United States District Court, D. Nevada
C. JONES United States District Judge.
case arises out of the alleged infringement of eleven patents
relating to online gambling. Pending before the Court are a
motion to reconsider and a motion to dismiss.
AND PROCEDURAL HISTORY
CG Technology Development, LLC (“CG Tech”) is a
wholly owned subsidiary of non-party CG Technology, L.P.
(“CG”), which provides technology solutions for
lottery, gaming, racing, and sports wagering. (First Am.
Compl. ¶ 2, ECF No. 23). “[CG] specializes in
providing secure, scalable, mobile technology and risk
management solutions to integrated resorts, gaming partners,
race and sports books, and lottery industries.”
(Id.). CG and CG Tech produce mobile phone
applications for real-money and social casino gaming, as well
as account-based wagering systems. (Id.).
is the assignee of U.S. Patent No. RE39, 818. Plaintiff
Interactive Games Limited (“IG Ltd”) is the
assignee of U.S. Patent Nos. 6, 899, 628; 6, 979, 267; 8,
342, 924; 7, 029, 394; and 9, 111, 417. Plaintiff Interactive
Games LLC (“IG LLC”) is the assignee of U.S.
Patent Nos. 7, 534, 169; 8, 771, 058; 8, 814, 664; 9, 355,
518; and 9, 306, 952. Plaintiffs have sued Defendants
Bwin.Party Digital Entertainment, PLC (“Bwin”),
Bwin.Party (USA), Inc. (“Bwin USA”), and
Bwin.Party Entertainment (NJ), LLC (“Bwin NJ”) in
this Court for direct and willful infringement via operation
of its various online casino games. Bwin USA and Bwin N.J.
asked the Court to dismiss the infringement claims as to the
‘058, ‘664, ‘518, and ‘952 Patents
based on unpatentability under 35 U.S.C. §
The Court denied the motion. Defendants have asked the Court
to reconsider and have separately asked the Court to dismiss
the claims of infringement of the ‘818, ‘058,
‘664, ‘518, and ‘952 Patents for failure to
state a claim.
Motion to Dismiss
argue that Rule 12(g) prevents the present motion due to
Defendants' failure to raise the challenges brought now
in their previous motion under Rule 12(b). Plaintiffs are
correct. A party waives challenges omitted from a first
motion under Rule 12, “[e]xcept as provided in Rule
12(h)(2) or (3).” See Fed R. Civ. P. 12(g)(2).
Rule 12(h)(2) provides that the defense of failure to
state a claim, inter alia, may be raised in a
pleading, at trial, or in a motion a cfor judgment on the
pleadings under Rule 12(c). See Fed. R. Civ. P.
12(h)(2). Defendants have not made a motion under Rule 12(c),
nor can the Court so treat the present motion, because
Defendants have not yet answered, and such a motion may only
be made after the pleadings are closed. See Fed. R.
Civ. P. 12(c). Defendants argue that judicial efficiency
counsels the early dismissal of the claims, but the Court may
not countermand the Civil Rules in the name of judicial
efficiency. Rather, the Court agrees with the reported
opinion of a sister district court that a successive motion
to dismiss is not permitted, even where a complaint is
amended after the previous motion is filed (which is not even
the case here), so long as the basis for the latter motion
was available by virtue of the operative version of the
complaint at the time of the previous motion. See
Northstar Fin. Advisors Inc. v. Schwab Invs., 135
F.Supp.3d 1059, 1070- 71 (N.D. Cal. 2015) (Koh, J.). The
Court denies the motion to dismiss.
Motion to Reconsider
argue that the Court should have ruled the ‘058,
‘664, ‘518, and ‘952 Patents to be
patent-ineligible under § 101. They argue that the Court
applied the concept of abstractness too narrowly at the first
Alice Corp. step. They also argue that the
Court's ruling is inconsistent with its ruling in Case
No. 2:16-cv-857, finding the ‘924, ‘267,
‘628, ‘394, ‘417, and ‘169 Patents to
be invalid under § 101.
have noted the lack of clarity in the test for abstractness
challenges under § 101. See, e.g., Shane D.
Anderson, Software, Abstractness, and Soft Physicality
Requirements, 29 Harvard J. L. & Tech. 567, 572-74
(2016). The Alice Corp. Court ruled that the
implementation of an abstract idea (such as an algorithm)
onto a general purpose computer did not provide a necessary
“inventive concept” to make the use of the idea
patentable, but the Court did not define “abstract
idea” apart from giving examples from prior case law.
Brady P. Gleason, Don't Give Up Section 101,
Don't Ever Give Up, 65 Cath. U. L. Rev. 773, 790
argue that the Alice Corp. Court “found that a
‘physical' implementation of an abstract idea by a
computer was ‘beside the point.'” (Mot.
Recon. 3 (citing Alice Corp. Pty. Ltd. v. CLS Bank
Int'l, 134 S.Ct. 2347, 2358-59 (2014))). What the
Alice Corp. Court found to be “beside the
point, ” however, was not the physical implementation
of abstract ideas generally, but rather the simple fact that
a generic computer is itself a physical object. See
Id. That fact did nothing to change the fact that the
physical computer was being used purely in its capacity as a
generalized computing device to perform abstract
calculations. See Id. at 2359. In the present case,
the geolocation step of the relevant claims adds a physical
component that is lacking in Alice Corp.-type
claims. The geolocation step is a concrete task requiring
physical activity beyond that necessarily attendant to the
computing (thinking) capabilities of a generic computer.
Plaintiffs also read a rule into the Court of Appeals'
dictum in Affinity Labs. of Tex., LLC v. DIRECTV,
LLC, 838 F.3d 1253 (Fed. Cir. 2016) that the Court does
not perceive, and which would conflict with decades-old case
law preserving the distinction between the tests for
patentability and anticipation. See infra. In
Affinity Labs., the Court of Appeals invalidated a
patent that “claim[ed] the general concept of
out-of-region delivery of broadcast content through the use
of conventional devices, without offering any technological
means of effecting that concept.” Id. at 1262.
Also, “the claims [we]re directed not to an improvement
in cellular telephones but simply to the use of cellular
telephones as tools in the aid of a process focused on an
abstract idea. That is not enough to constitute patentable
subject matter.” Id. The Court of Appeals'
comments concerning “longstanding business
practice” were made in recounting the holding of the
lower court and a similar holding of the Court of Appeals in
a previous case concerning the patentability of business
Court of Appeals has addressed abstractness since Alice
Corp. In In re Smith, the Court of Appeals
affirmed the rejection of a patent claim directed to a casino
game under Alice Corp. See 815 F.3d 816, 819 (Fed.
Cir. 2016). The applicant had attempted to patent a method
for dealing a card game while accepting and paying bets, as
in a casino. See Id. at 817-18.Applying the
two-step test under Alice Corp., the Court of
Appeals first found that “rules for conducting a
wagering game” constituted an abstract idea. See
Id. at 818-19. In affirming the examiner's rejection
of the claim, the Patent Trial and Appeals Board had
correctly noted that, “[a] wagering game is,
effectively, a method of exchanging and resolving financial
obligations based on probabilities created during the
distribution of the cards.” Id. (alteration in
original). Methods of conducting wagering games were just as
abstract as methods of exchanging financial obligations and
hedging risk. Id. at 819 (citing Alice
Corp., 134 S.Ct. 2347; Bilski v. Kappos, 561
U.S. 593 (2010)). The Court of Appeals noted that its
“own cases have denied patentability of similar
concepts as being directed towards ineligible subject
matter.” Id. (citing OIP Techs., Inc. v.
Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015)
(finding offer-based price optimization abstract), cert.
denied, 136 S.Ct. 701 (2015); Planet Bingo, LLC v.
VKGS LLC, 576 Fed.Appx. 1005, 1007-08 (Fed. Cir. 2014)
(determining that methods of managing a game of bingo were
abstract ideas)). The Court of Appeals then found that the
claim contained no inventive concept sufficient to transform
the abstract idea into a patent eligible application. See
Id. The Court of Appeals rejected the argument that the
requirement of shuffling and dealing physical playing cards
was sufficient, because, like the recitation of computer
implementation in Alice Corp., shuffling and dealing
a standard deck of cards was a “purely conventional
step.” See id.
Court has not changed its opinion that the best test for
abstractness under the first Alice Corp. step is
whether the invention can be practiced entirely ...