CG Technology Development, LLC v. Double Down Interactive, LLC
2:16-cv-00858
D. Nev.Jan 4, 2017Background
- Plaintiffs: CG Technology Development, LLC (assignee of RE39,818) and Interactive Games entities (assignees of six other patents) sued Double Down Interactive for patent infringement by its online/social casino games.
- Defendant moved to dismiss under 35 U.S.C. § 101 (Alice) for all asserted patents and moved to dismiss for failure to state a claim as to the RE’818 patent, including induced and contributory infringement allegations.
- The court incorporated prior §101 analyses from related cases and found six patents (’628, ’169, ’267, ’924, ’394, ’417) invalid under Alice; only the RE’818 patent survived §101.
- Plaintiffs’ amended complaint pleads direct infringement (focus on claim 20) based on use of smartphones/tablets/PCs as controllers that wirelessly transmit user information and authorize play based on age, supported by screenshots and descriptions.
- For induced/contributory infringement, Plaintiffs alleged knowledge at least as of service of the complaint and alleged post-filing inducement by marketing, instructions, and that customers must use accused controllers to play.
- Defendant sought a stay pending resolution of ownership disputes in a related Southern District of New York action; the court denied the stay citing consolidation and efficiency concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Patent eligibility under §101 for seven asserted patents | Patents are valid and cover Defendant’s online casino systems | All asserted patents are patent-ineligible under Alice | Court: six patents invalid under Alice; RE’818 is patent-eligible |
| Direct infringement of RE’818 | Defendant’s apps and demonstrations use controllers that meet claim elements (e.g., wireless controllers, age-based authorization) | Insufficiently pleaded; apps are not physical controllers | Court: complaint plausibly pleads direct infringement (at least claim 20); motion to dismiss denied for direct infringement |
| Induced and contributory infringement (pre- and post-filing) | Defendant induced and contributed to infringement by marketing, instructions, and requiring controllers to play | No knowledge pre-litigation; no intent to induce; non-infringing uses exist | Court: claims for pre-filing induced/contributory infringement dismissed; claims for post-filing conduct survive |
| Motion to stay pending NY ownership proceedings | Stay would avoid duplicate litigation and resolve ownership issues | Stay would prejudice Plaintiffs and create inefficiencies among consolidated cases | Court: stay denied (consolidated track and minimal prejudice to Defendant) |
Key Cases Cited
- Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014) (framework for §101 patent-eligibility analysis)
- Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632 (2015) (induced/contributory infringement requires knowledge of the patent and that induced acts constitute infringement)
- Global–Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) (willful blindness standard and knowledge requirement for induced infringement)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must plausibly state a claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely conceivable)
- In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012) (pleading specific intent to induce can survive dismissal where facts permit reasonable inference)