Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 1 of 21 PageID: 407
`
`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
`
`ATTORNEYS FOR PLAINTIFF
`BETEIRO, LLC
`
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`
`Case No. 21-cv-020148 (CPO-SAK)
`
`BRIEF IN SUPPORT OF MOTION
`FOR RECONSIDERATION AND
`RELIEF
`
`
`
`
`
`
`
`BETEIRO, LLC,
`
`
`
`
`
`Plaintiff
`
` v.
`
`DRAFTKINGS, INC.,
`
`Defendant
`
`
`
`
`
`
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 2 of 21 PageID: 408
`
`Plaintiff Beteiro, LLC (“Plaintiff” or “Beteiro”) respectfully submits this Motion for
`
`Reconsideration and Relief from a Judgment or Order in accordance with Rules 59(e) and 60(b) of the
`
`Federal Rules of Civil Procedure. As will be shown in greater detail herein below, a new Opinion issued
`
`from the Court of Appeals for the Federal Circuit illustrates the clear errors made by this Court in its
`
`Order granting Defendant’s Motion to Dismiss [Dkt. No. 25] (the “Order”). Accordingly, and in the
`
`interest of justice and judicial efficiency, the Court should reconsider and vacate the erroneous Order.
`
`I.
`
`Argument
`
`Last week, the Court of Appeals for the Federal Circuit issued its Opinion in Cooperative
`
`Entertainment, Inc. v. Kollective Technology, Inc., --- F.4th ---, 2022 WL 4488902 (Sept. 28, 2022 –
`
`copy annexed). That Opinion unequivocally holds that a Complaint which plausibly alleges the existence
`
`of inventive concepts cannot be dismissed at the pleading stage. See Kollective, 2022 WL 4488902 at *3
`
`(“The amended complaint plausibly alleges these inventive concepts, and this should have defeated
`
`Kollective’s Rule 12(b)(6) motion in this case”); see also id. at *6 (“We hold only that there are plausible
`
`factual allegations that the claims include inventive concepts, and that is enough to preclude dismissal”).
`
`Here, just as in Kollective, the Complaint makes specific allegations concerning inventiveness,
`
`with specific cited support from the intrinsic record. By way of example, the Complaint recites as
`
`follows:
`
`The claims of the Asserted Patents overcome deficiencies existing in the art as of the
`date of invention, and comprise non-conventional approaches that transform the
`inventions as claimed into substantially more than mere abstract ideas. For example,
`as of the date of invention, “[w]hile many individuals enjoy gambling and/or enjoy
`engaging in gaming activities and/or gambling activities, they may not always have
`access to particular gaming venues or gaming activities. Further, while many
`individuals may also be interested in making a gaming and/or gambling experience
`more interesting, more challenging, and/or more exciting, they typically do not have
`access to certain information, products, and/or services, for enhancing their experience
`or experiences.” ’920 Patent at 1:44-52. The inventions as claimed overcome these
`deficiencies in the state of the art, and provide a means by which interested parties can
`access gambling services remotely, while preserving geographic restrictions on such
`
`MOTION FOR RECONSIDERATION AND RELIEF
`
`1
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 3 of 21 PageID: 409
`
`access. As explained, as of the date of invention, “prior art gaming systems and/or
`gambling systems, as well as conventional gaming practices and/or gambling
`practices, have failed to provide the gaming community with services, products, and/or
`other offerings, which would provide for more enhanced gaming and/or gambling
`activities, environments, and/or experiences.” ’920 Patent at 1:53-58.
`
`See Dkt. No. 1 at ¶ 30.
`
`Such allegations must be accepted as true, and cannot be disregarded at the pleading stage. Just
`
`as in Kollective, the foregoing allegation identifies an improvement over the state of the art and plausibly
`
`makes the case that the preservation of geographic restrictions on remote (mobile) gaming was non-
`
`conventional as of May 2002.
`
`Similarly, the Complaint alleges:
`
`As of the date of invention (and still today), different jurisdictions had different laws
`relating to gambling activities, but no effective way to administer and regulate
`electronic and online wagering. Accordingly, the inventions as claimed provided a
`technological solution to the technological problems arising in the online wagering
`context. As explained: “The present invention can be utilized to facilitate compliance
`with the various and respective state, country, and/or sovereignty, gaming laws and/or
`gambling laws and/or so as to facilitate any reporting of gaming activities and/or
`gambling activities to the appropriate state, country, and/or sovereignty, authorities
`and/or so as to facilitate any payments of fees and/or taxes relating to the gaming
`activities and/or gambling activities.” ’920 Patent at 16:14-21. Indeed, one of the
`express objects of the inventions as claimed was “to provide an apparatus and method
`for facilitating gaming activity and/or gambling activity which utilize global
`positioning technology in order to ascertain the jurisdiction in which or from which a
`bet is placed.” ’920 Patent at 26:14-18. Such a solution was unconventional as of the
`date of invention, especially in view of the state of the art at the time, which was
`dependent upon in-person wagering.
`
`See Dkt. No. 1 at ¶ 31.
`
`Again, as in Kollective, the foregoing allegation identifies an improvement over the state of the art
`
`(namely, in-person wagering) and plausibly makes the case that the use of global positioning technology
`
`in order to ascertain the jurisdiction from which a proposed bet is being placed was non-conventional as
`
`of May 2002.
`
`Still further, the Complaint alleges:
`
`MOTION FOR RECONSIDERATION AND RELIEF
`
`2
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 4 of 21 PageID: 410
`
`The inventions as claimed further overcome the deficiencies existing in the art as of
`the date of invention by providing methods and apparatuses for providing wagering
`opportunities on an increased scale over traditional person-to-person live wagering.
`As explained, the inventions as claimed overcome prior deficiencies in this regard
`because “the apparatus 100 also includes any number of user computers or user
`communication devices 20.” ’920 Patent at 35:65-67. As such, the inventions as
`claimed provide non-conventional solutions to the conventional problems of the day
`because the wagering platform providers can maximize the number of wagers made
`without a proportional increase in overhead, wagering equipment/terminals, or
`employee capacity.
`
`See Dkt. No. 1 at ¶ 33.
`
`Once again, as in Kollective, the foregoing allegation identifies an improvement over the state of
`
`the art (namely, in-person wagering) and plausibly makes the case that the ability to scale the inventive
`
`system was non-conventional as of May 2002.
`
`Still further, the Complaint specifically alleges that, as of the Date of Invention in May 2002,
`
`“[T]he mobile gaming industry was essentially non-existent. The first mobile gaming venture to launch
`
`internationally did not arise until 2003 in the United Kingdom, and that in the form of an elementary
`
`interactive instant win game. The concept of geolocation restrictions on such gaming platforms was not
`
`routine as of the priority date, and did not become so until many years thereafter. Indeed, it was not until
`
`2006 that the Nevada Gaming Control Board first cleared the way for wireless gambling in the United
`
`States. Even at that time, the primary concern was over data security and identity controls, not
`
`geolocation.” See Dkt. No. 1 at ¶ 14. As in Kollective, the foregoing allegation specifically identifies
`
`the inventive concept captured in the Asserted Claims; namely, the use of geolocation restrictions on
`
`mobile gaming platforms. At the pleading stage, such allegations must defeat motions to dismiss.
`
`The Complaint includes a multitude of similarly specific allegations, all of which were identified
`
`by Plaintiff in its earlier briefing. See Case No. 1:21-cv-020156, Dkt. No. 23 at 23 (identifying, inter
`
`alia: (i) the unconventionality of geo-location in wagering context; (ii) industry view as of the Date of
`
`Invention that using geolocation as a means of legal compliance was disparaged and avoided; (iii) the
`
`MOTION FOR RECONSIDERATION AND RELIEF
`
`3
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 5 of 21 PageID: 411
`
`recognition of inventive nature of the claims by the Examiner; (iv) the unconventional use of geo-location
`
`in user communication devices as of the Date of Invention; (v) the fact that the industry leader in
`
`geolocation did not exist until nearly a full decade after the Date of Invention; (vi) the various
`
`technological improvements as claimed; (vii) the deficient state of the art and novel solution; (viii) the
`
`technological solution to problems arising in online wagering context; (ix) explaining technological
`
`solution for gaming providers; (x) explaining how state of the art illustrates unconventional nature of
`
`inventions; and (xi) explaining how inventions provide technological solution to problem arising in
`
`computer realm).
`
`Notwithstanding the foregoing identification and discussion of inventive concepts and
`
`improvements over the existing state of the art, the Court in its governing Order found that the Asserted
`
`Claims merely “describe conventional technology, conventionally applied, using broad functional
`
`language.” See Case No. 1:21-cv-020156, Dkt. No. 27 at 19. However, as Kollective emphasizes, the
`
`use of standard computing equipment is beside the point. See Kollective, 2022 WL 4488902 at *6.
`
`Rather, “[d]etermining whether the claimed [feature] is well-understood, routine, or conventional is a
`
`question of fact that cannot be resolved at the Rule 12(b)(6) stage, and the district court erred in resolving
`
`this factual issue against [Plaintiff].” Id. at *4. In view of Kollective, this Court’s Order is manifestly
`
`erroneous and should be vacated.
`
`II.
`
`Conclusion
`
`This Court’s Order cannot be reconciled with Federal Circuit precedent, including the newly issued
`
`Kollective Opinion, and will be reversed and remanded on appeal. As such, the relief requested herein
`
`is justified. Vacating the Order at this procedural juncture is far more efficient for the parties and the
`
`Court, will allow this case to proceed as scheduled, and will avoid a wasteful appeal to the Federal Circuit.
`
`//
`
`
`
`MOTION FOR RECONSIDERATION AND RELIEF
`
`4
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 6 of 21 PageID: 412
`
`Dated: October 5, 2022
`
`Respectfully Submitted
`
`
`
`
`
`
`
`
`
`/s/ David A. Ward
`David A. Ward
`KLUGER HEALEY, LLC
`
`GARTEISER HONEA, PLLC
`M. Scott Fuller
` Texas Bar No. 24036607
` sfuller@ghiplaw.com
`Randall Garteiser
` Texas Bar No. 24038912
` rgarteiser@ghiplaw.com
`119 W. Ferguson Street
`Tyler, Texas 75702
`Telephone: (903) 705-7420
`Facsimile: (888) 908-4400
`
`ATTORNEYS FOR PLAINTIFF
`BETEIRO, LLC
`
`MOTION FOR RECONSIDERATION AND RELIEF
`
`5
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 7 of 21 PageID: 413
`Case: 21-2167 Document: 36 Page: 1 Filed: 09/28/2022
`
`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`COOPERATIVE ENTERTAINMENT, INC.,
`Plaintiff-Appellant
`
`v.
`
`KOLLECTIVE TECHNOLOGY, INC.,
`Defendant-Appellee
`______________________
`
`2021-2167
`______________________
`
`Appeal from the United States District Court for the
`Northern District of California in No. 5:20-cv-07273-EJD,
`Judge Edward J. Davila.
`______________________
`
`Decided: September 28, 2022
`______________________
`
`MEREDITH MARTIN ADDY, AddyHart P.C., Atlanta, GA,
`argued for plaintiff-appellant.
` Also represented by
`BENJAMIN CAPPEL, Chicago, IL; MATTHEW MICHAEL
`WAWRZYN, Wawrzyn LLC, Chicago, IL.
`
` MICHAEL S. DOWLER, Park, Vaughan, Fleming & Dow-
`ler LLP, Houston, TX, argued for defendant-appellee.
`______________________
`
`Before MOORE, Chief Judge, LOURIE and STARK, Circuit
`Judges.
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 8 of 21 PageID: 414
`Case: 21-2167 Document: 36 Page: 2 Filed: 09/28/2022
`
`2
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
` MOORE, Chief Judge.
`Cooperative Entertainment, Inc. (Cooperative) appeals
`the United States District Court for the Northern District
`of California’s dismissal of its amended complaint under
`Rule 12(b)(6), which held all claims of U.S. Patent
`No. 9,432,452 ineligible under 35 U.S.C. § 101. We reverse
`the district court’s dismissal and remand for further pro-
`ceedings.
`
`BACKGROUND
`The ’452 patent relates to systems and methods of
`
`structuring a peer-to-peer (P2P) dynamic network for dis-
`tributing large files, namely videos and video games. ’452
`patent at 4:28–40. In prior art systems, video streaming
`was controlled by content distribution networks (CDNs),
`where content was “distributed directly from the CDN
`server originating the content.” Id. at 3:35–36, 9:50–52.
`The ’452 patent, in contrast, claims methods and systems
`for a network in which content distribution occurs “outside
`controlled networks and/or [CDNs],” i.e., outside a “static
`network of controlled systems.” Id. at 3:40–43 (emphasis
`added), 3:57–58, 5:38–42. It does this with dynamic P2P
`networks comprising “peer nodes,” i.e., nodes consuming
`the same content contemporaneously, that transmit con-
`tent directly to each other instead of receiving content from
`the CDN. Id. at 3:55–64, 4:52–60, 5:4–10, 6:40–43, 7:43–
`46.
`To facilitate content distribution, the claimed P2P net-
`works use “content segmentation” in which a video file, for
`example, is segmented into smaller clips and distributed
`piecemeal. As a result, viewers can obtain individual seg-
`ments as needed, preferably from other viewers. Id. at
`8:10–12, Figs. 2–9. Content is segmented using several
`techniques, including “CDN address resolution, trace route
`to CDN and the P2P server manager, dynamic feedback
`from peers reporting traffic rates between individual peer
`and
`its neighbors, round-robin, other server side
`
`
`
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 9 of 21 PageID: 415
`Case: 21-2167 Document: 36 Page: 3 Filed: 09/28/2022
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`3
`
`scheduling/resource allocation techniques, and combina-
`tions thereof.” Id. at 5:51–56 (emphasis added).
`Claim 1 recites:
`1. A system for virtualized computing peer-
`based content sharing comprising:
`at least one content delivery server computer
`constructed and configured for electrical connec-
`tion and communication via at least one communi-
`cations network; and
`at least one peer-to-peer (P2P) dynamic net-
`work including a multiplicity of peer nodes,
`wherein the multiplicity of peer nodes consume the
`same content within a predetermined time,
`wherein the multiplicity of peer nodes are con-
`structed and configured for electronic communica-
`tion over the at least one P2P dynamic network,
`wherein the at least one P2P dynamic network is
`based on at least one trace route; wherein the mul-
`tiplicity of peer nodes is distributed outside con-
`trolled networks and/or content distribution
`networks (CDNs) that are included within the at
`least one communications network;
`wherein the at least one content delivery server
`computer is operable to store viewer information,
`check content request, use the trace route to seg-
`ment requested content, find peers, and return cli-
`ent-block pairs;
`wherein distribution of P2P content delivery
`over the at least one P2P dynamic network is based
`on content segmentation;
`wherein content segmentation is based on CDN
`address resolution, trace route to CDN and P2P
`server manager, dynamic feedback from peers re-
`porting traffic rates between individual peer and
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 10 of 21 PageID: 416
`Case: 21-2167 Document: 36 Page: 4 Filed: 09/28/2022
`
`4
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`its neighbors, round-robin and other server side
`scheduling/resource allocation techniques.
`’452 patent at claim 1.
`
`Cooperative sued Kollective Technology, Inc. (Kollec-
`tive) for infringement of at least claims 1–3 and 5 of the
`’452 patent.1 In response to Kollective’s first motion to dis-
`miss under Rule 12(b)(6) arguing all claims are ineligible
`under 35 U.S.C. § 101, Cooperative filed an amended com-
`plaint. Kollective refiled its motion to dismiss. The district
`court granted the motion. Coop. Ent., Inc. v. Kollective
`Tech., Inc., 544 F. Supp. 3d 890, 902 (N.D. Cal. 2021). Co-
`operative appeals. We have jurisdiction under 28 U.S.C.
`§ 1295(a)(1).
`
`DISCUSSION
`I
`We review the district court’s dismissal under regional
`circuit law, here the Ninth Circuit. In re TLI Commc’ns
`LLC Pat. Litig., 823 F.3d 607, 610 (Fed. Cir. 2016). The
`Ninth Circuit reviews de novo whether a complaint con-
`tains “well-pleaded facts . . . that plausibly give rise to an
`entitlement to relief.” Whitaker v. Tesla Motors, Inc., 985
`F.3d 1173, 1176 (9th Cir. 2021) (internal citations and quo-
`tation marks omitted).
`Patent eligibility is ultimately a question of law we re-
`view de novo. Eligibility, however, may depend on under-
`lying issues of fact. See Berkheimer v. HP, Inc., 881 F.3d
`
`1 The parties dispute what claims were at issue be-
`low and whether the district court had jurisdiction to hold
`ineligible all claims of the ’452 patent. Appellant’s Br. 48–
`49; Appellee’s Br. 52–57. Because the alleged inventive
`concepts are present in all claims, we need not address the
`parties’ dispute over what claims were at issue before the
`district court.
`
`
`
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 11 of 21 PageID: 417
`Case: 21-2167 Document: 36 Page: 5 Filed: 09/28/2022
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`5
`
`1360, 1365 (Fed. Cir. 2018). To determine patent eligibil-
`ity, we apply the Supreme Court’s two-step Alice frame-
`work. See Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 217
`(2014). At step one, we determine whether the claim is “di-
`rected to” a “patent-ineligible concept,” such as an abstract
`idea. Id. If it is, at step two we examine “the elements of
`the claim to determine whether it contains an ‘inventive
`concept’ sufficient to ‘transform’ the claimed abstract idea
`into a patent-eligible application.”
` Id. at 221 (quot-
`ing Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`566 U.S. 66, 72, 79–80 (2012)). Specifically, we determine
`whether the claim elements, individually and as an or-
`dered combination, contain an inventive concept, which is
`more than merely implementing an abstract idea using
`“well-understood, routine, [and] conventional activities
`previously known to the industry.” Content Extraction &
`Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776
`F.3d 1343, 1347–48 (Fed. Cir. 2014) (quoting Alice, 573
`U.S. at 225) (alteration in original). Thus, patent eligibility
`may be resolved at the Rule 12 stage only if there are no
`plausible factual disputes after drawing all reasonable in-
`ferences from the intrinsic and Rule 12 record in favor of
`the non-movant. Visual Memory LLC v. NVIDIA Corp.,
`867 F.3d 1253, 1261–62 (Fed. Cir. 2017); CardioNet, LLC
`v. InfoBionic, Inc., 955 F.3d 1358, 1369 (Fed. Cir. 2020);
`Nat. Alternatives Int’l, Inc. v. Creative Compounds, LLC,
`918 F.3d 1338, 1349 (Fed. Cir. 2019); Data Engine Techs.
`LLC v. Google LLC, 906 F.3d 999, 1008 & n.2 (Fed. Cir.
`2018); Aatrix Software, Inc. v. Green Shades Software, Inc.,
`882 F.3d 1121, 1125–27 (Fed. Cir. 2018); Cellspin Soft, Inc.
`v. Fitbit, Inc., 927 F.3d 1306, 1316–18 (Fed. Cir. 2019);
`Berkheimer, 881 F.3d at 1368–70.
`II
`The district court held at Alice step one the “focus of
`the ’452 patent” is the abstract idea of “the preparation and
`transmission of content to peers through a computer net-
`work.” Kollective, 544 F. Supp. 3d at 896. We need not
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 12 of 21 PageID: 418
`Case: 21-2167 Document: 36 Page: 6 Filed: 09/28/2022
`
`6
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`address the parties’ dispute regarding the application of Al-
`ice step one because, as explained below, the claims contain
`alleged inventive concepts not limited to the abstract idea,
`which defeat Kollective’s Rule 12 motion. See Aatrix, 882
`F.3d at 1129 (addressing only Alice step two). At Alice step
`two, the district court characterized the ’452 patent as
`“merely implement[ing] the abstract idea of preparing and
`transmitting data over a computer network with generic
`computer components using conventional technology.”
`Kollective, 544 F. Supp. 3d at 900. Cooperative argues the
`district court erred because, inter alia, its amended com-
`plaint plausibly alleges that the ’452 patent claims recite
`inventive concepts at Alice step two, precluding dismissal.
`See Appellant’s Br. 3–17, 38–46. We agree. Claim 1 con-
`tains several alleged inventive concepts which the specifi-
`cation touts as specific improvements in the distribution of
`data compared to the prior art. The amended complaint
`plausibly alleges these inventive concepts, and this should
`have defeated Kollective’s Rule 12(b)(6) motion in this case.
`There are at least two alleged inventive concepts in
`claim 1 which should have precluded the district court’s
`holding on ineligibility. The first is the required dynamic
`P2P network wherein multiple peer nodes consume the
`same content and are configured to communicate outside
`the CDNs. ’452 patent at claim 1 (“at least one peer-to-peer
`(P2P) dynamic network including a multiplicity of peer
`nodes, wherein the multiplicity of peer nodes consume the
`same content within a predetermined time, . . . wherein the
`multiplicity of peer nodes is distributed outside controlled
`networks and/or content distribution networks (CDNs)”).
`The second requires trace routes be used in content seg-
`mentation. Id. at claim 1 (“wherein content segmentation
`is based on CDN address resolution, trace route to CDN
`and P2P server manager, dynamic feedback from peers re-
`porting traffic rates between individual peer and its neigh-
`bors,
`round-robin
`and
`other
`server
`side
`scheduling/resource allocation techniques”).
` Because
`
`
`
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 13 of 21 PageID: 419
`Case: 21-2167 Document: 36 Page: 7 Filed: 09/28/2022
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`7
`
`Cooperative plausibly alleged that both of these concepts
`were inventive, we reverse the district court’s dismissal.
`A
`Claim 1 recites the allegedly inventive concept of a par-
`ticular network structure for sharing content through a dy-
`namic P2P network. ’452 patent at claim 1. The written
`description and Cooperative’s amended complaint plausi-
`bly tout this as an improvement to content distribution sys-
`tems. Accordingly, we hold the district court erred in
`dismissing Cooperative’s complaint.
`Claim 1 recites a specific type of content-sharing net-
`work and delineates both the network’s structure and func-
`tion. The claimed system must contain at least one P2P
`dynamic network and one content delivery server. Id. The
`dynamic P2P network must include at least one trace route
`and a multiplicity of peer nodes, which the claim defines as
`nodes “consum[ing] the same content within a predeter-
`mined time” and configured to communicate within the dy-
`namic P2P network. Id. Claim 1 further limits the
`structural and functional relationship between the P2P
`network and the content delivery server: the “multiplicity
`of peer nodes is distributed outside controlled networks
`and/or” CDNs. Id. And, as discussed further below, it de-
`scribes how content is distributed within the P2P network
`using content segmentation based on trace routes. Id. It
`is this specific network structure required by claim 1 that
`Cooperative alleges to be inventive.
`The specification explains how claim 1’s dynamic P2P
`network structure is different from and improves upon the
`prior art, especially the structural limitation that the peer
`nodes consuming the same content be distributed outside a
`controlled network or a CDN: “The prior art fails to provide
`video streaming over P2P networks outside the structure
`and control of CDNs.” Id. at claim 1, 3:35–36. It describes
`that, in “contrast to the prior art,” grouping peer nodes
`based on their simultaneous consumption of common
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 14 of 21 PageID: 420
`Case: 21-2167 Document: 36 Page: 8 Filed: 09/28/2022
`
`8
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`content, such as a video or a video game, allows the “groups
`of peer nodes forming the dynamic P2P networks of the pre-
`sent invention [to] provide for smooth playback and avoids
`stuttering problems or delays or buffering problems.” Id.
`at 7:29–38. The “need for peer nodes to share in real-time
`or near-real-time all while the users are viewing the video
`content via the remote, distributed peer nodes provides a
`session constraint that does not exist with prior art gaming
`or prior art audio sharing.” Id. at 7:46–50 (emphasis
`added). As a result, claim 1 “by-pass[es] any established or
`static content delivery network (CDN); advantageously,
`this saves time, improves redundancy, and also reduces or
`eliminates costs for content delivery over the CDN for the
`peer nodes.” Id. at 5:41–44. This allegedly new claimed
`P2P network “provide[s] more efficient and reduced cost of
`delivery for the content,” id. at 4:49–50, and enables new
`content-delivery system functionality by “providing live
`streaming for video and/or audio content as well as data,
`files, analytics, and combinations thereof,” id. at 4:50–52.
`The amended complaint reiterates the benefits of claim
`1’s “novel technique” of a dynamic P2P network for distrib-
`uting content outside the control of a CDN. J.A. 46 ¶ 13
`(quoting ’452 patent at 5:38–48). For example, it alleges
`the prior art “failed to disclose . . . the multiplicity of peer
`nodes of the dynamic peer-to-peer network consum[ing] the
`same content within a predetermined time.” J.A. 46 ¶ 12
`(quoting J.A. 245 (examiner’s statement of reason of allow-
`ance)). It also alleges claim 1’s structure of sharing “com-
`mon video content iteratively [] in segments throughout the
`P2P network” is inventive because it “reversed the flow of
`distributed digital content” compared to the prior art and
`solved capacity problems related to content sharing. J.A.
`47 ¶ 14 (quoting ’452 patent at 4:52–60). As a result, the
`“problem that the ’452 patent addresses is capacity,” and
`“[t]he patent claims are addressed to the solution—sharing
`video content through a dynamic network . . . defined by
`
`
`
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 15 of 21 PageID: 421
`Case: 21-2167 Document: 36 Page: 9 Filed: 09/28/2022
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`9
`
`the peer nodes consuming the same content.” J.A. 49 ¶ 24.
`Specifically,
`[t]he benefit of this “bottom up” approach is mani-
`fold and generally directed to addressing the capac-
`ity problem. If control is passed to the P2P
`dynamic network, then capacity may be substan-
`tially addressed—and in some cases exclusively ad-
`dressed—by the P2P dynamic network. In other
`words, the computing capacity of the client devices
`consuming the video content is leveraged and used
`to the maximum extent.
`J.A. 49 ¶ 25. Contrary to the district court’s conclusion,
`Kollective, 544 F. Supp. 3d at 897, Cooperative’s allegations
`related to system capacity are plausibly tethered to claim
`1’s distribution of content within its P2P network outside
`the control of a CDN. ’452 patent at 9:54–60 (“The systems
`and methods of the present invention provide for harness-
`ing the content recipient devices to aggregate or assemble
`intelligent functionality of the devices unassociated with
`the content receipt, including but not limited to computa-
`tional storage and processing capacity of the content recip-
`ient devices in the P2P dynamic network . . . .” (emphasis
`added)); see also J.A. 48 ¶ 19 (“Claim 1, like all the claims,
`covers the virtual layer outside the control of the prior art
`distribution scheme pushed from the CDN.”).
`Drawing all inferences in favor of Cooperative, as we
`must on a motion to dismiss, we conclude that claim 1 re-
`cites a specific technical solution that is an inventive con-
`cept: it recites a particular arrangement of peer nodes for
`distributing content “outside controlled networks and/or
`[CDNs],” ’452 patent at claim 1, which did not exist in the
`prior art, ’452 patent at 3:35–36. This is not an “abstract
`idea implemented on a generic computer,” and it is alleged
`to improve the performance of the content delivery network
`with reductions in costs and improvements in several as-
`pects of system performance. See BASCOM Glob. Internet
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 16 of 21 PageID: 422
`Case: 21-2167 Document: 36 Page: 10 Filed: 09/28/2022
`
`10
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1352
`(Fed. Cir. 2016); Amdocs (Israel) Ltd. v. Openet Telecom,
`Inc., 841 F.3d 1288, 1299 (Fed. Cir. 2016) (citing BASCOM,
`827 F.3d at 1351).
`At a minimum, the district court should have denied
`the motion to dismiss because Cooperative’s allegations in
`the complaint regarding the claims and the ’452 patent’s
`written description create a plausible factual issue regard-
`ing the inventiveness of the dynamic P2P configuration of
`claim 1. See Berkheimer, 881 F.3d at 1370 (holding mate-
`rial dispute of fact regarding inventiveness created by im-
`proved redundancy, efficiency, computer functionality, and
`costs of operating a network or computer systems network
`costs that are captured by claim elements precludes sum-
`mary judgment). Claim 1 recites a specific network struc-
`ture, the patent’s written description explains how it is
`arranged, and the written description and amended com-
`plaint explain the alleged benefits of sharing content using
`a P2P network outside the control of a CDN using peer
`nodes. Determining whether the claimed network is well-
`understood, routine, or conventional is a question of fact
`that cannot be resolved at the Rule 12(b)(6) stage, and the
`district court erred in resolving this factual issue against
`Cooperative. See Aatrix, 882 F.3d at 1128.
`B
`The district court held that Cooperative did not plausi-
`bly allege that the second alleged inventive concept, seg-
`menting content using trace routes,
`is
`inventive.
`Kollective, 544 F. Supp. 3d at 899–900. We do not agree.
`As an initial matter, the parties dispute whether claim
`1 requires or merely permits the use of trace routes to seg-
`ment content. See Appellant’s Br. 10–14, 21–23, 41–43;
`Appellee’s Br. 16, 20–21, 34–35, 46–47, 50. Kollective does
`not dispute on appeal that segmenting content based on
`trace routes is inventive; rather, it contends only that the
`use of trace routes is not required and thus irrelevant to
`
`
`
`
`

`

`Case 1:21-cv-20148-CPO-SAK Document 28-1 Filed 10/05/22 Page 17 of 21 PageID: 423
`Case: 21-2167 Document: 36 Page: 11 Filed: 09/28/2022
`
`COOPERATIVE ENTERTAINMENT, INC. v.
`KOLLECTIVE TECHNOLOGY, INC.
`
`11
`
`eligibility. Appellee’s Br. 16, 20–21, 34–35, 46–47, 50. As
`Kollective acknowledges, Cooperative asserted