Jury awards Skillz $42.9M in patent infringement trial

A jury has awarded Skillz a $42.9 million judgment in its patent infringement lawsuit against rival AviaGames.

The jury found that Skillz provided a preponderance of evidence that AviaGames willfully infringed one of Skillz’s patents.

Skillz had alleged that AviaGames, originally an approved developer for the Skillz platform, had copied its patented platform and games from Big Run Studios in creating AviaGames’ own skill-based gaming platform, where players can wage real money for rewards in matches against other human players.

“The jury awarded us $42.9 million and found willful infringement. We’re very pleased with the verdict. It’s a step in the right direction to promoting fairness in our industry,” said Andrew Dahlinghaus, general counsel of Skillz, in a statement.

Skillz brought up internal communications about how AviaGames planned to “kill Skillz” with a plan dubbed Project X, a competing platform to host skill-based game tournaments with real money prizes. AviaGames launched Pocket7Games and it began taking market share from Skillz, resulting in a decline in Skillz’ stock price. AviaGames was able to raise $40 million in 2020.

“It’s a complete ripoff of Skillz,” said Skillz attorney Lazar Raynal in opening statements.

In the course of investigating the patent infringement, Skillz alleged it learned that AviaGames was deceiving players by pitting human players against bots, which were controlled by the company and engineered to defeat the human players who were wagering real money in the belief they were playing against other humans. Skillz alleged that AviaGames had created a bot called a “shark robot,” which went after humans who won too much and made sure they didn’t win more.

During the week-long case, AviaGames CEO Vickie Chen testified via TV and translator that AviaGames did not use bots in multiplayer games where humans had wagered money.

However, Skillz presented evidence from discovery about AviaGames’ internal communications discussing the use of bots via code words Cucumbers and Guides. This allegation prompted a federal investigation against AviaGames. We have asked AviaGames for comment. Players also filed a class-action lawsuit against AviaGames, saying it defrauded them by using the bots without disclosing it to players.

During the course of that litigation, Skillz said it uncovered evidence that Mountain View, California-based AviaGames, which raised $40 million in venture capital, deceived players by pitting humans against unbeatable bots instead of against real humans. Skillz said this constituted illegal gambling, and now the class-action suit alleges both fraud and racketeering.