PTAB

IPR2023-00266

DK Crown Holdings Inc v. Diogenes Ltd

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: Wagering Event with Buy-Out Offer
  • Brief Description: The ’969 patent discloses methods and systems for conducting a wagering event, such as on a sporting event, where a player can be offered a "cash out" or "buy-out" offer to sell their active wager back (in whole or in part) before the event concludes.

3. Grounds for Unpatentability

Ground 1: Obviousness over Schugar and DeWaal - Claims 1, 2, 8, 9, 13-16, 20-27, 29, and 30 are obvious over Schugar in view of DeWaal.

  • Prior Art Relied Upon: Schugar (Application # 2008/0311981) and DeWaal (Application # 2008/0113765).
  • Core Argument for this Ground:
    • Prior Art Mapping: Petitioner argued that Schugar taught the core method of the challenged claims: a wagering game on a sporting event where a player can "cash out" a portion or all of a current bet while it is in progress. Schugar explicitly disclosed offering a player the choice to "bank some or all" of their wager's equity, which corresponds to the partial and full "cash out" offers of the ’969 patent. The cash-out amount in Schugar was based on the player's wager and the current state of the game (e.g., score at halftime), mapping directly to claim limitations. Petitioner contended that while Schugar disclosed the method, DeWaal provided the necessary and well-known server-client architecture to implement it. DeWaal taught a gaming system with a "central controller" or server that manages wagering events across multiple remote gaming devices, receives inputs from players, and offers awards to quit a bonus event prior to completion. The combination of Schugar's method implemented on DeWaal's server-based system allegedly rendered the method, system, and computer-readable medium claims obvious.
    • Motivation to Combine: Petitioner asserted a person of ordinary skill in the art (POSITA) would combine Schugar and DeWaal to implement Schugar's novel wagering method on a known, scalable, and robust hardware platform. Schugar itself suggested its methods could be applied to any gaming machine and that the necessary hardware and software "already exist in the prior art," directing a POSITA to seek out systems like DeWaal. DeWaal, in turn, invited the implementation of "new and different" games on its flexible system. A POSITA would be motivated to use DeWaal's centralized architecture to gain operator-level benefits like improved control over gaming, error reduction, and management of parimutuel betting pools, all of which were tasks well-suited for a central server.
    • Expectation of Success: A POSITA would have a reasonable expectation of success because the combination involved implementing a new set of game rules (from Schugar) on a pre-existing and capable wagering platform architecture (from DeWaal). This was presented not as an inventive step, but as a straightforward application of a known software method to a known hardware system, using off-the-shelf networking components and standard protocols.

4. Arguments Regarding Discretionary Denial

  • Petitioner argued that discretionary denial would be inappropriate under both §314(a) and §325(d).
  • §314(a) / Fintiv: Petitioner made a Sotera-style stipulation, agreeing not to pursue in the co-pending district court litigation any invalidity ground that was raised or could have been reasonably raised in the IPR if a Final Written Decision (FWD) is issued.
  • §325(d) / Advanced Bionics: Petitioner contended that denial was unwarranted because the petition presented art and arguments not previously before the Examiner. First, Schugar was entirely new prior art and not cumulative of any art considered during prosecution. Second, Petitioner argued the Examiner made a clear error during prosecution by misinterpreting the claim scope. Specifically, during prosecution of a parent patent, the Applicant successfully argued that claim language required offering both a full buy-out and a partial buy-out. The Examiner appeared to carry this flawed, conjunctive interpretation over to the ’969 patent, despite different claim language. This error allegedly caused the Examiner to fail to issue a rejection based on prior art (like the Acres reference of record) that disclosed at least a full cash-out offer.

5. Relief Requested

  • Petitioner requested the institution of an inter partes review (IPR) and the cancellation of claims 1, 2, 8, 9, 13-16, 20-27, 29, and 30 of the ’969 patent as unpatentable.