Ex Parte Smolucha

Patent Trial and Appeal Board

Mar 29, 2018

11124411 (P.T.A.B. Mar. 29, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR
111124,411 0510612005 Walter E. Smolucha
70243 7590 04/02/2018
NIXON PEABODY LLP
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
ATTORNEY DOCKET NO. CONFIRMATION NO.
247079-002039USPT 7973
EXAMINER
70 West Madison, Suite 3500 MYHR,JUSTINL
CHICAGO, IL 60602
ART UNIT PAPER NUMBER
3714
NOTIFICATION DATE DELIVERY MODE
04/02/2018 ELECTRONIC
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.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address( es):
docketingchicago@nixonpeabody.com
ipairlink@nixonpeabody.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte WALTER E. SMOLUCHA
Appeal2016-007053
Application 11/124,411
Technology Center 3700
Before JOHN C. KERINS, MICHAEL L. HOELTER, and
LISA M. GUIJT, Administrative Patent Judges.
GUIJT, Administrative Patent Judge.
DECISION ON APPEAL
STATEMENT OF THE CASE
Appellant 1 seeks our review under 35 U.S.C. § 134(a) of the
Examiner's decision2 rejecting claims 1, 2, and 4--25 as being directed to
patent ineligible subject matter under the judicial exception to 35 U.S.C.
§ 101. Final Act. 2. We have jurisdiction over the appeal under 35 U.S.C.
§ 6(b).
We AFFIRM.
1 Appellant identifies the real party in interest as Bally Gaming, Inc., a
wholly owned subsidiary of Scientific Games Corp. Br. 2.
2 Appeal is taken from the Final Office Action dated July 9, 2015.
Appeal2016-007053
Application 11/124,411
THE CLAIMED SUBJECT MATTER
Claims 1, 12, 19, 21, and 24 are the independent claims on appeal.
Claim 21, reproduced below, is illustrative of the subject matter on appeal.
21. A method for using non-monetary chattel to play a
wagering game on a gaming machine including an electronic
display device and one or more input devices, the gaming
machine being configured to initiate the casino wagering game
responsive to a wager input of non-monetary chattel received by
at least one of the one or more input devices and to display on
the electronic display device a randomly determined outcome of
the casino wagering game, comprising:
providing access to a computer readable storage medium
storing non-monetary chattel information to a gaming
establishment;
creating a balance of non-monetary chattel;
setting a balance limit for the non-monetary chattel so that
play on a gaming machine is stopped when the balance limit is
met;
converting the non-monetary chattel to a single point
system used in the gaming machine, wherein converting includes
receiving conversion data from one or more clearing house
dealing in non-monetary chattel; and
transferring non-monetary chattel from a player to the
gaming establishment upon loss of the non-monetary chattel by
the player responsive to a random outcome of the wagering game
on the gaming machine that corresponds to a predetermined
losing outcome; and
transferring non-monetary chattel from the gaming
establishment to the player responsive to a random outcome of
2
Appeal2016-007053
Application 11/124,411
the wagering game on the gaming machine that corresponds to a
predetermined winning outcome.
ANALYSIS
Appellant argues claims 1, 2, and 4--25 as a group. Br. 9--23. We
select independent claim 21 as representative, with claims 1, 2, 4--20, and
22-25 standing or falling with claim 21. See 37 C.F.R. § 41.37(c)(l)(iv).
The Supreme Court has set forth a two-step framework for
determining whether claimed subject matter is judicially-excepted from
patent eligibility under 35 U.S.C. § 101. Alice Corp. Pty. Ltd. v. CLS Bank
Int'!, 134 S. Ct. 2347, 2355 (2014) (citing Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)). Accordingly, we
must first "determine whether the claims at issue are directed to one of those
patent-ineligible concepts"-i.e., a law of nature, a natural phenomenon, or
an abstract idea. Id. If so, we secondly "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. (quoting Mayo, 132 S. Ct. at 1298, 1297). The Supreme
Court has described the second part of the 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. (alteration in original)
(quoting Mayo, 132 S. Ct. at 1294). The Court acknowledged in Mayo, that
"all inventions at some level embody, use, reflect, rest upon, or apply laws
of nature, natural phenomena, or abstract ideas." Mayo, 132 S. Ct. at 1293.
3
Appeal2016-007053
Application 11/124,411
Therefore, we look to whether the claims focus on a specific means or
method that improves the relevant technology or are instead directed to a
result or effect that itself is the abstract idea and merely invoke generic
processes and machinery. See Enfish, LLC v. Microsoft Corp., 822 F .3d
1327, 1336 (Fed. Cir. 2016).
Step One of the Alice/Mayo Framework
Regarding step one of the Alice/Mayo framework, the Examiner
determines that the pending claims, including independent claim 21, are
"directed to" the abstract idea of "performing a financial transaction
involving a gaming network with the transfer of value and converting of
value," including non-monetary value. Final Act. 4; Ans. 2---6. The
Examiner also determines that wagering something of value in a wagering
game is an abstract idea. Ans. 3. The Examiner notes that our reviewing
court has held claims directed to managing and controlling certain wagering
games patent ineligible as abstract ideas. Final Act. 5 (citing Planet Bingo,
LLC VKGS LLC, 576 App'x. 1005 (Fed. Cir. 2014).
First, Appellant argues that "managing a game" is not a judicially
recognized abstract idea. Br. 11-12 (citing Planet Bingo, 576 App'x. 1005
(Fed. Cir. 2014)). However, the Examiner did not determine that claim 21 is
directed to a patent-ineligible concept (i.e., an abstract idea) solely because
claim 21 involves managing a game; rather, as set forth supra, the Examiner
determines that claim 21 is directed to a patent-ineligible concept (i.e., an
abstract idea) because claim 21 is directed to a fundamental economic
practice long prevalent in our system of commerce, namely, transferring and
4
Appeal2016-007053
Application 11/124,411
converting something of value (including non-monetary chattel), depending
on wagering game outcomes. \Ve agree with the Examiner's detennination,
noting that claim 21 is more similar to claims directed to the abstract idea of
intennediated settlements (see Alice Cmp., 134 S. Ct. 2347 (2014)) than to
managing a bingo game (see Planet Bingo, 576 App'x. 1005 (Fed. Cir.
2014)). In this respect, we agree with Appellant that claim 21 is "unlike the
claims at issue in Planet Bingo." Br. 12; see also id. at 12-13. Appellant's
argument does not address the Examiner's determination that the claims are
directed to a fundamental economic practice within the context of a
wagermg game.
Step Two of the Alice/Mayo Framework
The Examiner determines that the limitations of the claims (i.e., claim
21) "are well-known and routine to the financial system," including
converting the value of something into another value system, which involves
"picking a standardized point system" to which the value is converted. Final
Act. 6. The Examiner also determines that "the act of allowing non-
monetary value to be exchanged, based on vendor input, to a single point
value which is useable by [a wagering game system] ... is simply the basic
fundamental economic activity of exchanging one value for another that is
useful for the desired activity." Ans. 6. In support, the Examiner explains
"[t]his is the same concept as exchanging one nation's currency for another
so that an individual can carry[]out economic activity" and that "[t]he act of
setting up rates for exchange, carrying out exchange, and identifying [to]
what to exchange ... are well-known and basic economic activit[ies] that
5
Appeal2016-007053
Application 11/124,411
have existed well before the creation of computer art." Id. The Examiner
further determines that such currency conversion "is also well-known in the
gaming art." Final Act. 6. The Examiner concludes that these activities are
insufficient to ensure that the patent in practice amounts to significantly
more than a patent on the abstract idea itself. Id.
The Examiner also determines that the claims recite "generic gaming
machines and systems" (including network connections and servers) that are
"well-known components within the gaming art," and which fail to
transform the nature of the claim into a patent-eligible application. Final
Act. 6-7; see also Ans. 6-7 (determining that the claims employ "basic
network language well-known in the computer art for the purpose of either
gaming or financial transactions," which ("being generic") does not add
significantly more to the abstract idea itself.).
Appellant argues that "[the] claimed subject matter is inextricably
linked to--and in fact, defines-unconventional features acknowledged by
the Examiner to constitute wagering game systems and methods that are
both novel and non-obvious," whereby "the claims do not seek merely to
'manage' or 'administer' a known game, nor to administer mere abstract
ideas (e.g., fundamental concepts, building blocks, or basic tools of the
gaming industry)." Br. 13; see also Final Act. 6 (referencing the Decision
by the Patent Trial & Appeal Board in Appeal No. 2012-005841, which
reversed the Examiner's rejection of the claims under 35 U.S.C. § 103(a)
over certain prior art).
6
Appeal2016-007053
Application 11/124,411
To the extent Appellant argues that the claims necessarily contain an
"inventive concept" based on their alleged novelty and non-obviousness
over the prior art, this argument is unpersuasive. Although the second step
in the Alice/Mayo framework is termed a search for an "inventive concept,"
the analysis is not an evaluation of novelty or non-obviousness, but rather, a
search for "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."' Alice, 134 S. Ct. at 2355. A novel and
nonobvious claim directed to a purely abstract idea is, nonetheless, patent-
ineligible. See Mayo, 132 S. Ct. at 1304.
Appellant also argues that the Examiner failed to consider the claims
"as a whole" and erroneously applied the Examiner's "own generalized
abstraction of the claims." Br. 14. Appellant further argues that the
Examiner failed to "analyze[] the actual limitations recited in the claims."
Id. at 15 (emphasis omitted).
Indeed, as set forth supra, the second step of the Alice/Mayo
framework requires consideration of the elements of each claim, both
individually and as an ordered combination (or as a whole), to determine
whether the additional elements transform the nature of the claim into a
patent-eligible application. However, we disagree with Appellant that the
Examiner failed to properly apply this analysis.
The ordered combination of the elements of claim 21 require (in
relevant part): (i) providing a gaming establishment access to stored
information regarding non-monetary chattel; (ii) creating a balance of, and
7
Appeal2016-007053
Application 11/124,411
setting a balance limit for, the non-monetary chattel to stop play on a gaming
machine when the balance is met; (iii) converting the non-monetary chattel
to a single point system used in the gaming machine, wherein converting
includes receiving conversion data from one or more clearing house dealing
in non-monetary chattel; and (iv) transferring non-monetary chattel from a
player to the gaming establishment, or vice versa, responsive to a random
outcome of the wagering game on the gaming machine.
Considering these claim elements as a whole, we are not apprised of
error in the Examiner's determination, as set forth supra, that the ordered
combination fails to transform the nature of the claim into a patent-eligible
application. Rather, we agree with the Examiner's determination that the
claim elements, as a whole, recite the fundamental economic practices of
transferring and converting things of value (i.e., non-monetary chattel) to a
single currency (i.e., a currency based on points), which is utilized, and
therefore, required for participation, by a system (i.e., a gaming system).
The claims involve the well-known banking practices of providing account
information, setting credit limits, converting currency, and distributing assets
according to ownership, which, in this case, is determined by the outcome of
a wagermg game.
Further, the Examiner correctly analyzes the claim limitations
individually, as set forth supra, by determining that the claim limitations
reciting the transfer and conversion of non-monetary chattel are well-known
financial transactions, and separately, that the claim limitations reciting the
determination of ownership of the non-monetary chattel (or points) involves
8
Appeal2016-007053
Application 11/124,411
generic gaming machines-neither of which amounts to significantly more
than a patent upon the ineligible concept itself, as discussed infra.
Appellant further argues that the Examiner fails to set forth a prima
facie case by unambiguously identifying the abstract idea to which the
claims are allegedly directed. Br. 16. Specifically, Appellant contends that
"a prima facie case of patent ineligibility has not yet been established
because (i) the alleged 'abstract idea' in the rejection does not take into
consideration the basic character of the subject matter involved and (ii) the
rejection is silent as to how the claims are directed to, rather than merely
involving, the alleged 'abstract idea."' Id. at 17. We disagree because the
Examiner clearly articulates, as set forth supra, that the claims (i.e., claim
21) are directed to the abstract idea of "performing a financial transaction
involving a gaming network with the transfer of value and converting of
value." See also Ans. 2 ("The Examiner points out that the identified
abstract idea in the rejection was 'performing a financial transaction
involving a gaming network with the transfer of value and converting of
value,"' noting that "methods which are directed to managing a game [have
been] found as solely abstract and not adding significantly more.").
Appellant further argues that the claims (i.e., claim 21) recite
significantly more than an abstract idea because "the claims recite specific
structural elements that clearly distinguish the machine operative in the
claimed subject matter as a particular machine as opposed to a general-
purpose computer." Appeal Br. 19.
The Specification expressly defines the term "gaming machine" as
9
Appeal2016-007053
Application 11/124,411
a machine into which a coin or token is deposited, or which is
activated by a card or token associated with data regarding non-
monetary chattel, to play a game that uses a video display or an
electromechanical device with a spinning wheel. The gaming
machines include slot machines and push button machines. The
gaming machines include coin operated machines and machines
have a serial interface. Gaming machines include gaming tables
capable of being initiated by a card or token.
Spec. 4: 11-1 7. We determine that the recitation of "a gaming machine" in
the claims is insufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the ineligible concept itself, because
the Specification defines "gaming machine" as conventional and well-
known in the art.
Moreover, the introduction of a computer into the claims does not
alter the analysis under step two of the Alice/Mayo framework. In other
words, "the mere recitation of a generic computer cannot transform a patent-
ineligible abstract idea into a patent-eligible invention." Alice Corp., 134 S.
Ct. at 2358. Appellant's claimed generic computing components (i.e., a
computer readable storage medium) amount to a mere instruction to
implement the abstract idea on a computer. See id. at 2359 ("[T]he relevant
question is whether the claims here do more than simply instruct the
practitioner to implement the abstract idea ... on a generic computer.").
Finally, Appellant argues that the present claims "do not seek to pre-
empt the asserted abstract idea of 'transfer and conversion of value' such
that others cannot practice it." Br. 22. This argument is unpersuasive.
10
Appeal2016-007053
Application 11/124,411
Merely because claims do not preempt all forms of the abstraction
does not make them any less abstract. See OIP Techs., Inc. v. Amazon.com,
Inc., 788 F.3d 1359, 1362---63 (Fed. Cir. 2015) ("[T]hat the claims do not
preempt all price optimization or may be limited to price optimization in the
e-commerce setting do not make them any less abstract."). Moreover,
characterizing preemption as a driving concern for patent eligibility is not
the same as characterizing preemption as the dispositive test for patent
eligibility. Instead, "[t]he Supreme Court has made clear that the principle
of preemption is the basis for the judicial exceptions to patentability" and
"[f]or this reason, questions on preemption are inherent in and resolved by
the§ 101 analysis." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d
1371, 1379 (Fed. Cir. 2015) (citing Alice, 134 S. Ct. at 2354). Although
"preemption may signal patent ineligible subject matter, the absence of
complete preemption does not demonstrate patent eligibility." Id. The
Federal Circuit concluded that "[ w ]here a patent's claims are deemed only to
disclose patent ineligible subject matter under the Mayo framework, ...
preemption concerns are fully addressed and made moot." Id.; see also id.
(holding that "[i]n this case, Sequenom's attempt to limit the breadth of the
claims by showing alternative uses of cff DNA outside of the scope of the
claims does not change the conclusion that the claims are directed to patent
ineligible subject matter"). Given this direction from our reviewing court,
we decline to apply a preemption standard in our analysis, and instead apply
the steps set forth by the Supreme Court in Alice and Mayo.
11
Appeal2016-007053
Application 11/124,411
Accordingly, we sustain the Examiner's rejection of independent
claim 21, and claims 1, 2, 4--20, and 22-25 fall therewith.
DECISION
The Examiner's rejection of claims 1, 2, and 4--25 under 35 U.S.C.
§ 101 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)(l )(iv).
AFFIRMED
12