Dk Crown Holdings Inc. v. Ag 18, LLC

Case: 24-2078 Document: 56 Page: 1 Filed: 05/06/2026

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________ DK CROWN HOLDINGS INC., FKA DRAFTKINGS INC., Appellant v. AG 18, LLC, Appellee ______________________ 2024-2078 ______________________ Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2022- 01446. ______________________ Decided: May 6, 2026 ______________________ ELIOT DAMON WILLIAMS, Baker Botts LLP, Washing- ton, DC, argued for appellant. Also represented by JAMIE ROY LYNN, THOMAS CHISMAN MARTIN, ANDREW DAVID WILSON; LORI DING, Houston, TX; GEORGE HOPKINS GUY, III, Palo Alto, CA.

JONATHAN IRVIN TIETZ, Perkins Coie LLP, Washington, DC, argued for appellee. Also represented by ANDREW Case: 24-2078 Document: 56 Page: 2 Filed: 05/06/2026

2 DK CROWN HOLDINGS INC. v. AG 18, LLC

DUFRESNE, Madison, WI; PATRICK JOHN MCKEEVER, San Diego, CA. ______________________ Before CHEN, HUGHES, and STOLL, Circuit Judges.

CHEN, Circuit Judge.

This is an appeal of an inter partes review (IPR) final written decision by the Patent Trial and Appeal Board (Board), which found that most of the challenged claims of U.S. Patent No. 9,978,205 (’205 patent)—claims 1–17 and 19–30—are unpatentable as either anticipated or rendered obvious by the asserted prior art. DraftKings Inc. v. AG 18, LLC, No. IPR2022-01446, 2024 WL 1075310, at *41 (P.T.A.B. Mar. 12, 2024) (Decision). For challenged claim 18, however, the Board found that the IPR petitioner, DK Crown Holdings Inc., fka DraftKings, Inc. (DK), failed to prove that claim’s unpatentability and declined to con- sider a late-raised ground not contained in DK’s petition.

DK appeals as to claim 18. For the reasons below, we af- firm.

BACKGROUND The ’205 patent is titled “Location Based Restrictions on Networked Gaming” and generally relates to “peer-to- peer” gaming systems that restrict a player’s online gam- ing activity based on the player’s location.

Relevant to this appeal is claim 18, the only challenged claim not found unpatentable by the Board. Claim 18 de- pends from independent claim 12 and its dependent claims 15, 16, and 17. Claim 18 reads: The gaming system of claim 17, wherein the limits on wagers changes wagering to non-monetary based wagering and compensating the player with the player winnings is compensating the player with no monetary winnings.

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DK CROWN HOLDINGS INC. v. AG 18, LLC 3

’205 patent col. 17 ll. 45–48 (emphases added).

In its IPR petition (Petition), DK asserted three rele- vant grounds of unpatentability. “Grounds 1 and 2” relied on Bryson 1 alone, while “Ground 3” relied on Bryson in view of Schlottmann. 2 DK challenged claim 18 only under Grounds 1 and 2. Its Ground 3 challenge was directed only at claims 15–17. J.A. 288.

After the Board instituted inter partes review, DK, in a footnote to its petitioner’s reply (Reply), requested the Board to now analyze claim 18 under Ground 3 “instead of Grounds 1/2.” J.A. 830 n.5.

In its Decision, the Board found all claims from which claim 18 depends unpatentable; independent claim 12 was anticipated by Bryson, and dependent claims 15–17 were rendered obvious in view of Bryson and Schlottmann. 2024 WL 1075310, at *41. For its claims 15–17 analysis, the Board found that a skilled artisan would have been moti- vated to combine Bryson with Schlottmann with a reason- able expectation of success. In addition, the Board found claim 10, which claims similar “non-monetary limitations” to claim 18, unpatentable under 35 U.S.C. § 103. Id.; see also ’205 patent col. 16 l. 66 – col. 17 l. 3.

The Board, however, rejected DK’s request to analyze claim 18 under Ground 3 (Bryson and Schlottmann) “in- stead of Grounds 1/2” (Bryson alone). The Board explained that DK’s request “exceed[ed] the proper scope of a Peti- tioner Reply” because DK “improperly s[ought] to add a new prior art reference against claim 18 (i.e., Schlottmann) to fill a prima facie gap in the Petition as to claim 18.” De- cision, 2024 WL 1075310, at *13 (citing Netflix, Inc. v. DivX, LLC, 84 F.4th 1371, 1376–78 (Fed. Cir. 2023)). In

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Thereafter, DK filed a Request for Director Review of the Board’s refusal to analyze claim 18 under Ground 3, which the Director denied.

DK timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

DISCUSSION On appeal, DK argues that the Board abused its discre- tion by failing to analyze claim 18 under Ground 3 when it otherwise made all factual findings necessary to determine claim 18 unpatentable. Specifically, DK asserts that its pe- tition contained a “clerical error” by failing to assert Ground 3 against claim 18, and, because it is “obvious” that DK attempted to assert Ground 3 against claim 18 in its Petition, the Board’s refusal to correct that error was itself reversible error. Appellant Br. 2. DK also asserts that claim 18 is unpatentable under collateral estoppel. We dis- agree with both arguments.

We review the Board’s rejection of a new argument on reply for abuse of discretion. See Yita LLC v. MacNeil IP LLC, 69 F.4th 1356, 1365 (Fed. Cir. 2023).

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DK CROWN HOLDINGS INC. v. AG 18, LLC 5

As to DK’s first argument, we agree with the Board that DK asserted a new ground of unpatentability in its Reply footnote against claim 18 by seeking to add Schlottmann to its challenge. That much is clear from re- viewing the content of DK’s petition, including its sum- mary scorecard of its petitioned-for grounds:

J.A. 288.

Our case law explains that the Board cannot entertain theories absent from the petition. See, e.g., Netflix, 84 F.4th at 1377. That DK could have relied on Schlottmann as part of an unpatentability challenge against claim 18 does not mean that its petition must be read in such a man- ner. Given our repeated warnings to the Board to not stray from the grounds of the petition, it was no abuse of discre- tion to reject DK’s footnote request. Indeed, DK asserted its new argument after institution. Moreover, DK did not move to amend its Petition to correct its oversight. DK’s footnote is also not responsive to any argument in AG 18’s patent owner response. And the footnote fails to explain why the Board should entertain a new ground against Case: 24-2078 Document: 56 Page: 6 Filed: 05/06/2026

DK counters that, under Voice Tech Corporation v. Uni- fied Patents, LLC, it did not present a “new theory” of un- patentability in its Reply footnote and that its Petition “fully raised” Ground 3 against claim 18. Appellant Br. 22– (citing 110 F.4th 1331 (Fed. Cir. 2024)). Voice Tech, however, is inapposite. Although Voice Tech involved typo- graphical errors in the petition, the petition there identi- fied, via cross-reference, the substantive argument the petitioner intended to assert. 110 F.4th at 1338. In con- trast to Voice Tech, DK’s analysis of claim 18 in its Petition references no other argument. Indeed, the Petition fails to indicate anywhere that DK intended to assert Ground 3 or Schlottmann against claim 18.

DK’s collateral estoppel argument also fails. Specifi- cally, DK argues that because the Board invalidated other claims, i.e., claims 10, 12, 15, 16, and 17, which, in the ag- gregate, contain all the limitations of claim 18, it follows that claim 18 is invalid under collateral estoppel. We dis- agree. As an initial matter, DK’s analysis does not meet its burden to prove collateral estoppel applies based on claim 18’s similarity to an invalidated claim, as required under our precedent. See Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342–43 (Fed. Cir. 2013). This court, moreover, has never applied collateral estoppel in the man- ner DK suggests—by cobbling together limitations from disparate claims to replicate another claim. Based on DK’s arguments, we see no persuasive reason to do that here.

CONCLUSION We have considered DK’s remaining arguments and find them unpersuasive. For the foregoing reasons, we af- firm.

AFFIRMED