Relying on Computer-Implemented, Result-Focused Functional Language Is a Bad Bet

BETEIRO, LLC v. DRAFTKINGS INC

Before Dyk, Prost, and Stark.  Appeal from the United States District Court for the District of New Jersey.

Summary: Recitations of a computer-implemented method can be an abstract idea and non-eligible under 35 U.S.C. § 101 if the claims recite result-focused functional language that is analogous to longstanding “real-world” activities and do not improve technology.

Beteiro, LLC (“Beteiro”) filed several patent infringement suits against various online wagering companies (“Appellees”), including DraftKings Inc., in the district court alleging that Appellees infringed certain claims by providing a plurality of gambling and event-wagering services.  The Appellees filed motions to dismiss on the ground that the asserted patents claim nonpatentable subject matter under 35 U.S.C. § 101.  The district court granted the motions to dismiss and denied Beteiro’s motions for reconsideration.  Beteiro appealed to the Federal Circuit.

The Federal Circuit affirmed the district court’s decision and held that the asserted claims were directed to the abstract idea of “exchanging information concerning a bet and allowing or disallowing the bet based on where the user is located.”  Applying the two-step Mayo/Alice framework, the Federal Circuit determined that the asserted claims were directed to an abstract idea because the asserted claims (1) broadly recite generic steps of a kind frequently held to be abstract; (2) were drafted using largely result-focused functional language, containing no specificity about how the purported invention achieves those results; (3) involved methods of providing particularized information to individuals base on their locations; (4) could be analogized to longstanding “real-world” activities; and (5) did not improve technology (e.g., computers).  Further, under step two of the Mayo/Alice framework, the Federal Circuit held that the asserted claims achieved the abstract steps using generic computers and conventional technology.  Therefore, the claims were directed to ineligible subject matter, and the Federal Circuit affirmed the district court’s dismissal.

Editor: Sean Murray