DCT

1:18-cv-00533

CG Technology Development LLC v. William Hill US Holdco Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:18-cv-00533, D. Del., 10/12/2018
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because both Defendant entities are incorporated in the State of Delaware.
  • Core Dispute: Plaintiff alleges that Defendant’s sports betting kiosks and mobile wagering platform infringe patents related to user identity verification for gaming and systems for creating in-game wagering markets.
  • Technical Context: The technologies at issue address regulatory and operational challenges in the U.S. sports betting market, specifically the automated verification of a patron's identity and the dynamic creation of betting opportunities during live sporting events.
  • Key Procedural History: The complaint alleges that Defendants had pre-suit knowledge of the patents-in-suit based on two main assertions. First, it alleges that the CEO of William Hill, Joseph M. Asher, was previously a managing director at Plaintiff's parent company and was "intimately involved in developing" the patent portfolio. Second, it alleges that an affiliate of Defendants cited the '224 and '098 patents as prior art during the prosecution of its own patent application. These allegations form the basis of the willful infringement claim.

Case Timeline

Date Event
2008-10-24 ’305 Patent Priority Date
2013-03-11 ’224 Patent Priority Date
2013-03-15 ’098 and ’207 Patents Priority Date
2015-07-07 U.S. Patent No. 9,076,305 Issues
2016-01-19 U.S. Patent No. 9,240,098 Issues
2016-02-23 U.S. Patent No. 9,269,224 Issues
2016-08-05 Defendant’s alleged knowledge of ’224 Patent
2016-10-05 Defendant’s alleged knowledge of ’098 Patent and ’207 Patent application
2018-10-09 U.S. Patent No. 10,096,207 Issues
2018-10-12 Complaint Filed

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

U.S. Patent No. 9,240,098 - Kiosk for Gaming, issued January 19, 2016

The Invention Explained

  • Problem Addressed: The complaint states that prior art methods in the regulated gaming industry required separate systems for user registration, identity verification, account funding, and offering games, which was inefficient, insecure, and failed to meet high regulatory standards while providing a poor customer experience (Compl. ¶46).
  • The Patented Solution: The invention is a self-service gaming kiosk that integrates multiple components to solve this problem (Compl. ¶47). It combines an identification scanner (e.g., for a driver's license) and a biological sensor (e.g., a camera) into a single housing to perform a "two-factor verification of the user before offering gaming activities" (Compl. ¶48). This consolidation is intended to create a seamless, accurate, and secure process for user onboarding and gameplay in a regulated environment ('098 Patent, Abstract; col. 1:20-44).
  • Technical Importance: The technology purports to provide a consolidated, automated solution for satisfying "know your customer" (KYC) and other regulatory requirements in the gaming industry, a field where manual, multi-step verification processes were common (Compl. ¶46).

Key Claims at a Glance

  • The complaint asserts infringement of at least claim 2 (Compl. ¶68).
  • Essential elements of independent claim 2 include:
    • A kiosk for gaming by patrons, comprising a kiosk housing designed to hold a processor, identification scanner, and biological sensor.
    • An identification scanner mounted in the housing to accept an identification document and scan information from it into digital form for network transmission.
    • A biological sensor mounted in the housing to obtain biological data describing a patron and convert it to digital form for network transmission.
    • Input-output device(s) mounted in the housing to accept registration/login information and gaming commands and to present information for interactive gaming.
    • One or more microprocessors programmed to:
      • Present instructions to insert a government-issued identification document.
      • Obtain a digital form of the patron's identification from the scanner.
      • Obtain biological data describing a biological feature of the patron from the sensor.
      • Verify the identity and acceptability of the patron for gaming based at least in part on the digital identification and biological data.
      • On verification, offer gaming activities to the verified patron.
  • The complaint also asserts infringement of claims 4-6, 8-15, 17-19, and 21-23, which are dependent claims (Compl. ¶65).

U.S. Patent No. 9,269,224 - Devices for Gaming, issued February 23, 2016

The Invention Explained

  • Problem Addressed: In addition to the problems of consolidating verification, this patent addresses the challenge of verifying a user's identity to ensure eligibility across various jurisdictions with different regulations and the problem of interoperability across different gaming operators (Compl. ¶¶55-56).
  • The Patented Solution: The invention describes a "computing device" for gaming that, similar to the '098 patent, integrates an identification acceptor and a biological sensor to verify a patron's identity ('224 Patent, Abstract). The solution allows for customization of the verification process based on the specific requirements of a particular jurisdiction and provides a secure networked method for transferring information between different gaming operator servers (Compl. ¶¶55-56).
  • Technical Importance: This technology aims to create a standardized but adaptable hardware platform for user verification that can be deployed across different states and gaming ecosystems, each with its own unique set of compliance rules (Compl. ¶55).

Key Claims at a Glance

  • The complaint asserts infringement of at least claim 2 (Compl. ¶81).
  • Essential elements of independent claim 2 include:
    • A computing device for gaming by patrons, comprising a processor, memory, at least one identification acceptor, at least one biological sensor, and at least one network connector.
    • The identification acceptor designed to accept a government-issued identity document and scan information from it into digital form for network transmission.
    • The biological sensor designed and oriented to obtain biological data describing a patron into digital form for network transmission.
    • Input-output device(s) designed to accept registration/login information and gaming commands and to present information for interactive gaming.
    • One or more microprocessors programmed to:
      • Present instructions to insert an identification document into the acceptor.
      • Obtain a digital form of the patron's identification from the acceptor.
      • Obtain biological data describing a biological feature of the patron from the sensor.
      • Verify the identity and acceptability of the patron for gaming based at least in part on the digital identification and the biological data.
      • On verification, offer gaming activities to the verified patron.
  • The complaint also asserts infringement of claims 4-7 and 9-14, which are dependent claims (Compl. ¶78).

Multi-Patent Capsule: U.S. Patent No. 10,096,207 - Kiosk for Gaming, issued October 9, 2018

  • Technology Synopsis: This patent describes a gaming kiosk that verifies a user's identity by scanning a government-issued identification document, transmitting the digital identification data to a remote computing device for verification, and receiving verification data back from the remote device. Upon successful verification, the kiosk displays an indication that the user is approved for gaming activities ('207 Patent, Abstract; Compl. ¶54). The key distinction from the '098 and '224 patents appears to be the explicit claim step of transmitting the identification data to a remote device for verification, rather than performing the verification entirely within the kiosk (Compl. ¶94; '207 Patent, col. 7:4-9).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶94).
  • Accused Features: The William Hill Sports Betting Kiosk is accused of infringing. The complaint alleges the kiosk scans a user's ID, communicates with a server to validate the user's identity, and then permits the user to deposit funds and wager (Compl. ¶¶95-101).

Multi-Patent Capsule: U.S. Patent No. 9,076,305 - Wagering on Event Outcomes During the Event, issued July 7, 2015

  • Technology Synopsis: This patent addresses the technical problem of determining accurate probabilities for in-game wagering during live events, which the patent asserts was previously a manual, time-intensive, and inaccurate process (Compl. ¶¶60-61). The patented solution is a networked system that uses algorithms to automatically process large amounts of real-time statistical data from disparate sources to determine probabilities for in-game events, create a betting market with corresponding odds, and display it to users ('305 Patent, Abstract; Compl. ¶¶61-62).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶107).
  • Accused Features: The "InPlay" wagering feature of the William Hill sports betting platform is accused of infringing. The complaint alleges the platform receives live sporting event information, determines possible future states within the event (e.g., "Any Run in 7th Inning?"), creates a betting market with calculated odds, accepts wagers, closes the market, and determines payouts (Compl. ¶¶108-113).

III. The Accused Instrumentality

  • Product Identification: The accused instrumentalities are the William Hill Sports Betting Kiosk units and the William Hill Mobile Sports App, collectively referred to as the William Hill sports betting platform (Compl. ¶¶40-41, 67 fn. 1).
  • Functionality and Market Context: The complaint alleges the sports betting kiosks are physical units available in locations such as Nevada sports books (Compl. ¶69). A photograph provided in the complaint shows a physical kiosk branded with "William Hill SPORTS BETTING KIOSK" (Compl. p. 23). The kiosks are alleged to include a scanner for a driver's license, a camera for video authorization, and a touchscreen for user input (Compl. ¶¶41, 70-72). These components are used to register a new user account, verify the user's identity, and allow the user to deposit funds and place wagers (Compl. ¶75). The William Hill Mobile Sports App provides access to the betting platform on mobile devices and allows users to place various types of wagers, including "InPlay" wagers on live sporting events (Compl. ¶¶40, 42, 109). A screenshot from the mobile application shows an "InPlay" betting option for a live baseball game (Compl. p. 60).

IV. Analysis of Infringement Allegations

U.S. Patent No. 9,240,098 Infringement Allegations

Claim Element (from Independent Claim 2) Alleged Infringing Functionality Complaint Citation Patent Citation
A kiosk for gaming by patrons, comprising: a kiosk housing designed hold a processor, identification scanner, and biological sensor... Defendants provide physical sports betting kiosks in "sports book locations throughout Nevada" for user interaction. ¶69 col. 7:7-9
an identification scanner mounted in the kiosk housing and designed to accept an identification document and to scan identification information... into digital form for transmission over a network The kiosk includes a scanner and presents instructions for the user to scan their driver's license to create an account. ¶70 col. 7:10-14
a biological sensor mounted in the kiosk housing and oriented to obtain biological data describing a human patron... into digital form for transmission over a communication network The kiosk includes a camera to "video authorize the identity of the user." ¶71 col. 7:16-19
input-output device(s) mounted in the kiosk housing and designed to accept registration/login information and gaming commands... and to present information... for interactive gaming The kiosk includes a touch screen to accept user inputs during registration and to place wagers. ¶72 col. 7:20-23
one or more microprocessors... programmed to: present instructions to the human patron... to insert a government-issued identification document into the identification scanner The kiosk's user interface, operated by a microprocessor, displays a message instructing the user to scan a driver's license. A screenshot shows the on-screen instruction "Please insert your driver's license face-up in the scanner" (Compl. p. 27). ¶73 col. 7:24-29
obtain a digital form of the patron's identification from the patron's government-issued identification document using the identification scanner; [and] obtain biological data describing a biological feature of the patron from the biological sensor The kiosk extracts information from the scanned driver's license and obtains images of the user's face during video authorization. ¶74 col. 7:30-34
verify the identity of the patron and acceptability of the patron for gaming based at least in part on the digital form of the patron's identification and the biological data; and on verification, to offer gaming activities to the verified patron The kiosk verifies the user's identity and, upon completion of registration, permits the user to deposit money and wager on sports events. ¶75 col. 7:35-40
  • Identified Points of Contention:
    • Scope Questions: A central question may be whether a general-purpose camera used for a "video authorization" process, as alleged, meets the "biological sensor" limitation. The analysis may depend on whether the term requires a device specifically designed for biometric measurement (like an iris or fingerprint scanner) or if a conventional camera suffices.
    • Technical Questions: The complaint alleges the system verifies identity "based at least in part on... the biological data." A key factual question will be what role, if any, the data from the camera (the alleged "biological data") plays in the actual verification algorithm. Does the system, for example, perform automated facial recognition to compare the live video image to the driver's license photo, or is the video simply recorded for potential manual review, which may not satisfy the claim language?

U.S. Patent No. 9,269,224 Infringement Allegations

Claim Element (from Independent Claim 2) Alleged Infringing Functionality Complaint Citation Patent Citation
a computing device with a processor, memory, at least one identification acceptor, at least one biological sensor, and at least one network connector... Defendants provide sports betting kiosks (a type of computing device) in sports book locations, which contain the recited components. ¶82 col. 21:54-58
the identification acceptor being designed to accept a government-issued identity document and to scan identification information... into digital form for transmission over a network The kiosk includes a scanner and directs the user to scan their driver's license to create an account. ¶83 col. 21:59-62
the biological sensor being designed and oriented to obtain biological data describing a human patron into digital form for transmission over a communication network The kiosk includes a camera to "video authorize the identity of the user." ¶84 col. 21:63-65
the input-output device(s) being designed to accept registration/login information and gaming commands... and to present information... for interactive gaming The kiosk includes a touchscreen to accept user inputs during the registration process and to place wagers. ¶85 col. 21:66-col. 22:2
the one or more microprocessors being programmed to: present instructions to the human patron... to insert an identification document into the identification acceptor The kiosk's microprocessor operates the user interface, which displays a message instructing the user to scan a driver's license. ¶86 col. 22:3-7
obtain a digital form of the patron's identification from the identification acceptor; [and] obtain biological data describing a biological feature of the patron from the biological sensor The system extracts information from the scanned driver's license and obtains images of the user's face during video authorization. ¶87 col. 22:8-11
verify the identity of the patron and acceptability of the patron for gaming based at least in part on the digital form of the patron's identification and the biological data; and on verification, to offer gaming activities to the verified patron The system verifies the user's identity at the kiosk and permits the user to deposit funds and wager on sports events once registration is complete. ¶88 col. 22:12-17
  • Identified Points of Contention: The points of contention for the '224 Patent are substantially similar to those for the '098 Patent, as the asserted claims and accused functionalities are nearly identical. The dispute will likely focus on the definition of "biological sensor" and the specific technical method by which the "biological data" is used to "verify" the patron's identity.

V. Key Claim Terms for Construction

  • The Term: "biological sensor" (from '098 Patent, Claim 2; '224 Patent, Claim 2)
  • Context and Importance: This term is critical because the infringement allegation for this element relies on the accused kiosk's camera, which performs a "video authorization" (Compl. ¶¶71, 84). The case may turn on whether a general-purpose camera used in this manner constitutes a "biological sensor" as contemplated by the patents. Practitioners may focus on this term because it appears to be the primary basis for the "two-factor" verification aspect of the invention described in the complaint (Compl. ¶48).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specifications of both patents provide examples that could support a broad reading. The '098 patent specification states, "The biological sensor may be a camera and the biological data may be a digital image of a face of the patron captured by the camera" ('098 Patent, col. 7:64-67).
    • Evidence for a Narrower Interpretation: The patents also use the term in a context that could suggest a more specialized function than simply taking a picture. The abstract of the '098 patent discusses obtaining "biological data describing a human patron" to "verify the identity," which may suggest a more active biometric analysis rather than simple image capture for potential manual review. A defendant may argue that in the context of the entire specification, the term implies a device purpose-built for biometric data extraction, such as a fingerprint or iris scanner, distinguishing it from a standard camera.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Defendants induce infringement by designing their platform to be infringing and by "purposefully directing through instructions, promoting through advertising and marketing, encouraging through promotions, and otherwise causing the use of its sports betting platform by third parties including use by its customers" (Compl. ¶43). Specific allegations are made for each asserted patent (Compl. ¶¶65, 78, 91, 104).
  • Willful Infringement: The complaint alleges willful infringement based on Defendants’ purported pre-suit knowledge of the patents (Compl. ¶116). This allegation is supported by claims that the CEO of William Hill was previously involved in developing Plaintiff's patent portfolio (Compl. ¶117) and that Defendants' affiliate cited the '098 and '224 patents as prior art during the prosecution of its own patent application, allegedly establishing knowledge as early as August 2016 (Compl. ¶118).

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

The resolution of this case may depend on the court's determination of several key issues:

  • A core issue will be one of definitional scope: can the term "biological sensor," as used in the context of a two-factor identity verification system, be construed to cover a general-purpose camera performing a "video authorization" step, or does the patent language require a more specialized biometric scanning device?
  • A second central question will be evidentiary and functional: what is the specific technical process by which the accused kiosks "verify" a patron's identity "based at least in part on... the biological data"? The case may require discovery into whether an automated, algorithmic comparison occurs between the camera feed and the ID photo, which could support infringement, or if the process is fundamentally different from that claimed.
  • Regarding the in-game wagering technology, a key question will be one of methodological mapping: does the accused "InPlay" feature practice the specific sequence of steps recited in claim 1 of the '305 patent—including determining probabilities based on reliability information, creating a betting market, and closing that market in the manner claimed?