DCT

1:21-cv-20157

Beteiro LLC v. Hard Rock Tristate Ac LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:21-cv-20157, D.N.J., 11/22/2021
  • Venue Allegations: Plaintiff alleges venue is proper in the District of New Jersey because Defendant maintains a regular and established business presence in the district, including physical offices and employees, and generates substantial revenue from its mobile wagering platform offered to users in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s mobile sports wagering platform infringes four patents related to systems and methods for facilitating remote gambling activities by using geolocation technology to verify a user's jurisdictional eligibility to place a bet.
  • Technical Context: The technology at issue involves the integration of location-determining systems (such as GPS) with online betting platforms to ensure compliance with state and federal gaming regulations, a critical function in the U.S. online sports betting market.
  • Key Procedural History: The complaint notes that during the prosecution of the asserted patents, the U.S. Patent and Trademark Office examiner specifically considered their eligibility under 35 U.S.C. §101 in view of the Supreme Court's decision in Alice Corp. v. CLS Bank Int'l and expressly found the claims patent-eligible. This suggests an anticipation of, and a prepared response to, a potential patent eligibility challenge from the Defendant. The complaint also details the assignment history of the patents, originating from inventor Raymond Anthony Joao and ultimately assigned to Plaintiff Beteiro, LLC.

Case Timeline

Date Event
2002-05-31 Earliest Priority Date for all Asserted Patents
2018-03-16 Notice of Allowability for ’920 Patent
2018-05-08 U.S. Patent No. 9,965,920 Issues
2018-06-11 Notice of Allowability for ’341 Patent
2018-06-11 Notice of Allowability for ’266 Patent
2018-08-07 U.S. Patent No. 10,043,341 Issues
2018-12-04 U.S. Patent No. 10,147,266 Issues
2019-04-09 U.S. Patent No. 10,255,755 Issues
2021-10-27 Notice of Allowability for related Application No. 16/939,030
2021-11-22 Complaint Filing Date

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

U.S. Patent No. 10,043,341 - "Apparatus and Method for Facilitating Gaming Activity and/or Gambling Activity"

The Invention Explained

  • Problem Addressed: The patent's background describes a failure of prior art gaming systems to provide remote access to gambling activities while also enhancing the user experience with relevant information (Compl. ¶ 30; ’341 Patent, col. 1:56-61). A core technological problem was the inability of platform providers to effectively enforce geographic restrictions required for legal compliance with varying state and federal wagering laws (Compl. ¶¶ 31, 34).
  • The Patented Solution: The invention is a computer-based apparatus that solves this problem by linking wagering to location verification. The system's computer detects the posting of information about a gaming or sporting event, generates a notification to a user's communication device, and receives a "bet message" back from that device (’341 Patent, Abstract). Crucially, the bet message includes position or location information from a global positioning device on the user's device, which the computer then uses to determine if the bet is legally "allowed or disallowed" based on the user's jurisdiction (’341 Patent, col. 2:9-14).
  • Technical Importance: This approach provided a technological framework for the legally compliant operation of remote and mobile wagering, a foundational requirement for the expansion of the online sports betting industry in the United States (Compl. ¶ 31).

Key Claims at a Glance

  • The complaint asserts independent claim 13 (’341 Patent, col. 98:1-46; Compl. ¶ 76).
  • Essential elements of claim 13 include:
    • An apparatus with a computer specially programmed for processing information for placing a bet on a sporting event.
    • A receiver for receiving requests to notify an individual about the sporting event.
    • A processor that detects posted information about the event and generates a notification message.
    • The computer initiates a communication link with a communication device and receives a bet message from it.
    • The communication device comprises a global positioning device that determines its position or location.
    • The bet message contains information regarding the bet and the device's position/location at the time of transmission.
    • The computer determines if the bet is allowed or disallowed using this position or location information.

U.S. Patent No. 10,147,266 - "Apparatus and Method for Facilitating Gaming Activity and/or Gambling Activity"

The Invention Explained

  • Problem Addressed: As with its related patents, the ’266 Patent addresses the need for a system that can facilitate remote wagering while adhering to jurisdictional legal requirements, a problem prior art systems failed to solve (Compl. ¶¶ 31, 34; ’266 Patent, col. 1:56-61).
  • The Patented Solution: The ’266 Patent discloses a similar computer-based apparatus that detects event information, generates a notification, receives a bet message with location data, and allows or disallows the bet based on that location (’266 Patent, Abstract). This patent specifies that the notification message can be transmitted to the user's device directly over a communication link or as an "electronic mail message" (’266 Patent, col. 10:1-5). It also explicitly claims the dual-path logic of processing the bet if allowed and processing information for disallowing the bet if not allowed (’266 Patent, col. 94:44-48).
  • Technical Importance: This technology provides a specific technical method for creating legally compliant remote wagering systems that can use common communication protocols like email for user notifications (Compl. ¶ 31).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (’266 Patent, col. 94:1-48; Compl. ¶ 91).
  • Essential elements of claim 1 include:
    • An apparatus with a computer specially programmed for processing information for placing a bet.
    • A processor that detects posted information about a gaming/gambling/sporting event and generates a notification message.
    • The computer initiates a communication link with a first communication device and transmits the notification message.
    • The computer receives a bet message from the first or a second communication device.
    • The communication device comprises a global positioning device that determines its position or location.
    • The computer determines if the bet is allowed or disallowed using the position or location information.
    • The computer processes information for placing the bet if allowed, and for disallowing the bet if disallowed.

U.S. Patent No. 10,255,755 - "Apparatus and Method for Facilitating Gaming Activity and/or Gambling Activity"

  • Technology Synopsis: This patent claims a method and apparatus where a computer detects information about a gaming or sporting event, generates and transmits a notification message, receives a bet message from a user's device that includes location information from a global positioning device, and determines whether the bet is allowed or disallowed based on that location information (Compl. ¶ 24; ’755 Patent, Abstract).
  • Asserted Claims: At least Claim 2 (Compl. ¶ 104).
  • Accused Features: The accused features include the Hard Rock platform's system for detecting and processing event information, transmitting notifications, receiving bet messages from users' mobile devices, and using geolocation data to approve or deny wagers based on jurisdiction (Compl. ¶¶ 105-110).

U.S. Patent No. 9,965,920 - "Apparatus and Method for Facilitating Gaming Activity and/or Gambling Activity"

  • Technology Synopsis: This patent claims an apparatus with a processor for detecting information about a sporting event, generating a notification, receiving a bet message from a user's device, and processing the bet. A distinguishing feature is a transmitter that sends video or audio information obtained at the sporting event to the user's device (Compl. ¶ 21; ’920 Patent, Abstract).
  • Asserted Claims: At least Claim 16 (Compl. ¶ 117).
  • Accused Features: The accused features include the Hard Rock platform's system for processing bets, sending notifications about sporting events, and transmitting what the complaint characterizes as video information in the form of "real-time game status updates and odds adjustments" to the user's device (Compl. ¶¶ 118, 124).

III. The Accused Instrumentality

Product Identification

  • The "Accused Instrumentalities" are identified as the "Hard Rock Casino Sportsbook," which includes the online domains at www.hardrockcasino.com/sportsbook and associated mobile applications, such as "Hard Rock Sportsbook – Iowa" and "Hard Rock Sportsbook – Seminole" (Compl. ¶ 55).

Functionality and Market Context

  • The Accused Instrumentalities constitute a mobile wagering platform, comprising servers and software, that provides online gambling and sports wagering services to users in the United States (Compl. ¶ 55). A central feature alleged in the complaint is the system's requirement that users be "geovalidated" in order to place a bet (Compl. p. 24, Figure Group A). The platform collects, processes, and utilizes location information from the user's communication device to ensure compliance with state-specific laws, such as the requirement that a user be physically located in New Jersey to place a wager through the New Jersey platform (Compl. ¶ 56; p. 28, Figure Group B). The complaint includes a screenshot from the platform's terms stating that users will be required to download a "plugin" from a geolocation service provider to verify their physical location (Compl. p. 28, Figure Group B).

IV. Analysis of Infringement Allegations

U.S. Patent No. 10,043,341 Infringement Allegations

Claim Element (from Independent Claim 13) Alleged Infringing Functionality Complaint Citation Patent Citation
an apparatus including a computer, wherein the computer is specially programmed for processing information for providing for a placement of a bet on or regarding a sporting event The Hard Rock Mobile Wagering Platform, comprising servers and software, is specially programmed to offer, accept, monitor, and fulfill wagers on sporting events. ¶77 col. 2:5-14
the computer comprising a receiver, which receiver is configured to receive one or more requests to notify one or more individual users regarding the sporting event The apparatus receives user credentials upon login, which serves as a request to be notified of available sporting events for which wagers can be placed. ¶78 col. 43:35-41
a processor, wherein the processor detects postings of information regarding the sporting event for which the one or more wagers can be placed and generates one or more notification messages regarding the sporting event The platform's processor detects postings of event schedules, odds, and scores, and generates notification messages in the form of updated data displayed on the Hard Rock domains. ¶80 col. 5:5-11
the computer receives one or more bet messages... transmitted from the communication device of the one or more individual users The platform's computers are configured to receive "bet messages" transmitted by users who select wagers from the user interface. A screenshot of the "Betslip" interface is provided as an example. ¶81; p. 24 col. 10:50-53
wherein the communication device comprises at least one global positioning device which determines a position or location of the communication device The platform requires users to provide at least one global positioning device for each communication device and to download, install, or enable global positioning software. ¶82 col. 10:54-58
the computer determines if the bet is allowed or disallowed using position or location information of the communication device The platform processes incoming bet messages to allow or disallow the wagers based on the global position of the device, as required by regulatory compliance protocols. The betslip interface explicitly warns, "You must be geovalidated in order to place a bet." ¶84; p. 24 col. 12:1-6

Identified Points of Contention

  • Scope Questions: A central question may be whether the accused platform's method for determining location, which the complaint's own evidence suggests involves Wi-Fi networks and geolocation plugins (Compl. p. 28), meets the claim's requirement of a "global positioning device." The construction of this term will be critical.
  • Technical Questions: The complaint alleges the processor "detects postings of information" and "generates notification messages" (Compl. ¶ 80). A potential point of contention is whether the real-time, streaming data updates common in modern sportsbooks constitute discrete "postings" and "generations" of messages as contemplated by the patent, or a different technical process.

U.S. Patent No. 10,147,266 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
an apparatus including a computer, wherein the computer is specially programmed for processing information for providing for a placement of a bet on or regarding a gaming activity, a gambling activity, or a sporting event The Accused Instrumentalities comprise a system of servers and software specially programmed to offer, accept, monitor, and fulfill wagers on various events, including sporting events. ¶92 col. 9:5-10
the computer comprising a processor, wherein the processor detects postings of information regarding... and generates one or more notification messages The platform’s processor detects updated odds for specific wagers and delivers notification messages in the form of updated data displayed via the Hard Rock Domains. ¶93 col. 10:1-5
wherein the computer initiates a communication link with a first communication device and transmits the one or more notification messages to the first communication device as an electronic transmission Such notifications are delivered as an "electronic transmission" when the computer initiates a communication link with the user's browser via the Hard Rock Domains. ¶93 col. 10:1-5
wherein the first communication device or the second communication device comprises a global positioning device which determines a position or location of the first communication device or the second communication device The platform requires users to provide at least one global positioning device for each communication device and to enable global positioning software. ¶95 col. 10:54-58
wherein the computer determines if the bet is allowed or disallowed using the position or location information As part of regulatory compliance, the platform's processor decides to allow or disallow a wager based on the global position of the communication device from which the bet originated. ¶97 col. 11:4-8
if allowed, the computer processes information for placing the bet, and, if disallowed, the computer processes information for disallowing the bet The system is configured to process incoming bet messages for the purpose of allowing or disallowing the wagers associated therewith. ¶97 col. 11:4-12

Identified Points of Contention

  • Scope Questions: Similar to the ’341 patent, the construction of "global positioning device" will be a focal point of dispute. Additionally, the scope of "electronic transmission" may be contested, particularly how it applies to modern web application data protocols.
  • Technical Questions: The complaint's theory is that a notification is "generated" and then "transmitted" (Compl. ¶ 93). A defendant may argue that its system operates as a continuous data feed that the user's device renders, rather than a system that generates and sends discrete notification messages as required by the claim.

V. Key Claim Terms for Construction

The Term: "global positioning device"

  • Context and Importance: This term is the technological linchpin of the asserted claims. The infringement case depends on whether the accused platform's geolocation technology—which may rely on a combination of satellite GPS, Wi-Fi triangulation, cellular network data, and IP address analysis—falls within the patent's definition of this term. Practitioners may focus on this term because its scope will likely determine whether modern, multi-source location verification systems are covered by a patent with a 2002 priority date.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the device functionally, stating it can be "utilized to determine the position or location of the user communication device 20 so as to, for example, determine a jurisdiction in which the user communication device 20 is located and/or is being utilized" (’266 Patent, col. 44:40-44). This functional language may support a construction covering any technology that achieves this jurisdictional determination.
    • Evidence for a Narrower Interpretation: The specification frequently and explicitly uses the acronym "GPS" in conjunction with the term, stating a device can be "equipped with a global positioning system (GPS) device 20J" (’266 Patent, col. 15:15-17). This repeated linkage to the specific "GPS" system could support a narrower construction limited to satellite-based systems.

The Term: "detects postings of information"

  • Context and Importance: The claims require a processor to "detect postings" and then generate a notification. This sequence is central to the infringement allegation. The dispute may turn on whether the continuous flow of data in a modern sportsbook constitutes discrete "postings" that are "detected," or a different process altogether.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the function in terms of its result, such as notifying a user about "new or changed odds" (’266 Patent, col. 5:9-11). This could be interpreted to cover any technical means by which a system recognizes and communicates updated data to a user.
    • Evidence for a Narrower Interpretation: The patent's flowcharts depict a sequence where the system must first "AWAIT POSTING OF GAMING EVENT(S)" as a discrete step before processing can occur (’266 Patent, Fig. 9A, step 901). This may support a narrower construction requiring a distinct event of "posting," which could be argued as different from a continuous, real-time data stream.

VI. Other Allegations

  • Indirect Infringement: The complaint does not include separate counts for indirect infringement. The allegations are framed as direct infringement by the Defendant for making, using, and selling the Accused Instrumentalities as a single, controlled system (Compl. ¶¶ 76, 91).
  • Willful Infringement: Willfulness is alleged for each asserted patent. The basis for the allegation is Defendant's continued infringement "post-notice" of the patents, with notice being established by the service of the complaint itself (Compl. ¶¶ 86, 99, 112, 126).

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

  • A core issue will be one of definitional scope: can the term "global positioning device," as used in a patent family with a 2002 priority date, be construed to cover modern geolocation systems that, according to the complaint's own exhibits, rely on a combination of technologies including GPS, Wi-Fi, and specialized software plugins?
  • A second central issue will be one of patent eligibility: despite a favorable prosecution history, the case will likely involve a significant challenge under 35 U.S.C. §101. The question for the court will be whether the claims represent a patent-eligible technological improvement to computer functionality by integrating location verification to solve a jurisdictional problem, or an abstract idea of location-based wagering implemented using generic computer components.
  • A key evidentiary question will be one of technical operation: does the accused platform's architecture for delivering real-time odds and game updates function by "detecting postings" and "generating notification messages" as required by the claims, or does it use a fundamentally different data-handling model, such as a continuous data stream pulled by the client application?