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Federal Circuit Affirms Dismissal Of Beteiro LLC’s Suit Against Six Gambling Services Companies Because Patents Claimed Nonpatentable Subject Matter
07/17/2024On June 21, 2024, the United States Court of Appeals for the Federal Circuit (“CAFC”) affirmed a decision by the United States District Court for the District of New Jersey dismissing Beteiro, LLC’s (“Beteiro”) claims of patent infringement under Rule 12(b)(6) on the grounds that the asserted claims of the patents-in-suit claim nonpatentable subject matter under 35 U.S.C. § 101. The CAFC held that Beteiro’s patents—related to remote gaming and gambling activities—amounted to the practice of an abstract idea using conventional computer equipment and did not qualify for patent protection under the two-step framework of Alice/Mayo.
Beteiro owns four patents related to facilitating remote gaming and gambling activities through user communication devices equipped with GPS. The inventions disclosed in these patents are directed to determining whether or not to allow users to participate in live gaming or gambling activities based on their location. In particular, the patents describe a system where user location is determined via their GPS-enabled mobile communication devices to ensure compliance with jurisdictional gambling laws.
Beteiro filed patent infringement cases against six companies, DraftKings, Inc.; PointsBet USA, Inc.; BetMGM, LLC; Hillside New Jersey LLC; BetFair Interactive US LLC; and Kindred Group plc (“Appellees”), alleging that they infringed Beteiro’s patents by providing remote gambling services. The Appellees filed motions to dismiss, arguing that Beteiro’s patents claimed nonpatentable subject matter under 35 U.S.C. § 101. The district court agreed and dismissed the cases, concluding that the patents did not meet the eligibility criteria for patentable subject matter under Alice/Mayo.
On appeal, the CAFC agreed with the district court that the challenged claims of Beteiro’s patents were “directed to an abstract idea and do not contain an inventive concept.” In reaching this decision, the Court applied the Alice/Mayo two-step framework to determine patent eligibility under 35 U.S.C. § 101.
At step one, the CAFC found that Beteiro’s claims were directed to the abstract idea of exchanging information about a bet and determining its permissibility based on the user’s location. First, the Court noted that the claims exhibited several features that were “well-settled indicators of abstractness” including “detecting information, generating and transmitting a notification based on the information, receiving a message (bet request), determining (whether the bet is allowed based on location data), and processing information (allowing or disallowing the bet).” The CAFC noted that the claims used results-focused language, with “no specificity about how the purported invention achieves those results.” Further, the Court pointed to several of its precedents holding analogous claims, “such as those involving methods of providing particularized information to individuals based on their locations, to be abstract.” The CAFC also considered Beteiro’s patent claims to be analogous to “real-world” activities which constituted “a fundamental and longstanding economic activity, i.e. an abstract idea.”
At step two, the CAFC concluded that the claims did not contain an “inventive concept” that would transform the abstract idea into a patent-eligible application. The claims were found to be implemented using generic computer components; and the specification did not describe any technological improvement to GPS or mobile device technology. The CAFC rejected Beteiro’s arguments that the use of GPS in mobile wagering was unconventional in 2002, finding that the specification and the nature of the claims indicated that the use of GPS was well-understood and routine.
