DCT

2:25-cv-04102

Micro Gaming Ventures LLC v. DraftKings Inc

Log In

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:25-cv-04102, D.N.J., 05/09/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the District of New Jersey because Defendant maintains a regular and established 7,500-square-foot place of business in Hoboken, New Jersey.
  • Core Dispute: Plaintiff alleges that Defendant’s DraftKings Sportsbook online platform infringes five patents related to micro-betting and location-based wagering technologies.
  • Technical Context: The technology at issue involves systems for enabling real-time wagering on granular events within a larger sporting event ("micro-betting") and for authorizing such wagers based on the user's geographic location to ensure legal compliance.
  • Key Procedural History: The complaint highlights prosecution history for two recently issued patents. During prosecution of the '679 patent, the examiner allegedly distinguished prior art on the basis that it disclosed location-based wagering generally but lacked the patent's specific micro-betting limitations. During prosecution of the '244 patent, an initial rejection of a claim under 35 U.S.C. § 101 for being directed to an abstract idea was allegedly overcome by amendments clarifying the claim's recitation of a server performing a physical processing act.

Case Timeline

Date Event
2010-08-01 '311 Patent Family Priority Date (approx. per complaint)
2013-10-01 U.S. Patent No. 8,545,311 Issues
2014-01-21 U.S. Patent No. 8,632,392 Issues
2014-04-08 '679 & '244 Patent Families Priority Date
2014-05-27 U.S. Patent No. 8,734,231 Issues
2020-01-01 Simplebet (micro-betting provider) launches platform (approx. per complaint)
2023-06-12 Notice of Allowability for '679 Patent application
2023-10-10 U.S. Patent No. 11,783,679 Issues
2024-04-29 Office Action rejects claim 44 of '244 Patent application under § 101
2024-08-29 DraftKings acquires Simplebet (approx. per complaint)
2024-09-04 Applicants amend claims in '244 Patent application to overcome § 101 rejection
2025-01-08 Notice of Allowance for '244 Patent application
2025-04-01 U.S. Patent No. 12,266,244 Issues
2025-05-09 Complaint Filed

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

U.S. Patent No. 8,545,311 - "Systems and Methods for Enabling Remote Device Users to Wager on Micro Events of Games in a Data Network Accessible Gaming Environment," issued October 1, 2013

The Invention Explained

  • Problem Addressed: The patent's background section describes prior art sports betting as being limited to placing wagers before a "macro-event" (e.g., a full game) begins, with no available system for placing bets in real time on specific "micro-outcomes" that occur during the event, such as a particular pitch in a baseball game (Compl. ¶17; '311 Patent, col. 16:19-24).
  • The Patented Solution: The invention provides a system for a "bet/play as you watch, dynamic, parimutuel game" (Compl. ¶17; '311 Patent, col. 16:25-27). It enables users on a remote device to view video of a live event while simultaneously being presented with, and placing wagers on, various micro-events occurring within that live event ('311 Patent, Abstract; Fig. 8).
  • Technical Importance: This technology sought to transform passive game-watching into an interactive, continuous wagering experience, creating a new form of engagement for sports betting (Compl. ¶11, 17).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶38).
  • Claim 1 is a method claim with the following essential elements:
    • Displaying video of one or more events via a display screen of a remote computing device.
    • Identifying one or more micro-events within the event(s).
    • Generating multiple and parimutuel betting options with respect to varying outcomes of the micro-event(s).
    • Placing one or more micro-bets.
    • Transmitting the micro-bet(s) to a server.
    • Displaying data indicative of the betting options with the video of the event and/or micro-event(s).
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 8,632,392 - "Systems and Methods for Enabling Remote Device Users to Wager on Micro Events of Games in a Data Network Accessible Gaming Environment," issued January 21, 2014

The Invention Explained

  • Problem Addressed: The rapid, continuous nature of micro-betting creates technical challenges in managing the lifecycle of a bet—defining when it can be placed and when it must be closed—and in preventing cheating, such as placing a bet after an outcome is known (Compl. ¶15, 44).
  • The Patented Solution: The invention claims a "control function" for managing a series of micro-bets. This function is configured to determine when a micro-betting opportunity begins and ends and can randomize the available micro-bets, which is alleged to prevent cheating and provide a dynamic user experience (Compl. ¶44; '392 Patent, Abstract; Fig. 9).
  • Technical Importance: The claimed solution provides a technical framework for maintaining the integrity and operational flow of a high-speed, real-time wagering environment (Compl. ¶15).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶48).
  • Claim 1 is a method claim with the following essential elements:
    • Designating via a computer a control function for managing micro-bets.
    • Configuring the control function to determine when a micro-bet is available and when it has closed.
    • Randomizing at least one available micro-bet.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 8,734,231 - "Systems and Methods for Enabling Remote Device Users to Wager on Micro Events of Games in a Data Network Accessible Gaming Environment," issued May 27, 2014

  • Technology Synopsis: As a continuation of the '311 patent, this patent is also directed at the technical challenges of managing micro-bets. The complaint alleges the invention provides a computer-configured control function to determine when a micro-betting opportunity begins and ends, and to randomize available micro-bets to prevent cheating and enhance user experience (Compl. ¶54).
  • Asserted Claims: At least independent claim 1 is asserted (Compl. ¶58).
  • Accused Features: The complaint accuses the DraftKings Sportsbook's systems for managing the timing, availability, and presentation of micro-betting opportunities (Compl. ¶58).

U.S. Patent No. 11,783,679 - "Location-Based Wagering Via Remote Devices," issued October 10, 2023

  • Technology Synopsis: This patent addresses the legal and security requirement of ensuring that online wagers are placed only from authorized geographic locations. The invention involves determining the location of a user's mobile device, associating it with a legal jurisdiction, and authorizing or denying access to the wagering service accordingly, conforming the wagering options to local laws ('679 Patent, Abstract; Compl. ¶13-14).
  • Asserted Claims: At least independent claim 1 is asserted (Compl. ¶68).
  • Accused Features: The complaint accuses the DraftKings Sportsbook's use of geolocation technology to ensure users are within a jurisdiction where online sports betting is legal (Compl. ¶68).

U.S. Patent No. 12,266,244 - "Location-Based Wagering Via Remote Devices," issued April 1, 2025

  • Technology Synopsis: This patent combines concepts from the other two patent families. It claims a system that not only ensures secure, location-based access to a wagering service but also processes a test to determine whether a user has selected a micro-bet. Based on the outcome of that test, the system either processes the selected bet or offers new micro-bets to the user (Compl. ¶74; '244 Patent, Abstract).
  • Asserted Claims: At least independent claim 1 is asserted (Compl. ¶78).
  • Accused Features: The complaint accuses the DraftKings Sportsbook's integrated system that uses geolocation for access control and manages the interactive flow of presenting and processing micro-bets to the user (Compl. ¶78).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are the "DraftKings Sportsbook" website and mobile-phone application (Compl. ¶38, 48).

Functionality and Market Context

The DraftKings Sportsbook is an online platform that provides users with sports-betting services (Compl. ¶3). Its functionalities relevant to the complaint include "micro-betting" or "in-play betting," which allows users to place wagers on specific, small-scale outcomes within a larger live sporting event (Compl. ¶11). The platform also necessarily employs location-based technology to ensure that it only accepts wagers from users in jurisdictions where online gambling is legal (Compl. ¶13-14). The complaint alleges the value of the asserted innovations is reflected in DraftKings's acquisition of micro-betting provider Simplebet and its substantial revenue from its Sportsbook offering (Compl. ¶16). A screenshot from Defendant’s careers website is used to support the allegation of a regular and established place of business in Hoboken, New Jersey (Compl., p. 3).

IV. Analysis of Infringement Allegations

The complaint references preliminary infringement claim charts in Exhibits 15-19, but these exhibits were not filed with the complaint. The infringement analysis is therefore based on the narrative allegations in the body of the complaint.

'311 Patent Infringement Allegations

The complaint alleges that the DraftKings Sportsbook infringes by allowing users to place bets on micro-outcomes within larger macro-events while providing those bettors with real-time video of the macro-event on the same display screen (Compl. ¶34-35). This suggests a theory of infringement based on the platform's integrated user interface for in-play betting.

'392 Patent Infringement Allegations

The complaint alleges infringement by the DraftKings Sportsbook's use of a computer-based sports-betting control function. This function is alleged to determine when a micro-bet is open and available or closed to additional bettors, and to randomize micro-bets to provide a dynamic user experience and prevent cheating (Compl. ¶44). This theory focuses on the back-end logic and rules engine that manages the fast-paced lifecycle of micro-bets on the platform.

Identified Points of Contention

  • Scope Questions: For the '311 patent, a key question may be whether the phrase "displaying data ... with video of said at least one event" requires a specific technical integration beyond simply showing a video stream and betting odds on the same screen. For the '392 and '231 patents, the dispute may center on whether the platform's method of presenting and removing betting markets constitutes the claimed "control function" and whether its dynamic odds and offerings meet the "randomize" limitation. For the '679 and '244 patents, a central issue may be whether the patents claim the general concept of geofencing for legal compliance—a necessary feature for all U.S. sportsbooks—or a specific, inventive method of doing so that DraftKings practices.
  • Technical Questions: A factual question may arise regarding how the DraftKings platform technically manages the opening and closing of micro-betting markets. For instance, is the process automated based on real-time data feeds in a manner that maps onto the "control function" claims, or does it operate differently? Similarly, what evidence does the complaint provide that the accused product's presentation of betting options constitutes "randomizing" as required by the '392 and '231 patents' claims, versus simply updating based on game state and market conditions?

V. Key Claim Terms for Construction

The Term: "micro-event" ('311 Patent, Claim 1)

Context and Importance

The definition of "micro-event" is foundational to the infringement case for the micro-betting patents. Its scope will determine whether the types of in-play wagers offered by DraftKings (e.g., outcome of the next play, next player to score) fall within the claims. Practitioners may focus on this term because it distinguishes the invention from traditional wagers on the final outcome of a "macro-event."

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: The specification states that "micro-events with micro-outcomes can occur several or more times...during an overall sporting macro-event" and provides examples like "each swing of a baseball bat" or outcomes in an election ('311 Patent, col. 14:21-31). This could support a broad definition covering any discrete, wager-upon event within a larger contest.
  • Evidence for a Narrower Interpretation: The detailed description focuses heavily on examples from sports like baseball and football, such as the outcome of a single pitch or play ('311 Patent, col. 14:32-47). A defendant may argue that the term is limited to such granular, play-by-play actions rather than broader in-game outcomes (e.g., score at the end of a quarter).

The Term: "control function" ('392 Patent, Claim 1)

Context and Importance

This term is central to the '392 and '231 patents, which claim a technical solution for managing bets. The infringement analysis will depend on whether DraftKings's system for presenting, timing, and closing betting markets constitutes this claimed "function."

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: The specification describes the function in high-level terms, such as "a control function for managing a series of micro-bets" and "configuring said control function to determine when said series of micro-bets are set" ('392 Patent, Abstract). This may support construing the term to cover any automated system that manages the lifecycle of a bet.
  • Evidence for a Narrower Interpretation: Figure 9 of the patent depicts specific steps for the control function, including "Establish control function," "Configure...to set when micro-betting opportunity begins," and "Configure...to set when micro-betting opportunity ends" ('392 Patent, Fig. 9). This may support a narrower construction requiring a specific, configurable software module with explicit start/end triggers, rather than any general market management system.

VI. Other Allegations

The complaint does not contain separate counts for indirect or willful infringement. However, the prayer for relief requests a declaration that the case is "exceptional under 35 U.S.C. § 285" and an award of attorneys' fees, which suggests an intent to pursue a finding of egregious conduct (Compl., Prayer for Relief ¶C). The complaint does not allege any facts regarding pre-suit knowledge of the patents by the Defendant.

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

  • A core issue will be one of patent eligibility: do the claims represent a specific technological improvement to computer-based wagering systems, as the patentee's prosecution arguments suggest, or do they claim the abstract ideas of in-play betting and location-based authorization implemented with conventional computer components, raising questions under 35 U.S.C. § 101?
  • A second key question will be one of definitional scope: can claim terms rooted in the patents' specific embodiments, such as "control function" and "randomize," be construed broadly enough to read on the functionalities of a modern, dynamic sports betting platform like the DraftKings Sportsbook?
  • A final evidentiary question will be one of technical overlap: does the DraftKings Sportsbook's use of geolocation technology for regulatory compliance practice the specific methods claimed in the '679 and '244 patents, or does it rely on a generic, non-infringing implementation common to the industry?