DCT
6:21-cv-01321
Alvao Digital LLC v. StubHub Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alvao Digital, LLC (Florida)
- Defendant: Ticketmaster L.L.C. (Virginia); San Antonio Spurs, L.L.C. (Texas)
- Plaintiff’s Counsel: Garteiser Honea, PLLC
- Case Identification: 6:21-cv-01321, W.D. Tex., 11/10/2022
- Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas based on Defendant San Antonio Spurs maintaining a regular and established business presence in the District and Defendant Ticketmaster maintaining physical business locations and employees within the District.
- Core Dispute: Plaintiff alleges that Defendants’ platforms for selling and transferring event tickets, particularly the functionality that allows for such transactions after an event has commenced, infringe patents related to systems for selling tickets for a portion of an event.
- Technical Context: The technology at issue addresses the economic inefficiency of event tickets going partially unused by creating a computer-implemented secondary marketplace for the remaining portion of an event after a ticket holder has left.
- Key Procedural History: The operative complaint is the Fourth Amended Complaint. The complaint also alleges that industry leaders, including Ticketmaster, have cited the patents-in-suit in their own patent applications, which may be used to suggest pre-suit knowledge of the patents.
Case Timeline
| Date | Event |
|---|---|
| 2000-11-06 | Priority Date for ’717 & ’918 Patents |
| 2011-03-01 | U.S. Patent No. 7,899,717 Issued |
| 2019-01-22 | U.S. Patent No. 10,185,918 Issued |
| 2022-11-10 | Complaint Filing Date |
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, “Apparatus and Method for Selling a Ticket to an Event and/or to a Portion of an Event or Venue,” issued March 1, 2011.
The Invention Explained
- Problem Addressed: The patent’s background section describes the economic loss incurred when ticket holders cannot use their tickets for an entire event, such as when a season ticket holder misses a game or any attendee leaves before the event concludes. 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. 1:57-62).
- The Patented Solution: The invention provides a centralized computer system that creates a marketplace for these unused or partially-used tickets (’717 Patent, Fig. 1). The system allows a ticket holder to offer their ticket for resale after an event has already started, and enables another user to purchase the right to use the seat for the remainder of the event, thereby overcoming the "shortfalls of the prior art" (’717 Patent, col. 1:63-col. 2:2).
- Technical Importance: This technology created a computer-facilitated, dynamic secondary market to capture the residual value of in-progress event tickets, addressing a previously unmet need for liquidity for partially consumed intangible goods (’717 Patent, col. 2:1-7).
Key Claims at a Glance
- The complaint asserts claims 1-39, with Claim 39 identified as exemplary (Compl. ¶74).
- Independent Claim 39 recites an apparatus comprising:
- A central processing computer with a memory device storing information regarding a ticket request for a portion of an event.
- A receiver that receives information regarding an available ticket for a portion of an event after it has started.
- A processing device that processes the ticket request using the available ticket information and generates a ticket availability message.
- A transmitter that transmits the availability message to a communication device before the event concludes.
- The complaint reserves the right to assert all claims of the patent (Compl. ¶74).
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, “Apparatus and Method for Selling a Ticket to an Event and/or to a Portion of an Event or Venue,” issued January 22, 2019.
The Invention Explained
- Problem Addressed: As a continuation of the ’717 Patent, the ’918 Patent addresses the same problem of "lost or foregone revenues for ticket holders who are unable to utilize tickets" for the full duration of an event (’918 Patent, col. 1:60-64).
- The Patented Solution: The invention details a computer-implemented method where a system stores a request for a partial ticket, receives information that a partial ticket has become available (e.g., from a first individual leaving an event), processes this information, generates an availability message, and transmits that message to a second individual before the event ends, facilitating a transaction (’918 Patent, Abstract; col. 2:57-67). Figure 1 illustrates the networked architecture connecting user devices to a central processing computer and ticket issuer computers (’918 Patent, Fig. 1).
- Technical Importance: The method provides a specific, automated technical process for matching latent demand for partial event access with dynamically created supply, which was not possible with conventional, static ticketing systems (’918 Patent, col. 2:7-12).
Key Claims at a Glance
- The complaint asserts claims 1-15 (Compl. ¶89). Note: The complaint's exemplary mention of Claim 39 for this patent appears to be a typographical error, as the patent only contains 22 claims. This analysis focuses on independent Claim 1.
- Independent Claim 1 recites a computer-implemented method comprising the steps of:
- Storing, with a first computer, a request for a ticket for a portion of an event.
- Receiving and storing information regarding an available ticket for a portion of an event, where the availability arises when a first individual leaves the event.
- Processing the ticket request using the available ticket information.
- Generating a ticket availability message before the event concludes.
- Transmitting the message to a second communication device associated with a second individual before the event concludes.
- The complaint reserves the right to assert all claims of the patent (Compl. ¶89).
III. The Accused Instrumentality
Product Identification
The complaint identifies the "Accused Instrumentalities" as systems, platforms, and services provided by Defendants for event ticketing (Compl. ¶33, ¶66). This includes Ticketmaster’s "Ticket Transfer" platform and the San Antonio Spurs’ "Account Manager," which redirects users to Ticketmaster or other platforms like StubHub for ticket transactions (Compl. ¶33i, ¶35, ¶36).
Functionality and Market Context
The accused systems provide functionality for ticket holders to transfer or sell tickets to other users (Compl. ¶33i, ¶37). The complaint specifically alleges that this functionality is available after an event has already started but before it has concluded (Compl. ¶39, ¶53). For example, Figure 1 in the complaint is a screenshot presented as evidence of a ticket for a Spurs game being offered for sale on StubHub at 7:50 PM for an event that began at 7:30 PM (Compl. p. 12). Screenshots from the Spurs’ mobile application show prominent "Transfer" and "Sell" buttons, which allegedly enable the infringing activity (Compl. p. 23). The complaint alleges these services are central to Defendants' business, allowing them to control and monetize the secondary ticket market (Compl. ¶36, ¶74).
IV. Analysis of Infringement Allegations
’717 Patent Infringement Allegations
| Claim Element (from Independent Claim 39) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| An apparatus, comprising: a central processing computer, said central processing computer comprising: a memory device, wherein the memory device stores information regarding a ticket request or a ticket option request for a ticket for a portion of an event... | Ticketmaster's servers act as a central processing computer that stores ticket information and facilitates requests for tickets for events, including those that have already started (Compl. ¶41, ¶43). | ¶41, ¶43, ¶58 | col. 7:10-14, Fig.1 |
| a receiver, wherein the receiver receives... information regarding an available ticket for a portion of an event which remains after a start of the event... | Ticketmaster’s servers receive and store information about available tickets listed for sale or transfer by users via mobile or desktop devices, including for events that are already in progress (Compl. ¶50, ¶56-57). | ¶50, ¶56 | col. 15:30-41 |
| a processing device, wherein the processing device processes the information regarding a ticket request... using the information regarding an available ticket, and further wherein the processing device generates a ticket availability message... | Ticketmaster's servers process the stored information on available tickets and generate availability messages, such as marketplace listings or notifications, that are displayed to potential buyers (Compl. ¶58, ¶63). | ¶58, ¶63 | col. 12:43-52 |
| a transmitter, wherein the transmitter transmits the ticket availability message... to a second communication device associated with a second individual... before a completion or a conclusion of the event. | Ticketmaster's servers transmit ticket availability information (e.g., listings, alerts, notifications) to potential buyers’ devices (e.g., smartphones, computers) for events that are ongoing (Compl. ¶64, ¶81). | ¶64, ¶81 | col. 13:45-51 |
- Identified Points of Contention:
- Scope Questions: A central question may be whether the transfer of a full ticket for the remainder of an event constitutes a "ticket for a portion of an event" as contemplated by the patent, which also describes this partial ticket as being "derived from a ticket for an entire event" (’918 Patent, Claim 1).
- Technical Questions: The analysis may focus on whether the accused system's general marketplace listing or alert functionality performs the specific step of "processing" a stored "ticket request" using "available ticket" information to "generate" a message, or if it functions more as a passive platform where users must actively search for available tickets.
’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 or a ticket option request for a ticket for a portion of an event... | Ticketmaster's servers store data related to tickets for events, which the complaint alleges fulfills the function of storing requests for tickets, including for portions of events (e.g., after the start time) (Compl. ¶41, ¶58). | ¶41, ¶58 | col. 23:55-67 |
| 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... | A user lists their ticket for sale or transfer on the Ticketmaster platform via a mobile app or website after an event has started, which transmits the availability information to Ticketmaster's servers (Compl. ¶50, ¶54, ¶56). | ¶50, ¶54 | col. 24:21-34 |
| processing, with the first computer or with the second computer, the information regarding a ticket request... using the information regarding an available ticket. | Ticketmaster's servers process the availability information from sellers against the general demand for tickets, making the listed tickets discoverable to potential buyers through its platform (Compl. ¶58-59, ¶68). | ¶58-59 | col. 24:35-43 |
| generating, with the first computer or with the second computer, a ticket availability message... wherein the ticket availability message is generated before a completion or a conclusion of the event. | The system generates real-time updates, marketplace listings, and push notifications that inform customers of available tickets for ongoing events (Compl. ¶63, ¶78-79). The complaint provides a screenshot of tickets available at 8:41 PM for a 7:00 PM game (Compl. p. 19). | ¶63, ¶78 | col. 24:44-54 |
| transmitting, from a transmitter... the ticket availability message... to a second communication device associated with or used by the second individual or a fourth individual... before a completion or a conclusion of the event. | Ticketmaster's system transmits these availability messages (e.g., app notifications, updated web listings) to the devices of potential buyers while the event is still in progress (Compl. ¶64, ¶80-81). | ¶64, ¶80 | col. 24:55-65 |
V. Key Claim Terms for Construction
The Term: "a ticket for a portion of an event which remains after a start of the event"
Context and Importance: This term is the central concept of the asserted claims. Its construction will determine whether transferring a ticket for the remainder of an in-progress event falls within the scope of the patents. The dispute will likely center on whether "a ticket for a portion" requires the creation of a new, formally defined partial ticket, or if it can simply mean the right to use an existing ticket for its remaining duration.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent specification repeatedly discusses scenarios like a ticket holder leaving a game early and recouping value, which supports the idea that the "portion" is simply whatever time is left on the original ticket (’918 Patent, col. 1:47-53).
- Evidence for a Narrower Interpretation: The claim language "the ticket for a portion of the event... is derived from a ticket for an entire event" (’918 Patent, col. 23:61-63) could be argued to imply a distinct technical step of creating a new data object representing the partial ticket, rather than merely transferring the original.
The Term: "generating... a ticket availability message"
Context and Importance: This term is critical for determining the mechanism of infringement. Practitioners may focus on whether the accused systems’ general notifications and marketplace listings constitute the specific "generating" and "transmitting" of a message as required by the claims, or if a more targeted, request-driven notification is required.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes transmitting a "ticket availability report or message" which could encompass a general listing of available tickets on a webpage or app interface accessible to any user (’918 Patent, col. 13:14-16).
- Evidence for a Narrower Interpretation: The method claims describe a sequence of storing a request, then processing it with available ticket information, then generating and transmitting a message. This sequence suggests the message is generated in response to a specific request, potentially implying a targeted notification rather than a general broadcast (’918 Patent, Claim 1).
VI. Other Allegations
- Indirect Infringement: The complaint alleges that the Spurs induce infringement by advertising and promoting the accused services and providing instructions that encourage users to perform the infringing acts of transferring or selling tickets for ongoing events (Compl. ¶78-81, ¶93-96).
- Willful Infringement: Willfulness is alleged based on Defendants’ purported pre-suit knowledge of the Alvao Patents, evidenced by citations to the patents in their own patent applications (Compl. ¶77, ¶92).
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 the patent describes as "derived from a ticket for an entire event," be construed to read on the accused systems' function of transferring an original, full-event ticket to a new user after the event has already started?
- A key evidentiary question will be one of functional mechanism: does the accused platform’s system of listing available tickets on a marketplace and sending general alerts perform the specific, sequential method of storing a user’s request, processing that request against newly available tickets, and transmitting a responsive availability message, as required by the asserted method claims?
- An underlying legal question will concern control and liability: given that the complaint directs its infringement counts solely at the San Antonio Spurs, the court will need to examine the extent to which the Spurs "direct or control" the operation of the Ticketmaster platform to establish direct infringement for the entire accused system, as alleged by the Plaintiff.