The U.S. Court of Appeals for the Federal Circuit affirmed a lower court decision that GeoComply’s patent on its geolocation technology is too broad to be enforceable.
GeoComply accused competitor Xpoint of patent infringement, filing suit against the competitor in September 2022.
Appeals court agrees GeoComply’s argument failed the Alice test
The Delaware District Court dismissed the case in February 2023. In Judge William Bryson’s decision he said, “the idea of using multiple sources of information to verify a person’s locations is a longstanding business practice.” Accordingly, he said GeoComply’s patent failed the Alice test, established by a prior court case to determine whether or not a patent is simply an idea or abstract concept as opposed to an actual application.
GeoComply’s case included allegations that Xpoint had copied some of GeoComply’s source code, but the decision really came down to the enforceability of the patent.
GeoComply appealed the decision and judges heard oral arguments on the case last week. During those arguments, GeoComply again argued the patent had merit because the technology did more than simply determine location, it also determined a matrix to determine how reliable that location data was.
While the three-judge panel seemed swayed by some of GeoComply’s arguments, they did not believe those arguments had sufficiently made it into the initial argument at the district level. Despite arguments from GeComply that Bryson did acknowledge some of his argument in his response, the panel was not swayed.
Accordingly, the trio of judges affirmed the lower court ruling.
Xpoint celebrated its victory
Xpoint released the following statement about the decision:
“We are pleased the court has ruled in our favor, affirming what we have maintained from the start: Xpoint has conducted its business legally and appropriately, and GeoComply has attempted to restrict competition through a patent that is invalid under U.S. law. Both the District Court and now the U.S. Court of Appeals for the Federal Circuit have held that GeoComply’s patent infringement allegations against Xpoint are meritless. The decision means that Xpoint can continue to operate and innovate freely in the geolocation technology space.
“Furthermore, the invalidation of GeoComply’s patent shows that no company can monopolize vital geolocation technology services and force their clients to work with them. Xpoint will vigorously pursue opportunities to create choice for gaming operators and improve the health of the industry. Xpoint’s victory demonstrates its commitment to an open, competitive market that drives forward the capabilities of geolocation technology for the entire gaming industry. With this ruling, Xpoint is excited to continue our momentum and deliver leading-edge solutions across the sector.”
GeoComply offered its response
GeoComply offered its stance on the decision as well:
“Throughout this legal process, our commitment to serving our customers and delivering innovative solutions has remained as strong as ever. Our cutting-edge suite of solutions have never been about a single patent; they are the result of our decade-plus experience, the expertise of our team, and our unrelenting focus on customer success. This innovation is demonstrated through GeoComply’s proven track record of service delivery, reliability, and scalability. Our industry-leading platform processes over 1.2 billion transactions per month in a dynamic, context-aware system logic, all while consistently maintaining over 99.99% uptime and achieving over 99% pass rates. Our focus on creating and delivering industry-leading geolocation compliance and anti-fraud technology continues to drive us forward.
“We are disappointed by the court decisions related to patent law technicalities, and while we respect the judicial process, we stand firm in our belief that this specific innovation within our groundbreaking technology deserves protection from improper infringement. GeoComply takes pride in championing fair competition in the marketplace and promoting start-up innovators who challenge incumbents and strengthen the industry. However, when we believed our proprietary technology rights were being violated, we could not stand by without defending our innovation. GeoComply remains committed to promoting competition while still protecting our broad intellectual property rights.”
