Ex Parte Smith et al

Patent Trial and Appeal Board

Oct 16, 2014

12589541 (P.T.A.B. Oct. 16, 2014)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
12/589,541 01/22/2008 Ray Smith 321.004US1 5169
97462 7590 10/17/2014
Mark A. Litman & Associates, P.A.
7001 Cahill Road, Ste. 15A
Edina, MN 55439
EXAMINER
PIERCE, WILLIAM M
ART UNIT PAPER NUMBER
3711
MAIL DATE DELIVERY MODE
10/17/2014 PAPER
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte RAY SMITH and AMANDA TEARS SMITH
____________

Appeal 2012-006276
Application 12/589,541
Technology Center 3700
____________

Before NEAL E. ABRAMS, EDWARD A. BROWN
and CHARLES N. GREENHUT, Administrative Patent Judges.

ABRAMS, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Ray Smith and Amanda Tears Smith (Appellants) seek our review
under 35 U.S.C. § 134 from the Examiner’s decision rejecting claims 1–19.
We have jurisdiction over the appeal under 35 U.S.C. § 6(b).
We AFFIRM.
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Application 12/589,541

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THE INVENTION
The claimed invention is directed to a method of playing a casino
wagering game with player hands competing against a dealer hand. Claim 1,
reproduced below, is illustrative of the subject matter on appeal.
1. A method of playing a casino wagering game with player
hands competing at least against a dealer hand comprising:
a dealer accepting at least a first wager from at least one
player to play the casino wagering game;
the dealer providing a randomized set of physical playing
cards;
the dealer dealing a first number of randomized physical
playing cards from the randomized set of playing cards to the at
least one player at a first at least one player position on the
gaming table;
the dealer dealing a second number of cards to the dealer
from the randomized set of playing cards;
the dealer requiring the at least one player viewing the
first number of cards to see if less than all cards in the first
number of cards can be rearranged to form a qualifying HIGH
hand and the dealer confirming that a qualifying HIGH hand
has been formed;
only if the less than all cards can be rearranged to form
the qualifying HIGH hand, the at least one player placing an
additional wager to continue play of the casino wagering game,
and if the less than all cards cannot be rearranged to form the
qualifying HIGH hand, the at least one player must fold;
if the additional wager has been accepted by the dealer
from the at least one player, the dealer requires that the at least
one player placing a remainder of cards comprising the first
number of cards less the less than all cards to form a LOW
hand;
the dealer rearranging the second number of cards to
form a dealer HIGH hand and a dealer LOW hand;
the dealer separately comparing the at least one player's
HIGH hand to the dealer's HIGH hand and the dealer's LOW
hand to the player's LOW hand on the basis of the highest point
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count total in the HIGH hand and lowest point count total in the
LOW hand;
resolving the wagers in steps comprising a) comparing
the dealer's HIGH hand count to the at least one player's HIGH
hand count to determine a player win, loss or tie with respect to
the HIGH hands and b) comparing the dealer's LOW hand
count to the at least one player's LOW hand count to determine
a player win, loss or tie with respect to the LOW hands, the
wagers being resolved according to:
if the dealer determines that the player's HIGH
hand and LOW hand both outrank the dealer's HIGH
hand and LOW hand, the wager and additional wager are
paid evenly;
if the dealer determines that either the player's
HIGH hand or the at least one player's LOW hand
outranks the dealer's HIGH hand or the dealer's LOW
hand, a push results, wherein the first bet is returned to
the at least one player, and if the dealer's HIGH and
LOW hands outrank the at least one player's HIGH and
LOW hands, the first bet and additional wager are
forfeited. 

THE REJECTION
Claims 1–19 stand rejected under 35 U.S.C. § 101 as directed to non-
statutory subject matter.1
OPINION
I
It is the Examiner’s position that the method of playing poker recited
in claim 1 is non-statutory subject matter. The Examiner explained the
rejection in the following manner:

1 Three rejections of the claims under 35 U.S.C. § 103(a) were withdrawn by
the Examiner. Ans. 3–4.
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A “method of playing a casino wagering game” in this
context in its broadest sense is not limited to any particular
machine and required no transformation to take place. The
recitation of cards is not a sufficient tie to another statutory
class since such are not required in the play of the game and the
mere rearrangement of the cards does not transform the cards to
a different state of thing. See Diamond v. Diehr, 450 U.S. 175,
184 (1981) (quoting Benson, 409 U.S. at 70); Parker v. Flook,
437 U.S. 584, 588 n.9 (1978) (citing Cochrane v. Deener, 94
U.S. 780, 787-88 (1876)). See also In re Comiskey, 499 F.3d
1365, 1376 (Fed. Cir. 2007) (request for hearing en banc
pending). Here the method is broad enough to read on software
that would enable a player to play the game on a gaming
machine. This is not a sufficient tie to another statutory class.
Ans. 4–5.
Card games traditionally involve the use of a physical
deck of cards dealt to a player or players within a set of
predefined rules. Wagering may or may not occur in typical
card games. Those games that do include wagering follow a
clear set of guidelines or rules involving the wagering.
Applicant’s claimed method, while arguably reciting a number
of physical steps of dealing cards, is viewed here as an attempt
to claim a new set of rules for playing a card game. In this
examiner’s opinion, a set of rules qualifies as an abstract idea.
Therefore, the examiner maintains that Applicant’s claimed
method, although couched in terms of a few actual physical
steps, is a clear attempt to claim an abstract idea in the form of
a new set of rules for playing a card game. Since the claimed
method requires no transformation of a particular article and is
seen as an attempt to receive patent protection for an abstract
idea in the form of a new set of rules, the examiner maintains
that the claimed method is not patent eligible.
Id. at 5.
Directing Appellants to the Federal Register Notice entitled “Interim
Guidance for Determining Subject Matter Eligibility for Process Claims in
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View of Bilski v. Kappos (Fed. Reg. Vo. 75, No. 143/Tuesday July 27,
2010/Notices) for a complete list of factors that the Examiner considered in
making the rejection, the Examiner stated:
Specifically, the lack of implementation by a particular machine
or the transformation of a particular article, the lack of
meaningful limit imposed by the device or table and the
apparent attempt to claim an abstract idea in the form of a new
set of rules are all factors that weigh against eligibility. The
fact that a claim may be more than a mere statement of a
concept in that an actual playing of the game is claimed versus
just a new set of rules may be a factor weighing toward patent
eligibility. However, in this case that factor weighing towards
eligibility is not given much weight since the use of the
concept, as expressed in the method, would effectively grant a
monopoly over the concept. It is this examiner’s opinion that
the factors in this case weighing against patent eligibility far
outweigh the factors weighing toward patent eligibility.
Id.
II
Appellants’ position is that the rejection focuses solely upon the
aspects of a machine, while ignoring the physical transformation of a
material or article, and they argue:
It is to be noted that the provision of a shuffled set of playing
cards and the division of a set of playing cards is a physical
transformation (separating or slicing) of a physical element (the
shuffled set of playing cars). . . . The fact as to whether that
physical transformation is temporary or not . . . there occurs a
physical transformation first by the shuffling and secondly by
the separation that are an essential element of the ability of a
casino or club to provide a wagering game in commercial
practice. That physical transformative step will be shown to be
real and fundamental to a physical method step in compliance
with the requirements of 35 U.S.C. 101.
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Br. 10.
It is essential to this analysis to note that enabling a
wagering game that events occurring with the use of playing
cards are not predictable. The cards provided in a set must be
shuffled (randomized or pseudo-randomized) to such a degree
that predictability is reduced. Even a single manual shuffling
action on a set of cards reduces predictability.
Id.
Failure to acknowledge this actual and detailed
transformation as a physical change in an original material (the
randomized set of physical cards) would endanger patentability
of even less detailed physical transformations that have been
and continue to be allowed under 36 U.S.C. 101. Specifically,
slicing a material into smaller elements, collating sets of
materials, mixing materials and the like would be excluded as a
statutory class of invention in the absence of a specific class of
apparatus (machine) used to perform the that task. If the
process itself is novel, and the transformation is recited (as in
the present claims), the process is in compliance with 35 U.S.C.
101.
Id. at 13.
III
The Examiner applied the Interim Guidance, which discusses Bilski v.
Kappos, 130 S.Ct. 3218 (2010) and patent-ineligible subject matter. Supra
at 4–5. However, the Interim Guidance was developed before the Supreme
Court issued its decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct.
2347 ( 2014) further explaining the law in this area. Despite this intervening
precedent, we affirm the Examiner’s rejection of claims 1–19 under 35
U.S.C § 101. In affirming the Examiner’s rejection, we apply the decision in
Alice as set forth below.
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The claims in Alice were directed to a “method of exchanging
obligations as between parties” that included “creating a shadow credit
record and a shadow debit record” and then adjusting these shadow records
as transactions occurred. Alice, 134 S.Ct. at 2352 n. 2. The claimed
invention required the use of a computer. Alice, 134 S.Ct. at 2359. In
Alice, the Supreme Court discussed its decision in Mayo Collaborative
Services v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012) and explained the
test for determining whether a claim is directed to patent-ineligible subject
matter as follows:
In Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. ––––, 132 S.Ct. 1289, 182 L.Ed.2d
321 (2012), we set forth a framework for distinguishing patents
that claim laws of nature, natural phenomena, and abstract ideas
from those that claim patent-eligible applications of those
concepts. First, we determine whether the claims at issue are
directed to one of those patent-ineligible concepts. Id., at ––––,
132 S. Ct., at 1296–1297. If so, we then ask, “[w]hat else is
there in the claims before us?” Id., at ––––, 132 S.Ct., at 1297.
To answer that question, we consider the elements of each
claim both individually and “as an ordered combination” to
determine whether the additional elements “transform the
nature of the claim” into a patent-eligible application. Id., at ––
––, 132 S.Ct., at 1298, 1297. We have described step two of
this analysis as a search for an “ ‘inventive concept’ ”—i.e., 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.” Id., at ––––, 132
S.Ct., at 1294.
Alice, 134 S.Ct. at 2355.2

2 In a memo dated June 25, 2014, the USPTO provided guidance to
examiners in applying Alice. See “Preliminary Examination Instructions in
view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS

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According to the above instructions in Alice, it first must be
determined whether the claims at issue are directed to a patent-
ineligible concept (such as an abstract idea) and, if so, it then must be
determined whether there is something else in the claims that ensures
that they are directed to significantly more than a patent-ineligible
concept.
In Alice, the Supreme Court discussed its decision in Bilski v.
Kappos, 130 S.Ct. 3218 (2010), and stated:
It follows from our prior cases, and Bilski in
particular, that the claims at issue here are directed to an
abstract idea. Petitioner's claims involve a method of
exchanging financial obligations between two parties using
a third-party intermediary to mitigate settlement risk. The
intermediary creates and updates “shadow” records to reflect
the value of each party's actual accounts held at “exchange
institutions,” thereby permitting only those transactions for
which the parties have sufficient resources. At the end of each
day, the intermediary issues irrevocable instructions to the
exchange institutions to carry out the permitted transactions.
On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party
to mitigate settlement risk. Like the risk hedging in Bilski, the
concept of intermediated settlement is “ ‘a fundamental
economic practice long prevalent in our system of commerce.’ ”
Ibid.; see, e.g., Emery, Speculation on the Stock and Produce
Exchanges of the United States, in 7 Studies in History,
Economics and Public Law 283, 346–356 (1896) (discussing
the use of a “clearing-house” as an intermediary to reduce
settlement risk). The use of a third-party intermediary (or
“clearing house”) is also a building block of the modern
economy. See, e.g., Yadav, The Problematic Case of

Bank International, et. al. available at
http://www.uspto.gov/patents/announce/alice_pec_25jun2014.pdf.
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Clearinghouses in Complex Markets, 101 Geo. L.J. 387, 406–
412 (2013); J. Hull, Risk Management and Financial
Institutions 103–104 (3d ed. 2012). Thus, intermediated
settlement, like hedging, is an “abstract idea” beyond the scope
of § 101.
Alice, 134 S.Ct. at 2356 (emphasis added).
With regard to the first determination that should be made as set forth
in Alice, it is our view that a method of playing a casino wagering game as
recited in Appellants’ independent claim 1 is similar to the financial
arrangements claimed in Bilski and Alice, in that the casino wagering game
is effectively a method of exchanging financial obligations based on
probabilities created during the dealing and arranging of a hand of cards.
Therefore, we find independent claim 1 to be directed to the patent-ineligible
concept of an abstract idea.
As we noted above, according to Alice, the question to be settled next
is whether claim 1 recites an element or combination of elements that is
enough to ensure that the claim recites significantly more than an abstract
idea. In this regard, Appellants assert:
The original set of cards, having first been transformed into a
shuffled set, is then transformed into segments of specific sizes
and then the segments are physically distributed to different
areas. That third step is also a clear and further transformation
of a first article (a coherent and complete set of shuffled playing
cards) into a multiple second articles (player hands and a dealer
hand) at different physical positions. These steps clearly define
a transformation that is in compliance with the literal
requirements of Bilski v. Kappos, 130 S. Ct. 3218 (2010). Even
though Bilski held that the test of specific apparatus or physical
transformation was not an absolute test, the present claims as
amended clearly meet even the strictest compliance with the
requirements of 35 U.S.C. 101.
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Br. 10–11.
In Alice, the Court analyzed the recited method of intermediated
settlement, both taking the claim elements separately and as an ordered
combination of elements and, as the method was implemented on a
computer. Id. at 2359–2360. In concluding that the implementation of the
method on a computer was not sufficient to transform the recited methods
into patent-eligible subject matter, the Court said:
[t]he claims at issue amount to “nothing significantly more”
than an instruction to apply the abstract idea of intermediated
settlement using some unspecified, generic computer. Mayo,
566 U.S. at ––––, 132 S.Ct. at 1298. Under our precedents, that
is not “enough” to transform an abstract idea into a patent-
eligible invention.

Id. at 2360.
In the present case, the use of cards amounts to nothing significantly
more than instructions to a dealer and several players to apply the abstract
idea of playing a type of a casino wagering game. In other words, we find
that providing cards, dealing cards, viewing cards, rearranging cards,
wagering based upon the presence of cards, and resolving the wagers and
paying the winners based upon the hands of cards, as are set forth in claim 1,
taken individually or as an ordered combination, are merely necessary and
conventional steps in playing a card game, and do not add enough to the
claims to transform the recited methods into patent-eligible subject matter.3

3 See Ultramerical, Inc. v. Hulu, LLC, 722 F.3d 1335, 1348 (Fed. Cir. 2013)
(“If, to implement the abstract concept, one must perform the additional
step, or the step is a routine and conventional aspect of the abstract idea,

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The cards and hands of cards used in the claimed casino wagering game are
not used for their physical characteristics as cards or as combinations of
cards, but instead are representations of numbers or values, just as
electronically kept “shadow credit record” and “shadow debit record” were
in the computer implementation of the representative claim in Alice.
Appellants fail to identify any additional elements in claim 1 that transform
the claim into a patent-eligible application of the concept of playing a card
game according to a particular set of rules or instructions.
Accordingly, we find nothing in independent claim 1 to be sufficiently
transformative to render the recited methods patent eligible. We reach the
same conclusion with regard to dependent claims 2–19, which specify such
additional requirements as the numbers of cards in a hand, hand counts,
comparing ranks of cards, and placing side bets. Therefore, although we
have carefully considered all of Appellants’ arguments, we are not
persuaded that the positions taken by the Examiner are in error, even when
considered in light of the recent Supreme Court decision in Alice. This
being the case, the rejection of claims 1–19 is sustained.
DECISION
The rejection of claims 1–19 under 35 U.S.C. § 101 as directed to
non-statutory subject matter is affirmed.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a).

then the step merely restates an element of the abstract idea, and thus does
not further limit the abstract concept to a practical application.”).
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AFFIRMED

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