DCT
6:21-cv-01208
Alvao Digital LLC v. Ticketmaster LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alvao Digital, LLC (Florida)
- Defendants: Ticketmaster L.L.C. (Virginia); C3 Presents, L.L.C. (Texas); Stratus Properties, Inc. (Texas)
- Plaintiff’s Counsel: Garteiser Honea, PLLC
- Case Identification: 6:21-cv-01208, W.D. Tex., 11/10/2022
- Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendants maintain a regular and established business presence in the District, including a physical office for Defendant Ticketmaster in Austin.
- Core Dispute: Plaintiff alleges that Defendants’ ticket transfer and resale services infringe patents related to systems and methods for selling or reselling tickets for portions of events, particularly after an event has commenced.
- Technical Context: The technology at issue addresses the market for electronic event ticketing, specifically creating a mechanism to capture value from tickets that would otherwise go partially or completely unused.
- Key Procedural History: The complaint, a Third Amended Complaint, alleges that Defendants were on notice of the patents due to Defendants’ own patent applications back-citing the patents-in-suit.
Case Timeline
| Date | Event |
|---|---|
| 2000-11-06 | Priority Date for ’717 and ’918 Patents |
| 2011-03-01 | U.S. Patent No. 7,899,717 Issues |
| 2019-01-22 | U.S. Patent No. 10,185,918 Issues |
| 2021-11-09 | Date of Plaintiff's visit to Accused Instrumentality webpage showing tickets available for purchase after event start |
| 2021-11-16 | Date of Plaintiff's visit to Accused Instrumentality webpage showing tickets available for purchase after event start |
| 2021-11-17 | Date of Plaintiff's visit to Accused Instrumentality webpage |
| 2022-03-30 | Date of Plaintiff's visit to Accused Instrumentality webpage showing tickets available for purchase after event start |
| 2022-11-10 | Third 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 (’717 Patent)
The Invention Explained
- Problem Addressed: The patent’s background section identifies the economic loss that occurs when event tickets are expensive but go completely or partially unused, such as when a ticket holder leaves a game before its conclusion (’717 Patent, col. 1:30-50). At the time of 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" under these circumstances (’717 Patent, col. 1:57-60).
- The Patented Solution: The invention provides a computer-implemented system that facilitates the resale of a ticket, or an option for a ticket, for a portion of an event that is already in progress (’717 Patent, col. 2:3-7). A central processing computer manages requests from potential buyers and information about available tickets from sellers (e.g., a ticket holder leaving an event early), generates availability messages, and transmits them to buyers’ communication devices to enable a transaction before the event concludes (’717 Patent, Fig. 1; col. 12:5-40).
- Technical Importance: The technology created a framework for a secondary market for a previously illiquid asset class: partially-used event tickets (Compl. ¶21).
Key Claims at a Glance
- The complaint asserts infringement of claims 1-39, with claim 39 identified as exemplary; claim 39 depends from independent claim 31 (Compl. ¶62).
- Independent Claim 31 (Method): The essential elements include:
- Receiving and storing, on a central computer, a request for a ticket for a portion of an event that remains after its start.
- Receiving and storing information about an available ticket for a portion of an event, such as when the original ticket holder is leaving the venue.
- Processing the ticket request using the available ticket information.
- Generating a ticket availability message.
- Transmitting the message from the central computer to a potential buyer's communication device before the event concludes.
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 (’918 Patent)
The Invention Explained
- Problem Addressed: As a continuation of the application leading to the ’717 Patent, the ’918 Patent addresses the same problem of monetizing unused or partially used tickets for events like games, concerts, and performances (’918 Patent, col. 1:35-53).
- The Patented Solution: The ’918 Patent also describes a computer-implemented method for managing the sale of tickets for portions of events. Claim 1 specifically recites that the original ticket was purchased by a first individual from an issuer, and the ticket for the partial event is then purchased by a second individual with payment being made to the account of the first individual or a third-party reseller. This claim explicitly covers the transactional flow of a secondary market for a partially-used ticket (’918 Patent, col. 23:55-24:22).
- Technical Importance: This patent further details the system architecture and transactional flow for creating a secondary market for partially-used event tickets.
Key Claims at a Glance
- The complaint asserts infringement of claims 1-15 (Compl. ¶77).
- Independent Claim 1 (Method): The essential elements include:
- Storing, on a first computer, a request for a ticket for a portion of an event after its start.
- The transaction involves a ticket for an entire event purchased by a first individual, with the ticket for a portion of the event being purchased by a second individual and payment made to the first or a third individual's account.
- Receiving and storing information about the available partial ticket from the first or third individual, who initiates a communication link.
- Processing the request using the available ticket information.
- Generating and transmitting a ticket availability message to the second individual's communication device.
- Printing a hard copy or displaying an electronic ticket for the partial event.
III. The Accused Instrumentality
Product Identification
The Accused Instrumentalities include the "Ticketmaster Ticket Transfer" platform and associated systems, platforms, and services offered by Defendants Ticketmaster, C3 Presents, and Stratus Properties (Compl. ¶¶35-37).
Functionality and Market Context
The complaint alleges the Accused Instrumentalities constitute an event ticket service that allows a ticket purchaser to transfer tickets to others after an event has started (Compl. ¶35.i). This functionality is allegedly provided through Ticketmaster’s mobile application, desktop website, and account manager portals (Compl. ¶35.i). The complaint provides a screenshot from a UTEP athletics guide, allegedly showing that tickets for UTEP events are transferable via the Ticketmaster system up to one hour after the game has started (Compl. p. 22). Further allegations state that C3 Presents, a concert promoter, utilizes the Ticketmaster platform by redirecting users from its own website to Ticketmaster for purchasing and transferring tickets for its events (Compl. ¶38, p. 15).
IV. Analysis of Infringement Allegations
’717 Patent Infringement Allegations
| Claim Element (from Independent Claim 31) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving and storing, with a central processing computer, information regarding a ticket request...for a ticket for a portion of an event which remains after a start of the event | Ticketmaster’s servers (central processing computer) allegedly store information regarding ticket requests for events, including for portions of events that are already underway. | ¶39 | col. 12:46-54 |
| 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 of the event | The complaint alleges Ticketmaster facilitates customers listing tickets for sale for an ongoing event, including when the customer wishes to leave the event midway. | ¶46 | col. 12:17-25 |
| wherein the first individual or the third individual initiates or establishes a communication link with the central processing computer using a first communication device | A seller allegedly uses a first communication device (e.g., desktop or mobile device with the Ticketmaster App) to establish a link with Ticketmaster's servers to list a ticket for sale. | ¶47, ¶48 | col. 11:6-14 |
| processing...the information regarding a ticket request...using the information regarding an available ticket | Ticketmaster’s servers allegedly process buyer requests by listing and updating ticket quantities based on tickets made available by sellers on its marketplace. | ¶49 | col. 14:1-12 |
| generating...at least one of a ticket availability message and a ticket option availability message | Ticketmaster's website and mobile application allegedly generate information for customers about available tickets for ongoing events, including through push notifications. | ¶51 | col. 13:42-49 |
| transmitting, from the central processing computer, the...message to a second communication device...before a completion or a conclusion of the event | Ticketmaster allegedly transmits ticket availability messages to customer devices (second communication device) for ongoing events before they conclude. A screenshot purports to show tickets for a game available at 8:41 PM that started at 7:00 PM (Compl. p. 60). | ¶52 | col. 14:13-20 |
Identified Points of Contention
- Scope Questions: A central question may be whether the term "leaving a venue," as recited in the claim, requires evidence of the seller's physical departure, or if it can be read more broadly to cover any decision to sell a ticket after an event has started, regardless of the seller's location.
- Technical Questions: What specific evidence does the complaint provide that the Accused Instrumentalities generate a "ticket availability message" that is actively transmitted (or "pushed") to a potential buyer, as opposed to merely making a listing available for a buyer to find (or "pull")? The complaint alleges push notifications but the visual evidence primarily shows website listings (Compl. ¶51).
’918 Patent 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 which remains after a start of the event | Ticketmaster's servers (first computer) allegedly store information regarding ticket requests, including for portions of ongoing events. | ¶39, ¶41 | col. 23:55-64 |
| wherein the ticket for the entire event is purchased from a ticket issuer by a first individual having a ticket account | The complaint alleges Ticketmaster is a marketplace for tickets that have been pre-purchased by customers ("first individual") from event organizers ("ticket issuer"). | ¶44 | col. 24:5-9 |
| and further wherein the ticket for a portion of the event...is purchased by...a second individual...with a payment...being made to the ticket account of the first individual or a ticket account of a third individual | Ticketmaster is alleged to be a marketplace facilitating customers ("second individual") buying tickets from any first or third individual, with payment being processed for the benefit of the seller. | ¶45 | col. 24:10-18 |
| receiving and storing...information regarding an available ticket for a portion of an event | A seller allegedly uses the Ticketmaster platform to list a ticket for a portion of an ongoing event, and the information is stored on Ticketmaster's servers. | ¶46 | col. 24:19-29 |
| printing...a hard copy ticket...or displaying...an electronic ticket | The Ticketmaster mobile application displays an electronic ticket (e.g., barcode or QR code) for entry into the event. The complaint includes a screenshot from Ticketmaster’s website titled "Your Phone Is Your Ticket" (Compl. p. 14). | ¶49 | col. 25:40-52 |
Identified Points of Contention
- Scope Questions: The claim requires payment to be made to a "ticket account." A potential issue is whether Ticketmaster's payment and crediting system for sellers constitutes a "ticket account" as contemplated by the patent.
- Technical Questions: The claim requires steps to be performed by a "first computer" and a "second computer." How the distributed server architecture of the Accused Instrumentalities maps onto the "first computer" and "second computer" limitations of the claim may become a point of dispute.
V. Key Claim Terms for Construction
For the ’717 Patent
- The Term: "portion of an event which remains after a start of the event"
- Context and Importance: This term is the technological core of the patent, distinguishing the invention from conventional pre-event secondary markets. Its construction will determine whether the accused functionality of allowing ticket transfers after an event's official start time falls within the claim scope.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes a scenario where "a holder of a ticket(s) leaves a game prior to its completion or conclusion," suggesting the "portion" is simply the time remaining in the event (’717 Patent, col. 1:40-43).
- Evidence for a Narrower Interpretation: A defendant may argue that the term implies a discrete, defined portion (e.g., the second act of a play) rather than a continuously diminishing remainder of time.
For the ’918 Patent
- The Term: "displaying, via a display, an electronic ticket"
- Context and Importance: This limitation is critical for infringement, as it ties the claimed method to the final step of providing the user with a means of entry to the event. Practitioners may focus on this term because the nature of modern digital tickets (e.g., dynamic QR codes) could be argued to differ from the "electronic ticket" contemplated in a patent with a 2000 priority date.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification broadly refers to tickets as "any other mode or means, for allowing and/or permitting entry into" an event, which would support including modern digital tickets (’918 Patent, col. 7:25-28).
- Evidence for a Narrower Interpretation: The description of an "electronic ticket" mentions it "can also include a purchase confirmation code or number which can be utilized to obtain hard copy tickets," which could suggest the patent contemplated a simpler form of electronic voucher rather than a self-contained digital entry credential (’918 Patent, col. 15:30-34).
VI. Other Allegations
Indirect Infringement
The complaint alleges Defendants induce infringement by advertising and providing the Accused Instrumentalities, which allegedly instruct and enable users to perform the claimed methods of transferring tickets for partial events (Compl. ¶¶66, 81). Intent is alleged based on circumstantial evidence, including advertisements promoting the infringing use (Compl. ¶¶69, 84).
Willful Infringement
Willfulness is alleged based on Defendants’ alleged pre-suit knowledge of the patents. The complaint asserts this knowledge arises from Defendants' "own citation to the Alvao Patents in patent applications" (Compl. ¶¶65, 80).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the claim term "portion of an event," which the patent specification links to a ticket holder physically leaving a venue early, be construed to cover the accused functionality of allowing any digital ticket transfer to occur after an event's official start time, regardless of the seller's circumstances?
- A second central question will be one of evidentiary proof: what evidence will be presented to demonstrate that the Accused Instrumentalities specifically facilitate the resale of partially used tickets by attendees leaving mid-event, as opposed to merely enabling late-arriving attendees to receive a transferred ticket after the event has started?
- A key question for damages will be one of pre-suit knowledge: does the alleged back-citation of the patents-in-suit in Defendants' own patent applications legally constitute the kind of actual notice required to support a finding of willful infringement, potentially leading to enhanced damages?