MORE DETAIL ON BODOG LITIGATION (Update)

31 August 2007

Case was heard in Las Vegas, Nevada


More details are emerging on the legal scrap between 1st Technology LLC and Bodog Entertainment Group which has resulted in the latter's domains being discontinued (see previous InfoPowa reports)

The Bodog.com online gambling business was disrupted Monday and remained inoperative Tuesday due to a $48.6-million default judgment obtained by a Las Vegas company against Bodog in a patent infringement case, reports The Vancouver Sun.

By Tuesday afternoon, Bodog had established a new website, Newbodog.com, which is virtually identical to the old site and enabled Bodog clients to resume their activities.

The Canadian newspaper goes on to reveal that according to Nevada court documents, 1st Technology LLC of Las Vegas obtained a $48.6-million default judgement on June 14 against Bodog Entertainment Group S.A., Bodog.net and Bodog.com.

The Las Vegas company obtained the judgment after the Bodog companies failed to appear to answer allegations, filed in the U.S. District Court in Nevada, that downloaded software used by Bodog customers to facilitate its gaming activities infringed upon 1st Technology's patents.

A Bodog lawyer has already commented that proper and legal service would be an essential ingredient in proving such a default judgement, but it is not presently clear why Bodog officials did not respond to the allegations.

Through a series of high profile arrests of online gambling executives, the Justice Department has made it clear that it intends to pursue online gambling companies.

Bodog founder and CEO Calvin Ayre has avoided stepping on American soil, but the newspaper reports that he continues to return to Vancouver, where Bodog runs a marketing-support business in Vancouver called Riptown Media and a call centre in Burnaby called Triple Crown Customer Service.

The Vancouver Sun opines that 1st Technology has been steadily tightening the noose on Bodog, which was previously operated out of Costa Rica but is now based in Antigua.

In an affidavit filed in conjunction with the court action, 1st Technology lawyer Kristopher Rath complained that, despite the default judgment, Bodog "continues to act with impunity in the United States."

"The Bodog entities infringing activities are responsible for over $65 billion in cumulative transactions to date, with approximately two-thirds of this revenue currently being derived from infringing United States activities," he said.

The lawyer noted that, according to a Forbes interview with Ayre, "Bodog handled $7.3 billion dollars of revenue which translates to over $4.8 billion in revenue in the United States with revenue growing 300 per cent per year since 2004." He also noted that, according to the Forbes interview, Ayre "has amassed a current wealth of $1 billion, which was derived in large part through infringement of 1st Technology LLC's patent.

"However, despite reaping the rewards of U.S. commerce, the Bodog entities evade United States law and courts, and Mr. Ayre gloats about his companies' ability to operate above American law."

The lawyer said 1st Technology "continues to suffer massive and irreparable harm because of the Bodog entities' wrongful conduct", and the "only way to stop this harm is to enjoin Bodog's United States activities."

1st Technology is a leading technology licensing company with a specialised portfolio of multi-media patents for advanced gaming. It is understood that a number of online gaming and interactive media companies have licensed 1st Technologies' patents including Chartwell Technology Inc., Excapsa Software Inc., and Playtech Ltd.

This is not the first time that 1st Technology has resorted to litigation to secure licensing agreements in cases of patent infringement. In December 2005, SportingBet PLC and Paradise Poker entered into a licensing agreement with 1st Technology to resolve patent litigation claims between the parties. Likewise, NDS Group PLC and Orbis Technology also agreed to a licensing deal as a means to settle the claim against them for patent infringement in 2005.

Online Casino News courtesy of InfoPowa