The Case of Skillz Platform, Inc. v. AviaGames Inc.

The Case of Skillz Platform, Inc. v. AviaGames Inc.

By Katelyn Schuh, GW Law 2L

(Editor’s Note: the following is shared from Sports Litigation Alert, the nation’s leading sports law periodical.)

On April 5, 2021, AviaGames Inc. filed a motion to dismiss Skillz Platform Inc.’s initial complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for patent infringement based on a lack of patent eligible subject matter under 35 U.S.C. §101 for two asserted patents.

A motion to dismiss for failure to state a claim upon which relief can be granted “tests the legal sufficiency of a claim.” The two patents at issue are U.S Patent Nos. 9,649.564 (the 564 Patent) and U.S. Patent Nos. 9,479,602 (the 602 Patent). The Court denied the motion in relation to the 564 Patent and granted the motion without leave to amend as to the 602 Patent.

By way of background, Skillz maintains a mobile gaming platform which enables third-party game developers to make games available on its platform through a free Software Development Kit. In other words, Skillz connects players worldwide by hosting fee-based competitive esports games on its platform.

This matter all started in April 2021 when Skills filed its suit, contending that “AviaGames maintains a competing mobile gaming platform, which AviaGames developed using Skillz’s intellectual property that it gleaned while developing games for Skillz’s platform.”  Skillz owns the 564 Patent, which relates to ensuring that competitors in a mobile online gaming tournament play over client devices communicating along remote servers, which have common gameplay within a tournament that varies randomly between different tournaments. The main crux of the innovation of the 564 Patent is that it generates pseudo-random numbers, causing gameplay to differentiate between tournaments, but not between games within the same tournament.

The parties disagreed as to whether or not the patents were patent eligible under §101. AviaGames argued that the patents were directed to abstract ideas, lacking in a non-abstract improvement to computer technology, and thus lacked an inventive concept. However, Skillz contended that AviaGames overgeneralized the claims of the patents, ignored their specific implementation details, and raised factual issues about the conventionality of various technologies that cannot be resolved at the 12(b)(6) stage.

In Alice Corp. Pty. Ltd. v. CLS Bank Intern, the Supreme Court laid out a two-part framework for assessing the validity of patent claims under §101. Under Step One, a court must determine whether the claims at issue are directed to a patent ineligible concept. The second step is a “search for an ‘inventive concept’ – an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.’”

In regard to the 564 Patent, the parties disputed whether the claims were directed to an abstract idea under Alice Step One. AviaGames argued that the recitation of pseudo-random number generation was an improper attempt to patent a mathematical algorithm, while Skillz argued the claims were directed to specific implementations using pseudo-random number seeds to standardize gameplay in an electronic skills-based game. The Court found that AviaGames failed to show the claims of the 564 Patent were directed to abstract ideas at the pleading stage. The court concluded that AviaGames failed to show that the 564 claims were directed to patent ineligible abstract ideas at Alice step one, therefore they did not need to conduct an analysis under Alice step two. The Court denied the motion to dismiss in regard to the 564 Patent.

In regard to the 602 Patent, the Court assessed the eligibility in three parts – Claim 1 (representative of claims 2, 6-7, 9-11, 15-18, 20, and 24), Dependent Claims 8 and 17, and Dependent Claims 3-5, 12-14, and 21-23. For Claim 1, the Court agreed with AviaGames that the 602 Patent was directed to an abstract idea, thus the Court proceeded to Alice Step Two. Step Two considers whether the claims contained an inventive step that transformed the un-patentable abstract idea into patentable subject matter. The Court held that Skillz failed to show what about the ordered combination of the 602 Claims was an inventive concept, and found that the claim was directed to abstract ideas without an inventive concept to transform the un-patentable abstract ideas into patent-eligible subject matter. The court held that Claim 1, and the claims it represented, was patent ineligible subject matter.

Claims 3-5, 12-14, and 21-23 pertain to taking a video recording of a user’s screen during gameplay and broadcasting it to other client devices in a specific gaming event. The parties disputed whether the claims were patent-eligible subject matter. The Court agreed with AviaGames and held that the Broadcasting Claims were patent ineligible as they were implemented on generic hardware. In regard to Claims 8 and 17, the Court found that Skillz failed to show the claims were directed to an improvement in computer functionality under Alice Step One, or that they contained an inventive concept under Alice Step Two, thus they were also directed to patent ineligible subject matter. The court dismissed Skillz’s infringement claim based on the 602 Patent without leave to amend.

This case is being closely watched by industry experts because what started out as a business relationship seems to have ended in a series of lawsuits, costing both parties money and perhaps, their reputations.