DraftKings Inc v. Interactive Games LLC

1. Case Identification

• Case #: IPR2020-01109
• Patent #: 8,956,231
• Filed: June 17, 2020
• Petitioner(s): DraftKings Inc.
• Patent Owner(s): Interactive Games LLC
• Challenged Claims: 1-23

2. Patent Overview

• Title: Systems and Methods for Facilitating Gaming
• Brief Description: The ’231 patent discloses systems for facilitating electronic gaming on mobile devices while ensuring compliance with jurisdictional rules. The core claimed technology involves determining a user's location, authorizing gaming if the location is permitted, and subsequently re-determining the location at a variable frequency based on the device's proximity to a jurisdictional boundary.

3. Grounds for Unpatentability

Ground 1: Obviousness over Nguyen and Lewin - Claims 1-5, 7, and 21-23 are obvious over Nguyen in view of Lewin.

• Prior Art Relied Upon: Nguyen (Application # 2006/0095790) and Lewin (Application # 2008/0261688).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Nguyen, which relates to location and user identification for online gaming, disclosed nearly every element of the independent claims. Nguyen taught a system that determines a mobile user's location, compares it to jurisdictional boundaries to permit or deny gaming, and verifies the user's identity. Critically, Petitioner asserted Nguyen taught the alleged point of novelty: varying the "frequency for determining the player's location" during a gaming session based on "the player's proximity to a jurisdiction in which Internet gaming would not be permitted." Lewin was introduced to teach the limitation of determining that a specific device is authorized for gaming, a requirement Petitioner argued was not explicitly in Nguyen. Lewin disclosed an "authorized device" check based on characteristics like a device serial number, separate from user or location verification.
  • Motivation to Combine: A POSITA would combine Lewin's device authorization with Nguyen's location-based gaming system to enhance regulatory compliance. Both references addressed the same problem of providing remote gambling systems that comply with varied jurisdictional requirements. Petitioner contended that adding a device authorization check from Lewin to Nguyen's system was a predictable and common-sense improvement to ensure that a registered device was being used, thereby increasing security and compliance.
  • Expectation of Success: A POSITA would have a reasonable expectation of success because both systems used remote servers for verification. Integrating Lewin's device authentication logic into Nguyen's existing verification server would be a straightforward application of a known technique to a similar system to achieve a predictable result.

Ground 2: Obviousness over Nguyen, Lewin, and Verteuil - Claims 1-11, 13, 15-17, and 21-23 are obvious over Nguyen in view of Lewin and Verteuil.

• Prior Art Relied Upon: Nguyen (Application # 2006/0095790), Lewin (Application # 2008/0261688), and Verteuil (Application # 2004/0219932).
• Core Argument for this Ground:
  • Prior Art Mapping: This ground asserted that to the extent Nguyen was found not to explicitly teach dynamically setting the location re-determination time, Verteuil supplied this teaching. Verteuil disclosed an "efficient tracking method" for mobile units where the timing for location updates was "dynamically set depending, at least in part, on the location of the mobile unit relative to one or more locations of interest," such as a boundary. Verteuil explicitly taught setting a "second time for requesting updated location information" based on variables including "a distance between the first location...and a boundary of a location of interest," as well as the device's velocity and direction of travel. This was argued to directly map to the limitations in independent claim 1 and dependent claims 8-11, 13, and 15 related to setting a "period of time" based on distance, speed, and direction.
  • Motivation to Combine: A POSITA would be motivated to incorporate Verteuil's sophisticated dynamic polling techniques into the Nguyen/Lewin system to improve efficiency. Nguyen disclosed the concept of varying location check frequency but lacked specific implementation details. Verteuil provided these details, teaching how to vary polling frequency to conserve network resources—a known problem in location-based services. This combination would allow the gaming system to perform location checks more frequently when a player is near a boundary and less frequently when far away, achieving the same goal of compliance with greater efficiency.
  • Expectation of Success: Success was expected because Verteuil's method was designed to be incorporated into existing location-based service applications, and Nguyen's online casino was such an application. Implementing Verteuil's known dynamic timing algorithms within Nguyen's system would have been a predictable modification.

Ground 3: Obviousness over Nguyen, Lewin, Verteuil, and Raith - Claims 12 and 14 are obvious over Nguyen in view of Lewin, Verteuil, and Raith.

• Prior Art Relied Upon: Nguyen, Lewin, Verteuil, and Raith (Application # 2005/0101333).

• Core Argument for this Ground:

  • Prior Art Mapping: This ground added Raith to address claims 12 and 14, which require determining a "period of time" based on the device's speed or direction, calculated from a current and a prior location. While Nguyen and Verteuil taught using speed and direction to adjust location check frequency, Petitioner argued Raith explicitly taught the fundamental method for this calculation. Raith disclosed that the "speed or velocity" of a mobile terminal could be computed "based on two or more position estimates over a period of time."
  • Motivation to Combine: A POSITA seeking to implement the speed- and direction-based polling frequency adjustments described in Nguyen and Verteuil would have naturally looked to a known, fundamental technique for calculating speed and velocity. Raith provided this well-understood method. The motivation was simply to use a standard calculation technique to implement a disclosed feature.
  • Expectation of Success: A POSITA would have easily succeeded in using the prior and current locations already determined by the Nguyen/Verteuil system as inputs for the simple speed/velocity calculation taught by Raith. This was a straightforward application of a basic physics principle to available data.

• Additional Grounds: Petitioner asserted additional obviousness challenges against claims 4, 18, 19, and 20 based on combinations including Morrison (for handset identification), Wun (for disabling communication ports), and Cockerille (for software hash verification), relying on similar motivations to add known security and compliance features to the primary Nguyen/Lewin system.

4. Key Claim Construction Positions

• Petitioner argued that the Board need not expressly construe any claim terms because the prior art invalidates the claims under any plausible construction.
• Petitioner noted that the ’231 patent provides an "extremely broad sense" for the term "determining," encompassing a wide variety of actions including calculating, looking up, receiving, and establishing.

5. Arguments Regarding Discretionary Denial

• Petitioner argued against discretionary denial under §314(a) and the Fintiv factors, stating that the parallel district court litigation was in its earliest stages and had been stayed pending the outcome of the IPR.
• Petitioner also argued against denial under §325(d), asserting that while the primary reference, Nguyen, was cited in a large IDS during prosecution, there was no evidence the examiner ever substantively considered it. Petitioner contended the examiner therefore committed a material error by failing to recognize that Nguyen taught the alleged point of novelty of the invention.

6. Relief Requested

• Petitioner requests institution of inter partes review and cancellation of claims 1-23 of the ’231 patent as unpatentable.