DCT
2:22-cv-00358
Alvao Digital LLC v. FC Dallas Soccer LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alvao Digital, LLC (Florida)
- Defendant: FC Dallas Soccer, LLC (Texas)
- Plaintiff’s Counsel: Garteiser Honea, PLLC
- Case Identification: 2:22-cv-00358, E.D. Tex., 11/21/2022
- Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains a regular and established business presence in the Eastern District of Texas.
- Core Dispute: Plaintiff alleges that Defendant’s online and mobile application-based ticketing systems, which allow for the resale and transfer of event tickets after the event has commenced, infringe two patents related to electronic systems for selling tickets for a portion of an event.
- Technical Context: The technology at issue addresses the market for event tickets by creating a system to recapture value from tickets that are either wholly unused or only partially used, for example, when a fan leaves a sporting event before its conclusion.
- Key Procedural History: This First Amended Complaint follows an original complaint filed in the same litigation. Plaintiff notes that the patents-in-suit have been cited as prior art in patents issued to major industry participants, including Ticketmaster and Stubhub.
Case Timeline
| Date | Event |
|---|---|
| 2000-11-06 | Priority Date for ’717 and ’918 Patents |
| 2011-03-01 | U.S. Patent No. 7,899,717 Issued |
| 2019-01-22 | U.S. Patent No. 10,185,918 Issued |
| 2022-09-10 | Date of alleged infringing activity shown in complaint screenshot |
| 2022-09-22 | Date of alleged infringing activity shown in complaint screenshot |
| 2022-11-21 | First Amended Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,899,717 - Apparatus and Method for Selling a Ticket to an Event and/or to a Portion of an Event or Venue
- Patent Identification: U.S. Patent No. 7,899,717, issued March 1, 2011.
The Invention Explained
- Problem Addressed: The patent identifies a significant economic inefficiency in the event ticketing market: ticket holders often fail to use the full value of their tickets, either by not attending at all or by leaving an event before it concludes, resulting in "lost or foregone revenues" for the holder and an empty seat at the venue (’717 Patent, col. 1:30-56). At the time of the invention, the patent asserts there was "no apparatus or method in the prior art which can allow a ticket holder to recoup revenues for unused tickets and/or tickets which [were] only utilized for a portion of an event" (’717 Patent, col. 1:57-60).
- The Patented Solution: The invention is a computer-implemented system that creates a secondary market for tickets or portions of tickets, including during the event itself. A central processing computer receives information about available tickets (e.g., from a holder who is leaving an event early) and processes requests from potential buyers, facilitating the transaction and transfer of the ticket for the remaining portion of the event (’717 Patent, Abstract; col. 2:48-62). This allows a new fan to enter the event mid-way through, and the original holder to recover some of their cost.
- Technical Importance: The invention describes a technological framework for a dynamic, intra-event ticketing market, which was presented as an unconventional solution to the problem of perishable, underutilized assets (event seats) (Compl. ¶11).
Key Claims at a Glance
- The complaint asserts infringement of claims 1-39, with an analysis focusing on independent method claim 31 (Compl. ¶43, noting claim 39 depends from 31).
- Claim 31 Elements:
- Receiving and storing information regarding a ticket request for a portion of an event.
- Receiving and storing information regarding an available ticket for a portion of an event, including when an individual is leaving a venue.
- Processing the ticket request using the available ticket information.
- Generating a ticket availability message.
- Transmitting the message to a communication device associated with a potential buyer.
- The complaint reserves the right to assert other claims, including dependent claims (Compl. ¶43).
U.S. Patent No. 10,185,918 - Apparatus and Method for Selling a Ticket to an Event and/or to a Portion of an Event or Venue
- Patent Identification: U.S. Patent No. 10,185,918, issued January 22, 2019.
The Invention Explained
- Problem Addressed: As a continuation of the application leading to the ’717 Patent, the ’918 Patent addresses the same problem of lost value from unused or partially used event tickets (’918 Patent, col. 1:45-65).
- The Patented Solution: The ’918 Patent claims a computer-implemented method that builds on the earlier patent. The method involves storing a request for a partial ticket, receiving information about an available partial ticket (e.g., from a departing fan), processing the two, generating and transmitting an availability message, and then consummating the transaction. A key part of the claimed solution is the final step of either printing a hard copy ticket or displaying an electronic ticket for the new buyer (’918 Patent, Abstract; col. 25:17-48).
- Technical Importance: This patent further specifies the end-to-end process of the dynamic ticketing system, from request to fulfillment via a physical or electronic ticket, solidifying the claims around the unconventional business method (Compl. ¶11).
Key Claims at a Glance
- The complaint asserts infringement of claims 1-15 (Compl. ¶58). It confusingly cites non-existent claim 39 as exemplary, an apparent drafting error. Analysis centers on the first asserted independent claim, Claim 1.
- Claim 1 Elements:
- Storing a ticket request for a portion of an event on a computer.
- Receiving and storing information about an available ticket for a portion of an event.
- Processing the request against the available ticket information.
- Generating and transmitting a ticket availability message.
- Receiving a response to the message.
- Processing information to consummate a transaction.
- Transmitting the ticket information to the buyer's device.
- Printing a hard copy ticket or displaying an electronic ticket.
- The complaint reserves the right to assert other claims (Compl. ¶58).
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are the ticketing systems, platforms, and services offered by Defendant FC Dallas, which are alleged to be controlled by FC Dallas and operated through the AXS platform. This includes the "fcdallas.com" website, the AXS mobile application, and the "AXS Account Manager" (Compl. ¶¶31-32).
Functionality and Market Context
The system provides an "event ticket service that allows a ticket(s) purchaser to buy and sell tickets to others... after an event or game has started" (Compl. ¶31). The complaint alleges that FC Dallas directs users from its own branded website to the AXS platform to manage, transfer, and resell tickets (Compl. ¶33). A screenshot from the AXS website explains that "When fans have tickets they can't use, they can list them for sale with AXS," and that these are labeled as "resale" tickets (Compl. p. 12). A key piece of visual evidence provided is a series of screenshots purporting to show a ticket for an FC Dallas game that started at 7:30 pm being offered for sale on the AXS platform at 9:57 pm on the same night (Compl. p. 15). This screenshot shows the user interface for selecting and purchasing the ticket after the event had already begun (Compl. p. 15). The AXS platform is described as providing "technology platforms to its clients such as entertainment venues, promoters, and sports teams" to "list, sell, issue and deliver tickets" (Compl. p. 11).
IV. Analysis of Infringement Allegations
U.S. Patent No. 7,899,717 Infringement Allegations
| Claim Element (from Independent Claim 31) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving and storing... information regarding a ticket request or a ticket option request for at least one of a ticket for a portion of an event... | The AXS platform allows users to search for tickets to events, including events in progress. The system stores this search/request to query its database of available tickets. | ¶¶32, 43 | col. 12:46-51 |
| receiving and storing... information regarding an available ticket for a portion of an event... when the first individual or the third individual is leaving a venue... | The platform allows ticket holders to list their tickets for resale. The complaint alleges this occurs after the event has started, as shown in a screenshot of a ticket for a 7:30 pm game being offered for sale at 9:57 pm. | ¶¶34, 43; p. 15 | col. 12:20-36 |
| processing... the information regarding a ticket request or a ticket option request... using the information regarding an available ticket | The AXS platform's backend systems match a user's ticket search against the inventory of available resale tickets to identify potential matches. | ¶¶43, 45 | col. 13:1-12 |
| generating... a ticket availability message or a ticket option availability message... | The system generates a user-facing display of available tickets that match the user's search criteria, including price and location. This is depicted in a screenshot of the AXS webpage. | ¶45; p. 15 | col. 13:13-31 |
| transmitting... the message to a second communication device associated with... a second individual... | The ticket availability information is transmitted over the internet and displayed on the potential buyer's computer or smartphone. | ¶43; p. 14 | col. 13:32-37 |
U.S. Patent No. 10,185,918 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| storing, with a first computer, information regarding a ticket request... for a ticket for a portion of an event... | A user's search for a ticket on the AXS platform constitutes a request that is stored, at least transiently, on AXS's servers for processing. | ¶¶32, 58 | col. 23:54-61 |
| receiving and storing... information regarding an available ticket for a portion of an event... | The platform receives and stores listings from sellers offering their tickets for resale, including for events that are already in progress. | ¶¶34, 58; p. 12 | col. 24:16-33 |
| processing... the information regarding a ticket request... using the information regarding an available ticket | The system's servers process the buyer's request against the database of sellers' listings to find and present matching tickets. | ¶58; p. 15 | col. 24:34-44 |
| generating... a ticket availability message... | The system generates a webpage or application screen displaying the available resale tickets to the potential buyer. The complaint includes a screenshot showing such a display. | ¶60; p. 15 | col. 24:45-56 |
| transmitting... the ticket availability message... to a second communication device... | The webpage or application screen with the ticket listing is transmitted to the user's device (e.g., smartphone). | ¶58; p. 15 | col. 24:57-65 |
| receiving a response to the... message... | The user provides a response by selecting a ticket and clicking a "CONTINUE" or "CHECKOUT" button to initiate the purchase. | ¶58; p. 15 | col. 25:1-5 |
| processing... information for consummating a transaction regarding a purchase of the ticket... | The AXS platform processes the user's payment information and finalizes the sale. | ¶34; p. 12 | col. 25:6-16 |
| printing, via a printer, a hard copy ticket... or displaying, via a display, an electronic ticket... | The AXS App provides a digital ticket with a "digital bar-code that refreshes after a certain time-frame" for entry into the event. | ¶58; p. 10 | col. 25:25-48 |
- Identified Points of Contention:
- Technical Questions: A central question is whether the accused system facilitates the sale of partially-used tickets from fans who are physically leaving a venue early, as the patents' background sections emphasize, or if it only facilitates the sale of wholly-unused tickets after the event's official start time has passed. The complaint's evidence, such as the screenshot of a ticket for sale two hours after the start (Compl. p. 15), strongly supports the latter but does not explicitly show a transfer from a departing attendee. This potential distinction raises a question about whether the accused system truly practices the core inventive concept as described in the specification.
- Scope Questions: The infringement theory may depend on the construction of "a ticket for a portion of an event." A question for the court will be whether this term covers any ticket sold after an event has begun (as some portion of the event has passed), or if it is limited to a ticket that has been partially used by a prior holder and is explicitly being sold for only the remaining duration.
V. Key Claim Terms for Construction
The Term: "a ticket for a portion of an event" (from Claim 1 of ’918 Patent and Claim 31 of ’717 Patent)
Context and Importance: This term is the technological and conceptual core of both asserted patents. The entire infringement case may hinge on whether the sale of a whole ticket after the event's start time falls within the scope of this limitation. Practitioners may focus on this term because its construction will determine if the accused system, which sells tickets for events already in progress, meets the claims.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The plain language could be interpreted to mean any ticket that grants access to less than the full event duration. The specification discusses recouping revenues for tickets "which are only utilized for a portion of an event" (’918 Patent, col. 1:60-64), which could include a ticket purchased late.
- Evidence for a Narrower Interpretation: The patent specifications repeatedly frame the problem and solution around a ticket holder who "leaves a game prior to its completion or conclusion" (’918 Patent, col. 1:49-51). The system is described as allowing the holder to "sell or resell the ticket or tickets for his or her seat or seats... for a remaining portion of an event or venue" (’918 Patent, col. 12:58-64). This language could support an interpretation that the "portion" must be what remains after an original holder has partially used the ticket.
The Term: "storing... information regarding a ticket request" (from Claim 1 of ’918 Patent)
Context and Importance: Infringement of this element depends on whether a user's standard search on a website constitutes a "stored" request. The defense may argue that a transient search query is not "stored" in the manner contemplated by the patent.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent describes a "user or individual desiring to purchase a ticket" who can "enter a request" (’918 Patent, col. 12:46-51). Any server-side processing of a user's search criteria could be argued to involve "storing" that information, even if only temporarily in memory, to perform the search.
- Evidence for a Narrower Interpretation: The specification also describes a system where users can "post their ticket requests with the central processing computer 10 at any time" (’918 Patent, col. 15:33-37). This language, along with flowcharts showing a distinct step of entering a request, could suggest a more formal, persistent data object—like a "want ad" or price alert—rather than a simple, ephemeral web search.
VI. Other Allegations
- Indirect Infringement: The complaint alleges induced infringement under 35 U.S.C. § 271(b). The factual basis is that Defendant provides and advertises the AXS platform, including website instructions and app functionalities, that allegedly guide and encourage users to perform the steps of the patented methods, such as listing tickets for resale after an event has started (Compl. ¶¶47-50, 62-65).
- Willful Infringement: Willfulness allegations are based on two grounds: (1) pre-suit knowledge allegedly evidenced by Defendant's "own citation to the Alvao Patents in patent applications," and (2) post-suit knowledge based on Defendant's receipt of the original complaint in the litigation (Compl. ¶¶40, 46, 55, 61).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: Can the claim term "a ticket for a portion of an event," which is rooted in the patents' narrative of a fan leaving an event early, be construed broadly enough to read on the sale of a standard, wholly-unused ticket that is merely sold after the event's start time? The outcome of this claim construction dispute will be pivotal.
- A key evidentiary question will be one of operational reality: Does the complaint and subsequent discovery provide sufficient evidence that the accused system is used to sell partially-used tickets from departing attendees, or is its functionality limited to selling unused tickets after the event has commenced? A mismatch between the accused system's actual operation and the specific problem solved by the patents could create a significant non-infringement argument for the defense.
- A third question relates to divided infringement: As the accused method involves actions by a seller, a buyer, and the AXS platform (as agent for FC Dallas), the court will have to analyze whether FC Dallas "directs or controls" the other parties' actions sufficiently to be held liable for direct infringement of the method claims under the standards set by Akamai.