Case 1:21-cv-20148-CPO-SAK Document 1 Filed 11/22/21 Page 1 of 57 PageID: 1
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`David A. Ward
` New Jersey Bar No. 042381996
` dward@klugerhealey.com
`KLUGER HEALEY, LLC
`521 Newman Springs Road, Suite 23
`Lincroft, NJ 07738
`Telephone: (973) 307-0800
`Facsimile: (888) 635-1653
`
`
`M. Scott Fuller
` Texas Bar No. 24036607
` Georgia Bar No. 100968
` sfuller@ghiplaw.com
`Randall Garteiser
` Texas Bar No. 24038912
` California Bar No. 239829
` rgarteiser@ghiplaw.com
`GARTEISER HONEA, PLLC
`119 W. Ferguson Street
`Tyler, Texas 75702
`Telephone: (903) 705-7420
`Facsimile: (888) 908-4400
`Pro Hac Vice Pending
`ATTORNEYS FOR PLAINTIFF
`BETEIRO, LLC
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
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`
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`Case No. 21-cv-_________
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`JURY TRIAL DEMANDED
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`BETEIRO, LLC,
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`Plaintiff
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` v.
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`DRAFTKINGS, INC.,
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`
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`Defendant
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`ORIGINAL COMPLAINT FOR PATENT INFRINGEMENT
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`ORIGINAL COMPLAINT FOR PATENT INFRINGEMENT
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`Beteiro, LLC (“Plaintiff”) hereby files this Original Complaint for Patent Infringement against
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`Defendant DraftKings, Inc. (“DraftKings” or “Defendant”), and alleges, upon information and belief, as
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`follows:
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`THE PARTIES
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`1.
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`Beteiro, LLC is a limited liability company organized and existing under the laws of the State of
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`Florida with its principal place of business at 600 S. Dixie Highway, Suite 605, West Palm Beach,
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`Florida 33401.
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`2.
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`Upon information and belief, Defendant is a domestic for-profit corporation organized and existing
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`under the laws of the State of Delaware, with a principal place of business located at 221 River
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`Street, Hoboken, New Jersey 07030. On information and belief, Defendant may be served through
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`its registered agent in the State of Delaware at: National Registered Agents, Inc., 160 Greentree
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`Drive, Suite 101, Dover, Delaware 19904.
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`JURISDICTION AND VENUE
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`3.
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`4.
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`This Court has subject matter jurisdiction over this case under 28 U.S.C. §§ 1331 and 1338(a).
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`This Court has personal jurisdiction over Defendant. On information and belief, Defendant has
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`continuous and systematic business contacts with the State of New Jersey. On information and
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`belief, Defendant maintains physical offices and employees in the State of New Jersey, and
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`promotes itself as being licensed by the New Jersey Division of Gaming Enforcement. Moreover,
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`on information and belief, Defendant generates substantial revenues in this District from its
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`infringing Mobile Wagering Platform. Indeed, the New Jersey office location is promoted by
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`DraftKings as the headquarters for the Sportsbook Team, which is the subject of the instant action
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`for infringement.
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`ORIGINAL COMPLAINT FOR PATENT INFRINGEMENT
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`See https://careers.draftkings.com/locations/.
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`5.
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`On information and belief, DraftKings has a substantial presence in the State of New Jersey and
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`within this District, as exemplified by the LinkedIn Profile Page for DraftKings, which indicates
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`there are over 200 employees of DraftKings residing in the greater New York City area.
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`See DraftKings LinkedIn Profile Page, at: https://www.linkedin.com/company/draftkings-inc-/.
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`6.
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`On information and belief, DraftKings provides a plurality of gambling and event wagering
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`services, including but not limited to providing and supporting its branded Mobile Wagering
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`Platform, which is comprised of hardware (including servers) and software (including source
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`code). On information and belief, such hardware and software are made, used, sold, offered for
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`sale, and tested on the authority and under the direction of DraftKings. Such branded Mobile
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`Wagering Platform of DraftKings is directly accessible to users in the United States through the
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`Internet domains and mobile applications of DraftKings.
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`7.
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`Venue is proper in the District of New Jersey as to Defendant pursuant to at least 28 U.S.C. §§
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`1391(b) and (c) and 1400(b). As noted above, Defendant maintains a regular and established
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`business presence in this District.
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`PATENTS-IN-SUIT
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`8.
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`Plaintiff is the sole and exclusive owner, by assignment, of U.S. Patent Nos. 9,965,920 (“the ’920
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`Patent”); 10,043,341 (“the ’341 Patent”); 10,147,266 (“the ’266 Patent”); and 10,255,755 (“the
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`’755 Patent”) (hereinafter collectively referred to as “the Beteiro Patents”).
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`9.
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`By operation of law, the Beteiro Patents were originally issued and exclusively vested to the sole
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`named inventor, Raymond Anthony Joao, as of the date of their respective issuances. See 35
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`U.S.C. § 261; Schwendimann v. Arkwright Advanced Coating, Inc., 959 F.3d 1065, 1072 (Fed.
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`Cir. 2020); Suppes v. Katti, 710 Fed. Appx. 883, 887 (Fed. Cir. 2017); Taylor v. Taylor Made
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`Plastics, Inc., 565 Fed. Appx. 888, 889 (Fed. Cir. 2014). Mr. Joao, in a written instrument dated
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`March 6, 2012, and filed with the United States Patent and Trademark Office on May 7, 2015 at
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`Reel 035604 and Frames 0126-0132, assigned all rights, title, and interest in the Beteiro Patents to
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`GTJ Ventures, LLC. Thereafter, in a written instrument dated June 15, 2021, and filed with the
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`United States Patent and Trademark Office on June 16, 2021 at Reel 056566 and Frames 0057-
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`0060, GTJ Ventures assigned all rights, title, and interest in the Beteiro Patents to the Plaintiff,
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`Beteiro, LLC. As such, Plaintiff Beteiro LLC has sole and exclusive standing to assert the Beteiro
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`Patents and to bring these causes of action.
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`10.
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`The Beteiro Patents are valid, enforceable, and were duly issued in full compliance with Title 35
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`of the United States Code.
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`11.
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`The inventions described and claimed in the Beteiro Patents were invented individually and
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`independently by Raymond Anthony Joao.
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`12. Mr. Joao is a prolific inventor, with more than 80 issued United States Patents to his credit. The
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`Beteiro Patents represent substantial advancements in the gambling industry which were
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`unconventional at the time of invention. In fact, Mr. Joao is extremely knowledgeable in the field,
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`having earned: (i) a Masters Degree in Sports Management from Columbia University (New
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`York); and (ii) a Masters Degree in Global Sports Law from Instituto Superior de Derecho y
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`Economia (Madrid, Spain).
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`13.
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`The Beteiro Patents each include numerous claims defining distinct inventions.
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`14.
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`The priority date of each of the Beteiro Patents is at least as early as May 31, 2002. As of the
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`priority date, the inventions as claimed were novel, non-obvious, unconventional, and non-routine.
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`Among other things, as of the priority date, the mobile gaming industry was essentially non-
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`existent. The first mobile gaming venture to launch internationally did not arise until 2003 in the
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`United Kingdom, and that in the form of an elementary interactive instant win game. See, e.g.,
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`https://www.gamblingcommission.gov.uk/for-the-public/National-Lottery/About-the-National-
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`Lottery.aspx. The concept of geolocation restrictions on such gaming platforms was not routine
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`as of the priority date, and did not become so until many years thereafter. Indeed, it was not until
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`2006 that the Nevada Gaming Control Board first cleared the way for wireless gambling in the
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`United States. Even at that time, the primary concern was over data security and identity controls,
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`not geolocation See https://www.nytimes.com/2006/05/03/technology/techspecial3/03gamble.
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`html?smid=url-share.
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`15.
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`As further evidence of the non-routine and unconventional nature of the solutions captured in the
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`Beteiro Patents is the stated position of the now-leading geolocation provider in the United States
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`that: “Historically, the notion that you could indeed draw geographical boundaries on the internet
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`would have been laughable; such was the weakness of the original technologies and the availability
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`of cheap and easy methods to fake your location online.” See https://www.geocomply.com/paspa-
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`geolocation-compliance/. As such, the prevailing view as of the date of invention was to avoid
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`global positioning as a means of legal compliance.
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`16.
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`As further evidence of the stated non-routine aspects of the inventions, during prosecution of the
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`’920 Patent, Primary Examiner Jasson Yoo specifically and expressly considered whether the
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`claims of the ’920 Patent were eligible under 35 USC §101 in view of the United States Supreme
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`Court’s decision in Alice. Examiner Yoo affirmatively and expressly found that the claims are in
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`fact patent eligible under 35 USC §101 because: (i) all claims explicitly require the use of a
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`particular machine or processor to detect the posting of information; (ii) all claims explicitly
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`require the use of a particular machine or processor to generate and transmit a notification message
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`to a communication device; (iii) all claims explicitly require the use of a particular receiver for
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`receiving a bet message including location information; and (iv) all claims explicitly require the
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`use of a particular machine or processor to determine whether the bet is allowed or disallowed by
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`using GPS. See Notice of Allowability, dated March 16, 2018.
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`17.
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`As further evidence of the stated non-routine aspects of the inventions, during prosecution of the
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`’341 Patent, Primary Examiner Jasson Yoo specifically and expressly considered whether the
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`claims of the ’341 Patent were eligible under 35 USC §101 in view of the United States Supreme
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`Court’s decision in Alice. Examiner Yoo affirmatively and expressly found that the claims are in
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`fact patent eligible under 35 USC §101 because: (i) all claims explicitly require the use of a
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`particular machine or processor to detect the posting of information; (ii) all claims explicitly
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`require the use of a particular machine or processor to generate and transmit a notification message
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`to a communication device; (iii) all claims explicitly require the use of a particular machine or
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`processor for receiving a bet message including location information; and (iv) all claims explicitly
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`require the use of a particular machine or processor to determine whether the bet is allowed or
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`disallowed by using GPS. See Notice of Allowability, dated June 11, 2018.
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`18.
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`As further evidence of the stated non-routine aspects of the inventions, during prosecution of the
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`’266 Patent, Primary Examiner Jasson Yoo specifically and expressly considered whether the
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`claims of the ’266 Patent were eligible under 35 USC §101 in view of the United States Supreme
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`Court’s decision in Alice. Examiner Yoo affirmatively and expressly found that the claims are in
`
`fact patent eligible under 35 USC §101 because: (i) all claims explicitly require the use of a
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`particular machine or processor to detect the posting of information; (ii) all claims explicitly
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`require the use of a particular machine or processor to generate and transmit a notification message
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`to a communication device; (iii) all claims explicitly require the use of a particular machine or
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`processor for receiving a bet message including location information; and (iv) all claims explicitly
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`require the use of a particular machine or processor to determine whether the bet is allowed or
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`disallowed by using GPS. See Notice of Allowability, dated June 11, 2018.
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`19.
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`As further evidence of the stated non-routine aspects of the inventions, during prosecution of
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`Application No. 16/939,030, Primary Examiner Jasson Yoo specifically and expressly considered
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`whether the then-pending claims were eligible under 35 USC §101 in view of the United States
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`Supreme Court’s decision in Alice. Examiner Yoo affirmatively and expressly found that the
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`claims are in fact patent eligible under 35 USC §101 because: (i) all claims integrate the invention
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`into a practical application by providing an improvement to a technical field; (ii) all claims provide
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`an improvement to a technical field by allowing individuals to access gaming or gambling venues
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`and/or activities without requiring them to be physically located at gaming or gambling venues
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`and/or activities; (iii) all claims provide individuals with information regarding the gaming or
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`gambling venues so that bets can be placed from a remote location; (iv) all claims achieve the
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`stated benefits by: (a) detecting a posting of information regarding a gaming activity, gambling
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`activity or sporting event, and (b) generating a notification message regarding the gaming activity,
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`gambling activity or sporting event; (v) in all claims a global position device is used to determine
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`a position or location information of a communication device associated with the individual, and
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`allowing or disallowing the activity request or bet based on the position or location information;
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`as such, the claimed machine is required and imposes a meaningful limit on the scope of a claim
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`and plays a significant part in permitting the claimed method to be performed; (vi) at the time the
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`application was filed, the use of global positioning systems for various applications and providing
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`a user a message if a posting was detected were not as well-known as today; in fact, and as
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`indicated in the specification, prior art systems failed to provide a system that allows individuals
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`access to particular gaming venues or gaming activities, and did not provide individuals certain
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`information for enhancing their experience; and (vii) the claimed invention provides an
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`improvement to online betting and therefore is integrated into a practical application. See Notice
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`of Allowability, dated October 27, 2021.
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`20.
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`Plaintiff alleges infringement on the part of Defendant of the ’920 Patent, the ’341 Patent, the ’266
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`Patent, and the ’755 Patent (collectively as the “Asserted Patents”).
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`21.
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`The ’920 Patent relates generally to an apparatus, including a processor, specially programmed to
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`detect a posting of information regarding a sporting event for which a bet can be placed, which
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`detects the posting regarding the sporting event and generates a notification message containing
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`information regarding the sporting event. The apparatus initiates a communication link with a first
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`user communication device and transmits the notification message to the first user communication
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`device via the communication link; a receiver which receives a bet message, containing
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`information regarding a bet on or regarding the sporting event, transmitted from the first user
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`communication device or a second user communication device; and a transmitter. The apparatus
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`or processor processes information for placing the bet and the transmitter transmits video
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`information or audio information regarding, and obtained at, the sporting event to the first user
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`communication device, the second user communication device, or a third user communication
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`device. See Abstract, ’920 Patent.
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`22.
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`The ’341 Patent relates generally to an apparatus, including a computer including a processor
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`which detects a posting of information regarding a gaming activity, gambling activity, or sporting
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`event, and generates the notification message. The computer initiates a communication link with
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`a first device and transmits the notification message to the first device. The computer receives a
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`bet message transmitted from the first device or from a second device. The first device or second
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`communication device includes a global positioning device and a display. The bet message
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`contains information regarding a bet to be placed and information regarding the position or
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`location of the first device or second device at a time of a transmission of the bet message. The
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`computer determines if the bet is allowed or disallowed using position or location information of
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`the first device or the second device. See Abstract, ’341 Patent.
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`23.
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`The ’266 Patent relates generally to an apparatus, including a computer. The computer detects a
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`posting of information regarding a gaming activity, gambling activity, or sporting event, and
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`generates a notification message. The computer initiates a communication link with, and transmits
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`the notification message to, a first communication device, or the computer transmits the
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`notification message as an electronic mail message which is received by a first communication
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`device. The computer receives a bet message transmitted from the first communication device or
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`a second communication device. The first communication device or second communication device
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`includes a global positioning device which determines a position or location of the first
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`communication device or second communication device. The computer determines if the bet is
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`allowed or disallowed using the position or location information. If allowed, the computer
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`processes information for placing the bet. If disallowed, the computer processes information for
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`disallowing the bet. See Abstract, ’266 Patent.
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`24.
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`The ’755 Patent relates generally to a method and apparatus, including: detecting, with a computer,
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`a posting of information regarding a gaming activity, gambling activity, or sporting event;
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`generating a notification message regarding the same; initiating a communication link with, and
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`transmitting the notification message to, a first communication device as an electronic
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`transmission, or transmitting the notification message as an electronic mail message; receiving a
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`bet message transmitted from the first communication device or a second communication device,
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`wherein the first communication device or the second communication device comprises a global
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`positioning device which determines a position or location of the first communication device or
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`second communication device, wherein the bet message contains information regarding a bet to
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`be placed regarding the activity or event, and information regarding the position or location of the
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`first communication device or second communication device; and determining whether the bet is
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`allowed or disallowed using the position or location information. See Abstract, ’755 Patent.
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`25.
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`As noted, the claims of the Asserted Patents have priority to at least May 31, 2002. At that time,
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`the use of geolocation and global positioning as an integral data point in the processing of mobile
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`wagers was still many years away. For example, the first GPS chip to be incorporated into a mobile
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`device with sufficient sensitivity to assess the ability of an individual to place a wager in a given
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`jurisdiction was the GL20000 GPS Chip, which was first used in the HP iPaq in 2005.
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`26.
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`Still further, the current industry leader in the space – GeoComply – did not even exist until 2011,
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`nearly a full decade later than the nominal date of invention in May 2002. See, e.g.,
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`https://www.geocomply.com/about-us/. This fact alone is compelling evidence of the non-routine
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`and unconventional inventive concepts captured in the claims of the Beteiro Patents.
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`27.
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`The claims of the Asserted Patents are not drawn to laws of nature, natural phenomena, or abstract
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`ideas. Although the systems and methods claimed in the Asserted Patents are ubiquitous now
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`(and, as a result, are widely infringed), the specific combinations of elements, as recited in the
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`claims, were not conventional or routine at the time of the invention.
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`28.
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`Further, the claims of the Asserted Patents contain inventive concepts which transform the
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`underlying non-abstract aspects of the claims into patent-eligible subject matter.
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`29.
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`Consequently, the claims of the Asserted Patents recite apparatuses and methods resulting in
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`improved functionality of the claimed systems and represent technological improvements to the
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`operation of computers. The claims of the Asserted Patents provide a basis for legally compliant
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`remote wagering, increased accessibility to wagering platforms, increased opportunity for
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`wagering providers, increased accessibility to wagering information to wagerers, reduced fraud,
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`and more secure transactions among wagering providers and wagerers. See, e.g., ’920 Patent at
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`2:5-7:58.
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`30.
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`The claims of the Asserted Patents overcome deficiencies existing in the art as of the date of
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`invention, and comprise non-conventional approaches that transform the inventions as claimed
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`into substantially more than mere abstract ideas. For example, as of the date of invention, “[w]hile
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`many individuals enjoy gambling and/or enjoy engaging in gaming activities and/or gambling
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`activities, they may not always have access to particular gaming venues or gaming activities.
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`Further, while many individuals may also be interested in making a gaming and/or gambling
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`experience more interesting, more challenging, and/or more exciting, they typically do not have
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`access to certain information, products, and/or services, for enhancing their experience or
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`experiences.” ’920 Patent at 1:44-52. The inventions as claimed overcome these deficiencies in
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`the state of the art, and provide a means by which interested parties can access gambling services
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`remotely, while preserving geographic restrictions on such access. As explained, as of the date of
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`invention, “prior art gaming systems and/or gambling systems, as well as conventional gaming
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`practices and/or gambling practices, have failed to provide the gaming community with services,
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`products, and/or other offerings, which would provide for more enhanced gaming and/or gambling
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`activities, environments, and/or experiences.” ’920 Patent at 1:53-58.
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`31.
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`As of the date of invention (and still today), different jurisdictions had different laws relating to
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`gambling activities, but no effective way to administer and regulate electronic and online
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`wagering. Accordingly, the inventions as claimed provided a technological solution to the
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`technological problems arising in the online wagering context. As explained: “The present
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`invention can be utilized to facilitate compliance with the various and respective state, country,
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`and/or sovereignty, gaming laws and/or gambling laws and/or so as to facilitate any reporting of
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`gaming activities and/or gambling activities to the appropriate state, country, and/or sovereignty,
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`authorities and/or so as to facilitate any payments of fees and/or taxes relating to the gaming
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`activities and/or gambling activities.” ’920 Patent at 16:14-21. Indeed, one of the express objects
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`of the inventions as claimed was “to provide an apparatus and method for facilitating gaming
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`activity and/or gambling activity which utilize global positioning technology in order to ascertain
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`the jurisdiction in which or from which a bet is placed.” ’920 Patent at 26:14-18. Such a solution
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`was unconventional as of the date of invention, especially in view of the state of the art at the time,
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`which was dependent upon in-person wagering.
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`32.
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`The inventions as claimed further overcome the deficiencies existing in the art as of the date of
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`invention by providing a means by which gambling platform providers could more effectively
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`market various gaming activities to wider audiences. As explained, the inventions as claimed
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`overcome these deficiencies by “allow[ing] a user or player to access a central processing computer
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`and search for a gaming activity, gaming activities, a gaming event, or gaming events, in which
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`the user or player may desire to bet or participate.” ’920 Patent at 32:6-10. As such, the inventions
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`as claimed provide non-conventional solutions to the conventional problems of the day by making
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`it possible to expose more individuals to the various gaming options available in the market.
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`33.
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`The inventions as claimed further overcome the deficiencies existing in the art as of the date of
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`invention by providing methods and apparatuses for providing wagering opportunities on an
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`increased scale over traditional person-to-person live wagering. As explained, the inventions as
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`claimed overcome prior deficiencies in this regard because “the apparatus 100 also includes any
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`number of user computers or user communication devices 20.” ’920 Patent at 35:65-67. As such,
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`the inventions as claimed provide non-conventional solutions to the conventional problems of the
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`day because the wagering platform providers can maximize the number of wagers made without a
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`proportional increase in overhead, wagering equipment/terminals, or employee capacity.
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`34.
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`As noted, as of the date of invention (and still today), different jurisdictions had different laws
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`relating to gambling activities, but no effective way to administer and regulate electronic and
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`online wagering. A key problem as of the date of invention was the inability of wagering platform
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`providers to geographically restrict access by remote participants. Accordingly, the inventions as
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`claimed provided a technological solution to the technological problems arising in the online
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`wagering context by unconventionally adapting the mobile devices used by wagering participants
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`so as to create new mobile gaming machines. As explained: “[T]he user communication device
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`20 can also include a global positioning device 20J for determining the position or location of the
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`user communication device 20. In a preferred embodiment, the global positioning device 20J can
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`be utilized to determine the position or location of the user communication device 20 so as to, for
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`example, determine a jurisdiction in which the user communication device 20 is located and/or is
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`being utilized.” ’920 Patent at 44:37-44. As such, the inventions as claimed provided non-
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`conventional solutions to the conventional problems of the day. Indeed, the very infringing
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`scenarios in existence today were contemplated and foreseen by the inventor many years ago: “In
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`another preferred embodiment, wherein the user communication device 20 is a wireless
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`communication device and/or a mobile communication device (i.e. personal digital assistant,
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`wireless videophone, wireless telephone, or palm-held device, etc., which can be equipped with a
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`global positioning system (GPS) device 20J), the location of the user communication device 20
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`and, therefore, the location from which the gaming activity and/or gambling activity originates
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`and/or from which it takes place can be determined by the user communication device 20
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`automatically transmitting position data and/or information to the respective central processing
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`computer 10 and/or gaming facility computer 30 at the time of the user's accessing of the respective
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`central processing computer 10 and/or gaming facility computer 30.” ’920 Patent at 80:10-24.
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`Again, this scenario was far from conventional as of the date of invention, as evidenced by the fact
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`that the first iPhone was not introduced to the market until 2007, and the common “app-store” did
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`not exist until 2008, many years after the date of invention. https://en.wikipedia.org/wiki/IPhone
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`and https://en.wikipedia.org/wiki/App_Store_(iOS/iPadOS). Moreover, as of 2002, it was
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`effectively illegal in the United States to even wager on athletic events, much less to do so
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`remotely. More specifically, the Professional and Amateur Sports Protection Act of 1992 was the
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`federal law in effect from October 1992 until it was declared unconstitutional by the United States
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`Supreme Court in May 2018. See Murphy v. National Collegiate Athletics Association, 138 S.Ct.
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`1461 (2018). In view of the prevailing and long-standing laws in the United States, the inventive
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`concepts captured in the claims of the Beteiro Patents were plainly unconventional and non-
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`routine.
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`35.
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`As noted, as of the date of invention (and still today), different jurisdictions had different laws
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`relating to gambling activities, but no effective way to administer and regulate electronic and
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`online wagering. A key problem as of the date of invention was the inability of wagering platform
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`providers to geographically restrict access by remote participants. Accordingly, the inventions as
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`claimed provided a technological solution to the technological problems arising in the online
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`wagering context by creating unconventional central processing computers specially programmed
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`to assess the legality of proposed wagers in real-time. As explained: “At step 2003, the respective
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`central processing computer 10 and/or gaming facility computer 30 can determine if the remote
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`gaming activity and/or gambling activity is allowed by the state having jurisdiction over the remote
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`gaming activity and/or gambling activity. If, at step 2003, the respective central processing
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`computer 10 and/or gaming facility computer 30 determines that the remote gaming activity and/or
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`gambling activity is disallowed by the identified state having jurisdiction over same, then the
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`operation of the apparatus 100 will proceed to step 2004 and the respective central processing
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`computer 10 and/or gaming facility computer 30 will cancel the respective bet, wager, and/or
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`gaming activity and/or gambling activity.” ’920 Patent at 80:37-50. As such, the claimed “central
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`processing computer” does not merely comprise standard conventional hardware and software;
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`rather, as claimed, it advances the functionality of the computer as a useful tool in the electronic
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`processing of wagers, the prevention of illegal gambling, and providing a measure of compliance
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`on the part of wagering platform providers.
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`36.
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`As noted above, during prosecution of each of the ’920 Patent, the ’341 Patent, and the ’266 Patent,
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`the Primary Patent Examiner specifically considered whether the claims at issue were eligible
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`under 35 USC §101 in view of the United States Supreme Court’s decision in Alice. In each
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`instance, after due consideration, the Primary Patent Examiner expressly found that the claims are
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`in fact patent eligible under 35 USC §101 because: (i) all claims explicitly require the use of a
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`particular machine or processor to detect the posting of information; (ii) all claims explicitly
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`require the use of a particular machine or processor to generate and transmit a notification message
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`to a communication device; (iii) all claims explicitly require the use of a particular machine or
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`processor for receiving a bet message including location information; and (iv) all claims explicitly
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`require the use of a particular machine or processor to determine whether the bet is allowed or
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`disallowed by using GPS. The Primary Patent Examiner was, in each instance, correct. For these
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`same reasons, all