Bodog Loses Domain Name, $48.9 Million in Dispute with 1st Technology

30 August 2007

Online operator Bodog has found itself at the tail end of a patent infringement suit spanning the larger part of a year, stripped of its former domain name and owing a California-based patent holder $48.9 million.

On Tuesday, after the domain was mysteriously shut down, the company cited difficulties with its Domain Names System (DNS) registration and directed customers to an alternate site,

Company founder Calvin Ayre specified that the DNS issues stemmed from "a dispute over the ownership of the domain name," adding that the company's legal representatives would challenge "this dispute."

The dispute to which Ayre refers began in September 2006, when 1st Technology Chief Executive Scott Lewis filed a motion for permanent injunction against, Bodog Entertainment Group, S.A., and (Bodog).

1st Technology argued that Bodog was illegally using a "method and system for interactively transmitting multimedia information over a network which requires a reduced bandwidth," which Lewis invented and patented in 1996.

Subsequent to the initial filing and service, Bodog failed to appear before a U.S. District Court (Nevada District). According to court documents, Nevada District entered default on behalf of Bodog on Feb. 26.

On March 21, 1st Technology filed an application for default judgment, which was granted in June by Judge Roger L. Hunt, who ordered Bodog to fork over $48.9 million in damages--which Bodog has yet to do.

In August, the case moved to the state of Washington for enforcement, said 1st Technology attorney Venkat Balasubramani of the Seattle-based firm, Balasubramani Law.

As expected, Bodog did not appear at the enforcement proceedings.

Before the King County Superior Court, 1st Technology noted that Bodog had not responded to the default judgment and asked that all Bodog domains be seized and transferred to their control. On Aug. 21, Judge John Erlick agreed, ordering all registrars to transfer control of Bodog domains over to 1st Technology.

"The Court makes clear that the intent of this Order is to allow Plaintiff (1st Technology) to liquidate or otherwise monetize the Domain Names without incurring any expense," wrote Erlick in the ruling. "Plaintiff may decide not to auction the Domain Names, and instead may operate the Domain Names in any manner it sees fit, including exploiting any traffic to the sites accessible via the Domain Names."

Balasubramani said that the conditions presented in the ruling were designed to satisfy 1st Technology's judgment, but added that, for the time being, he would offer no further comment.

1st Technology attorneys L. Kristopher Rath and Mark A. Hutchison of Las Vegas-based Hutchison & Steffen did not return phone calls.

Cory Aronovitz, a lawyer with Chicago-based Casino Law Group, has worked previous cases against Lewis and was curious as to why Bodog did not act sooner to settle the case and avoid litigation.

"It's insane that Bodog was so 'stick-your-head-in-the-sand,'" Aronovitz told IGN. "Ayre should have settled earlier. He was advised by lawyers that had experience in settling suits with Lewis to settle, that the firms that (Lewis) is working with are aggressive, that (these firms) are not concerned about who-has-how-much and where they're located, that they have prior experience in going after difficult litigants and that a judgment issued by the United States is pretty strong paper.

"I could've settled this thing for $1 million," he added.

Aronovitz also theorized that bringing the case to Nevada was, for Lewis, an advantageous move.

"Lewis could have gotten the default anywhere, but in Nevada . . . where nine of the 12 jury members work in a casino: You can't win that case," he quipped.

Lewis has not limited his lawsuits to Internet gambling companies.

In January 2007, as 1st Media LLC (under which he registered another patent for the same graphic enhancement method), Lewis filed a joint action against online file sharing company Napster and Web-based karaoke service kSolo.

He entered the same infringement charges against the companies, claiming they transacted business by making, using, selling or offering to sell, and distributing products that violated his patent.

Lewis settled with kSolo on April 5.

Click here to view a copy of the Order Granting Motion for Writ of Execution Regarding Domain Names from the King County Superior Court.

Click here to view a copy of the Judgment Summary from the King County Superior Court.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.