DCT

1:17-cv-01041

CG Technology Development LLC v. FanDuel Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:17-cv-01041, D. Nev., 04/08/2016
  • Venue Allegations: Plaintiffs allege venue is proper in the District of Nevada because FanDuel transacts business in the state, offers its services to Nevada residents through its website and mobile applications, and has held promotional events within the district.
  • Core Dispute: Plaintiffs allege that Defendant’s daily fantasy sports platform infringes eight patents related to online gaming systems, interactive wagering, user profiling, and statistics generation.
  • Technical Context: The technology at issue addresses systems and methods for facilitating large-scale, interactive online wagering and gaming, a commercially significant field for the daily fantasy sports industry.
  • Key Procedural History: The complaint notes that on July 15, 2014, Plaintiffs sent a letter to Defendant identifying seven of the eight patents-in-suit and alleging infringement, an event which may be relevant to the plaintiffs' claims of willful infringement.

Case Timeline

Date Event
1997-11-14 U.S. Patent No. RE39,818 Priority Date
2000-05-01 U.S. Patent No. 8,641,511 Priority Date
2001-07-13 U.S. Patent Nos. 6,899,628, 9,111,417, 8,342,924, 7,029,394, & 6,884,166 Priority Date
2005-04-26 U.S. Patent No. 6,884,166 Issue Date
2005-05-31 U.S. Patent No. 6,899,628 Issue Date
2005-07-08 U.S. Patent No. 7,534,169 Priority Date
2006-04-18 U.S. Patent No. 7,029,394 Issue Date
2007-09-04 U.S. Patent No. RE39,818 Issue Date
2009-05-19 U.S. Patent No. 7,534,169 Issue Date
2013-01-01 U.S. Patent No. 8,342,924 Issue Date
2014-02-04 U.S. Patent No. 8,641,511 Issue Date
2014-07-15 Plaintiffs sent notice letter to Defendant
2015-08-18 U.S. Patent No. 9,111,417 Issue Date
2016-04-08 Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. RE39,818 - “Personalized Wireless Video Game System”

  • Patent Identification: U.S. Patent No. RE39,818, “Personalized Wireless Video Game System,” issued September 4, 2007 (Compl. ¶17).

The Invention Explained

  • Problem Addressed: The patent describes a need for video game systems that are not restricted by physical cables and that can recognize individual users to provide a customized experience (RE'818 Patent, col. 1:16-41).
  • The Patented Solution: The invention is a wireless game controller with a non-volatile memory that stores personalized user data, such as the user's age and performance history. This information is transmitted to the game processor to customize and authorize gameplay, for example by prohibiting a user from playing a game based on their age (RE’818 Patent, Abstract; col. 3:30-48).
  • Technical Importance: This approach enabled a portable, personalized gaming identity that was not tied to a specific console and allowed for features like parental controls based on user-specific data stored in the controller itself (RE'818 Patent, col. 3:42-48).

Key Claims at a Glance

  • The complaint asserts independent claims 1 and 20, and dependent claims 24 and 25 (Compl. ¶19).
  • Independent Claim 20 recites the essential elements of:
    • A game apparatus comprising: a wireless transmitter to transmit both an identification code and game control signals to a processor executing a game;
    • the identification code used by the processor to retrieve identification data and authorize game play based at least in part on an age of a player; and
    • a plurality of input controls to allow the player to interact with the processor to play the game (RE'818 Patent, col. 7:25-32).

U.S. Patent No. 6,899,628 - “System and Method for Providing Game Event Management to a User of a Gaming Application”

  • Patent Identification: U.S. Patent No. 6,899,628, “System and Method for Providing Game Event Management to a User of a Gaming Application,” issued May 31, 2005 (Compl. ¶29).

The Invention Explained

  • Problem Addressed: The patent identifies drawbacks in early online gaming, including the failure to provide a secure environment for competing for tangible prizes and the lack of incentives to foster dedicated patronage (U.S. Patent No. 6,899,628, col. 1:23-34).
  • The Patented Solution: The patent describes a system architecture comprising a first server that hosts a gaming application and a separate, remote "enhanced services platform" that manages game events, generates statistics, and handles wagering. The server monitors game events and communicates event information to this remote platform, which can then generate a wager record between users (U.S. Patent No. 6,899,628, col. 2:50-col. 3:14).
  • Technical Importance: This architecture allowed for the separation of game hosting from higher-level services like wagering and statistics, enabling a more scalable and robust system for managing events and wagers across potentially numerous, distributed game servers (U.S. Patent No. 6,899,628, col. 3:15-29).

Key Claims at a Glance

  • The complaint asserts independent claim 31 (Compl. ¶31).
  • Independent Claim 31 recites the essential elements of:
    • A server for managing game events, comprising: a processor that executes a gaming application accessed by a remote user via a network;
    • a monitor module coupled to the processor that monitors a plurality of game events during the execution of the gaming application by the user; and
    • an interface coupled to the processor that communicates event information to an enhanced services platform remote from the server, enabling the platform to generate a wager record between users (U.S. Patent No. 6,899,628, col. 23:62-col. 24:7).

Multi-Patent Capsule: U.S. Patent No. 9,111,417

  • Patent Identification: U.S. Patent No. 9,111,417, “System and Method for Providing Enhanced Services to a User of a Gaming Application,” issued August 18, 2015 (Compl. ¶42).
  • Technology Synopsis: This patent describes a complete system for providing a game over a network. The system presents a graphical user interface (GUI) that allows a user to offer a wager to other users, receives acceptances, generates statistics during gameplay, and ultimately determines the outcome and transfers funds between users (Compl. ¶44).
  • Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶44).
  • Accused Features: The complaint accuses FanDuel’s end-to-end daily fantasy sports platform, including its user interface for creating contests, its live-scoring statistics generation, and its automated payout system (Compl. ¶44-52).

Multi-Patent Capsule: U.S. Patent No. 8,641,511

  • Patent Identification: U.S. Patent No. 8,641,511, “Real-Time Interactive Wagering on Event Outcomes,” issued February 4, 2014 (Compl. ¶56).
  • Technology Synopsis: This patent claims a method for operating a computer wagering system. The method involves opening and funding a gaming account for a client, authorizing the client to access the account from a computing device, and matching requests from different clients to enter opposite sides of a game based on at least one event (Compl. ¶58).
  • Asserted Claims: The complaint asserts independent claim 16 (Compl. ¶58).
  • Accused Features: The complaint accuses FanDuel's system for user account creation, login verification, and its functionality for matching users in head-to-head or multi-user contests (Compl. ¶60-64).

Multi-Patent Capsule: U.S. Patent No. 8,342,924

  • Patent Identification: U.S. Patent No. 8,342,924, “System and Method for Providing Enhanced Services to a User of a Gaming Application,” issued January 1, 2013 (Compl. ¶75).
  • Technology Synopsis: This patent describes an apparatus that receives information associated with an event initiated by a first user during a game. The system then generates statistics based on this information and causes the statistics to be electronically displayed to a second user (Compl. ¶77).
  • Asserted Claims: The complaint asserts independent claim 11 (Compl. ¶77).
  • Accused Features: The complaint accuses FanDuel’s live scoring feature, which allegedly generates and displays statistics to users in a contest based on the real-time performance of athletes selected by other users (Compl. ¶79-80).

Multi-Patent Capsule: U.S. Patent No. 7,029,394

  • Patent Identification: U.S. Patent No. 7,029,394, “System and Method for Generating Statistics for a User of a Gaming Application,” issued April 18, 2006 (Compl. ¶86).
  • Technology Synopsis: This patent claims a system for generating statistics that comprises a server that executes a gaming application, monitors game events, and communicates event information. The system generates statistics based on this event information and entry-fee records, and then uses those statistics to determine an outcome (Compl. ¶88).
  • Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶88).
  • Accused Features: The complaint accuses FanDuel's platform of executing a game, monitoring real-world events, communicating those events to users, and determining contest outcomes based on statistics generated from those events and the associated entry fees (Compl. ¶90-93).

Multi-Patent Capsule: U.S. Patent No. 6,884,166

  • Patent Identification: U.S. Patent No. 6,884,166, “System and Method for Establishing a Wager for a Gaming Application,” issued April 26, 2005 (Compl. ¶99).
  • Technology Synopsis: This patent describes a system for establishing a wager where a server hosts a gaming application. A processor allows a first user to generate a wager offer, presents that offer to a plurality of second users, and receives a wager acceptance from a second user to form a wager between them (Compl. ¶101).
  • Asserted Claims: The complaint asserts independent claim 39 (Compl. ¶101).
  • Accused Features: The complaint accuses FanDuel's functionality that allows users to create their own contests (a "wager offer"), which are then presented in the lobby for other users to accept and join (Compl. ¶103-106).

Multi-Patent Capsule: U.S. Patent No. 7,534,169

  • Patent Identification: U.S. Patent No. 7,534,169, “System and Method for Wireless Gaming System with User Profiles,” issued May 19, 2009 (Compl. ¶112).
  • Technology Synopsis: This patent claims an apparatus with a user profile associated with a user of a gaming device. The system updates the user's profile to reflect a "first success level" during a first gaming session, and then modifies the gaming environment for a subsequent, second gaming session based on that success level (Compl. ¶114).
  • Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶114).
  • Accused Features: The complaint accuses FanDuel's platform of maintaining user profiles and modifying the user experience, such as by presenting different types of contests (e.g., "Satellite contests") to users based on their prior activity and success (Compl. ¶116-119).

III. The Accused Instrumentality

Product Identification

  • The accused products are FanDuel’s on-line daily fantasy sports contests, which are provided through its website and mobile applications (Compl. ¶13).

Functionality and Market Context

  • The complaint alleges that FanDuel operates one of the largest online sites for daily fantasy sports (Compl. ¶13). Its platform allows users to create accounts, deposit money, and participate in contests where they draft teams of real-world athletes and compete based on the athletes' statistical performance in live games (Compl. ¶12, 14). The system authorizes users based on age, matches users in contests with specified entry fees, monitors multiple live sporting events, generates statistics, determines winners based on contest rules, and manages the transfer of funds between user accounts (Compl. ¶13, 14). A screenshot provided in the complaint shows a FanDuel login screen, which is used to access the platform and transmit user identification (Compl. ¶21).

IV. Analysis of Infringement Allegations

RE39,818 Infringement Allegations

Claim Element (from Independent Claim 20) Alleged Infringing Functionality Complaint Citation Patent Citation
[a] game apparatus comprising: a wireless transmitter to transmit both an identification code and game control signals to a processor executing a game FanDuel's platform is accessed by users via general-purpose computing devices that wirelessly transmit login credentials (identification code) and contest entries (game control signals) over the internet to FanDuel's servers. ¶21 col. 7:25-28
the identification code...used by the processor to retrieve identification data and authorize game play based at least in part on an age of a player FanDuel's servers use the transmitted login information to access user data and authorize gameplay, including verifying that the user is over the legal age to participate. ¶19, 22 col. 7:28-30
a plurality of input controls to allow the player to interact with the processor to play the game FanDuel's website and mobile application present a graphical user interface with numerous buttons, links, and menus that allow users to select contests, draft players, and manage their accounts. ¶23 col. 7:31-32
  • Identified Points of Contention:
    • Scope Questions: A primary question may be whether a user's general-purpose device (e.g., a smartphone or laptop) running a web browser or mobile application constitutes a "game apparatus" with a "wireless transmitter" as contemplated by the patent, which has a 1997 priority date and describes dedicated game controllers.
    • Technical Questions: The analysis may question whether FanDuel's age verification process, which the complaint alleges involves checking user age (Compl. ¶13), performs the specific function of "authoriz[ing] game play based at least in part on an age of a player" in the manner required by the claim.

6,899,628 Infringement Allegations

Claim Element (from Independent Claim 31) Alleged Infringing Functionality Complaint Citation Patent Citation
a server for managing game events, comprising: a processor that executes a gaming application that is accessed by a remote user via a network FanDuel operates servers that run its daily fantasy sports gaming application, which users access over the internet from their personal computing devices. ¶33 col. 23:62-64
a monitor module coupled to the processor that monitors a plurality of game events during the execution of the gaming application by the user The FanDuel platform monitors real-world sporting events in real time, which form the basis of the fantasy sports contests played by users. ¶34 col. 23:65-67
an interface coupled to the processor that communicates event information...to an enhanced services platform remote from the server The platform's interface communicates live scoring data and other event information to users' devices. The complaint includes a screenshot of a "Live scoring" interface to support this allegation (Compl. ¶35). ¶35 col. 24:1-4
such that the platform may generate a wager record associated with a wager between a plurality of users based on at least one of the first event information and the second event information Upon a user entering a contest, the system generates a record of the entry, which constitutes a "wager record" between the competing users based on the outcomes of the monitored game events. ¶36 col. 24:4-7
  • Identified Points of Contention:
    • Scope Questions: A key question may be whether FanDuel's integrated system meets the "remote from the server" limitation. The patent appears to describe a distinct "enhanced services platform" that is separate from the game-hosting "server." It is an open question whether different software modules within an integrated architecture can be considered "remote" from one another for the purposes of this claim.
    • Technical Questions: An evidentiary question may arise as to whether monitoring external, real-world sporting events constitutes monitoring "game events during the execution of the gaming application by the user," or if the claim requires monitoring of events generated within the software environment itself.

V. Key Claim Terms for Construction

Patent: RE39,818

  • The Term: "game apparatus"
  • Context and Importance: Practitioners may focus on this term because the patent's specification and figures depict a dedicated hardware controller, whereas the accused instrumentality is software operating on a general-purpose computer or smartphone. The construction of this term may be dispositive of infringement.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim language itself is broad and does not explicitly limit the "apparatus" to a specific physical form factor.
    • Evidence for a Narrower Interpretation: The patent's abstract describes a "wireless game controller," and the detailed description consistently refers to a physical controller with input switches, suggesting the invention is a piece of dedicated hardware (RE'818 Patent, Abstract; col. 4:60-67).

Patent: 6,899,628

  • The Term: "enhanced services platform remote from the server"
  • Context and Importance: This term is critical because Claim 31 requires communication of event information from the server to a platform that is "remote." The accused FanDuel system is alleged to be an integrated platform. The dispute may turn on whether "remote" requires physical separation or if it can be satisfied by logical separation within a single, integrated system.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent describes the platform's function as providing "enhanced services" such as event management, statistics, and wagering, which could be construed as logically distinct software modules, regardless of physical location (U.S. Patent No. 6,899,628, col. 4:18-29).
    • Evidence for a Narrower Interpretation: The Summary of the Invention describes an embodiment comprising a "first server, a second server, a processor remotely coupled to the first server and the second server," which suggests that the distinct functions are performed by physically separate hardware (U.S. Patent No. 6,899,628, col. 2:50-54).

VI. Other Allegations

  • Indirect Infringement: The complaint alleges both induced and contributory infringement for at least U.S. Patent No. 8,641,511. Inducement is alleged based on FanDuel providing its customers with detailed instructions, rules, and advertisements that encourage use of the platform in an infringing manner (Compl. ¶70). Contributory infringement is alleged on the basis that FanDuel's product is especially made for infringing use and has no substantial non-infringing uses (Compl. ¶71).
  • Willful Infringement: The complaint includes a count for willful infringement of all eight patents-in-suit (Compl. ¶124-126). The basis for this allegation is Defendant's alleged knowledge of seven of the patents as of a July 15, 2014 notice letter and its subsequent continued infringement, which Plaintiffs characterize as acting with reckless disregard of a high likelihood of infringement (Compl. ¶125-126).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of technological scope: can claim terms drafted for the online gaming and hardware environment of the late 1990s and early 2000s, such as "game apparatus" and physically distinct server platforms, be construed to cover a modern, integrated, software-as-a-service platform operating on users' general-purpose mobile devices?
  • A key architectural question will be one of system definition: does FanDuel's integrated platform, which appears to perform multiple functions within a unified system, satisfy claim limitations that recite distinct and "remote" components, such as a "server" and a separate "enhanced services platform"?
  • An important evidentiary question will be one of functional operation: does the accused platform's monitoring of external, real-world sporting events meet the claim requirement of monitoring game events "during the execution of the gaming application by the user," or is there a fundamental mismatch between how the patented systems and the accused platform operate with respect to event generation and monitoring?