DCT

3:25-cv-04102

Micro Gaming Ventures LLC v. DraftKings Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 3:25-cv-04102, D.N.J., 05/09/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the District of New Jersey because Defendant conducts substantial business in the state, a portion of the alleged infringements occurred there, and Defendant maintains a regular and established place of business in the district, specifically a 7,500-square-foot office in Hoboken.
  • Core Dispute: Plaintiff alleges that Defendant’s DraftKings Sportsbook online platform infringes five patents related to micro-betting (in-play wagering) and location-based authorization for online gaming.
  • Technical Context: The technology involves systems for defining, offering, and managing wagers on discrete events within a larger sporting event (micro-events) and for verifying a user's geographic location to ensure compliance with jurisdictional gambling laws.
  • Key Procedural History: The complaint references the prosecution history of the ’679 and ’244 patents, noting that an examiner found claims patentable over prior art that disclosed location-based wagering but lacked micro-betting specifics, and that a § 101 rejection for the ’244 patent was overcome by amendment. This suggests Plaintiff is preemptively addressing potential patent eligibility challenges under 35 U.S.C. § 101.

Case Timeline

Date Event
2010-08-20 Earliest Priority Date for ’311, ’392, ’231 Patents
2013-10-01 ’311 Patent Issued
2014-01-21 ’392 Patent Issued
2014-04-08 Earliest Priority Date for ’679, ’244 Patents
2014-05-27 ’231 Patent Issued
2023-10-10 ’679 Patent Issued
2025-04-01 ’244 Patent Issued
2025-05-09 Complaint Filing Date

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"

  • Patent Identification: 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 describes a limitation in prior art sports betting where wagers were placed on the overall outcome of a "macro-event" (e.g., a full game) before it started, but there was no 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 (Ex. 1 to Compl., ’311 Patent, col. 16:19-24).
  • The Patented Solution: The invention provides a "bet/play as you watch, dynamic, parimutuel game" that enables multiple betting options on micro-event outcomes even after the macro-event has started (Ex. 1 to Compl., ’311 Patent, col. 16:24-30). It proposes a system where a user can view real-time video of a macro-event on a remote device while simultaneously being presented with, and placing wagers on, micro-events occurring within that macro-event (Ex. 1 to Compl., ’311 Patent, Fig. 6).
  • Technical Importance: This approach sought to increase user engagement by transforming passive viewing of a live event into an interactive, continuous wagering experience.

Key Claims at a Glance

  • Asserted Independent Claim: Claim 1
  • Claim 1 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 among the multiple and parimutuel betting options.
    • Transmitting the micro-bet(s) to one or more servers.
    • Displaying data indicative of the betting options in association with the video of the event and/or micro-event(s).

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"

  • Patent Identification: 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 patent addresses the technical challenges of managing the lifecycle of a micro-betting opportunity (knowing when it begins and ends) and preventing cheating, which can occur if bettors have inside information about an imminent play (Ex. 2 to Compl., ’392 Patent, Abstract). The complaint alleges an additional advantage is providing a dynamic user experience (Compl. ¶15).
  • The Patented Solution: The invention proposes a computer-implemented "control function" that can be configured to designate when a micro-betting opportunity begins and ends (Ex. 2 to Compl., ’392 Patent, col. 20:4-9). This control function can be operated by a human controller who can "reset" the betting options after each play, and the system can also randomize the available micro-bets to prevent cheating (Ex. 2 to Compl., ’392 Patent, col. 22:1-12; Compl. ¶15).
  • Technical Importance: This technology provides a specific technical framework for operators to administer and control the high-speed, dynamic environment of in-play wagering.

Key Claims at a Glance

  • Asserted Independent Claim: Claim 1
  • Claim 1 Elements:
    • Designating via a computer a control function for managing one or more micro-bets based on at least one micro-event within an event.
    • Configuring the control function to determine when at least one micro-bet is available or open to bettors.
    • Configuring the control function to determine when the micro-bet has closed to additional bettors.
    • Randomizing, via a computer, available micro-bets among said micro-bets to prevent cheating.

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"

  • Patent Identification: 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: This patent, part of the same family as the ’311 and ’392 patents, is also directed to micro-betting technology. The complaint alleges it resolves technical problems by allowing a computer to configure a sports-betting control function to determine when a micro-bet is open or closed and to randomize micro-bets (Compl. ¶54).
  • Asserted Claims: At least Claim 1 (Compl. ¶58).
  • Accused Features: The complaint accuses the DraftKings Sportsbook website and mobile app of infringing the ’231 patent (Compl. ¶58).

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

  • Patent Identification: U.S. Patent No. 11,783,679, "Location-Based Wagering Via Remote Devices," issued October 10, 2023.
  • Technology Synopsis: This patent addresses the technical problem of ensuring secure, legally compliant access to online wagering services by verifying a user's geographic location (Compl. ¶64; Ex. 4 to Compl., ’679 Patent, Abstract). The claimed method involves invoking a wagering service, determining the mobile device's location and associated jurisdiction, and authorizing access based on that location (’679 Patent, col. 36:26-44).
  • Asserted Claims: At least Claim 1 (Compl. ¶68).
  • Accused Features: The complaint accuses the DraftKings Sportsbook platform, which must verify user location to comply with state laws, of infringing the ’679 patent (Compl. ¶13, 68).

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

  • Patent Identification: U.S. Patent No. 12,266,244, "Location-Based Wagering Via Remote Devices," issued April 1, 2025.
  • Technology Synopsis: This patent is in the same family as the ’679 patent and is also directed to location-based wagering. It adds the processing of a test to determine whether a user has made a selection of a micro-bet, and upon such a determination, processing the bet via a server or offering new micro-bets if no selection was made (Compl. ¶74).
  • Asserted Claims: At least Claim 1 (Compl. ¶78).
  • Accused Features: The complaint accuses the DraftKings Sportsbook platform of infringing the ’244 patent through its location-based and micro-betting functionalities (Compl. ¶78).

III. The Accused Instrumentality

Product Identification

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

Functionality and Market Context

  • The DraftKings Sportsbook is described as an online sportsbook platform that provides users with sports-betting services, including micro-betting or in-play betting (Compl. ¶3, 11). The complaint alleges that micro-betting became popular in the U.S. around 2020 and that DraftKings acquired micro-betting provider Simplebet in 2024 for $198M, indicating the commercial importance of this technology (Compl. ¶12). The complaint includes a screenshot from Defendant’s website describing its Hoboken, New Jersey office as home to its "Customer Experience, Compliance, and Fraud teams" to support its venue allegations (Compl. p. 3). The platform is also alleged to use geolocation technology to ensure users are in jurisdictions where online gambling is legal (Compl. ¶13).

IV. Analysis of Infringement Allegations

The complaint references but does not attach Exhibits 15-19, which it states contain exemplary infringement analyses. In the absence of these claim charts, the infringement theory is summarized below based on the narrative allegations in the complaint.

’311 Patent Infringement Allegations

  • Narrative Infringement Theory: The complaint alleges that the DraftKings Sportsbook platform directly infringes at least claim 1 of the ’311 patent (Compl. ¶38). The infringement theory appears to be that the platform provides users with real-time video of a macro-event (the game) on the same display screen where it offers them the opportunity to place bets on micro-outcomes within that event (Compl. ¶34). This combination of simultaneous video playback and micro-betting functionality on a user's device is alleged to practice the claimed invention.
  • Identified Points of Contention:
    • Scope Questions: A central question may be whether the "parimutuel betting options" required by the claim reads on the fixed-odds betting model typically used in modern sportsbooks. The patent specification focuses heavily on a parimutuel model, and the nature of DraftKings's odds-setting system will be a key factual issue.
    • Technical Questions: Does the DraftKings Sportsbook platform actually "generate" betting options in the manner claimed, or does it merely display pre-determined or algorithmically-adjusted odds from a central server? The claim's active "generating" step may be a point of dispute.

’392 Patent Infringement Allegations

  • Narrative Infringement Theory: The complaint alleges that DraftKings infringes at least claim 1 of the ’392 patent by using a computer-configured "sports-betting control function" to determine when a micro-bet is available or closed to bettors (Compl. ¶44, 48). It further alleges that the platform randomizes micro-bets to provide a dynamic user experience and prevent cheating, mapping to other claim elements (Compl. ¶44).
  • Identified Points of Contention:
    • Scope Questions: The case may turn on the definition of "control function." The patent describes this function being managed by a human controller hitting a "reset" button (Ex. 2 to Compl., ’392 Patent, col. 20:10-15). The question will be whether DraftKings's highly automated, algorithm-driven system for managing in-play bets meets the definition of the claimed "control function."
    • Technical Questions: What evidence does the complaint provide that the accused platform "randomizes" the available micro-bets as required by the claim? The functionality might be better described as algorithmically determined based on game state, which may or may not meet the claim's requirement for randomization.

V. Key Claim Terms for Construction

’311 Patent

  • The Term: "micro-event"
  • Context and Importance: This term is the core of the invention. Its construction will determine whether the granular, in-play wagering opportunities offered by DraftKings (e.g., outcome of the next play, pitch, or drive) fall within the scope of the patent, which was filed when such technology was nascent (Compl. ¶10).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification states that a micro-event can be a "swing of a baseball bat" or "the result of the pitch or the overall at bat," and that any "macro-event or series of events with official statistics tracking micro-outcomes" are eligible (Ex. 1 to Compl., ’311 Patent, col. 13:25-62). This suggests a broad definition covering any discrete, trackable action within a larger game.
    • Evidence for a Narrower Interpretation: The claims and specification repeatedly tie the micro-event to "parimutuel betting options" (Ex. 1 to Compl., ’311 Patent, Claim 1). A defendant may argue that a "micro-event" must be of a type suitable for a parimutuel wagering structure, potentially distinguishing it from events in a fixed-odds system.

’392 Patent

  • The Term: "control function"
  • Context and Importance: The infringement allegation hinges on whether DraftKings's system for managing live betting markets is a "control function" as claimed. Practitioners may focus on this term because the patent's description suggests a more manual, human-centric process than what is likely used in modern automated sportsbooks.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claims define the function by its purpose: "for managing a series of micro-bets," and configuring it "to determine when said series of micro-bets are set" and "when no more micro-bets... can be placed" (Ex. 2 to Compl., ’392 Patent, Claim 1). This functional language could support a broad reading on any system, automated or manual, that achieves these results.
    • Evidence for a Narrower Interpretation: The specification describes an embodiment where "a person controlling the availability of the betting by hitting a 'reset'" and a "human controller" who can "'hit' or select a graphically displayed 'set' button" (Ex. 2 to Compl., ’392 Patent, col. 20:10-26). This explicit description of a human operator could be used to argue for a narrower construction that excludes fully automated systems.

VI. Other Allegations

Indirect Infringement

  • The complaint does not contain specific factual allegations to support claims for induced or contributory infringement. The infringement counts focus on direct infringement (Compl. ¶38, 48, 58, 68, 78).

Willful Infringement

  • The complaint does not explicitly allege 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 is often predicated on a finding of willful infringement or other litigation misconduct (Compl., Prayer for Relief ¶C).

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

  1. A central issue will be one of patent eligibility: given the complaint’s extensive arguments that the claims are not abstract ideas but are instead rooted in computer technology (Compl. ¶18, 30, 35), a key question is whether the asserted claims, directed to methods of wagering, will withstand a challenge under 35 U.S.C. § 101 as claiming more than an abstract idea implemented on a generic computer.
  2. The case will also involve a question of technological scope: can the term "control function," described in the 2010-era patent with reference to a human operator, be construed to cover the sophisticated, algorithm-driven systems that manage modern in-play betting markets like the DraftKings Sportsbook?
  3. A third key question will be one of definitional mapping: does the accused platform’s offering of fixed-odds wagers on in-game events meet the claim limitation of generating "parimutuel betting options" for "micro-events," or is there a fundamental mismatch between the patented parimutuel-centric system and the operational reality of the accused product?