Beteiro, LLC v. Betmgm, LLC
| Docket Number | 1:21-cv-20156 |
| Decision Date | 07 September 2022 |
| Parties | BETEIRO, LLC, Plaintiff, v. BETMGM, LLC, Defendant. |
| Court | U.S. District Court — District of New Jersey |
David A. Ward, Kluger Healey, LLC, 521 Newman Springs Road, Suite 23, Lincroft, NJ 07738, M. Scott Fuller, pro hac vice, Randall Garteiser, pro hac vice, Garteiser Honea, PLLC, 119 W. Ferguson Street, Tyler, TX 75702, On behalf of Plaintiff.
Theresa M. House, Arnold & Porter Kaye Scholer, LLP, One Gateway Center, Suite 1025, Newark, NJ 07102, Evan Rothstein, pro hac vice, Patrick Hall, pro hac vice, Arnold & Porter Kaye Scholer, LLP, 1144 Fifteenth Street, Suite 3100, Denver, CO 80202, Philip Marsh, pro hac vice, Arnold & Porter Kaye Scholer, LLP, 3000 El Camino Real, Five Palo Alto Square, Suite 500, Palo Alto, CA 94306-3807, Michael Gershoni, pro hac vice, Arnold & Porter Kaye Scholer, LLP, 601 Massachusetts Ave., NW, Washington, DC 20001-3743, On behalf of Defendant.
O'HEARN, District Judge.
This matter comes before the Court on Defendant BetMGM LLC's ("Defendant" or "BetMGM") Motion to Dismiss, (ECF No. 9), the Amended Complaint filed by Plaintiff Beteiro, LLC ("Plaintiff"), (ECF No. 5).1 The Court did not hear oral argument pursuant to Local Rule 78.1. For the reasons that follow, Defendant's Motion is GRANTED.
Plaintiff is the owner—by way of a series of assignments starting with the sole named inventor, Raymond Anthony Joao—of four U.S. patents: (i) U.S. Patent No. 9,965,920 ("the '920 Patent"); (ii) U.S. Patent No. 10,043,341 ("the '341 Patent"); (iii) U.S. Patent No. 10,147,266 ("the '266 Patent"); and (iv) U.S. Patent No. 10,255,755 ().2 (Am. Compl., ECF No. 5, ¶¶ 10-11). In general, the Patents-in-Suit describe an apparatus or method for facilitating—using computers or "communication device[s]"—remote or mobile gambling activity while abiding by local jurisdictions' laws with respect to such activity. '920 Patent, at [57]; '341 Patent, at [57]; '266 Patent, at [57]; '755 Patent, at [57].3 The Patents-in-Suit are all part of the same family: each subsequent Patent is a continuation of the '920 Patent. '755 Patent, at [63]. Plaintiff alleges a priority date "at least as early as May 31, 2002." (Am. Compl., ECF No. 5, ¶ 16).
Plaintiff alleges that "[t]he claims of the [Patents-in-Suit] provide a basis for legally compliant remote wagering, increased accessibility to wagering platforms, increased opportunity for wagering providers, increased accessibility to wagering information to wagerers, reduced fraud, and more secure transactions among wagering providers and wagerers." (Am. Compl., ECF No. 5, ¶ 31). These alleged innovations purport to overcome deficiencies in the art as of the date of invention, "provid[ing] a technological solution to the technological problems arising in the online wagering context." (Am. Compl., ECF No. 5, ¶¶ 32-33). The inventions as claimed "provide a means by which interested parties can access gambling services remotely, while preserving geographic restrictions on such access," thus "making it possible to expose more individuals to the various gaming options available in the market." (Am. Compl., ECF No. 5, ¶¶ 32-34). "Wagering platform providers" can further "maximize the number of wagers made without a proportional increase in overhead, wagering equipment/terminals, or employee capacity." (Am. Compl., ECF No. 5, ¶ 35).
In the course of the prosecution of each of the '920 Patent, the '341 Patent, and the '266 Patent—though notably, not the '755 Patent—Plaintiff alleges that the Primary Patent Examiner Jasson Yoo ("the Patent Examiner") considered those Patents' eligibility under 35 U.S.C. § 101 and relevant Supreme Court precedent and found that they were patent-eligible.4 (Am. Compl., ECF No. 5, ¶¶ 18-21). Upon examination, the Patent Examiner allowed the relevant claims of each of the Patents-in-Suit to issue. (Am. Compl., ECF No. 5, ¶¶ 41, 45, 49, 53).
Plaintiff alleges that Defendant "makes, sells, advertises, offers for sale, uses, or otherwise provides a plurality of gambling and event wagering services, including but not limited to providing and supporting its branded Mobile Wagering Platform, which is comprised of hardware (including servers) and software (including source code)." (Am. Compl., ECF No. 5, ¶ 57). According to Plaintiff, this "Mobile Wagering Platform" infringes upon each of the relevant claims of the Patents-in-Suit. (Am. Compl., ECF No. 5).
On November 22, 2021, Plaintiff initiated this action with the filing of its Complaint, alleging Defendant's direct and, upon service of the Complaint, willful infringement of the Patents-in-Suit.5 (ECF No. 1). Plaintiff later amended its Complaint on January 1, 2021. (ECF No. 5).6 After a stipulated extension of time, (ECF No. 7), Defendant filed the present Motion, seeking dismissal of the Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that the Alleged Patents are directed toward patent-ineligible subject matter under 35 U.S.C. § 101, (ECF No. 9). On March 3, 2022, this Court granted Plaintiff's request to set a briefing schedule for responding to this Motion and to similar motions filed in the related cases, see supra note 1. (ECF No. 13). Consistent with that schedule, Plaintiff filed its response on April 7, 2022, (ECF No. 23), to which Defendant replied, (ECF No. 24).
To state a claim, a complaint needs only to provide a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). Although "short and plain," this statement must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quotations, alterations, and citation omitted). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do . . . ." Id. (citations omitted). Rather, a complaint must contain sufficient factual allegations "to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955.
When considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), a court must accept the complaint's well-pleaded allegations as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). Through this lens, the court then conducts a three-step analysis. Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). "First, the court must 'tak[e] note of the elements a plaintiff must plead to state a claim.' " Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). Next, the court should identify and disregard those allegations that, because they are no more than "the-defendant-unlawfully-harmed-me accusation[s]," are not entitled to the assumption of truth. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937; Malleus, 641 F.3d at 563. Finally, the court must determine whether "the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.' " Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937). A facially plausible claim "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 210 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937).
On a Rule 12(b)(6) motion, the "defendant bears the burden of showing that no claim has been presented." Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). The court may only consider the facts alleged in the pleadings, any attached exhibits, and any matters of judicial notice. S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd., 181 F.3d 410, 426 (3d Cir. 1999); see also Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 913 (Fed. Cir. 2017) . The court may also consider, however, "an undisputedly authentic document that a defendant attaches as an exhibit to a motion . . . if the plaintiff's claims are based on the document." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If any other matters outside the pleadings are presented and the court does not exclude them, a Rule 12(b)(6) motion will be treated as a summary judgment motion pursuant to Rule 56. FED. R. CIV. P. 12(d).
Section 101 of the Patent Act provides that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. § 101. Despite this broad mandate, the Supreme Court has long recognized three categories of subject matter that are not patent-eligible under the statute: (i) laws of nature; (ii) natural phenomena; and (iii) abstract ideas. Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208, 213, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014) (quoting Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589, 133 S.Ct. 2107, 186 L.Ed.2d 124 (2013)).
To determine whether the subject matter of a claim is patentable under § 101, courts employ a two-step inquiry. Alice, 573 U.S. at 217-18, 134 S.Ct. 2347 . First, courts must determine "whether the claims at issue are directed to one of those patent-ineligible concepts." Id. If they are, courts must then consider the...
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