William Hill embroiled in patent dispute

Just days before its shares are due to start trading, William Hill, the betting shop operator, has become embroiled in a row concerning an alleged patent infringement.

Julian Menashe, who claims he holds a patent for a piece of software related to its online casino operation, claims he has been warned by William Hill that it will report him to the Financial Services Authority if he attempts "to mislead the market" by unduly publicising its dispute with him.

Mr Menashe, who heads a South African software business, says the warning came when he suggested that William Hill had failed to disclose the full potential of his patent dispute with the bookmaker.

The offer prospectus notes Menashe Business Mercantile's (MBM) claim that William Hill's online casino operation "indirectly infringes" Mr Menashe's patent. "William Hill has rejected a settlement offer made by Dr Menashe as being unrealistically high, and disputes both that the patent in question is being infringed and the validity of the patent," it says.

Mr Menashe said yesterday: "William Hill has failed to disclose that if it loses the case it may be forced to cease its online casino business," adding that this would cost the company "losses amounting to more than £100m".

Mr Menashe said yesterday that he had offered to settle for £200,000 to cover the alleged licence fee plus 1.5 per cent of the group's gross win. This gross win amounted to £35.4m in the 53 weeks to 1 January.

In the prospectus, William Hill says it is "indemnified for resulting damages" should MBM win its case, according to an agreement it has with CryptoLogic, the company supplying its gaming software. However, Mr Menashe asserts that William Hill has failed to "mention CryptoLogic's ability to settle".

A spokesman for William Hill yesterday said: "It would be totally inconceivable for us not to be both complete and accurate. All the information is in the prospectus. It's very clear and we stand by everything."