DCT
1:24-cv-00736
Get Out Ahead LLC v. Wire Industries Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Get Out Ahead, LLC (Nevada)
- Defendant: Wire Industries, Inc. (f/k/a WagerWire, LLC) (Delaware)
- Plaintiff’s Counsel: PHILLIPS, MCLAUGHLIN & HALL, PA; Garteiser Honea, PLLC
- Case Identification: 1:24-cv-00736, D. Del., 06/21/2024
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant is a Delaware corporation, making it domiciled and resident in the state. The complaint also alleges Defendant maintains a regular and established business presence in the District.
- Core Dispute: Plaintiff alleges that Defendant’s mobile sports wagering platform and API infringe patents related to the online exchange and partial sale of wagering tickets.
- Technical Context: The technology at issue facilitates a secondary market for active sports wagers, allowing users to sell full or partial stakes in a bet before the underlying sporting event concludes.
- Key Procedural History: The complaint alleges that the patents-in-suit were cited as relevant prior art during the patent prosecution of applications assigned to Defendant, which may be relevant to the question of pre-suit knowledge and willfulness.
Case Timeline
| Date | Event |
|---|---|
| 2015-06-03 | Priority Date for ’270 and ’479 Patents |
| 2018-03-06 | U.S. Patent No. 9,911,270 Issues |
| 2019-02-12 | U.S. Patent No. 10,204,479 Issues |
| 2024-06-21 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,911,270 - "SYSTEM, METHOD, AND NON-TRANSITORY COMPUTER-READABLE STORAGE MEDIA FOR MULTIPLE EXCHANGE OF MULTIPLE ITERATIONS OF THE SAME ONLINE WAGER TRANSACTION"
- Issued: March 6, 2018
The Invention Explained
- Problem Addressed: The patent’s background section describes the illiquidity of traditional sports betting tickets, where a bettor is typically locked into their wager until the event concludes. It notes that while private sales can occur, the gaming establishment has no way to track ownership, creating challenges in distributing winnings correctly and managing disputes under an "honor system" (ʼ270 Patent, col. 1:29-60).
- The Patented Solution: The invention proposes a computer-implemented exchange system that allows a user to sell a fraction of an existing wager. The system achieves this by taking an original "parent" ticket, splitting it into two "child" tickets (one for the portion to be sold, one for the portion to be retained), deactivating the parent ticket, and then offering the newly-created "for sale" child ticket on a managed online exchange (ʼ270 Patent, Abstract; col. 15:53-67; FIG. 15). This creates a trackable, auditable secondary market for wagers.
- Technical Importance: This system provides a mechanism for wagering service providers to track and audit each secondary exchange, offering users liquidity and flexibility while enabling providers to potentially collect commissions on such trades (ʼ270 Patent, col. 4:22-31).
Key Claims at a Glance
- The complaint asserts at least independent claim 9 (Compl. ¶37).
- The essential elements of method claim 9 include:
- Prompting a user to access an exchange website.
- Prompting the user to create a user account.
- Prompting the user to choose a ticket from their account for partial sale.
- Receiving a percentage value of the ticket the user wishes to sell.
- Splitting the ticket into a first child ticket (for sale) and a second child ticket (to retain).
- Setting the status of the original ticket to inactive.
- Setting the status of the first child ticket to active.
- Offering the first child ticket for sale on the exchange website.
U.S. Patent No. 10,204,479 - "SYSTEM, METHOD, AND NON-TRANSITORY COMPUTER-READABLE STORAGE MEDIA FOR MULTIPLE EXCHANGE OF MULTIPLE ITERATIONS OF THE SAME ONLINE WAGER TRANSACTION"
- Issued: February 12, 2019
The Invention Explained
- Problem Addressed: As with its parent patent, the '479 Patent addresses the lack of a formal, managed secondary market for sports wagers, which limits user flexibility and operator control over post-purchase transactions (ʼ479 Patent, col. 1:29-60).
- The Patented Solution: The patent describes a system that prompts a user to select a ticket for partial sale, receives a user-indicated percentage value for the sale, splits the original ticket into two child tickets based on that percentage, sets the original ticket as inactive, and offers the first child ticket for sale on an exchange website ('479 Patent, Abstract; col. 2:9-23). The claims add specific constraints, such as the sale percentage being above a predefined threshold.
- Technical Importance: The invention enhances the wagering experience by giving users the ability to "monitor their wagers and sell when it is most advantageous," adding a layer of strategy while providing wagering services with a new, controllable revenue opportunity (ʼ479 Patent, col. 4:35-41).
Key Claims at a Glance
- The complaint asserts at least independent claim 10 (Compl. ¶52) and dependent claim 13 (Compl. ¶58).
- The essential elements of method claim 10 include:
- Prompting a user to access an exchange website.
- Prompting the user to choose a ticket from the exchange website to offer for partial sale.
- Receiving a percentage value of the ticket to sell, where the value is less than 100% and above a predefined percentage threshold.
- Splitting the ticket into a first child ticket (for sale) and a second child ticket (to retain).
- Setting the status of the original ticket to inactive.
III. The Accused Instrumentality
Product Identification
- The WAGERWIRE Mobile Application and the WAGERWIRE API, collectively referred to as the "Accused Instrumentalities" (Compl. ¶29, p. 11).
Functionality and Market Context
- The Accused Instrumentalities are alleged to constitute an "innovative marketplace where players can buy and sell previously placed sports bets" (Compl. ¶33, Figure Group C). The system allegedly provides users the ability to "cash-out" of open wagers by dividing a wager into two "child" tickets, selling one while retaining ownership of the other (Compl. ¶30). A screenshot from the complaint shows a user interface with a slider to "LIST PART OF YOUR BET," allowing a user to select a percentage of their bet to sell. (Compl. ¶41; Figure Group F). The complaint further alleges the technology is offered via a mobile application and an API for integration into third-party sportsbook apps (Compl. p. 11, Figure Group A).
IV. Analysis of Infringement Allegations
’270 Patent Infringement Allegations
| Claim Element (from Independent Claim 9) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| prompting a user to access, by a hosting unit, an exchange website associated with a wagering service | The WagerWire system, through its application and advertising, prompts users to access its exchange. | ¶38 | col. 7:11-14 |
| prompting the user, by a profile management unit, to create a user account | The mobile application provides interfaces for users to create accounts, such as a "SIGN UP FOR ACCOUNTS" button. | ¶39 | col. 7:35-40 |
| prompting the user, by the hosting unit, to choose a ticket from the user account to offer for partial sale | The application displays a user's open bets and provides a "LIST PART OF YOUR BET" feature, prompting the user to select a wager for partial sale. | ¶40 | col. 2:13-15 |
| receiving, from the user by the hosting unit, a percentage value of the ticket that the user wishes to sell | The system includes a user interface with a slider that allows the user to select a percentage to sell, which the hosting unit receives. | ¶41 | col. 15:55-60 |
| splitting, by a ticket management unit, the ticket into two child tickets, a first child ticket corresponding to the percentage value...and a second child ticket... | The complaint alleges the system splits the wager into two "child" tickets to facilitate the selling of one part while the user retains the other. | ¶42 | col. 15:60-67 |
| setting, by the ticket management unit, a status associated with the ticket as inactive | The complaint alleges this step occurs "Necessarily" after the split to render the original ticket "void and non-negotiable." | ¶43 | col. 16:3-6 |
| setting, by the ticket management unit, a status associated with the first child ticket as active | This is alleged to occur to give the newly created "for sale" ticket an "open and negotiable status" to facilitate the transaction. | ¶44 | col. 16:11-14 |
| offering, by the ticket management unit, the first child ticket for sale on the exchange web site | After a user initiates a partial sale, the system provides a "Bet Listed!" confirmation, indicating the ticket is offered on the exchange. A screenshot illustrates this confirmation (Compl. ¶45; Figure Group G). | ¶45 | col. 16:9-11 |
- Identified Points of Contention:
- Technical Question: The complaint's allegations regarding the internal system actions of "splitting" the ticket and setting specific "inactive"/"active" statuses are based on "information and belief" and logical inference from the user-facing functionality (Compl. ¶42-44). A key question for discovery will be what evidence confirms that the accused system's back-end architecture performs these specific claimed steps, as opposed to an alternative technical implementation that achieves a similar result.
’479 Patent Infringement Allegations
| Claim Element (from Independent Claim 10) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| prompting a user to access, by a hosting unit, an exchange website associated with a wagering service | The complaint realleges that the WagerWire system prompts users to access its exchange via its app and marketing materials. | ¶53 | col. 2:25-27 |
| prompting the user, by the hosting unit, to choose a ticket from the exchange website to offer for partial sale | The user interface allegedly prompts users to select one of their open bets to sell partially. | ¶54 | col. 2:13-15 |
| receiving, from the user...a percentage value...wherein the percentage value is less than one hundred percent and above a predefined percentage threshold | The system's slider allows a user to select a percentage less than 100%, and the complaint alleges the system operates with a predefined minimum threshold. | ¶55 | col. 10:57-60 |
| splitting, by a ticket management unit, the ticket into two child tickets, a first child ticket... and a second child ticket... | As with the '270 patent, the complaint alleges the system splits the wager into two "child" tickets to facilitate a partial sale. | ¶56 | col. 2:15-20 |
| setting, by the ticket management unit, a status associated with the ticket as inactive | The complaint again alleges this step occurs by necessity to void the original, fully-owned ticket after the split. | ¶57 | col. 2:20-21 |
- Identified Points of Contention:
- Scope Question: A central issue for this patent will be the construction of "predefined percentage threshold". The complaint alleges this element is met (Compl. ¶55), but the provided visuals do not explicitly disclose such a threshold. The defense may argue that allowing a user to sell any fraction (e.g., from 1% to 99%) does not meet this limitation, which may require a non-trivial minimum value set by the service provider, as contemplated in the patent's specification.
V. Key Claim Terms for Construction
- The Term: "splitting... the ticket into two child tickets" (from ’270 Patent, Claim 9)
- Context and Importance: This term describes the core technical mechanism of the invention. Its construction is critical because the infringement analysis depends on whether the accused system's method of creating partial, tradable interests in a wager constitutes "splitting" as claimed. Practitioners may focus on this term because the defense could argue its system does not literally "split" a single data record but rather employs a different database schema, such as creating new, linked records while archiving the original.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent uses the term "fractioning" interchangeably with "splitting" and depicts it abstractly in flowcharts, which may support an interpretation that covers any technical method of dividing a whole into tradable parts, regardless of the specific database implementation ('270 Patent, FIG. 15; col. 15:53-67).
- Evidence for a Narrower Interpretation: The specification describes a process that includes generating a new "ticket code for each child ticket" ('270 Patent, col. 16:1-2; FIG. 15, step 1308). This could support an argument that "splitting" requires the creation of two distinct, newly identified data entities, not merely the modification of ownership attributes on an original entity.
- The Term: "predefined percentage threshold" (from ’479 Patent, Claim 10)
- Context and Importance: This limitation is a key point of distinction for claim 10. The infringement case for this claim may stand or fall on whether the accused system is found to implement this feature. Practitioners may focus on this term because it appears to add a specific business rule to the claimed method.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: A party could argue that any lower limit (e.g., >0%) constitutes a "threshold," and as long as the system predefines that a user cannot sell 0%, the limitation is met. The patent's general description of allowing users to sell "all or part of an entry" suggests flexibility ('479 Patent, col. 4:22).
- Evidence for a Narrower Interpretation: The specification provides a specific example: "The wagering service may establish the fraction increments that the user is allowed to sell, such as, for example, a minimum of 10% of the user's interest" ('479 Patent, col. 10:57-60). This language may be used to argue that the term requires a commercially meaningful minimum percentage set by the provider, not just a logical floor of >0%.
VI. Other Allegations
- Indirect Infringement: While the formal counts are for direct infringement, the complaint contains factual allegations that may support a claim for induced infringement. It alleges Defendant provides the WagerWire app and API along with "instructional media (e.g., written directions or visual prompts and video tutorials)" and an "interactive user interface" that together prompt and instruct end-users to perform the steps of the patented methods (Compl. ¶38, ¶39).
- Willful Infringement: The complaint alleges willful infringement based on both post-suit and pre-suit knowledge. Post-suit knowledge is based on the service of the complaint (Compl. ¶35, ¶50). Pre-suit knowledge is alleged based on three grounds: (1) Plaintiff's "wide marketing" of the patented technology; (2) the patents-in-suit allegedly being cited as prior art during the prosecution of Defendant's own patent applications; and (3) alleged "direct communication" between the inventors and officers of the Defendant (Compl. ¶47, ¶64).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope and evidence: Can Plaintiff produce evidence from discovery to prove that the WagerWire system’s back-end architecture performs the specific claimed steps of "splitting" a parent ticket and assigning "inactive"/"active" statuses, or will a fundamental mismatch in technical operation be revealed?
- A key question of claim construction will determine the viability of the '479 Patent claim: Can the term "predefined percentage threshold" be met by any system-defined lower limit (e.g., >0%), or must it be a more substantive minimum percentage (e.g., 10%) as suggested by a specific embodiment in the patent?
- Finally, the case may turn on the question of willfulness: The complaint makes strong allegations of pre-suit actual knowledge, including alleged direct communications and citation of the patents in Defendant’s own patent filings. A central issue will be whether this alleged knowledge, if proven, makes the continued alleged infringement an egregious, willful act justifying enhanced damages.