Plaintiff CG Technology Development, LLC sued Defendants Bwin.Party Digital Entertainment, PLC in the U.S. District Court for the District of Nevada for infringement of various patents via operation of various online casino games. Bwin filed a motion to dismiss infringement as to U.S. Patents 8,771,058; 8,814,664; 9,355,518; and 9,306,952 based on unpatentability under 35 U.S.C. § 101.
The District Court followed the two-step test set forth by the Supreme Court in which first, a court determines whether the claim is "directed to one of those patent-ineligible concepts." If not, the analysis ends. If so, however, a court must consider the elements of each claim "both individually and 'as an ordered combination' to determine whether the additional elements 'transform the nature of the claim' into a patent-eligible application."
All patents relate to various aspects of online gambling, and various details of the four patents at issue are discussed below.
The '058 Patent
The '058 patent is directed to a zone dependent payout percentage gambling system. Higher payout percentages are offered in certain locations than in other locations. For example, in certain areas of a casino, such as in mall and shop areas, payout percentages of between 98% and 99% are offered. In other areas, payout percentages below 96% may be offered. Figure 6 is reproduced below and illustrates separate zones for the mobile device.
Claim 19 is representative of the '058 patent and is the only claim Plaintiffs have accused Defendants of infringing. Claim 19 reads in full:
19. A computer system comprising:
a processor operable to execute a set of instructions; and
a memory having stored thereon the set of instructions, in which the set of instructions, when executed by the processor, cause the computer system to perform a method comprising:
determining a first location of a mobile gaming device,
determining a first game configuration associated with the first location,
generating a first game outcome using the first game configuration,
determining a first payout associated with the first game outcome,
crediting a player account with a first amount based on the first payout,
determining a second location of the mobile gaming device, wherein the second location is different from the first location,
determining a second game configuration associated with the second location, wherein the second game configuration is different from the first game configuration,
generating a second game outcome using the second game configuration,
determining a second payout associated with the second game outcome, and
crediting the player account with a second amount based on the second payout.
The District Court noted that determining game configurations (based on some set of rules, e.g., an algorithm, list, etc.), generating game outcomes based on the configurations (based on some set of rules, e.g., an algorithm, list, etc.), determining payouts based on game outcomes (based on some set of rules, e.g., an algorithm, list, etc.), and crediting players based on payouts (accounting) are abstract ideas that can be conducted in one's mind.
But at least one aspect of the process requires activity outside of one's mind: determining the physical location of the mobile gaming device. Claim 19 is limited to using a computer system to locate a mobile gaming device. The specification notes that location verification technology may be network- or satellite-based and may use methods such as geo-fencing or triangulation.
The District Court found that determining an actual, physical location is not an abstract concept because one cannot perform the function in one's head. Claim 19 does not simply instruct a practitioner to use a computer to perform calculations using pre-existing location data; it requires as an essential step that the computer actually determine the location of the mobile gaming device.
The District Court found that because claim 19 requires the location of a mobile gaming device via a computer system, that is concrete enough to take the claim outside the scope of Alice Corp.'s "abstract idea" exception to patentability under § 101. The location of the mobile gaming device via computer is a limited, concrete, physical task.
The District Court found that the argument of whether similar methods of location-based gaming options are well known and long-practiced goes to anticipation or obviousness under §§ 102 or 103, respectively, not patentability under § 101.
The District Court therefore denied the motion to dismiss Claim 19 of the '058 Patent under § 101.
The '664 Patent, '518 Patent, and '952 Patent
Each of the challenged claims in the '664 Patent, '518 Patent, and '952 Patent recites a requirement of physically locating wireless gaming terminals via a computer to perform a function, and the District Court found that these claims are not invalid under § 101 for the same reasons as with Claim 19 of the '058 Patent above. The District Court summarily determined that such action makes the process sufficiently concrete to survive Alice Corp.
Thus, the motion to dismiss was denied for all patents.
This case easily could have been decided differently, as we have seen many times in the past, by the Court simply identifying the function of location-determination as a well-known feature and then dismissing the feature in the abstract idea analysis. However, this Court correctly noted that whether the location-determination feature is well known goes to anticipation or obviousness, rather than patentability under § 101. As a result, all claims reciting the requirement of physically locating the wireless gaming terminal were found to be directed to patentable subject matter.
Order by District Judge Robert C. Jones
