NEXRF Corp. v. Playtika Ltd.

• Decision Date: 07 July 2021
• Docket Number: Case No. 3:20-cv-00603-MMD-CLB
• Citation: 547 F.Supp.3d 977
• Parties: NEXRF CORP., Plaintiff, v. PLAYTIKA LTD., et al., Defendants.
• Court: U.S. District Court — District of Nevada

547 F.Supp.3d 977

NEXRF CORP., Plaintiff,

v.PLAYTIKA LTD., et al., Defendants.

Case No. 3:20-cv-00603-MMD-CLB

United States District Court, D. Nevada.

Signed July 7, 2021

Adam K. Yowell, Fisher Broyles, Reno, NV, Alastair James Warr, Pro Hac Vice, FisherBroyles LLP, Chicago, IL, for Plaintiff.

Christina Ji-Hye Yang, Pro Hac Vice, Forrest A. Jones, Pro Hac Vice, Gerson Panitch, Pro Hac Vice, Finnegan Henderson Farabow Garrett & Dunner LLP, Washington, DC, Meng Zhong, Michael J. McCue, Lewis Roca Rothgerber Christie LLP, Las Vegas, NV, for Defendants Playtika Ltd., Playtika Holding Corp.

Chelsea Latino, Adam Hosmer-Henner, McDonald Carano LLP, Reno, NV, Lance E. Wyatt, Pro Hac Vice, Ricardo J. Bonilla, Pro Hac Vice, Fish and Richardson, Dallas, TX, Michael J. McCue, Lewis Roca Rothgerber Christie LLP, Las Vegas, NV, for Defendant Caesars Interactive Entertainment.

ORDER

MIRANDA M. DU, CHIEF UNITED STATES DISTRICT JUDGE

I. SUMMARY

Plaintiff NEXREF Corp. sued Defendants Playtika Ltd., Playtika Holding Corp. (collectively, "Playtika") and Caesars Interactive Entertainment ("Caesars") for allegedly infringing five patents¹ by offering online slot machine games. (ECF No. 1.) Before the Court are Caesars and Playtika's motions to dismiss (ECF Nos. 26, 28),² and Playtika's motion for sanctions under Federal Rule of Civil Procedure 11 (ECF No. 53).^{3 ,4} As further explained below, because the Court agrees with Defendants in pertinent part that all five of Plaintiff's asserted patents are invalid under Alice Corp. Pty. Ltd. v. CLS Bank Int'l , 573 U.S. 208, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014), and its progeny, the Court will grant both motions to dismiss. The Court will also deny Playtika's motion for sanctions primarily because it is based on arguments that the Court does not rule on in this order.

II. BACKGROUND

The following allegations are adapted from the Complaint. (ECF No. 1.) Plaintiff alleges that the asserted patents "disclose various systems and methods for embodiments of a fully remote, multiplayer capable, secure, and engaging casino-style gaming system." (Id. at 2.) Said otherwise, the asserted patents generally claim slot machine games playable on a computer or handheld device run on a remote server. Plaintiff more specifically alleges that all asserted patents cover certain unconventional elements:

1. A centralized game server that sends game outcomes and corresponding images to a remote device;

2. A verification server coupled to the centralized game server that controls access to gaming activities;

3. A relatively fast image and/or video delivery component.

(Id. at 2.)

Plaintiff further alleges that particular asserted patents contain additional unconventional elements. (Id. at 2-3.) The ’229 patent covers a paytable module associated with the centralized game server. (Id. ) The ’407 patent covers a transactional system that credits funds from winning game outcomes to a user's financial account. (Id. at 3.) And the ’116 patent covers location tracking of a user, along with providing that user with rewards. (Id. )

Caesars owned Playtika for some time but does not anymore. (Id. at 4-5.) Both Defendants offer various mobile slot machine games, some that allow users to wager real money, and some that do not. (Id. at 5-7.) Plaintiff accuses these games of infringement.⁵ (Id. at 5-23.)

Plaintiff's Complaint includes five counts, one for each of the asserted patents. (Id. ) In each count, Plaintiff alleges that Defendants infringe "the asserted claims of" each of the asserted patents, and otherwise states that Defendants infringe "one or more claims of" each patent, "including but not limited to claim 1[.]" (See, e.g., id. at 7.) But Plaintiff characterizes claim 1 of each asserted patent as exemplary, and only ever specifically includes the limitations of claim 1 of each asserted patent in its Complaint. (Id. at 7-8, 10, 14, 17, 20.)

Following the order that Plaintiff uses in the Complaint, and to provide necessary context for the Court's discussion infra , claim 1 of each of the asserted patents follows below.

A. The ’229 patent

A gaming server system configured to communicate with at least one network access device communicatively coupled to a network, the gaming server system comprising:

a verification system configured to access a registration database having a plurality of registration data associated with each registered user;

a memory module configured to store a plurality of images corresponding to at least one game outcome that are communicated to the at least one network access device;

a centralized gaming server communicatively coupled to each of the at least one network access device, the centralized gaming server configured to generate at least one random game outcome by random generation at the centralized gaming server;

a paytable module associated with the centralized gaming server, the paytable module configured to determine one or more prizes associated with a game outcome; and

the centralized gaming server configured to access the memory module and communicate the plurality of images corresponding to the at least one random game outcome to the at least one network access device.

(Id. at 7-8.)

B. The ’406 Patent

A system to run a gaming application on a network access device, comprising:

the network access device; and

a remote gaming system including a verification system;

the network access device configured to transmit user identification information and security information to the verification system;

the network access device configured to receive an acknowledgement from the verification system indicating that the user identification information and security information are valid;

the network access device configured to receive a game input from a user of the network access device and transmit the game input to the remote gaming system;

the remote gaming system configured to receive the game input and generate a random game output, the remote gaming system further configured to associate an image ID with the random game output and select one or more images associated with the image ID for encoding and broadcasting to the network access device;

the network access device configured to receive a plurality of broadcast images generated by the remote gaming system.

(Id. at 10.)

C. The ’454 Patent

A networked gaming system comprising:

a user identification received by at least one network access device that is compared with registration data in a registration database, wherein a player is provided access to a game when the user identification matches the registered player data;

a transactional component that charges the registered player at least one credit for a game outcome;

a centralized networked gaming module that performs game operations and generates at least one random game output by random generation at the networked gaming module;

the networked gaming module associates the at least one random game output with an image ID; and

the networked gaming module communicates one or more images corresponding to the image ID to the network access device.

(Id. at 14.)

D. The ’407 Patent

A gaming system network, comprising:

a verification system configured to verify that a user attempting to access the gaming system network is a registered player, the user operating a network access device communicating with the gaming system network;

a gaming system configured to generate at least one random game output, the gaming system configured to associate an image ID with the at least one random game output;

a video server configured to store a plurality of images corresponding to at least one game, the video server configured to retrieve one or more images associated with the image ID, wherein the one or more images are representative of a game output, the video server configured to communicate the one or more images to the network access device; and

a transactional system configured to credit monetary funds to a financial account of the user based on the at least one random game output.

(Id. at 17.)

E. The ’116 Patent

An interactive gaming system for a casino property, the interactive gaming system comprising:

a wireless device associated with a registered user, wherein the wireless device is used to determine a location of the registered user and the wireless device communicates with a network using at least one wireless networking protocol;

a verification system that accesses a registration database having registration data associated with each registered user;

a centralized gaming server communicatively coupled to the wireless device, the centralized gaming server generates at least one random game outcome;

a memory module that stores a plurality of images corresponding to the at least one game outcome that are communicated to the wireless device;

the centralized gaming server accesses the memory module and communicates the plurality of images corresponding to the random game outcome to the wireless device; and a casino player tracking system that includes,

a registered user profile that further includes a plurality of user preferences,

a record of a plurality of accumulated points associated with a betting activity of the registered user, wherein the betting activity is associated with the random outcomes generated by the centralized gaming server,

at least one complimentary good or service corresponding to the accumulated points associated with the registered user; and

a plurality of messages generated by the casino player tracking system for the wireless device regarding the complementary goods or services.

(Id. at 20.)

III. MOTIONS TO DISMISS

The Court begins by reciting the legal standards governing its review of these motions. It then analyzes Claim 1 of the ’229 patent under the Alice framework as representative of the asserted claims of the ’454 and ’406 patents as well.⁶ The Court then analyzes Claim 1 of the ’407 patent under the Alice framework, followed by Claim 1 the ’116 patent.⁷ Finally, the Court explains that it will not grant Plaintiff...