Beteiro, LLC v. Draftkings Inc.
Authored by: Jeremy J. Gustrowsky
In a recent decision, the Federal Circuit affirmed the dismissal of several patent infringement lawsuits brought by Beteiro, LLC against major online gambling companies like DraftKings, BetMGM, and others. Beteiro owned a family of patents (U.S. Patent Nos. 9,965,920; 10,043,341; 10,147,266; and 10,255,755) that described a system for allowing users to place bets remotely—such as from their mobile phones—while checking the user’s location to ensure compliance with gambling laws. The patents claimed methods involving sending notifications about betting opportunities, receiving bets along with the user’s location, and then allowing or disallowing the bet based on where the user was.
The court found that these patent claims were not eligible for patent protection under Section 101 of the patent laws. Specifically, the court said the claims were directed to an “abstract idea”—essentially, exchanging information about a bet and deciding whether to allow it based on the user’s location. The court pointed out that this is something that has always been done in gambling, even in brick-and-mortar casinos that straddle state lines, where staff must ensure bets are placed in legal jurisdictions.
Importantly, the court noted that the patents did not describe any new technology or inventive way of using computers or GPS. Instead, they simply used generic computer components and well-known technology (like GPS on a mobile phone) to carry out a conventional business practice. The court emphasized that just because the claims involved computers and GPS didn’t make them patentable, especially when the patent documents themselves treated these technologies as standard and did not explain any technical improvements.
This decision is a reminder that to be eligible for a patent, an invention must do more than just use existing technology to automate or streamline a long-standing business practice. There must be a discernable, preferably prominent, technological innovation or improvement recited in the claims, not just the use of generic computer components to perform an abstract idea.