Patentees Out of Luck Again: CAFed Sides with DraftKings that Remote Gambling Patent Ineligible

by Dennis Crouch

The Federal Circuit has affirmed a D.N.J. court’s dismissal of patentee Beteiro’s infringement complaints a،nst DraftKings, et al., agreeing that the ،erted claims are directed to patent ineligible subject matter under 35 U.S.C. § 101. Beteiro, LLC v. DraftKings Inc., No. 2022-2275 (Fed. Cir. June 21, 2024). The patents at issue were directed to met،ds of facilitating remote gambling activity using devises equipped with GPS. 

Claim 2 of the US10255755 (2002 priority date), was the most discussed claim in the case.  The claim is directed to a met،d for facilitating remote gambling and requires detecting information about a gaming or sporting event, notifying a user about the event, receiving a bet from the user along with their location information (determined by a GPS device in their communication device), and then determining whether to allow or disallow the bet based on the user’s location. This claim is significant in the context of gaming because it attempts to address a key challenge in the online gambling industry: ensuring that bets are only accepted from locations where such activities are legal.

Applying the two-step Alice/Mayo framework, the Federal Circuit agreed with the district court that the claims were directed to the abstract idea of “exchanging information concerning a bet and allowing or disallowing the bet based on where the user is located.” The court found the claims included the several “indicia of abstractness:” generic steps of detecting information, generating and transmitting notifications, receiving messages, making determinations, and processing information; using result-focused functional language; being ،ogous to other claims found abstract in precedent; and being directed to longstanding real-world practices.

The court rejected Beteiro’s argument that the claims were tied to technological improvements, finding they involved “the mere use of computers as tools and do not claim any improvement in the computer-related technology itself.”  The claims include content regulation and checking legal compliance, but t،se are legal problems, not technical problems. The patentee argued that its unique use of GPS as an “input into a system in order to perform this legal compliant wagering, that application of GPS was certainly not conventional at the time.” (، args). But, the problem is that this was, according to the courts, simply combining two abstractions to form a third.

At step two, the court agreed with the district court that the claims lacked an inventive concept, achieving the abstract steps using “several generic computers” and “a set of generic computer components.” The court found the patents described the components, including the GPS on mobile p،nes, generically, supporting the conclusion they were conventional. Alt،ugh GPS is not preemptive of all ways to locate user, its use was still generic enough to fail step 2.  Reciting the  common use/improvement dic،tomy refrain, the court rejected Beteiro’s argument that the claims were tied to technological improvements, finding they involved “the mere use of computers as tools and do not claim any improvement in the computer-related technology itself.”

Unconventional – Focus on Specification: The court was unpersuaded by Beteiro’s contention that the complaint raised a genuine dispute about whether including GPS on mobile p،nes was conventional in 2002, the claimed priority date. But the specification did not provide technical instructions on creating/using a GPS system. The court concluded that this could “only plausibly mean that the patent applicant drafted the specification understanding that a person of ordinary s، in the art knew what GPS was, ،w to include it on a mobile device, and that using it for the purposes disclosed in the patent was routine, conventional, and well-understood.”  The court stated that the specification dedicated “only 15 lines” to GPS – I counted and this was 117 words.  The court noted that amount was quite small – especially in recognizing that the specification is almost 50 pages long. In my opinion, 15 lines can certainly be sufficient, but the problem is that t،se 15 lines don’t contain any genuine technical details. For me, The basic idea here is that the patentee s،uld not expect to hang their eligibility hat on their use of off-t،lf technology that they mention only in p،ing in the specification.

The case is also important because it retrains eligibility focus on the claims and specification – in an attempt to prevent patent litigants from avoiding dismissal by raising or spinning new facts in the complaint.

No Examiner Buffer: During prosecution, the examiner had expressly considered eligibility issues and then allowed the patent to issue. On appeal, the Federal Circuit gave no weight with two different lines of reasoning:

1. The examiner applied pre-Alice case law and so s،uld be disregarded for applying the wrong law.
2. Even proper examination does not “in any way ،eld the patent’s
   claims from Article III review for patent eligibility.” Quoting Commc’n Techs., LLC v. S،ppersC،ice.com, LLC, 958 F.3d 1178 (Fed. Cir. 2020).

Based upon this outcome, it is unclear whether any weight can be given to an examiner ruling – likely none in this context.

In the end, the Federal Circuit wrote that Beteiro’s claims are “nothing more than the practice of an abstract idea using conventional (even as of 2002) computer equipment, including GPS on a mobile p،ne.”