Jeremy Hornik et al.

Patent Trials and Appeals Board

May 28, 2020

2018006369 (P.T.A.B. May. 28, 2020)

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.
11/379,176 04/18/2006 Jeremy Hornik 247079-002160USPT 9381
70243 7590 05/28/2020
NIXON PEABODY LLP
70 West Madison, Suite 3500
CHICAGO, IL 60602
EXAMINER
HENRY, THOMAS HAYNES
ART UNIT PAPER NUMBER
3715
NOTIFICATION DATE DELIVERY MODE
05/28/2020 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 JEREMY HORNIK, ALFRED THOMAS, and
WILLIAM WADLEIGH
____________

Appeal 2018-006369
Application 11/379,176
Technology Center 3700
____________

Before WILLIAM V. SAINDON, MICHAEL L. HOELTER, and
BRENT M. DOUGAL, Administrative Patent Judges.

SAINDON, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Appellant1 seeks review under 35 U.S.C. § 134(a) of the Examiner’s
decision in the Final Office Action dated October 20, 2016 to reject claims
1–7 and 14–25. Appeal Br. 1. Claims 8–13 are canceled.2 We have
jurisdiction under 35 U.S.C. § 6(b).
We affirm in part.

1 We use the word “Appellant” to refer to “applicant” as defined in
37 C.F.R. § 1.42. Appellant identifies Bally Gaming, Inc. as the real party in
interest. Appeal Br. 3.
2 See Amendment (received July 13, 2016) in response to the Non-Final
Office Action (dated January 14, 2016).
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BACKGROUND
The claims are generally directed to computer-implemented wager
gaming machines. The gaming machines operate under a licensing model
that determines the fee structure for which the operator pays for use of the
wager games. Of the rejected claims, 1, 14, and 20 are independent. Claims
1, 14, and 20 are reproduced below with emphasis added:
1. A computer-implemented method comprising:
transmitting, from a content server to a client gaming machine
and using one or more processors of the content server, a
list including available wager gaming content and a
plurality of available licensing models including at least
two different licensing models selected from the group
consisting of a subscription model in which a customer
pays a flat fee for an unlimited number of games, a tiered
model, a periodic model, a popularity model, and one or
more other licensing models;
receiving, at the content server, a selection from the list
indicating a selected wager gaming content and a selected
licensing model;
transmitting, from the content server to the client gaming
machine, wager gaming content and licensing content
corresponding to the selection,
detecting, via an input device of the client gaming machine, a
physical item associated with monetary value that
establishes a credit balance on the client gaming machine;
initiating, in response to an input indicative of a wager drawn on
the credit balance, a wagering game including the selected
wager gaming content, and conducting the wagering game
on the client gaming machine according to the selected
licensing model.

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14. A system comprising:
a gaming machine including an input device configured to detect
physical items associated with monetary value that
establish credit balances, the gaming machine executing,
via one or more first processors, programmed instructions
that cause the gaming machine to receive wager gaming
content subject to a license requiring payment of a license
fee based on indicated use of the wagering game content
while subject to the license, initiate wagering games
responsive to wagers drawn on respective credit balances,
conduct the wagering games based on the wager gaming
content according to the license, and transmit information
indicating how the gaming machine used the wager
gaming content while subject to the license; and
a download manager receiving the information indicating how
the wager gaming content was used while subject to the
license, and determining, via one or more second
processors, the license fee based on the indicated use of
the wager gaming content.

20. A gaming system operating with a gaming machine
configured to conduct a wagering game using wager
gaming content subject to a license, the gaming machine
including an input device configured to detect a physical
item associated with a monetary value establishing a credit
balance on the gaming machine, the gaming system
comprising:
a download manager including one or more processors, the
download manager being connected for communication to
the gaming machine, the download manager executing, via
at the one or more processors, stored instructions which
cause the download manager to:
transmit, to the gaming machine, the wager gaming
content;
determine whether the gaming machine has permission to
use the wager gaming content subject to the license;
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enable use of the wager gaming content on the gaming
machine, wherein the gaming machine, in response
to an input indicative of a wager drawn on the credit
balance, initiates a wagering game using the wager
gaming content;
receive, from the gaming machine, information about
prior usage of the wager gaming content on the
gaming machine while subject to the license;
determine, based on the information, a licensing fee based
on the prior usage.

REFERENCES
The Examiner relies on the following references:
Name Reference Date
Smith US 5,581,270 Dec. 3, 1996
Saffari US 6,264,561 B1 July 24, 2001
Chatani US 6,810,528 B1 Oct. 26, 2004
Nguyen US 2002/0116615 A1 Aug. 22, 2002

REJECTIONS
1. Claims 1–7 and 20–25 stand rejected under 35 U.S.C. § 103(a)
as unpatentable over Saffari, Chatani, and Nguyen.
2. Claims 14–19 stand rejected under 35 U.S.C. § 103(a) as
unpatentable over Smith and Nguyen.

DISCUSSION
Appellant argues each independent claim separately, and we address
them in turn. No dependent claim is argued separately, and we treat them as
a group with their independent claim. 37 C.F.R. § 41.37(c)(1)(iv) (2017).
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Claims 1–7
Independent claim 1 requires transmission of information from a
content server to a client gaming machine. The key limitation at issue on
appeal requires transmission of a list that includes “available wager gaming
content” as well as “a plurality of available licensing models including at
least two different licensing models” (emphasis added).
The Examiner rejects claims 1–7 in view of Saffari, Chatani, and
Nguyen. Final Act. 2–4. Relevant to the limitation at issue, the Examiner
asserts that Saffari provides a list having a plurality of licensing models, but
the models are all the same. Id. at 2–3. The Examiner then finds that
Nguyen describes a licensing model that is different from Saffari’s model.
Id. at 3. The Examiner concludes that combining the teachings of the two
references having different models leads to a list containing different
licensing models. Id. at 3–4; see also Ans. 2.
Appellant argues that the prior art merely teaches two licensing
models, not a list of different licensing models to choose from. Appeal Br.
9; see also id. at 8–11 (setting forth the entire argument for claim 1). In
other words, Appellant argues that, even if Saffari and Nguyen’s licensing
models are different, the prior art suggests merely using one or the other, not
a list having different models to choose from, i.e., a list that provides an
option to use one model or another. See also Reply Br. 2–3 (arguing the
prior art “simply provides two examples of systems with a single licensing
model” rather than “a list of different licensing models”).
We agree with Appellant. The Examiner has not shown that the prior
art on appeal discloses a list of licensing models, where at least two models
are different. We understand the Examiner’s point that the prior art teaches
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two models, and if one combined the two models of the prior art, one would
have a list with two choices. But we do not see where this prior art teaches
providing that choice—that only appears in the rejection as a result of the
Examiner’s proposed addition of Nguyen’s prior art model into Saffari
without removing Saffari’s existing model. Disclosure of two models
independently does not disclose or suggest providing the two models
together at the same time.
The Examiner does not make a finding that the prior art teaches or
suggests a list having at least two different licensing models. Thus, we must
conclude that the only reason the Examiner seeks to add Nguyen’s model to
Saffari’s machine (as opposed to replace it), is to re-create the claims in
hindsight. Accordingly, we do not sustain the Examiner’s rejection of claim
1, or of claims 2–7, which depend therefrom and thus contain the same
issue.
Claims 14–19
Independent claim 14 does not include the limitation we addressed in
our analysis of claim 1. Claim 14 is directed to a gaming machine
programmed to receive wager gaming content subject to a license requiring
payment of a licensing fee. The fee is “based on indicated use of the
wagering game content,” and determined based on “information indicating
how the gaming machine used the wager gaming content.”
The Examiner rejects the claims under Smith and Nguyen. Final Act.
7–9. The Examiner finds that Smith teaches “information indicating a usage
of gaming content subject to a license.” Id. at 7 (citing Smith, col. 2, ll. 33–
36). In the cited portion of Smith, we find that a user plays a game for a
period of time until her allotted time has expired, after which she may
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purchase additional time. Smith, col. 2, ll. 30–36. The Examiner cites
Nguyen for the premise of providing wagering games in particular (Smith
appears directed to video games in general) and also for Nguyen’s billing
scheme, which is based on “indicated use” rather than Smith’s time-based
fee. Final Act. 7 (citing Nguyen ¶ 104). In the cited portion of Nguyen, we
find a “pay-as-you go” licensing scheme for a wagering game, where the
owner pays for each game on a per-use basis, rather than an up-front basis.
Nguyen ¶ 104. The Examiner explains that the proposed combination would
have been obvious for the purpose of allowing “players to play a more
diverse set of games” and to provide “a more operator friendly billing
scheme.” Id.3
“Prior Usage” Limitation
Appellant first argues that Nguyen’s scheme applies a fixed fee for
each usage, then collects aggregate fees accrued over a billing period.
Appeal Br. 12. In support, Appellant asserts that Nguyen does not describe
the fee is “for use of a given game [that] is variable based on how the game
is used or any other aspect of prior usage.” Id. (emphasis added); see also
id. (“There is no suggestion . . . that the fees for each use of a wagering
game are variable based on prior use.”); Reply Br. 3–4 (similar).
Appellant’s first argument fails for the simple reason that it argues
features (“prior use”) not in the claim. In addition, Appellant argues for a

3 The Examiner makes further findings regarding Smith and Nguyen not
challenged here, which we adopt as our own. See Final Act. 7–8; see also
Ex parte Frye, 94 USPQ2d 1072, 1074–76 (BPAI 2010) (precedential)
(setting forth the standard for review by the Board; limiting review to issues
actually raised).
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narrow, specific interpretation of that unclaimed term (“variable based on
prior use”). See, e.g., Appeal Br. 12–13 (citing Spec. ¶ 1164); Reply Br. 3–
4. Although we acknowledge that the Specification does disclose an
unnamed billing scheme (Spec. ¶ 116) that appears to be what the Appellant
wishes the claims to recite, the claims have no language that tends to
constrain them to that specific scheme. Instead, the generic, broad language
of claim 14 is satisfied by the Examiner’s proposed combination of Smith
and Nguyen.
Specifically, a license fee “based on indicated use of the wagering
game content” is met by the prior art’s teaching of a “pay-as-you go”
scheme. That is because, in such a scheme, pay is based on actual prior use.
When the machine transmits how many times the game was played, it
transmits “information indicating how the gaming machine used the wager
gaming content.”5, 6 The scheme reads on the plain meaning of the claim,
and we see nothing in the Specification that otherwise limits the claims as
recited.
Rationale for Combination

4 Appellant cites to paragraph 128, which appears to be an error. In the copy
of the Specification provided to us, there is no paragraph 128, and the
language reproduced in the Brief instead appears at paragraph 116.
5 For example: How did the machine use the content? It used game 1 x
times, game 2 y times, and game 3 z times.
6 Our reading of claim 14 is further supported by dependent claims 16 and
17, which state that the “licensing fee” and “information indicating how the
gaming machine used the wager gaming content” in claim 14 can be “a
number of times the wagering games were conducted.”
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Appellant’s second argument is against the rationale for the
combination. Appeal Br. 13–14. In review, the Examiner’s proposed
modification to Smith’s game-rental system is to include more types of
games (wagering-type games) and to switch from a pay-per-time model to a
pay-per-use model. See Final Act. 7–8.
The Examiner is correct that including wagering-type games would
“allow . . . a more diverse set of games,” and Appellant does not appear to
challenge this particular portion of the rationale. We find no fault in the
rejection here.
Likewise, we do not find fault in the Examiner’s proposed switch
from one known fee model to another. Accord KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398, 416 (2007) (“when a patent claims a structure already known
in the prior art that is altered by the mere substitution of one element for
another known in the field, the combination must do more than yield a
predictable result”). Appellant does not offer a specific technical challenge
to the feasibility or predictability of the Examiner’s proposed substitution of
one known element for another, but rather argues that “there is actually little
(if any) difference between Smith’s ‘pay-per-view’ model and Nguyen’s
‘pay-as-you-go’ model.” Appeal Br. 13. Appellant appears to acknowledge
the simplicity of the proposed combination, but argues that the Examiner has
not stated why one of ordinary skill would specifically put Nguyen’s model
in for Smith’s, on the theory that they are basically equivalent. But under
controlling case law, such as KSR, the Examiner’s rejection is sufficient to
show obviousness of the claim on this record. Nothing of record indicates a
technical hurdle in implementing any given scheme, and both Smith’s and
Nguyen’s fee schemes are established to be known. This is an example of
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where the proposed combination is a simple substitution of one known
element for another. Accordingly, we sustain the Examiner’s conclusion of
obviousness for claim 14, and of claims 15–19 that depend therefrom and
are not argued separately. 37 C.F.R. § 41.37(c)(1)(iv).
Claims 20–25
The Examiner rejected claims 20–25 over Saffari, Chatani, and
Nguyen. Final Act. 4–7. Relevant to the issue at hand, the Examiner found
that Nguyen’s “pay-as-you go” scheme is a fee based on prior use. That is, a
fee is based on use.
“Prior Usage” Limitation
The first issue Appellant presents is whether the prior art discloses the
claimed “prior usage.” Appeal Br. 14–15. Unlike claim 14 addressed
above, independent claim 20 does have a “prior usage” element. However,
Appellant argues that “prior usage” requires that “the fee . . . of a given
game is variable based on how the game is used” (emphasis added). Thus,
like claim 14, Appellant is arguing limitations (variable fee) not found in the
claim. Merely reciting that the license fee is based on “prior usage” is
insufficient to limit the claim to some sort of variable fee schedule. Nothing
in the claim suggests that the fee must be variable, let alone variable in a
given way.
Instead, the claim requires receipt of information about prior usage
and then determining a fee based on the prior usage. Nguyen describes a fee
schedule where usage is billed at a fixed cost for time a game is used, rather
than paid up front. Nguyen ¶ 104. In this way, Nguyen describes “a usage
fee may be paid” periodically based on “each time a game is played.” Id.
Different games may have different costs. Id.
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Appellant appears to be arguing that Nguyen’s “fee” is really a “bill,”
which is allegedly different from the “fee” that is claimed. See Reply Br. 4.
This is not persuasive. Even under the unclaimed fee structure in paragraph
116 of the Specification that Appellant holds out as being a “variable” fee
that changes responsive to prior usage—that fee is still akin to a bill. For
example, if 3333 games were played under that fee structure, and then the
fee calculated, the “licensing fees” would be ($0.05 x 1000) + ($0.10 x
1000) + ($0.20 x 1333) = $50 + $100 + $226.60 = $376.60. See Spec. ¶ 104.
If a single game were played, then the licensing fees would be $0.05. The
license fee is not variable based on the number of uses; it can be found
deterministically using the set fee schedule. What is variable is the cost,
which varies in a predetermined way according to a schedule. Accord, e.g.,
id. (“the first 1000 games . . . may cost $0.05 per game, . . . the second 1000
games . . . cost $0.10 per game”) (emphasis added). But the claims are not
directed to these features described in the Specification. The claims merely
require determining “a licensing fee based on the prior usage.” In either
Nguyen or the Specification, the licensing fee paid is a dollar amount
calculated according to a set fee schedule after one or more games are
played. Although Nguyen does not have a variable cost per game based on a
progressive fee schedule, the claim does not require such.
Rationale for Combination
The second issue Appellant presents is whether the Examiner
sufficiently articulated a reason to combine the teachings of Nguyen with
Saffari and Chatani. Appeal Br. 15–16. The Examiner relied on Nguyen for
its disclosure of “payments . . . based on prior use.” Final Act. 5. The
Examiner’s combination is premised on a finding that including this
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payment scheme allows “a more operator friendly billing scheme.” Id. This
finding must be evaluated in the context of Nguyen’s disclosure that its
“pay-as-you go” scheme is more “operator friendly” than a pay up front
scheme because “pay-as-you go” allows costs to be aligned with actual use,
so an operator need not pay for games up front that prove unpopular.
Nguyen ¶ 104 (stating that an “advantage of the game license request
method [in Nguyen] is that a gaming machine owner may be able to operate
. . . many different types of games but only pay for each game on a per use
basis,” and further contrasting “pay-as-you go” with “up front”—“when a
particular game is unpopular, the costs to the gaming machine operator are
minimized”). Saffari’s billing scheme is to pay up front for the ability to
enable play of a game. Final Act. 4; see, e.g., Saffari, col. 7, l. 66–67 (“the
selected games will be accessible and enabled for use”); id. at col. 7, ll. 1–28
(explaining how games on a chip are enabled or disabled based on the
licensing). Thus, Nguyen specifically teaches to replace a scheme like
Saffari’s in order to obtain a stated benefit. In this light, we sustain the
Examiner’s finding because the proposed combination is premised on
rational underpinnings.7 Accordingly, we sustain the Examiner’s rejection
of claim 20, and of claims 21–25, which depend therefrom.

7 The Examiner makes further findings regarding Saffari, Chatani, and
Nguyen that are not challenged and which we adopt as our own. See Final
Act. 4–7; see also Frye, 94 USPQ2d at 1074–76.
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CONCLUSION
We do not sustain the Examiner’s rejection of claims 1–7. We sustain
the Examiner’s rejection of claims 14–25. Claims 8–13 were previously
canceled.

DECISION SUMMARY
As to claims 1–7 and 14–25 on appeal:
Claims
Rejected
35
U.S.C. §
Reference(s)/Basis Affirmed Reversed
1–7, 20–25 103 Saffari, Chatani, Nguyen 20–25 1–7
14–19 103 Smith, Nguyen 14–19
Overall
Outcome
14–25 1–7

AFFIRMED IN PART