Cantor Fitzgerald affiliate sues DraftKings, FanDuel over patents invented by Lutnick

By Blake Brittain

April 2 (Reuters) - An affiliate of bond-trading giant Cantor Fitzgerald [RIC:RIC:CNTOR.UL] sued sports-betting platforms DraftKings DKNG.O and FanDuel in U.S. court on Thursday, alleging they infringed patents created by defunct gambling-technology company Cantor Gaming.

Two of the patents, related to mobile gambling technology, were co-invented by U.S. Commerce Secretary Howard Lutnick and other Cantor Gaming employees on the company's behalf when Lutnick was Cantor Fitzgerald's CEO.

They are now owned by plaintiff Interactive Games LLC, another Cantor affiliate, according to Nevada business records.

Lutnick stepped down as CEO of Cantor Fitzgerald and chairman of Interactive Games when he was confirmed as Republican U.S. President Donald Trump's Commerce Secretary last year. The company at the time said that Lutnick divested from all of his Cantor business interests.

"Secretary Lutnick has fully complied with the terms of his ethics agreement, including all divestiture and recusal requirements, and will continue to do so," a Commerce Department spokesperson said.

Cantor Fitzgerald, FanDuel and a spokesperson for the USPTO declined to comment on the lawsuits, which were filed in New Jersey and Massachusetts federal court. A spokesperson for DraftKings did not immediately respond to a request for comment.

Companies sued for patent infringement often petition the Commerce Department's U.S. Patent and Trademark Office to review patents they are alleged to infringe. If the patent agency agrees to the review, and finds the patents to be invalid while a case is pending, defendants can ask the court to dismiss the infringement lawsuit.

That could create an unusual situation if DraftKings and FanDuel ask the USPTO to review patents that were co-invented by the cabinet official who oversees the agency and that are owned by his former company.

Dennis Crouch, a law professor at the University of Missouri, noted that the secretary is named as an inventor on hundreds of patents related to financial technology and online gaming. "Lutnick is the first Secretary of Commerce in U.S. history who is so personally and financially tied into the patent system," he said.

Inventors do not necessarily have an ownership interest in their patents, often applying for patents on behalf of their companies, research institutions or other employers.

Interactive Games said in the lawsuits that DraftKings and FanDuel's platforms infringed five of its patents created by Cantor Gaming related to mobile-betting technology. It requested an unspecified amount of monetary damages.

Lutnick founded Nevada-based Cantor Gaming, a sportsbook and gambling-technology company, in 2006.

Interactive Games has previously sued DraftKings and FanDuel over related technology in patent infringement cases that began in 2016. The companies challenged the patents' validity at the USPTO in those cases.

British sports-betting company Betfair was also named as a defendant in Interactive Games' New Jersey lawsuit. Betfair could not immediately be reached for comment.

The cases are Interactive Games LLC v. DraftKings Inc, U.S. District Court for the District of Massachusetts, No. 1:26-cv-11544 and Interactive Games LLC v. FanDuel Inc, U.S. District Court for the District of New Jersey, No. 2:26-cv-03514.

For Interactive Games: Michael Joffre, Chandrika Vira, Daniel Block, William Milliken and Richard Crudo of Sterne Kessler Goldstein & Fox

For the betting companies: attorney information not yet available