potentially engaging in fraudulent betting practices that would be impractical for humans to monitor Compl. ¶42 This created a need for automated systems to surveil user behavior for deviations from normal patterns Compl. ¶42 '226 Patent, col. 16:22-46
• The Patented Solution: The invention provides a system that determines whether a user's current wager deviates from their historical "wagering characteristics" Compl. ¶43 These characteristics may include factors like the average wager volume or the user's wagering performance '226 Patent, col. 16:22-46 If the system detects a deviation from the user's established pattern, it can prevent the user from submitting further wagers, adding an automated "layer of security" Compl. ¶43 '226 Patent, col. 16:29-33 This fraud detection is performed in conjunction with verifying that the user's mobile device is in a geographical area where gambling is permitted '226 Patent, claim 1
• Technical Importance: This technology represented an unconventional approach to identity verification and fraud prevention by moving beyond static, one-time checks to a dynamic, real-time evaluation of user behavior to detect fraudulent activity unique to the mobile environment Compl. ¶69

Key Claims at a Glance

• The complaint asserts at least claims 1-3, 5-8, 12-21, and 25 of the '226 Patent Compl. ¶156 Independent claim 1 is representative.
• The essential elements of independent claim 1 include:
  • Receiving, via a mobile phone, input from a user that specifies a wager for a gambling event.
  • Determining that the mobile phone is in a defined geographical area in which gambling is permitted.
  • Determining that the wager deviates from a wagering characteristic of the user that is based on prior wagers submitted by the user.
  • In response, preventing, by the application, the user from submitting further wagers via the mobile phone.
• The complaint reserves the right to assert additional claims Compl. ¶156

U.S. Patent No. 8,974,302 - "Multi-Process Communication Regarding Gaming Information," issued March 10, 2015

• Technology Synopsis: The patent addresses the challenge of ensuring mobile users remain within approved gambling locations by repeatedly checking their location Compl. ¶72 It describes performing these checks at dynamic intervals based on the user's proximity to a jurisdictional boundary, helping to manage battery life and costs while maintaining regulatory compliance Compl. ¶72 Compl. ¶80 The system also checks the authorization status of the user's device (e.g., whether it is jailbroken) Compl. ¶72
• Asserted Claims: At least claims 1-17, 19-24, 26, and 28-40 Compl. ¶166
• Accused Features: The complaint alleges that FanDuel's Mobile Apps, which use third-party GeoComply services, infringe by repeatedly checking a user's location to ensure they are permitted to gamble Compl. ¶129 Compl. ¶130

U.S. Patent No. 12,434,138 - "Gambling Service With Adaptive Location Checking Frequency," issued October 7, 2025

• Technology Synopsis: The technology addresses the battery degradation and costs associated with constant location checks for mobile gambling Compl. ¶84 The invention performs a series of location checks at different rates, with the rate based on the user's distance from a border where gambling is allowed (e.g., more frequent checks closer to the border) Compl. ¶87
• Asserted Claims: At least claims 1-30 Compl. ¶176
• Accused Features: The complaint accuses FanDuel's use of GeoComply, alleging its location services recheck users "more often as [they] approach the [state] border" Compl. ¶135

U.S. Patent No. 12,400,515 - "Mobile Gambling Application With Location-Based Tracking and Recommendations Based on What Games Are Trending," issued August 26, 2025

• Technology Synopsis: The invention addresses the challenge of recommending new games to users in a remote gambling environment Compl. ¶51 The system identifies a characteristic of a game a user has played, identifies a second game with similar characteristics, and recommends the second game to the user Compl. ¶52 The recommendation may also be based on the trending popularity of the second game Compl. ¶94
• Asserted Claims: At least claims 5-7, 13-15, 17-22, and 24-29 Compl. ¶186
• Accused Features: The complaint alleges that FanDuel's Mobile Apps, which recommend games to players, practice the claimed invention Compl. ¶¶92-93

III. The Accused Instrumentality

Product Identification

• The accused instrumentalities are the "FanDuel Mobile Apps," which include iOS and Android versions of FanDuel Sportsbook & Casino, FanDuel Casino, FanDuel Fantasy Sports, FanDuel Racing, and FanDuel Picks Compl. ¶2 The complaint provides a visual displaying the icons for these applications Compl. p. 2

Functionality and Market Context

• The FanDuel Mobile Apps provide digital sports entertainment and gaming services, including online sports betting, daily fantasy sports, and online casino games Compl. ¶2 A screenshot in the complaint shows the user interface for the FanDuel Sportsbook & Casino app, which includes options for placing various types of bets on sporting events Compl. p. 40
• A core technical function of the apps is user and location verification to comply with state-specific gambling laws Compl. ¶127 Compl. ¶128 Compl. ¶129 The apps embed and utilize location-verifying routines from a third-party, GeoComply, to determine if users are in a permitted jurisdiction Compl. ¶130 This system allegedly runs "hundreds of location data, device integrity, and identity fraud checks on every geolocation transaction" Compl. ¶133 and repeatedly checks the user's location Compl. ¶134
• The complaint positions the FanDuel Sportsbook & Casino app as "North America's go-to for sports betting as the most downloaded app and #1 online sportsbook" Compl. ¶99 It further alleges that FanDuel generated $5.79 billion in revenue in 2024 and that its apps were downloaded 10.8 million times that year Compl. ¶139 A map included in the complaint illustrates the various U.S. states where FanDuel's sports betting services are available online or at retail locations Compl. p. 46

IV. Analysis of Infringement Allegations

'181 Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
obtain[ing] a list of applications installed on the smart phone,	The FanDuel apps, through embedded third-party software from GeoComply, are alleged to perform "device integrity" checks which would necessitate accessing information about the device's software.	¶133	col. 23:54-64
transmit[ting] the list of applications to a gambling service,	The GeoComply routines embedded in the FanDuel apps are alleged to transmit data to FanDuel's and/or GeoComply's servers (the "gambling service") to perform verification checks.	¶¶130-131	col. 36:54-61
receiv[ing], from the gambling service, a determination of whether the geographic location of the smart phone is a location where gambling is allowed,	The FanDuel apps receive a determination from the GeoComply service that allows or disallows gambling based on the user's location.	¶¶130; Compl. ¶135	col. 36:36-45
receiv[ing], from the gambling service, a determination of whether the smart phone is rooted based in part on the list of applications...,	The FanDuel apps allegedly receive a determination from the GeoComply service regarding the device's integrity, which corresponds to the patent's concept of a "rooting" check.	¶133	col. 23:45-52
decid[ing] whether a user of the smart phone is allowed to gamble based on the determinations.	The FanDuel apps will "cease working" or "will not work" if a player moves outside a permitted jurisdiction, thereby deciding to disallow gambling based on the location determination.	¶¶135-136	col. 24:1-5

'226 Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
receiv[ing] via the mobile phone, input from the user that specifies the wager for [a] gambling event,	The FanDuel apps provide interfaces for users to make various types of wagers, such as spreads, moneylines, and totals on sporting events.	¶102	col. 16:7-10
determin[ing] that the mobile phone is in a defined geographical area in which gambling is permitted,	The FanDuel apps use embedded GeoComply software to detect the user's location and determine if they are in a state where gambling is legally permitted before allowing wagers.	¶¶129-130	col. 1:12-20
determin[ing] that the wager deviates from a wagering characteristic of the user that is based on prior wagers submitted by the user,	The complaint does not provide sufficient detail for analysis of this element.	-	col. 16:22-24
in response, prevent[ing], by the application, the user from submitting further wagers via the mobile phone.	The complaint does not provide sufficient detail for analysis of this element.	-	col. 16:22-46

Identified Points of Contention

• Scope and Evidentiary Questions for the '181 Patent: A primary point of contention may be whether the "device integrity" checks allegedly performed by FanDuel's integrated GeoComply software Compl. ¶133 meet the claim limitation of determining if a phone is "rooted based in part on the list of applications installed on the smart phone." The infringement analysis may turn on the specific technical methods used by the accused system and whether they fall within the scope of the claim language, raising both evidentiary questions about the accused product's operation and legal questions about the claim's scope.
• Evidentiary Questions for the '226 Patent: The complaint's allegations for the '226 Patent appear to lack specific factual support for the core fraud-detection element. A key question for the case will be what evidence, if any, Plaintiff can produce to show that the accused FanDuel apps actually determine a "wagering characteristic" based on a user's prior wagers and then block new wagers that "deviate" from that characteristic, as required by the claim. The complaint alleges infringement but does not describe the specific functionality in the accused products that is alleged to practice this element.

V. Key Claim Terms for Construction

For the '181 Patent:

• The Term: "rooted"
• Context and Importance: This term is central to the patent's security claims. The infringement analysis depends on whether the "device integrity" checks allegedly performed by FanDuel's apps Compl. ¶133 constitute a determination of whether a device is "rooted". Practitioners may focus on this term because its definition will determine whether modern security checks, which may not use the exact methods envisioned in 2010, fall within the claim's scope.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent specification describes rooting in general terms as having "bypassed security restrictions" Compl. ¶40 or been "hacked" '181 Patent, col. 21:25, which could support a construction covering any form of unauthorized administrative access or security compromise.
  • Evidence for a Narrower Interpretation: The specification also provides specific examples of how to check for a rooted device, such as "comparing a running operating system with a listing of approved operating systems" or checking for "undesired programs" '181 Patent, col. 23:45-64 This language may be used to argue for a narrower construction limited to these or similar methods of analyzing the device's software environment.

For the '226 Patent:

• The Term: "wagering characteristic of the user"
• Context and Importance: This term defines the baseline against which a user's behavior is measured for potential fraud. The viability of the infringement claim for the '226 Patent hinges on this term's construction, especially given the lack of specific factual allegations in the complaint about how FanDuel might implement such a feature.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification provides a non-exhaustive list of examples, including "the average volume wagered by the user, whether the user is a high-volume, medium-volume or low-volume wagerer, [and] the user's wagering performance" '226 Patent, col. 16:22-46 This could support a broad definition covering any data point or profile related to a user's historical betting patterns.
  • Evidence for a Narrower Interpretation: The patent also states that a user may be denied access if updated information "does not fall within a predetermined range of acceptable characteristics or does not substantially match ongoing wagering requirements within a predetermined degree of tolerance" '226 Patent, col. 16:22-46 This language could support a narrower construction requiring a system of pre-defined, quantifiable thresholds rather than a more general behavioral comparison.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that FanDuel induces infringement by encouraging users to download and use the Mobile Apps through marketing, providing user guides and help pages, and requiring users to activate geolocation services to use the apps Compl. ¶150 Compl. ¶160 Compl. ¶170 Compl. ¶180
• Willful Infringement: Willfulness is alleged based on both pre-suit and post-suit knowledge. The complaint alleges pre-suit knowledge stemming from a 2014 letter from Plaintiff's predecessor, Cantor Fitzgerald, regarding its patent portfolio Compl. ¶141, and post-suit knowledge from a specific notice letter sent on April 1, 2026, detailing the Asserted Patents and infringement contentions Compl. ¶143 Compl. ¶149 Compl. ¶159

VII. Analyst's Conclusion: Key Questions for the Case

• A central evidentiary question will be one of technical implementation: Does the accused "device integrity" check, performed by third-party GeoComply software, actually function by obtaining and analyzing a "list of applications" as required by claim 1 of the '181 patent, or does it use a different, non-infringing technical method to achieve a similar security goal?
• A second key evidentiary question will be one of functional existence: Can Plaintiff demonstrate that FanDuel's fraud-prevention systems create and compare a user's bet against a historical "wagering characteristic" to block deviant wagers, as claimed by the '226 patent, or are the complaint's allegations for this patent based on the patent's teachings rather than the accused product's actual functionality?
• A core legal issue will be one of claim scope in a modern context: How will terms like "rooted" and "wrapper", which arose from the technical landscape of the late 2000s, be construed by the court in relation to the sophisticated, multi-layered security and software architectures of today's mobile operating systems and third-party compliance services?