Bodog Loses Again, Claim Preclusion Not Applicable in Ex Parte Reexam

By Scott A. McKeown
January 14, 2010

Back in 2007, a default judgment was entered in a Nevada district court against the well known Internet gambling website Bodog.com for infringement of U.S. Patent 5,564,001. (1st Technology LLV. v. Rational Entertainment LTDA., Rational Poker School Limited, Bodog Entertainment GroupS.A., Bodog.com, and Futurebet Systems Ltd.) As Internet gambling is illegal in the U.S. the folks at Bodog chose not to show up and defend the suit, as a result, a $46 million dollar judgment was entered against them. Thinking that they had no assets to satisfy the judgment within reach of the U.S., Bodog simply thumbed their nose (as some might say they also do to U.S gambling laws) at the defendant 1st Technology, labeling them a “patent troll.”

Upon obtaining the default judgment, 1st Technology, realizing that the domain Bodog.com was well known, valuable, and registered in the U.S., pursued a successful n in rem action to obtain the domain name. Thereafter, the folks at Bodog registered countless variations of the term Bodog in combination with other words, such as “Bodoglife.com”

In March of 2008, an ex parte reexamination request was filed and reexamination ordered by the USPTO in relation to the 1st Technology Patent. On January 8, 2010, the reexamination was favorably terminated, confirming all claims without amendment. In their press release, issued January 12, 2010, 1st Technology states that ” We welcomed the re-exam petition as an opportunity to demonstrate once and for all the novelty and innovation of the ‘001 Patent.” However, judging by the petitions filed by 1st Technology, it appears that, initially, the reexamination of the ‘001 Patent was anything but welcomed.

Upon determining that a substantial new question of patentability (SNQ) existed, 1st Technology petitioned the Office under 37 CFR 1.181 (MPEP 2246) taking the position that the determination was ultra vires. In essence, 1st Technology urged that since Bodog was behind the anonymous filing (although this was disputed by the requester via an opposition petition), and had an opportunity to allege invalidity in Nevada and chose not to, that this issue was precluded from consideration by the USPTO on a collateral estoppel theory.

In response, the USPTO dismissed the petition by distinguishing the trademark related case law relied upon by 1st Technology, and explained the statutory mandates of ex parte reexamination, as supported by Federal Circuit case law relating to patents and reexamination. The USPTO decision to dismiss the petition, which was authored by Kenneth M. Schor, Senior Legal Advisor in the Office of Patent Legal Administration, explains in part:

If the doctrine of claim preclusion was applicable to reexamination in general, then there would have been no need for Congress to expressly provide for the specific provisions of 35 USC 315(c) and 35 USC 317(b) of the inter partes reexamination statute. In addition, the fact that Congress provided for such provisions for inter partes reexamination via The American Inventors Protection Act (AIPA)… while not doing so for ex parte reexamination, shows an intent of Congress that the doctrine of claim preclusion in general, and the specific elements of claim preclusion set forth in the inter partes reexamination statute, do not apply to an ex parte reexamination.

The USPTO petition decision, as well as some of the original filings that led up to the decision are found in Control No. 90/009,075 (see at least petition dismissal of 9/24/09). Unfortunately, some of the more scandalous, initial petition filings/exhibits of 1st Technology were expunged from the USPTO’s files as alleging criminal behavior of Bodog. In explaining their decision to dismiss the petition, the USPTO provides a tutorial on the differences in outcomes/standards of district court and ex parte Office proceedings, explaining these issues in the context of the controlling Federal circuit case law and inter partes statutes. This petition decision is a very worthwhile read for those unfamiliar with the law underlying post verdict situations in patent reexamination such as those posed by In re Translogic (CAFC, October 12, 2007).

As to Bodog, the patent dispute was reportedly settled in April of last year. As part of the settlement, Bodog.com was returned to Bodog. Currently, Bodog claims to have exited the gambling business, licensing their name (i.e., intellectual property to others); if you will, a non-practicing entity of sorts.

As the saying goes, if you can’t beat em, join em.

The Author

Scott A. McKeown

Scott A. McKeown is a partner with Oblon, McClelland, Maier & Neustadt, L.L.P. He is a member of the firm's Management Committee, and co-chairs the Post-Grant Patent practice group focusing on post-grant counseling, litigation and related prosecution issues. He leads the Post-Grant Patent team responsible for electronics, wireless communications, software and computer-related inventions and business methods.

Mr. McKeown handles all aspects of post-issuance patent proceedings at the United States Patent and Trademark Office (USPTO). He specializes in administrative trials before the Patent Trial & Appeal Board (PTAB) as well as appeals to the Court of Appeals for the Federal Circuit (CAFC).

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 3 Comments comments.