United States District Court, D. Delaware
before the Court is Defendants' motion to dismiss. (D.I.
37). I have reviewed the parties' briefing. (D.I. 38, 39,
48). For the following reasons, Defendants' motion is
April 10, 2018, Plaintiff, a Nevada corporation based in Las
Vegas, filed this action asserting infringement of U.S.
Patent Nos. 9, 240, 098 ("the '098 patent"), 9,
269, 224 ("the '224 patent"), and 9, 076, 305
("the '305 patent") relating to sports
gambling. (D.I. 1). Defendants, a Delaware corporation based
in Las Vegas,  moved to dismiss for failure to state a
claim under Federal Rule of Civil Procedure 12(b)(6), on the
basis that the '305 patent claims are invalid under 35
U.S.C. § 101. (D.I. 16). I dismissed the complaint in an
oral order "for failure to state a claim inasmuch as its
allegations treat the two remaining defendants as one entity
without providing any plausible basis for the
assertion," and gave leave to file an amended complaint.
(D.I. 33). Plaintiff filed a first amended complaint
("FAC"), which added a claim for infringement of
U.S. Patent No. 10, 096, 207 ("the '207
patent"). (D.I. 35). Defendants now move to dismiss the
FAC pursuant to Rule 12(b)(6), again on the basis that the
'305 patent claims are invalid under § 101, as well
as for failure to state a claim of pre-suit willful
infringement or pre-suit induced infringement. (D.I. 37, 38).
reviewing a motion to dismiss pursuant to Rule 12(b)(6), the
Court must accept the complaint's factual allegations as
true. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555-56 (2007). Rule 8(a) requires "a short and plain
statement of the claim showing that the pleader is entitled
to relief." Id. at 555. The factual allegations
do not have to be detailed, but they must provide more than
labels, conclusions, or a "formulaic recitation" of
the claim elements. Id. ("Factual allegations
must be enough to raise a right to relief above the
speculative level... on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact)."). Moreover, there must be sufficient factual
matter to state a facially plausible claim to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
facial plausibility standard is satisfied when the
complaint's factual content "allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Id. ("Where a
complaint pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief."
(internal quotation marks omitted)).
101 of the Patent Act defines patent-eligible subject matter.
It provides: "Whoever invents or discovers any new and
useful process, machine, manufacture, or composition of
matter, or any new and useful improvement thereof, may obtain
a patent therefor, subject to the conditions and requirements
of this title." 35 U.S.C. § 101. The Supreme Court
has recognized an implicit exception for three categories of
subject matter not eligible for patentability-laws of nature,
natural phenomena, and abstract ideas. Alice Corp. Pty.
v. CLS Bank lnt'l, 134 S.Ct. 2347, 2354 (2014). The
purpose of these carve outs is to protect the "basic
tools of scientific and technological work." Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132
S.Ct. 1289, 1293 (2012). "[A] process is not
unpatentable simply because it contains a law of nature or a
mathematical algorithm," as "an application of a
law of nature or mathematical formula to a known structure or
process may well be deserving of patent protection."
Id. at 1293-94 (internal quotation marks and
emphasis omitted). In order "to transform an
unpatentable law of nature into a patent-eligible application
of such a law, one must do more than simply state the law of
nature while adding the words 'apply it.'"
Id. at 1294 (emphasis omitted).
Alice, the Supreme Court reaffirmed the framework
laid out in Mayo "for distinguishing patents
that claim laws of nature, natural phenomena, and abstract
ideas from those that claim patent-eligible applications of
those concepts." 134 S.Ct. at 2355. First, a court must
determine whether the claims are directed to a
patent-ineligible concept. Id. If the answer is yes,
the court must look to "the elements of the claim both
individually and as an 'ordered combination'" to
see if there is an '"inventive
concept'-i.e., an element or combination of
elements that is 'sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the
[ineligible concept] itself.'" Id. "A
claim that recites an abstract idea must include
'additional features' to ensure that the [claim] is
more than a drafting effort designed to monopolize the
[abstract idea]." Id. at 2357. Further,
"the prohibition against patenting abstract ideas cannot
be circumvented by attempting to limit the use of [the idea]
to a particular technological environment." Id.
at 2358 (quoting Bilski v. Kappos, 561 U.S. 593,
610-11 (2010)). Thus, "the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea
into a patent-eligible invention." Id. For this
second step, the machine-or-transformation test can be a
"useful clue," although it is not determinative.
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716
(Fed. Cir. 2014).
disputes about whether an aspect of the claims is inventive
may preclude dismissal at the pleadings stage."
Cellspin Soft, Inc. v. Fitbit, Inc., 927 F.3d 1306,
1318 (Fed. Cir. 2019). While not "any allegation about
inventiveness, wholly divorced from the claims or the
specification, defeats a motion to dismiss, plausible and
specific factual allegations that aspects of the claims are
inventive are sufficient. As long as what makes the claims
inventive is recited by the claims, the specification need
not expressly list all the reasons why this claimed structure
is unconventional." Id. at 1317.
a claim is drawn to patent-eligible subject matter under
§ 101 is an issue of law," and "is a matter of
both claim construction and statutory construction."
In re Bilski, 545 F.3d 943, 951 (Fed. Cir. 2008),
aff'd sub nom. Bilski v. Kappos, 561 U.S. 593
(2010). "Claim construction is a question of law."
In re Nuijten, 500 F.3d 1346, 1352 (Fed. Cir. 2007).
is not required to individually address claims not asserted
or identified by the non-moving party, so long as the court
identifies a representative claim and "all the claims
are substantially similar and linked to the same abstract
idea." Content Extraction & Transmission
LLC v. Wells Fargo Bank, Nat. Ass'n, 776 F.3d
1343, 1348 (Fed. Cir. 2014) (quotation marks omitted).
PATENT-ELIGIBLE SUBJECT MATTER
'305 patent relates to systems and methods for betting on
a sporting event. Claims 1, 19, 20 and 22 are independent
argues that claim 1 is representative. (D.I. 38 at 2).
Plaintiff does not dispute that claim 1 is representative for
independent claims 20 and 22. (See D.I. 39 at
15-16). For the following reasons, I find all the asserted
claims "substantially similar" to claim 1 and thus
treat claim 1 as representative. See Content
Extraction, 176 F.3d at 1348.
1. A method, comprising:
receiving by at least one processor state information of a
live event in substantially real time, in which the live
event comprises a sporting event played by human players
according to predetermined rules that are used to determine
at least one winner of the sporting event;
after a start of the sporting event, determining by the at
least one processor a plurality of possible future states of
the sporting event based on the state information, the
possible future states occurring before an end of the
after a start of the sporting event, creating by the
processor a first betting market for betting on at least one
of the plurality of possible future states, in which the
plurality of users comprises a first user, and in which the
act of creating a first betting market comprises:
determining by the processor a probability for each of the
plurality of possible future states based on probability
information, in which the act of determining a probability
comprises determining a probability for at least one of the
plurality of possible future states based on probability