After losing a round in federal court earlier this week, Flash Seats owner Veritix expressed disappointment in the ruling prohibiting the Cleveland Cavaliers from using Flash Seats paperless ticketing technology.

In addition, Veritix President Jeff Kline told TicketNews that the company is contemplating an appeal of the ruling. “Our attorneys are looking into that possibility.”

Under the decision by U.S. District Court Judge Kathleen O’Malley, the Cav’s use of the Flash Seats paperless ticketing system violated a prior exclusive ticketing agreement between Ticketmaster and the team. The Cavs have been promoting the use of Flash Seats as an option to season ticket holders who want to resell their tickets, but they are now bared from using it.

“We are disappointed in the recent United States Federal Court ruling that states that the Cleveland Cavaliers cannot continue to use Veritix’s Flash Seats® technology as a means for season ticket holders to sell or resell their season tickets during the 2009-2010 season. The ruling came as a result of another vendor’s [Ticketmaster] claim that it had the exclusive right to provide these services,” Kline said in a statement. “We believe, as do the Cleveland Cavaliers, that teams should have the ability to choose how best to serve their season ticket holders and enhance the fan experience, and are exploring our legal options.”

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The company counts Cavs owner Dan Gilbert as a major investor, and to date Flash Seats technology has been used to process more than 350,000 seats, which has facilitated more than 250,000 transfers, according to Kline. In addition, the technology has generated more than 1.3 million unique user profiles for teams and venues on and other Web sites.

“For the past two seasons, season ticket holders have been able to enjoy the convenience and security that Flash Seats® technology allows to electronically post, transfer or resell their season tickets in a team supported and secure marketplace,” Kline said in a statement. “By using Flash Seats®, the Cleveland Cavaliers have been able to better manage their marketing and customer service functions since the team knows exactly who is in each and every seat, due to the technology’s electronic transfer function. Research shows that 60 percent of those attending sports events are not the original purchaser of the ticket.”

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