CAFC Affirms PTAB Ruling That DraftKings Didn’t Show Unpatentability of Gaming Patent Claim

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a choice at this time in DK Crown Holdings Inc. v. AG 18, LLC, affirming a remaining written choice of the Patent Trial and Appeal Board (PTAB) and holding that DK Crown Holdings Inc., previously generally known as DraftKings, Inc. (DK), did not show that declare 18 of U.S. Patent No. 9,978,205 was unpatentable throughout inter partes evaluation (IPR).

AG 18, LLC owns the ‘205 patent, which is titled “Location Based Restrictions on Networked Gaming” and covers peer-to-peer gaming systems that restrict a player’s on-line wagering exercise primarily based on geographic location. DK filed an IPR petition earlier than the PTAB difficult claims 1 via 30 of the patent. The PTAB finally discovered claims 1 via 17 and 19 via 30 unpatentable as both anticipated by or apparent over the asserted prior artwork. Claim 18 was the one declare at subject on attraction, and it survived.

The declare 18 problem will depend on impartial declare 12 via dependent claims 15, 16, and 17, and is directed to a gaming system by which wagering limits convert to non-monetary wagering and any participant winnings are equally non-monetary. In its petition, DK challenged declare 18 solely beneath Grounds 1 and a pair of, each of which relied solely on a previous artwork patent of Bryson, U.S. Patent No. 8,460,109. The Ground 3 problem was directed solely at claims 15 via 17 within the petition.

After the PTAB instituted the IPR, DK included a footnote in its petitioner’s reply requesting that the Board analyze declare 18 beneath Ground 3, the Bryson-plus-Schlottmann mixture, relatively than beneath Grounds 1 and a pair of. The PTAB declined, discovering that DK improperly sought to introduce Schlottmann as a brand new prior artwork reference towards declare 18 to fill a spot within the authentic petition. Since claims 15 via 17 are essentially included as limitations of declare 18, and DK’s authentic petition by no means argued that Bryson alone taught or recommended these limitations with respect to say 18, the Board discovered that DK had not carried its burden of proof. DK then sought Director Review, which was denied, earlier than interesting to the CAFC.

On attraction, DK argued the Board “abused its discretion” by refusing to research declare 18 beneath Ground 3. DK characterised the omission as a “clerical error” and contended it was “obvious” that DK supposed to claim Ground 3 towards declare 18; nonetheless, Judge Chen rejected that argument. The CAFC agreed “with the Board that DK asserted a new ground of unpatentability in its Reply footnote against claim 18 by seeking to add Schlottmann to its challenge.” The courtroom emphasised that its case regulation prohibits the Board from entertaining theories that have been absent from the petition and located that the late-raised footnote didn’t reply to any argument in AG 18’s patent proprietor response. DK additionally didn’t transfer to amend its petition to appropriate the asserted oversight, and additional argued that the choice ought to stand on the premise of Voice Tech Corporation v. Unified Patents, LLC, which concerned typographical errors in a petition the place the substantive argument was nonetheless identifiable via cross-reference. The CAFC discovered Voice Tech inapplicable, concluding that, in contrast to the petition in that case, DK’s petition contained no cross-reference or indication anyplace that Ground 3 or Schlottmann was supposed to use to say 18.

Furthermore, DK contended that declare 18 needs to be deemed unpatentable beneath collateral estoppel as a result of the PTAB had already invalidated claims 10, 12, 15, 16, and 17, which collectively include the entire limitations present in declare 18. The CAFC rejected this concept outright, discovering that DK’s evaluation did not fulfill the burden required beneath Ohio Willow Wood Co. v. Alps South to show that collateral estoppel applies primarily based on declare 18’s similarity to an already-invalidated declare. The courtroom additionally famous that it had “never applied collateral estoppel in the manner DK suggests,” particularly by “cobbling together” limitations from disparate claims to duplicate one other declare, and located no persuasive purpose to take action. Ultimately, the CAFC affirmed the PTAB’s choice, thereby upholding the validity of declare 18 of the ‘205 patent.

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