A Conventional Business Practice Executed by Generic Computer Components Cannot Survive Alice/Mayo Step 2

In Beteiro, LLC v. Draftkings, Inc., [2022-2275, 2022-2277, 2022-2278, 2022-2279, 2022-2281, 2022-2283] (Fed. Cir. 2024), the Federal Circuit affirmed the dismissal of a suit for infringement of U.S. Patent Nos. 9,965,920, 10,043,341, 10,147,266, and 10,255,755 for failure to state a claim based on the subject matter ineligibility of the patent claims.

All of the patents share a common specification and title: “Apparatus and Method for Facilitating Gaming Activity and/or Gambling Activity.” The patents disclose a purported invention which “facilitate[s] gaming activity and/or gambling activity at a gaming venue remote from the user’s or individual’s physical location” such that the user can “participate in live gaming activity and/or gambling activity via a user communication device” even if the user is not in the same location as the gaming venue.

At step one of the Alice/Mayo test, the Federal Circuit agreed with the district court that Beteiro’s claims are directed to the abstract idea of “exchanging information concerning a bet and allowing or disallowing the bet based on where the user is located.”

The Federal Circuit said that the claims exhibit several features that are well-settled indicators of abstractness:

  • First, the claims broadly recite generic steps of a kind frequently held to be abstract (detecting information, generating and transmitting a notification based on the information, receiving a message (bet request), determining (whether the bet is allowed based on location data), and processing information (allowing or disallowing the bet).
  • Second, the claims are drafted using largely (if not entirely) result-focused functional language, containing no specificity about how the purported invention achieves those results.
  • Third, there are several precedents where broadly analogous claims, such as those involving methods of providing particularized information to individuals based on their locations, to be abstract.
  • Fourth, the district court was able to persuasively analogize Beteiro’s patent claims to longstanding “real-world” (“brick and mortar”) activities.

At step two, the district court found that the representative claim failed to provide an inventive concept because it achieved the abstract steps “using several generic
computers – namely, a ‘computer,’ a ‘communication link,’ a ‘first communication device,’ a ‘second communication device,’ and a ‘global positioning device.’” The district court thus concluded that the claim that simply describes a conventional business practice executed by generic computer components cannot survive Step 2. The Federal Circuit agreed.