Konami Gaming Inc. v. High 5 Games, LlcMOTION for Summary Judgment;D. Neb.October 21, 2016 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Robert C. Ryan (7164) HOLLAND & HART LLP 5441 Kietzke Lane, Second Floor Reno, NV 89511 Phone: (775) 327-3000 Fax: (775) 786-6179 rcryan@hollandhart.com Ryan A. Loosvelt (8550) HOLLAND & HART LLP 9555 Hillwood Drive, Second Floor Las Vegas, NV 89134 Phone: (702) 669-4600 Fax: (702) 669-4650 raloosvelt@hollandhart.com Attorneys for High 5 Games, LLC Christopher B. Hadley (Admitted pro hac vice) HOLLAND & HART LLP 222 South Main St., Suite 2200 Salt Lake City, UT 84101 Phone: (801) 799-5873 Fax: (801) 618-4238 cbhadley@hollandhart.com Teague I. Donahey (Admitted pro hac vice) HOLLAND & HART LLP 800 West Main Street, 17th Floor Boise, ID 83702 Phone: (208) 383-3988 Fax: (208) 343-8869 tidonahey@hollandhart.com UNITED STATES DISTRICT COURT DISTRICT OF NEVADA KONAMI GAMING, INC., a Nevada corporation, Plaintiff, v. HIGH 5 GAMES, LLC a Delaware limited liability company, Defendant. Case No.: 2:14-cv-01483-RFB-NJK DEFENDANT HIGH 5 GAMES, LLC’S MOTION FOR SUMMARY JUDGMENT THAT THE ASSERTED PATENT CLAIMS ARE INVALID UNDER 35 U.S.C. § 112 ¶¶ 2 AND 6 AND 35 U.S.C. § 101 Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 1 of 39 i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 TABLE OF CONTENTS I. INTRODUCTION..............................................................................................................1 II. CONCISE STATEMENT OF MATERIAL FACTS......................................................3 A. The Asserted Patents ................................................................................................3 B. The Asserted Patent Claims .....................................................................................4 C. Technological Background ......................................................................................6 1. Claimed Hardware Components ..................................................................6 2. Unclaimed and Undescribed Software .........................................................9 III. ARGUMENT ....................................................................................................................10 A. THE ASSERTED CLAIMS ARE INVALID UNDER 35 U.S.C. § 112 ¶¶ 2 AND 6 ............................................................................................................10 1. Legal Background ......................................................................................10 2. The Asserted Claims All Include Numerous Elements Reciting Function Without Reciting Sufficient Structure for Performing That Function and Thus Are Subject to the Requirements of 35 U.S.C. § 112 ¶ 6 .........................................................................................16 3. The Patent Specifications Fail to Disclose Sufficient Structure Corresponding to the Claimed Functions and Thus the Asserted Claims Fail to Comply With 35 U.S.C. § 112 ¶¶ 2 and 6 ..........................21 B. THE ASSERTED CLAIMS ARE INVALID UNDER 35 U.S.C. § 101 ..............24 1. Legal Background ......................................................................................24 2. The Asserted Claims Are Directed to an Abstract Idea, Which Is Patent-Ineligible Subject Matter Under 35 U.S.C. § 101 ..........................25 3. The Mere Implementation of an Abstract Idea Using Generic Computer Components Is Legally Insufficient to Create Patent Eligibility ...................................................................................................29 IV. CONCLUSION ................................................................................................................30 Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 2 of 39 ii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 TABLE OF AUTHORITIES Page(s) CASES Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013)....................................................................................25, 29, 30 Alice Corp. Pty. Ltd. v. CLS Bank Int’l, __ U.S. __, 134 S. Ct. 2347 (2014) .................................................................................. passim Ariad Pharms, Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en banc) ................................................................................11 Aristocrat Tech. Australia Pty Ltd. v. International Game Tech., 521 F.3d 1328 (Fed. Cir. 2008)........................................................................................ passim Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335 (Fed. Cir. 2012)................................................................................................19 Blackboard, Inc. v. Desire2Learn Inc., 574 F.3d 1371 (Fed. Cir. 2009)................................................................................................22 CG Tech. Dev., LLC v. Big Fish Games, Inc., No. 2:16-cv-00857-RCJ-VCF, 2016 WL 4521682 (D. Nev. Aug. 29, 2016) ...........................1 Dow Chem. Co. v. NOVA Chem. Corp., 803 F.3d 620 (Fed. Cir. 2015)..................................................................................................12 Electric Power Gp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016)................................................................................................27 Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016)................................................................................................28 EON Corp. IP Holdings LLC v. AT&T Mobility LLC, 785 F.3d 616 (Fed. Cir. 2015)..................................................................................................18 ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509 (Fed. Cir. 2012)......................................................................................16, 17, 19 Ergo Licensing, LLC v. CareFusion 303, Inc., 673 F.3d 1361 (Fed. Cir. 2012)................................................................................................22 Everglades Game Tech., LLC v. Supercell, Inc., No. 14-643-GMS, 2015 WL 4999654 (D. Del. Aug. 21, 2015) ..............................................26 Ex Parte Erol, No. 2011-00143, 2013 WL 1341107 (P.T.A.B. Mar. 13, 2013)..............................................19 Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 3 of 39 iii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Ex Parte Lakkala, No. 2011-001526, 2013 WL 1341108 (P.T.A.B. Mar. 13, 2013)............................................19 Ex Parte Miyazaki, 89 U.S.P.Q. 2d (BNA) 1207, 2008 WL 5105055 (B.P.A.I. 2008) ..........................................13 Ex Parte Smith, No. 2012-007631, 2013 WL 1341109 (P.T.A.B. Mar. 14, 2013)............................................19 Farstone Tech., Inc. v. Apple, Inc., No. 8:13-cv-1537-ODW(JEMx), 2015 U.S. Dist. LEXIS 137819 (C.D. Cal. Oct. 8, 2015) ............................................................................................................................20 Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002) .................................................................................................................11 Flo Healthcare Solutions, LLC v. Kappos, 697 F.3d 1367 (Fed. Cir. 2012)................................................................................................14 Global Cash Access, Inc. v. NRT Tech. Corp., No. 2:15-cv-00822-MMD-GWF, 2016 U.S. Dist. LEXIS 39472 (D. Nev. Mar. 25, 2016) ..................................................................................................................................25 GoDaddy.com, LLC v. RPost Commc’ns Ltd., No. CV-14-00126-PHX-JAT, 2016 WL 212676 (D. Az. Jan. 19, 2016) ..........................18, 19 Greenberg v. Ethicon Endo-Surgery, 91 F.3d 1580 (Fed. Cir. 1996)..................................................................................................13 Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946) ...................................................................................................12, 13, 17, 27 Harris Corp. v. Ericsson Inc., 417 F.3d 1241 (Fed. Cir. 2005)................................................................................................22 Hewlett Packard Co. v. ServiceNow, Inc., No. 14-cv-00570-BLF, 2015 U.S. Dist. LEXIS 29384 (N.D. Cal. Mar. 10, 2015) ........................................................................................................................................28 In re Smith, 815 F.3d 816 (Fed. Cir. 2016)..................................................................................3, 25, 26, 30 In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607 (Fed. Cir. 2016)............................................................................................29, 30 Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed. Cir. 2015)..........................................................................................25, 30 Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 4 of 39 iv 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed. Cir. 2015)................................................................................................25 Konami Gaming, Inc. v. Marks Studios, LLC, No. 2:14-CV-01485-JAD-CWH (D. Nev.) ..................................................................17, 20, 21 Lighting World, Inc. v. Birchwood Lighting, Inc., 382 F.3d 1354 (Fed. Cir. 2004)................................................................................................14 McRO, Inc. v. Bandai Namco Games Amer. Inc., __ F.3d __, 2016 U.S. App. LEXIS 16703 (Fed. Cir. Sept. 13, 2016) ....................................27 Mortgage Grader, Inc. v. First Choice Loan Servs., 811 F.3d 1314 (Fed. Cir. 2016)................................................................................................30 Nautilus, Inc. v. Biosig Instr., Inc., __ U.S. __, 134 S. Ct. 2120 (2014) ..............................................................................10, 11, 12 Nazomi Commc’ns, Inc. v. Nokia Corp., 739 F.3d 1339 (Fed. Cir. 2014)..................................................................................................6 Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359 (Fed. Cir. 2008)................................................................................................22 Phillips v. AWH Corp., 415 F.3d 1303 (2005) .................................................................................................................4 Planet Bingo, LLC v. VKGS LLC, 576 Fed. Appx. 1005 (Fed. Cir. 2014) .....................................................................................25 RaceTech, LLC v. Kentucky Downs, LLC, No. 1:15-CV-00059-GNS, 2016 WL 843382 (W.D. Ky. Mar. 1, 2016) .................................25 Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014)..................................................................................................25 Universal Oil Prods. Co. v. Globe Oil & Ref’g Co., 322 U.S. 471 (1944) .................................................................................................................11 Velocity Patent LLC v. Mercedes-Benz USA, LLC, No. 13-cv-8413, 2016 WL 5234110 (N.D. Ill. Sept. 21, 2016) ...............................................18 Verint Sys. Inc. v. Red Box Recorders Ltd., No. 14-cv-5403(SAS), 2016 U.S. Dist. LEXIS 612 (S.D.N.Y. Jan. 4, 2016) .........................20 Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015)........................................................................................ passim WMS Gaming, Inc. v. International Game Tech, 184 F.3d 1339 (Fed. Cir. 1999)..........................................................................................18, 22 Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 5 of 39 v 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 York Prods., Inc. v. Central Tractor Farm & Family Ctr., 99 F.3d 1568 (Fed. Cir. 1996)..................................................................................................13 STATUTES 35 U.S.C. § 101 ...................................................................................................................... passim 35 U.S.C. § 112 ...................................................................................................................... passim OTHER AUTHORITIES Amer. Heritage Dictionary of the English Lang. 1398 ..................................................................18 Fed. R. Civ. P. 56 .............................................................................................................................1 L.R. 56-1 ..........................................................................................................................................1 U.S.P.T.O. Manual of Patent Examining Proc. (“MPEP”) § 2181 (9th ed. 2015) ........................14 Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 6 of 39 vi 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 TABLE OF ABBREVIATIONS “Ex.”: Exhibit attached to the Declaration of Teague I. Donahey, filed herewith, Ex. Nos. 1-19. “Konami Br.”: Konami Gaming, Inc.’s Opening Claim Construction Brief [ECF No. 86]. “Nicely Decl.”: Declaration of Mark Nicely, filed herewith, Ex. Nos. A-O. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 7 of 39 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Pursuant to Fed. R. Civ. P. 56 and D. Nev. L.R. 56-1, Defendant High 5 Games, LLC (“High 5”), by and through its counsel, Holland & Hart LLP, hereby moves for summary judgment that all asserted claims of the Konami patents-in-suit are invalid pursuant to 35 U.S.C. § 112 ¶¶ 2 and 6 and 35 U.S.C. § 101. This motion is made on the basis of the Memorandum of Points and Authorities set forth herein, the Declaration of Teague I. Donahey (“Donahey Decl.”), filed herewith, the Declaration of Mark Nicely, filed herewith, the pleadings and papers on file in this action, and any oral argument permitted by the Court. MEMORANDUM OF POINTS & AUTHORITIES I. INTRODUCTION The asserted claims of the Konami patents-in-suit are invalid. Accordingly, summary judgment in High 5’s favor is now appropriate, before the parties and the Court expend further resources adjudicating an unnecessary infringement dispute.1 See Aristocrat Tech. Australia Pty Ltd. v. International Game Tech., 521 F.3d 1328 (Fed. Cir. 2008) (affirming Judge Sandoval’s entry of summary judgment that patent claims covering gaming machines were invalid under 35 U.S.C. § 112 ¶¶ 2 and 6); CG Tech. Dev., LLC v. Big Fish Games, Inc., No. 2:16-cv-00857-RCJ- VCF, 2016 WL 4521682 (D. Nev. Aug. 29, 2016) (Jones, J.) (granting motion to dismiss based on invalidity of gaming patents under 35 U.S.C. § 101. The Konami patents-in-suit are directed towards slot wagering games played on electronic gaming machines. At a high level, the claimed gaming machines emulate old slot machines (which had spinning mechanical reels with symbols on the reel peripheries) by electronically displaying the rotation of simulated reels. Of course, Konami makes no claim to have invented electronic slot machines, which have been played in casinos for decades. Rather, the specific inventions claimed in the patents-in-suit more narrowly concern a slot wagering 1 Concurrently herewith, High 5 is submitting its Responsive Claim Construction Brief pursuant to D. Nev. L.P.R. 1-16 setting forth its position on the construction of numerous disputed terms and phrases from Konami’s four patents-in-suit. High 5 is submitting this summary judgment motion separately, however, to ensure that certain patent invalidity issues that relate to claim construction are fully and appropriately briefed. As explained herein, this motion presents questions of law that are intertwined with the claim construction process and are frequently adjudicated at an early stage of the case. Should the Court find the patents-in-suit invalid and enter summary judgment in High 5’s favor, the entire case would be resolved, rendering the remainder of the parties’ claim construction and other disputes moot. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 8 of 39 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 game in which consecutive runs of identical symbols are shown spinning on the simulated reel or reels, which purportedly generates player excitement and a heightened anticipation of winning. The asserted claims recite numerous details concerning the game rules—e.g., what reels and symbols must be displayed to the game player, under what circumstances, and when. Neither the claims nor the specification, however, provide any disclosure—beyond superficial references to generic computer components used in any modern electronics device—concerning the underlying hardware and software that would be required to implement the invention, despite the fact that Konami and the named inventor, Osamu Yoshimi, both concede that such hardware and software are needed. Most significantly, no software algorithm is disclosed. The complete failure of the patents-in-suit to claim or describe the hardware and software implementation of the invention with any specificity renders the claims invalid, for two reasons. First, by claiming the invention in terms of its function—what the invention does—as opposed to the actual hardware and software implementation of the invention—what the physical invention is—Konami has engaged in functional claiming that subjects its patent claims to the requirements of 35 U.S.C. § 112 ¶ 6.2 Under § 112 ¶ 6, where, as here, a patentee has claimed an element of his invention in functional terms, the element must be construed to cover only the “corresponding structure, material, or acts described in the specification and equivalents thereof.” Furthermore, if the specification fails to disclose the requisite structure, then the patent claim is insufficiently bounded in scope and the claim is invalid for indefiniteness under 35 U.S.C. § 112 ¶ 2.3 See Aristocrat, 521 F.3d at 1337–38. That is the case here: the specification of the patents-in-suit fails to disclose the necessary hardware and software structure and the asserted claims are accordingly insufficiently bounded and are invalid as a matter of law. Second, given the undisputed focus of the patent claims on the simple game rules associated with the “consecutive run of symbols” concept, and given the corresponding failure to claim or even disclose any specific hardware or software implementation of those game rules, 2 35 U.S.C. § 112 ¶ 6 was recently recodified as 35 U.S.C. § 112(f). The statutory language remains the same. 3 35 U.S.C. § 112 ¶ 2 was recently recodified as 35 U.S.C. § 112(b). The statutory language remains the same Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 9 of 39 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 the asserted claims are invalid under 35 U.S.C. § 101 for failure to claim patentable subject matter. No one is entitled to obtain a patent covering an abstract idea. The Federal Circuit has squarely held that, where a patent claim is directed to “rules for conducting a wagering game,” the claim is directed to an abstract idea for purposes of § 101, patent ineligible, and invalid. See In re Smith, 815 F.3d 816, 818–19 (Fed. Cir. 2016). The same result is required here. Accordingly, High 5 respectfully requests that the Court enter summary judgment in High 5’s favor that all asserted claims of the patents-in-suit are invalid under 35 U.S.C. § 112 ¶¶ 2 and 6 and 35 U.S.C. § 101. II. CONCISE STATEMENT OF MATERIAL FACTS A. The Asserted Patents In this action, Konami asserts that High 5 infringes certain patent claims from four closely-related patents: U.S. Patent Nos. 8,096,869 (“the ʼ869 patent”); 8,366,540 (“the ʼ540 patent”); 8,622,810 (“the ʼ810 patent”); and 8,616,955 (“the ʼ955 patent”) (collectively the “patents-in-suit”). See Exs. 1, 3, 5, 7 (patents-in-suit). These patents share a common genealogy: the ʼ540 patent issued from a “continuation application” that continued the prosecution of the application that issued as the ʼ869 patent, but with differing claims. In turn, the ʼ810 and ʼ955 patents issued from yet other continuation applications that further continued the prosecution of the applications underlying the ʼ869 and ʼ540 patents, but yet again with differing claims. As such, the “specifications” of all four patents-in-suit (i.e., the patent drawings, background, summary, and description sections) are substantively identical.4 See id. Osamu Yoshimi is the sole inventor named on all four patents-in-suit. See id. Mr. Yoshimi was a game designer for Konami entities in Japan and Australia from approximately 1998 through 2007. See Ex. 9 (Yoshimi Dep. Tr.) at 20:19–24:10. As a game designer, Mr. Yoshimi was responsible for developing game rules for Konami games. See id. at 149:16–150:3. The patents-in-suit all are directed to game rules allegedly developed by Mr. Yoshimi for certain gaming machines, which Konami has referred to as “slot wagering games.” Ex. 12 4 Because the specifications are substantively identical, High 5 will cite to the specification of the ʼ869 patent for ease of reference. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 10 of 39 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 (Konami Cl. Constr. Br.) at 1, 2, 3 (referring to the claimed invention as a “slot wagering game”); Ex. 13 at 6 (Konami Contentions) (“[T]he subject invention is directed toward electronic or virtual slot machines . . . .”); see also Ex. 10 (Yoshimi Dep. Tr.) at 142:6–12 (“The invention is game rules.”). These gaming machines electronically display simulated rotatable reels that spin as the game is played. The claimed game rules contemplate that consecutive runs of identical symbols will be made visible to the game player as the reels spin. See, e.g., Ex. 1 at Title & Abstract. According to the patents-in-suit, such consecutive runs of symbols generate a “heightening of interest” in the player. See id. at 5:13. B. The Asserted Patent Claims Each United States patent contains a written description of the invention, which is called a “specification.” See 35 U.S.C. § 112(a). At the conclusion of the specification are a series of numbered “claims” that should “particularly point[] out and distinctly claim[] the subject matter which the inventor or a joint inventor regards as the invention.” Id. § 112(b). Although the specification provides a general and often lengthy description of the invention, including the background of the invention, a summary of the invention, and a discussion of the inventor’s preferred embodiments, it is the numbered “claims” at the end of the patent that define the legal scope of the patent grant. Phillips v. AWH Corp., 415 F.3d 1303, 1312 (2005). Each patent claim recites a number of features, or elements, that combined make up the claimed invention. Claim elements are also called “limitations” because, generally speaking, as additional elements are included in a claim, the legal coverage of the claim becomes more narrow or limited in scope. Patent claims may be “independent” or “dependent.” An independent claim is a claim that stands on its own, without reference to any other claim, and is complete in and of itself. In contrast, a dependent claim is a claim that incorporates by reference all of the elements of another claim and adds an additional limitation or limitations. Thus, for example, an independent claim may claim a combination of elements A, B, and C; and a dependent claim may incorporate by reference all of those elements and combine them with element D. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 11 of 39 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Since a dependent claim includes all the subject matter of a parent independent claim, if the independent claim is not infringed, the dependent claim likewise cannot be infringed. In other words, if a parent independent claim directed to the combination of features A, B, and C is not provided by given subject matter (i.e., because that subject matter is missing A, B, or C), the dependent claim, which incorporates A, B, and C by reference, and adds an additional element or elements, is similarly not met by the given subject matter. Dependent claims provide a type of alternative, or “fall-back” position. For example, if a parent independent claim is found to be invalid under the prior art, it is possible that a dependent claim depending from the parent claim could nevertheless be valid in light of the same prior art, due to, for example, the addition of features to the dependent claim that distinguish the claim from the prior art. That is why dependent claims are included in patents: as a fall-back position in case the broader parent claim is determined to be invalid or unenforceable. (Since, however, the dependent claim typically adds additional features or aspects to the subject of a parent claim, the dependent claim might not cover (be infringed by) subject matter that may fall within the scope of the broader parent claim.) Here, pursuant to Konami’s L.P.R. 1-6 Amended Disclosure of Asserted Claims and Infringement Contentions Konami is presently asserting the following 52 patent claims5 from the patents-in-suit against High 5: (A) claims 1–3, 6–7, 11, and 19–21 of the ʼ869 patent (claims 1 and 19 of which are independent claims); (B) claims 1–3, 6–9, 13, and 21–25 of the ʼ540 patent (claims 1 and 21 of which are independent claims); (C) claims 1–15 of the ʼ810 patent (claims 1, 8, and 15 of which are independent claims); and (D) claims 1, 4–10, and 13–19 of the ʼ955 patent (claims 1, 10, and 19 of which are independent claims). Ten of Konami’s asserted claims are independent claims: claims 1 and 19 of the ʼ869 patent; claims 1 and 21 of the ʼ540 patent; claims 1, 8, and 15 of the ʼ810 patent; and claims 1, 10, and 19 of the ʼ955 patent. The remaining 42 asserted claims are dependent claims. 5 High 5 has filed a motion asking the Court to require Konami to reduce the number of asserted patent claims at issue in the case. See ECF No. 60. To date, the motion remains pending. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 12 of 39 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 C. Technological Background As the Federal Circuit has explained in another context: To function, a computing device requires both hardware and software. Processors are hardware components embedded in computing devices. The central processing unit (“CPU”) enables a computing device to carry out instructions contained in a computer program. Software refers to instructions that tell the device hardware what to do. The hardware then follows these instructions (“executes” the software). Nazomi Commc’ns, Inc. v. Nokia Corp., 739 F.3d 1339, 1340 (Fed. Cir. 2014). 1. Claimed Hardware Components The asserted claims recite one or more of the following hardware elements: “processor,” “game controller,” “memory device,” and “display device.” These are generic references to basic components of computing systems. The following graphic illustrates basic computer architecture: Nicely Decl. Ex. K at 21. A “processor” is the generic reference for a device within a computer device that carries out, or executes, instructions contained in software code. See id. at 22. It is commonly known as a central processing unit, or a “CPU.” See id. at 21. It is also known as a “microprocessor.” See Nicely Decl. Ex. K at 23, 27. A processor typically includes control circuitry, which provides Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 13 of 39 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 direction to other components of the computer system, an “arithmetic logic unit” or “ALU,” which performs arithmetic and logic operations, and “registers,” which are specialized memory locations used by the processor. Id. A “controller” is a generic name for a semiconductor device within a computer or a computerized electronics device that interfaces with and manages another internal or external component or device. See Nicely Decl. Ex. L. Though there are many different kinds of controllers in this context, the “game controller” of the patents-in-suit is associated with a conventional CPU. See Ex. 1 at 3:33–35; 6:58–62; Ex. 10 (Yoshimi Dep. Tr.) at 83:1–18; 87:9– 16; 100:17–24; Ex. 13 (Konami Contentions) at 156 (“The computer processor is the game controller.”); Nicely Decl. ¶¶ 108-110. “Memory” is the generic name for a kind of device within a computer or a computerized electronics device that stores the software instructions that the processor implements. See Nicely Decl. Ex. K at 20, 32–38. In modern electronics devices, the processor retrieves the instructions from memory and then executes them. See id. at 22. Different types of instructions may be stored in different types of memory devices. See generally id. at 35–37. A “display” is simply a generic term for the visual display provided with respect to a computer or a computerized electronics device, e.g., a computer monitor or screen. See id. at 20. The specification confirms that generic, conventional computer components are contemplated by the claims’ recitation of “processor,” “game controller,” “memory device,” and “display device.” For example, the specification discloses a “control module” having a “microprocessor” and random access memory (RAM).6 See Ex. 1 at 3:33–35; 6:58–62. The “control module” is connected to a “data storage device,” which is described as being a conventional memory device such as “read only memory (ROM), erasable read only memory (EPROM), Compact Flash Card, PCMCIA card and the like,” 7 or a “hard disc drive.” Id. at 3:35–45; 6:64–7:3. “[V]ideo imagery” is output to a “main display module.” Id. at 7:6–7. 6 RAM is a conventional memory storage location in a computer or electronics device that may be easily read and over-written, and, accordingly, is used to store data that is not necessarily intended to be permanent (e.g., application data). See Nicely Decl. Ex. K at 36. 7 ROM is a non-volatile (more permanent) memory storage location in a computer or electronics device, used primarily for storing firmware (embedded software native to the hardware), and an Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 14 of 39 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Figure 7 of the patents-in-suit illustrates these generic, conventional components. Specifically, it shows the “control module 60,” including a “microprocessor 62,” “random access memory (RAM) 64,” and a “data storage device 66,” coupled to a “user keyboard 68” and a “display module 70”: See id. Fig. 7 & 6:58–7:7. In deposition, Mr. Yoshimi confirmed that the asserted claims recite only generic, conventional computing components. He testified that the “processor” he had in mind was “ordinary” and that, in forming his invention, he did not have in mind any particular type or brand. Ex. 10 (Yoshimi Dep. Tr.) at 100:11–15; 113:11–114:7; 116:1–25. The “processor” uses “ordinary processing.” Id. at 114:16–115:16. He further confirmed that the “game controller” includes the “processor.” See id. at 100:17–24. He described the “game controller” as being a generic “CPU” that “may also have ROM or RAM.” Id. at 83:1–18; 87:9–16. Finally, he explained that the “memory device” and “display device” elements are simply references to ordinary, generic parts. See id. at 120:16–122:25. EPROM is a ROM variant in which the memory can be erased and re-programmed. See Nicely Decl. Ex. K at 35-36. CompactFlash and PCMCIA refer to standardized memory expansion cards that can be inserted into card slots on electronics devices. See, e.g., id. at 36. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 15 of 39 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 2. Unclaimed and Undescribed Software As Konami has stated, “[a]ll modern gaming machines, whether land-based or web- based, are implemented by software executed by a computer processor.” Ex. 13 (Konami Contentions) at 156. Software is the set of instructions that causes the hardware to carry out particular functions. See Nicely Decl. Ex. M at 80. Software can come in the form of “firmware,” which is typically the basic operating system instructions for an electronics device, and it is typically embedded in the device’s most fundamental hardware elements. See id. Other application software may be of a less permanent nature and used to provide functions beyond the basic operation of the computer itself. See id. At a high level, software is written in a way that tells the computer the steps it should perform in a particular order to accomplish a particular task. See id. The overarching set of rules or steps for a sequence of computer operations is known as an “algorithm.” See generally Nicely Decl. Ex. N. Specifically, an algorithm provides an unambiguous sequence of specific operations and procedures that must be performed by the computer in a particular order, leading to a solution to a problem. See id. at 6. In patents, depending on the subject matter, an “algorithm may be expressed as a mathematical formula, in prose, or as a flow chart, or in any other manner that provides sufficient structure.” Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1352 (Fed. Cir. 2015). Significantly, the algorithm is different than the functionality to be achieved: the same function may be achieved through numerous different algorithms. See Aristocrat, 521 F.3d at 1334. Before a computer can accomplish the required operations, the algorithm must be converted to a comprehensively detailed set of instructions that are written in a format that the computer can understand. See Nicely Decl. Ex. N at 7–8. This format is known as software code. See id. There are many different software languages that a programmer could use to create a set of software code. See id. Thus, an algorithm may be expressed in software code in many different ways, both structurally and in terms of the software language utilized. See id. Furthermore, in the context of the patents-in-suit, as the specification recognizes, “gaming machines have come to be regulated by government authorities as to . . . the manner in Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 16 of 39 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 which the machines must return a percentage of the monetary turnover to the players,” and gaming machines, whether mechanical or electronic, must “comply with these restrictions.” Ex. 1 at 1:27–45. Thus, in electronic gaming machines, it is necessary that the software algorithm and code implement game rules using a specific mathematical structure that complies with gaming regulations (e.g., mathematics that ensure the requisite probability of a winning outcome). Nicely Decl. ¶ 124. Here, the game rules claimed in the four patents-in-suit are implemented in software, and if one wants to understand the details of how a game is constructed and operates, one needs to consult the underlying software. See Ex. 9 (Yoshimi Dep. Tr.) at 101:5–102:2; 149:4–150:24; 165:3–166:2; 167:1–22; Ex. 10 (Yoshimi Dep. Tr.) at 140:22–141:19. The specification of the patents-in-suit confirms that the claimed inventions are implemented through software. The specification explains that “program code” “enable[es]” and “driv[es]” the claimed inventions. Ex. 1 at 3:40; 6:62–63. This program code is stored on a data storage device. See id. at 3:36; 6:62–65. Further, “[c]ontrol module 60 acts to implement appropriate elements of the program code according to inputs from a user keyboard 68 . . . .” Id. at 7:4–7. No software algorithms or software code, however, are included in, attached to, or described in the specification, and, indeed, no discussion of software whatsoever is contained in the specification beyond the passing, high-level references to the unspecified and undescribed “program code” cited above. See id. passim. Finally, no specific game mathematics are disclosed. See id. passim. III. ARGUMENT A. THE ASSERTED CLAIMS ARE INVALID UNDER 35 U.S.C. § 112 ¶¶ 2 AND 6 1. Legal Background a. The U.S. Patent System and a Patentee’s Quid Pro Quo The patent laws grant a patent holder a right to exclude others from making, using, and selling a patented invention—essentially, a limited monopoly right. See Nautilus, Inc. v. Biosig Instr., Inc., __ U.S. __, 134 S. Ct. 2120, 2124 (2014). In exchange for this significant commercial right, the patent system requires that the patent holder provide society with an Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 17 of 39 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 equally significant quid pro quo: the patent holder must refrain from keeping its invention a trade secret, it must publicly disclose and describe the invention in the patent document “in sufficient detail to enable one skilled in to practice the invention once the period of the monopoly has expired,” and it must provide a “precision of disclosure” such that the patent will “warn the industry concerned of the precise scope of the monopoly asserted.” Universal Oil Prods. Co. v. Globe Oil & Ref’g Co., 322 U.S. 471, 484 (1944). Several provisions of the patent law have been enacted to enable courts to police patent holder’s disclosures to ensure that they are fully providing the public with the requisite quid pro quo. For example, under the “written description” requirement, 35 U.S.C. § 112 requires that the patent include a specification that contains a written description of the invention. See Ariad Pharms, Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1344 (Fed. Cir. 2010) (en banc). The written description must reasonably convey to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date. See id. at 1351. Separately, under the “enablement” requirement of § 112, the specification must also describe “the manner and process of making and using the invention, in such full, clear, concise, and exact terms as to enable any person skilled in the art . . . to make and use the same.” See id. at 1344. Most pertinent here, and as described more fully below, although the patent laws permit a patent holder to claim its invention in terms of the invention’s function (i.e., its results or effects), § 112 ¶¶ 2 and 6 require that the specification adequately disclose the structure of the invention and how the invention is actually physically implemented—and the patent’s coverage will be limited to the disclosed structure and its equivalents. b. 35 U.S.C. § 112 ¶ 2 “[L]ike any property right, [a patent’s] boundaries should be clear.’” Nautilus, 134 S. Ct. at 2124 (quoting Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 730 (2002)). To this end, under 35 U.S.C. § 112 ¶ 2, each patent must include a specification describing the invention and concluding with “one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.” This is known as the claim definiteness requirement. See, e.g., Nautilus, 134 S. Ct. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 18 of 39 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 at 2125. A failure to comply with this requirement renders the patent claim invalid. See id. While there are a number of different ways in which a patent claim can be invalid for indefiniteness, one way relevant here is a failure to comply with 35 U.S.C. § 112 ¶ 6 (discussed below). Whether a patent claim is invalid for indefiniteness is a question of law. Dow Chem. Co. v. NOVA Chem. Corp., 803 F.3d 620, 625 (Fed. Cir. 2015). c. 35 U.S.C. § 112 ¶ 6 This motion presents issues of law associated with 35 U.S.C. § 112 ¶ 6, which is one important way in which the patent laws place clear boundaries on the scope of rights granted under a patent. Section 112 ¶ 6 was passed in the aftermath of the Supreme Court’s landmark 1946 decision, Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946). The Court in Halliburton addressed the problem of functional claiming under which patent applicants attempt to describe the claimed invention by focusing on an invention’s results—“what it will do”—and not on the invention’s actual physical implementation. A patent claim that describes an invention in terms of its results (i.e., its function), as opposed to how the results are achieved, places little bounds on the scope of patent rights and is a recipe for mischief. Accordingly, in Halliburton, the Court held: “A claim which describes the most crucial element in a ‘new’ combination in terms of what it will do, rather than in terms of its own physical characteristics or its arrangement in the new combination, is invalid.” 329 U.S. at 9. Halliburton thus held the claim in issue invalid as being indefinite because the functional language at issue (an “echo receiving means”) did not provide sufficient notice to the public of the scope of the patent. Congress undertook to address perceived problems related to the Halliburton decision by enacting § 112 ¶ 6 in the Patent Act of 1952, which provides: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof. “In enacting this provision, Congress struck a balance in allowing patentees to express a claim limitation by reciting a function to be performed rather than by reciting structure for performing Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 19 of 39 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 that function, while placing specific constraints on how such a limitation is to be construed, namely by restricting the scope of coverage to only the structure, materials, or acts described in the specification as corresponding to the claimed function and equivalents thereof.” Williamson, 792 F.3d at 1347. Thus, under the statute, a patent applicant may engage in functional claiming, but he is required to disclose the underlying “structure, material, or acts in support thereof” in the specification, and the scope of the claim element at issue is limited accordingly. This places reasonable bounds on claim scope and provides adequate notice of such bounds to the public. d. The Significance of the Claim Term “Means” There are many ways in which a drafter might use functional language to describe a claim element and thus bring § 112 ¶ 6 into play. See, e.g., Ex Parte Miyazaki, 89 U.S.P.Q. 2d (BNA) 1207, 2008 WL 5105055, at *13 (B.P.A.I. 2008) (Precedential Opinion) (“While the particular claim language involved in the Supreme Court’s Halliburton decision uses the word ‘means,’ the issue was claiming in a purely functional manner, a practice condemned by pre- existing case law, and not any particular problem associated uniquely with the word ‘means’ as distinguished from other purely functional words and phrases.”). Over time, however, it has become conventional for patent practitioners to use the word “means” in the claim to signal an intent to invoke § 112 ¶ 6. See Greenberg v. Ethicon Endo- Surgery, 91 F.3d 1580, 1584 (Fed. Cir. 1996). To use a basic example, a patent might claim a “means for lifting,” under which the patentee would be claiming the function of lifting, including all mechanisms used to accomplish that function, but the claim would be interpreted under § 112 ¶ 6 to include only the specific mechanisms described in the specification and their equivalents. Thus, the term “means” took on a talismanic role in claim drafting. In response, the courts adopted a set of rebuttable presumptions: (1) if a patent claim element is drafted as a “means for,” there is a rebuttable presumption that the requirements for § 112 ¶ 6 have been triggered, and, conversely, (2) if a claim element omits the term “means,” then there is a rebuttable presumption that the element is not subject to § 112 ¶ 6. See, e.g., York Prods., Inc. v. Central Tractor Farm & Family Ctr., 99 F.3d 1568, 1574 (Fed. Cir. 1996). Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 20 of 39 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 This binary approach became even more entrenched in Lighting World, Inc. v. Birchwood Lighting, Inc., 382 F.3d 1354 (Fed. Cir. 2004), wherein the Federal Circuit held that “the presumption flowing from the absence of the term ‘means’ is a strong one that is not readily overcome.” Id. at 1358. And as recently as 2012, the Federal Circuit stated: “When the claim drafter has not signaled his intent to invoke § 112, ¶ 6 by using the term ‘means,’ we are unwilling to apply that provision without a showing that the limitation essentially is devoid of anything that can be construed as structure.” Flo Healthcare Solutions, LLC v. Kappos, 697 F.3d 1367, 1374 (Fed. Cir. 2012). Meanwhile, not surprisingly, patent attorneys seeking to avoid the limitations placed on functional claiming by § 112 ¶ 6, and thereby obtain broad patents for their clients, adopted creative ways to engage in functional claiming without using the term “means.” For example, to use the same basic example as above, rather than claiming a “means for lifting” that would almost certainly trigger application of § 112 ¶ 6, a patent attorney might draft the claims using other terms such as “lifting element,” “mechanism for lifting,” or, perhaps most pertinent here, “device configured to lift.” See, e.g., U.S.P.T.O. Manual of Patent Examining Proc. (“MPEP”) § 2181 (9th ed. 2015) (identifying “configured to” as a linking phrase typically used with functional language). Such creative functional claiming became so prevalent, however, that it eventually caused a backlash. e. The Federal Circuit’s Decision in Williamson In 2015, the Federal Circuit revisited the court’s handling of § 112 ¶ 6 issues in Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015). In Williamson, the patent-at- issue included a system claim utilizing computer hardware and software linked by a network, which included a “distributed learning control module” element but no specific recitation of “means.” See id. at 1343–44. The Federal Circuit, in a portion of the opinion decided en banc, overruled the so-called “strong” presumption that had been articulated in, e.g., Lighting World, stating that the heightened presumption had “shifted the balance struck by Congress in passing § 112, para. 6 and has resulted in a proliferation of functional claiming untethered to § 112, para. 6 and free of the strictures set forth in the statute.” Id. at 1349. The Federal Circuit then clarified Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 21 of 39 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 the standard to be applied when the term “means” is absent from a claim: “When a claim term lacks the word ‘means,’ the presumption can be overcome and § 112, para. 6 will apply if the challenger demonstrates that the claim term fails to ‘recite sufficiently definite structure’ or else recites ‘function without reciting sufficient structure for performing that function.’” Id. The court then turned to the claim language at issue. See id. at 1350. The court emphasized that the term “means” gives rise to § 112 ¶ 6 because it sets forth a “black box recitation of structure” for providing the claimed function. Id. Likewise, the term “module,” like other non-specific terms such as “mechanism,” “element,” and “device,” generates the same “black box” issue. Id. More specifically, the court found that the term “module” in this context “is simply a generic description for software or hardware that performs a specified function.” Id. As such, the court found that “distributed learning control module” failed to recite sufficiently definite structure, even if, conceivably, one of skill in the art could program a computer to perform the recited functions. Id. at 1351. Accordingly, § 112 ¶ 6 applied to the claims at issue. Finally, the court examined the patent specification to determine whether it disclosed a “sufficient structure that corresponds to the claimed function.” See id. at 1351–54. The court held that it did not. See id. In so doing, the court adopted the reasoning set forth in the Aristocrat decision: that (a) “special purpose computer” was necessary to implement the “distributed learning control module” limitation because a general purpose computer would require special programming via software code to perform the specialized functions; and (b) where a special purpose computer is necessary for implementation, “this court has consistently required that the structure disclosed in the specification be more than simply a general purpose computer or microprocessor. . . . We require that the specification disclose an algorithm for performing the claimed function.” Williamson, 792 F.3d at 1352. Furthermore, expert testimony concerning what one of ordinary skill in the art would understand reading the specification could not create structure where none was disclosed in the specification. See id. at 1354. In short, Williamson represents a recognition by the Federal Circuit that the § 112 ¶ 6 pendulum had swung too far, and that patent attorneys must not be allowed to effectively nullify Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 22 of 39 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 the statute’s restrictions on functional claiming through artful drafting that avoids the term “means.” f. The § 112 ¶ 6 Analysis Involves Questions of Law That Are Suitable for Summary Judgment By its terms, § 112 ¶ 6 is analyzed on a claim element-by-claim element basis. See 35 U.S.C. § 112 ¶ 6. Whether patent claim language is functional such that § 112 ¶ 6 is invoked is, like other matters associated with patent claim construction, a question of law. Williamson, 792 F.3d at 1346. Where an element of a patent claim is drafted in functional terms, but the patent specification fails to disclose sufficient structure for performing that function, the entire claim violates § 112 ¶ 6 and thus is invalid for indefiniteness under § 112 ¶ 2. See id. at 1354. Whether a patent claim is invalid as indefinite for failure to comply with § 112 ¶ 6 is also a question of law. ePlus, Inc. v. Lawson Software, Inc., 700 F.3d 509, 516 (Fed. Cir. 2012). Because the § 112 ¶ 6 analysis involves such legal questions, it is particularly well-suited for resolution at the summary judgment stage. See, e.g., Aristocrat, 521 F.3d at 1331–38 (affirming grant of summary judgment of patent invalidity under § 112 ¶ 6). 2. The Asserted Claims All Include Numerous Elements Reciting Function Without Reciting Sufficient Structure for Performing That Function and Thus Are Subject to the Requirements of 35 U.S.C. § 112 ¶ 6 Under Williamson, where a claim element includes functional language but lacks the word “means,” the claim element will still be subject to the requirements of § 112 ¶ 6 if it fails to recite sufficiently definite structure, or else recites function without reciting sufficient structure for performing that function. See Williamson, 792 F.3d at 1349 (emphasis added). If the claimed structure is insufficient to perform the claimed function without more, it is not “sufficient structure” and the requirements of § 112 ¶ 6 apply to ensure that the claims are appropriately limited to the scope of the patent disclosure. Here, it is beyond dispute that the asserted claims are replete with claim elements reciting a number of different functions. The functional language contained in the various claim elements is charted out more specifically in the parties’ Joint Claim Construction and Prehearing Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 23 of 39 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Statement, which charts are incorporated herein by reference for purposes of brevity. See ECF No. 81 at 57–109. Thus, the asserted claims are almost entirely composed of elements that are functional in nature. However, as explained in more detail below, the asserted claims do not recite a structure that is legally sufficient for performing those claimed functions. Put another way, the claims describe in great detail what the claimed inventions “do” in terms of results (i.e., what is displayed to the player when the game is played), but studiously avoid details about what the inventions “are” (i.e., how the is actually implemented in terms of the hardware and software). See Halliburton, 329 U.S. at 9. a. A “Processor” Is Not a Sufficient Structure for Performing the Claimed Functions Konami has asserted that the claim element “processor” provides a sufficient structure in the asserted claims from the ʼ869 and ʼ540 patents such that § 112 ¶ 6 does not apply. See, e.g., Ex. 13 (Konami Contentions) at 10 & Ex. A at 3. The precise question, however, is whether a “processor” without more provides a sufficient structure for performing the claimed functions. Since it is undisputed that the functions claimed in the ʼ869 and ʼ540 patents cannot be performed without the assistance of software, and thus that a mere “processor” would be unable to perform the functions without more, the claimed “processor” is not a sufficient structure for performing the claimed functions, and § 112 ¶ 6 applies to the ʼ869 and ʼ540 patent claims. The specification does not provide any description or discussion of the claimed “processor” other than referring to an unspecified “microprocessor” being included within a “control module.” See Ex. 1 at 3:33–35; 6:58–62; Fig. 7. Nothing in the specification or prosecution history suggests that the “processor” is anything other than a conventional microprocessor. See Exs. 1–8 passim. Indeed, in Konami Gaming, Inc. v. Marks Studios, LLC, No. 2:14-CV-01485-JAD-CWH (D. Nev.) (“Marks”), a co-pending action in which Konami has asserted the same four patents-in-suit against a different defendant, Konami itself confirmed that “processor” should be read in light of the references to “microprocessor” in the specification and should accordingly be given its plain and ordinary meaning. See Ex. 12 (Konami Cl. Constr. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 24 of 39 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Br.) at 15–16 (citing ʼ869 patent at 3:30–38; 6:58–7:50). Konami did not assert that the term “processor,” as used in the patents-in-suit, has any special definition. Id. The named inventor on the patents-in-suit, Mr. Yoshimi, testified that the “processor” he had in mind was “ordinary” and that, in forming his invention, he did not have in mind any particular type or brand. Ex. 10 (Yoshimi Dep. Tr.) at 100:11–15; 113:11–114:7; 116:1–25. The “processor” uses “ordinary processing.” Id. at 114:16–115:16. Thus, one of ordinary skill in the art would recognize that the term “processor,” as used in the patents-in-suit, is a reference to a conventional microprocessor, i.e., a CPU. See id.; see also GoDaddy.com, 2016 WL 212676, at *56 (defining “processor” as a general purpose computer, a CPU, or a program that translates another program into a form acceptable by the computer being used) (citing Amer. Heritage Dictionary of the English Lang. 1398). A conventional microprocessor, however, “lends sufficient structure only to basic functions of a microprocessor.” EON Corp. IP Holdings LLC v. AT&T Mobility LLC, 785 F.3d 616, 623 (Fed. Cir. 2015). Where the claimed functionality goes beyond the basic, off-the-shelf functions of a microprocessor and requires special programming through software, the programming transforms a microprocessor into an entirely different device: “The instructions of the software program that carry out the algorithm electrically change the general purpose computer by creating electrical paths within the device. These electrical paths create a special purpose machine for carrying out the particular algorithm.” WMS Gaming, Inc. v. International Game Tech, 184 F.3d 1339, 1348 (Fed. Cir. 1999). When this occurs, the programming effectively creates a “new machine,” Aristocrat, 521 F.3d at 1333, and a “microprocessor no longer lends sufficient structure to the claim,” EON, 785 F.3d at 623. Accordingly, where a claim recites a “processor” for performing a function, and where, as here, one of ordinary skill in the art would recognize “processor” to mean a conventional microprocessor or central processing unit (CPU), the claimed “processor” alone does not impart sufficient structure for performing the claimed function unless a commercially-available, off-the- shelf microprocessor can perform the function without special programming. See Velocity Patent LLC v. Mercedes-Benz USA, LLC, No. 13-cv-8413, 2016 WL 5234110, at *6 (N.D. Ill. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 25 of 39 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Sept. 21, 2016); GoDaddy.com, LLC v. RPost Commc’ns Ltd., No. CV-14-00126-PHX-JAT, 2016 WL 212676, at *56–57 (D. Az. Jan. 19, 2016) (citing Ex Parte Smith, No. 2012-007631, 2013 WL 1341109, at *7–8 (P.T.A.B. Mar. 14, 2013)); see also Ex Parte Lakkala, No. 2011- 001526, 2013 WL 1341108, at *6–7 (P.T.A.B. Mar. 13, 2013); Ex Parte Erol, No. 2011-00143, 2013 WL 1341107, at *8–9 (P.T.A.B. Mar. 13, 2013). This is doubly true where the phrase “configured to” follows the term “processor”: the phrase “configured to” means that the item being modified must be specifically “made to” or “designed to” perform the corresponding function, as opposed to being merely “capable of.” See, e.g., Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335, 1349 (Fed. Cir. 2012). In every asserted claim of the of the ʼ869 and ʼ540 patents, the claimed “processor” is “configured to” perform a number of functions. For example, in claim 1 of the ʼ869 patent, the “processor” is “configured to”: (a) execute a game (b) displaying a matrix of symbol containing elements having a plurality of rows and a plurality columns; (c) at least one column of said matrix comprising a portion of a simulated rotatable reel of a plurality of said symbol containing elements; (d) said simulated rotatable reel comprising sections of symbol containing elements displaying a plurality of symbols that are fixed for each game played on said gaming machine; (e) said simulated rotatable reel including at least one section in which a consecutive run of three or more of said symbol containing elements is populated by an identical symbol so that, as the simulated rotatable reel rotates, a consecutive string of said same identical symbol is sequentially displayed within said consecutive string of symbol containing elements; (f) and said identical symbol is randomly selected anew for each play of said game, and (g) wherein said identical symbol is selected by virtually spinning a notional, non-visible, inner reel comprising a subset of said plurality of symbols. See Ex. 1 at 7:52–8:2. One of ordinary skill in the art at the time of the invention would have recognized, however, that a generic off-the-shelf “processor” is not capable of performing any of these specialized functions, without something more. See, e.g., Ex. 10 (Yoshimi Dep. Tr.) at 103:13– 17; 105:8–17; 116:1–25. Namely, software is used to implement the recited functions. Ex. 13 (Konami Contentions) at 156 (“All modern gaming machines, whether land-based or web-based, Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 26 of 39 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 are implemented by software executed by a computer processor.”); Ex. 9 (Yoshimi Dep. Tr.) at 101:5–102:2; 149:4–150:24; 165:3–166:2; 167:1–22; Ex. 10 (Yoshimi Dep. Tr.) at 140:22– 141:19. For this reason, the claimed generic “processor” alone is not a “sufficient structure for performing [the corresponding] function[s]” and thus, under Williamson, § 112 ¶ 6 applies to the asserted claims of the of the ʼ869 and ʼ540 patents. Williamson, 792 F.3d at 1349. b. A “Game Controller” Is Not a Sufficient Structure for Performing the Claimed Functions In the ʼ810 and ʼ955 patents, the asserted claims recite the claim element “game controller” instead of “processor.” See Exs. 5 & 7. For example, in claim 1 of the ʼ810 patent, the “game controller” is “configured to”: “(i) initiate the first instance of a game using the reel, (ii) randomly select a second identical symbol from the set of symbols, (iii) replace each of the first identical symbols in the run of consecutive symbol positions of the reel with the second identical symbol, and (iv) initiate a second instance of the game using the reel having the run of consecutive symbol positions populated with the second identical symbol.” Ex. 7 at 8:7–15. Konami argues that the “controller,” like the “processor,” constitutes structure such that the requirements of § 112 ¶ 6 may be avoided. See Ex. 13 (Konami Contentions) at 10 & Ex. A at 3. The specification does not explicitly describe the “game controller”; the specification only refers to the “game controller” as being “not shown.” See, e.g., Ex. 1 at 4:26, 49. No discussion of the “game controller” is contained in the prosecution history. See Exs. 2, 4, 6, 8 passim. The lack of any explicit description of the “game controller” in the intrinsic evidence renders the term a classic “black box” that, at best, is a “generic description[s] for software or hardware” that fails to recite sufficient structure. See Williamson, 792 F.3d at 1350. In Marks, however, Konami asserted that the “control module”8 referenced in the specification constitutes one embodiment of the “game controller.” See Ex. 12 (Konami Cl. 8 Notably, in Williamson, the Federal Circuit expressly held that the term “module” is “a well- known nonce word” that also fails to recite sufficient structure for purposes of § 112 ¶ 6. Williamson, 792 F.3d at 1350; see also Verint Sys. Inc. v. Red Box Recorders Ltd., No. 14-cv- 5403(SAS), 2016 U.S. Dist. LEXIS 612, at *36 (S.D.N.Y. Jan. 4, 2016) (same); Farstone Tech., Inc. v. Apple, Inc., No. 8:13-cv-1537-ODW(JEMx), 2015 U.S. Dist. LEXIS 137819, at *7–8 (C.D. Cal. Oct. 8, 2015) (same). Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 27 of 39 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Constr. Br.) at 14 (citing ʼ869 patent at 3:30–38). Moreover, the “control module” is described as including a microprocessor and random access memory (RAM). See Ex. 1 at 3:33–35; 6:58– 62. This is consistent with Mr. Yoshimi’s characterization of the “game controller” as being a “CPU” that “may also have ROM or RAM.” Ex. 10 (Yoshimi Dep. Tr.) at 83:10–18; see also id. at 100:17–24 (stating that the “game controller” includes the “processor”); Ex. 13 at 156 (Konami Contentions) (“The computer processor is the game controller.”). As such, the “game controller” element suffers from the same problems that the “processor” element (discussed supra) does: an off-the-shelf microprocessor cannot perform the claimed functions because additional software programming is required, and thus the claimed “game controller”—even if synonymous with the “control module”—would not be a “sufficient structure for performing [the claimed] function[s]” without more. Williamson, 792 F.3d at 1349. Furthermore, in Marks, Konami went even further in asserting that the term “game controller” was not limited to the “control module” embodiment described in the specification, but instead should be understood “according to its function.” Ex. 12 (“Konami Cl. Constr. Br.) at 14. Konami then cited numerous portions of the specification in which the function of the “game controller” is discussed. See id. at 15. In short, Konami itself admits that the “game controller” element should not be understood as a structural limitation, but instead is a broader concept that is defined solely “according to its function.” Thus, by Konami’s own admission, “game controller” is no different than the unbounded “game control means” that the Federal Circuit found to be indefinite under § 112 ¶¶ 2 and 6 in Aristocrat. See 521 F.3d at 1332–38. Accordingly, § 112 ¶ 6 applies to the asserted claims of the of the ʼ810 and ʼ955 patents as well. Williamson, 792 F.3d at 1349. 3. The Patent Specifications Fail to Disclose Sufficient Structure Corresponding to the Claimed Functions and Thus the Asserted Claims Fail to Comply With 35 U.S.C. § 112 ¶¶ 2 and 6 Because all asserted claims are subject to the requirements of § 112 ¶ 6, the second step of the analysis is to determine whether the specification discloses sufficient structure corresponding to the functions performed by those elements. See Williamson, 792 F.3d at 1351– 54. In this regard, the Federal Circuit has repeatedly held that the disclosure of a general purpose Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 28 of 39 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 computer or conventional microprocessor is insufficient for computer-implemented inventions, and that the specification must disclose the specific algorithm that underlies the invention. Ergo Licensing, LLC v. CareFusion 303, Inc., 673 F.3d 1361, 1364–65 (Fed. Cir. 2012); Blackboard, Inc. v. Desire2Learn Inc., 574 F.3d 1371, 1384 (Fed. Cir. 2009); Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1367 (Fed. Cir. 2008); Aristocrat, 512 F.3d at 1333; WMS Gaming, 184 F.3d at 1349. The algorithm that must be disclosed is the “step-by-step procedure for accomplishing a given result,” and may be expressed as “a mathematical formula, in prose, or as a flow chart, or in any other manner that provides sufficient structure.”9 Ergo Licensing, 673 F.3d at 1365 (where claims recited “control means,” finding patent claims invalid where specification did not contain any step-by-step process for performing controlling function). The Aristocrat case is on all fours with the facts of this case. See 521 F.3d 1328. In Aristocrat, like here, the patent was directed to an electronic slot machine with certain combinations of symbols. See id. at 1330. The patent included, among other things, the claim element “game control means,” and the principal issue was whether the patent specification properly disclosed a structure for performing the game control function. See id. at 1332. The patentee argued that the specification disclosed sufficient structure because it disclosed a “standard microprocessor” with “appropriate programming.” Id. at 1333. The Federal Circuit disagreed, holding that, first, the mere disclosure of a microprocessor was insufficient because it constituted “pure functional claiming.” Id. Second, the disclosure of “appropriate programming” did not rescue the patent holder because “[t]he term ‘appropriate programming’ simply references a computer that is programmed so it performs the function in question, which is to say that the function is performed by a computer that is capable of performing the function.” Id. at 1334. Finally, the Federal reiterated the following rule: “[T]he corresponding structure for a § 112 ¶ 6 claim for a computer-implemented function is the algorithm disclosed in the specification.” Id. at 1333 (emphasis added) (quoting Harris Corp. v. Ericsson Inc., 417 F.3d 9 To be clear, in gaming patents, a disclosure of game mathematics is an insufficient disclosure of structure for purposes of § 112 ¶ 6 unless the software algorithm is also disclosed. See Aristocrat, 521 F.3d at 1334 (holding that the game mathematics disclosed in the patent described the outcome of performing the function, not the structure of the claimed device). Here, however, neither the game mathematics nor the software algorithm is disclosed. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 29 of 39 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 1241, 1253 (Fed. Cir. 2005)). And, because the specification only described a microprocessor with unspecified “appropriate programming,” the algorithm was not provided. See id. at 1334– 35. In so doing, the court made at least two important observations: (1) merely because one of ordinary skill in the art could devise an algorithm to perform the function is insufficient; and (2) discussions of the results of the operation of the unspecified algorithm are discussions of the function, not the algorithm itself. See id. In the patents-in-suit, the gaming machine displays to the user a simulated rotatable reel having consecutive runs of identical symbols. See Exs. 1, 3, 5, 7. The specifications go into tremendous detail concerning the variations of what can be displayed to the user, e.g., how many simulated reels might be shown, how many rows and columns of elements might be displayed, how fast the simulated reels are spun, etc. See id. Significantly, however, such discussions of what can be displayed to the user concern the results of the game’s hardware operating a software algorithm. As in Aristocrat, the actual algorithm used to obtain such results is undisclosed. For example, the specification states as follows: In yet a further broad form of the invention there is provided a method of implementing a game on a gaming machine; said method including the steps of: (c) providing said gaming machine with a control module; said module including a microprocessor, a working memory and a data storage device connection means, (d) writing program code to said data storage device, (e) connecting said data storage device to said control module. Ex. 1 at 3:30–38 (emphasis added). Like the reference to “appropriate programming” in Aristocrat, see 521 F.3d at 1334, the disclosure of unspecified and undescribed “program code” does not disclose the underlying software algorithm. See also id. at 3:40 (referencing unspecified and undescribed “enabling digital code”); id. at 6:62–63 and 7:2 (referencing unspecified and undescribed “program code driving any of the described embodiments”); id. at 7:5 (referencing unspecified and undescribed “program code”). Tellingly, in its claim construction briefing, Konami was unable to identify any specific structure or algorithm corresponding to the functions recited in the asserted claims. See, e.g., Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 30 of 39 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Ex. 14 (Konami Prel. Cl. Constr.) at 75–85; Joint Cl. Constr. & Prehearing Stmt. [ECF No. 81] at 51–109. For example, D. Nev. L.P.R. 1-14, which governs the parties’ exchange of preliminary claim constructions, required Konami to: “for each term that any party [e.g., High 5] contends is governed by 35 U.S.C. § 112(6), identify the structure(s), act(s), or material(s) corresponding to that term’s function.” Similarly, D. Nev. L.P.R. 1-15(b) required Konami to disclose in the Joint Claim Construction and Prehearing Statement “an identification of all references from the specification or prosecution history that support [its] construction” with respect to any disputed terms. In both documents, however, for every single claim that High 5 asserts is invalid under § 112 ¶ 6 for failure to disclose corresponding structure, Konami repeated the following uninformative and non-specific statement: “. . . Konami identifies the ‘955 Patent, Abstract, Figures 1 – 10, and the Specification Column 1, line 1 – Column 7, line 52, as providing the structures, acts, or materials that correspond to any function recited in the claims, and states that none of the claim terms are indefinite.” Ex. 14 (Konami Prel. Cl. Constr.) at 75–85; Joint Cl. Constr. & Prehearing Stmt. [ECF No. 81] at 51–109. In other words, Konami identified the entire patent as being the required structure! Accordingly, just as in Aristocrat, because no algorithm is disclosed that corresponds to the functions performed by the “processor” and “game controller” claim elements, all asserted claims violate § 112 ¶ 6 and are therefore invalid for indefiniteness under § 112 ¶ 2. See Aristocrat, 521 F.3d at 1338. B. THE ASSERTED CLAIMS ARE INVALID UNDER 35 U.S.C. § 101 1. Legal Background Under 35 U.S.C. § 101, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” There are several important exceptions to patent eligibility, however: laws of nature, natural phenomena, and abstract ideas are not patentable. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, __ U.S. __, 134 S. Ct. 2347, 2354 (2014). The Supreme Court has articulated a two-part test to determine whether a patent improperly covers an abstract idea, and thus claims patent-ineligible subject matter. See Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 31 of 39 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 id. at 2355. First, the court must determine whether a patent’s claims are directed to an abstract idea. Id. Second, if so, the court then examines whether the remaining claim elements are sufficient to “transform the nature of the claim” into a patent-eligible application. Id. Ultimately, whether a patent claims a patent-ineligible abstract idea is a question of law, Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340–41 (Fed. Cir. 2013), and it is an issue amenable to resolution early in the case, even at the pleading stage, see, e.g., Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348–49 (Fed. Cir. 2015) (affirming a district court’s granting of a motion to dismiss on § 101 grounds); Global Cash Access, Inc. v. NRT Tech. Corp., No. 2:15-cv-00822-MMD-GWF, 2016 U.S. Dist. LEXIS 39472 (D. Nev. Mar. 25, 2016) (granting motion to dismiss on § 101 grounds). 2. The Asserted Claims Are Directed to an Abstract Idea, Which Is Patent-Ineligible Subject Matter Under 35 U.S.C. § 101 “[A]n idea of itself is not patentable.” Alice, 134 S. Ct. at 2355. An abstract idea for § 101 purposes is “an idea, having no particular concrete or tangible form.” Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. Cir. 2014). Claims are improperly “directed to” an abstract idea where “their character as a whole is directed to excluded subject matter.” Internet Patents, 790 F.3d at 1346. “An abstract idea does not become nonabstract by limiting the invention to a particular field of use or technological environment.” Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1366 (Fed. Cir. 2015) (citing Alice, 134 S.Ct. at 2358). Here, the patent claims are directed to abstract ideas for at least three major reasons. a. The Asserted Claims Are Directed to Simple Game Rules for a Wagering Game, Which Constitutes an Abstract Idea Patents claiming simple game rules as the invention are directed to abstract ideas and thus invalid under § 101. See In re Smith, 815 F.3d at 818–19 (finding “Blackjack Variation” utilizing “real or virtual standard playing cards” to be an abstract idea and patent ineligible); see also Planet Bingo, LLC v. VKGS LLC, 576 Fed. Appx. 1005, 1007–08 (Fed. Cir. 2014) (determining that methods of managing a game of bingo were abstract ideas); RaceTech, LLC v. Kentucky Downs, LLC, No. 1:15-CV-00059-GNS, 2016 WL 843382, at *5–6 (W.D. Ky. Mar. 1, Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 32 of 39 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 2016) (holding that methods and apparatus for pari-mutuel historical gaming to constitute an abstract idea) (“[C]ourts have also applied the abstract idea principle to invalidate patents related to recreational wagering.”); Everglades Game Tech., LLC v. Supercell, Inc., No. 14-643-GMS, 2015 WL 4999654, at *3 (D. Del. Aug. 21, 2015) (finding promotional gaming methods to be an abstract idea) (“[T]he invention is the promotional game, albeit with improved functionality.”) (emphasis in original). In the recent Federal Circuit decision In re Smith, the patent (entitled “Blackjack Variation”) related to a Blackjack “wagering game utilizing real or virtual standard playing cards.” 815 F.3d at 817. The representative claim at issue claimed a “method for conducting a wagering game” comprising a number of steps that were essentially simple game rules. See id. at 817–18. The patent examiner rejected the claims during prosecution as claiming unpatentable abstract ideas under §101, a decision which was affirmed by the Patent Trial and Appeal Board (PTAB). See id. at 818. On appeal, the Federal Circuit once again affirmed. The court held that, where a patent claim is directed to “rules for conducting a wagering game,” the claim is directed to an abstract idea for purposes of a § 101 analysis. See id. at 818–19. Here, as in In re Smith, the asserted claims are all directed to simple game rules underlying what Konami terms a “slot wagering game.” Ex. 12 (Konami Cl. Constr. Br.) at 1, 2, 3; Ex. 10 (Yoshimi Dep. Tr.) at 142:6–12 (“The invention is game rules.”); 147:21–148:6; Ex. 11 (Yoshimi Dep. Tr.) at 32:23–25; 50:2–13 (“[T]his patent relates to the game rules.”); 50:22– 51:6; 52:2–15. The game rules require that there be consecutive runs of symbols selected and shown to the game player at particular times as the simulated rotatable reel is virtually spun. Essentially no technological details are claimed or disclosed concerning how these rules are to be implemented from a hardware/software standpoint, other than the claimed generic computer components and passing references to certain unspecified “program code” in the specification. Indeed, Mr. Yoshimi testified as follows: Q. . . . . [Y]our invention is not the software that does your invention, it’s the concept of how the game operates. Is that correct? A. The invention is game rules. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 33 of 39 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 Q. And not a particular software program? A. Correct. Q. Is it fair to say it wasn’t important to you what particular process the machine and its software used to implement your idea? A. Correct. I’m not particular about, say, this thing has to be used or that thing has to be used. As long as the game rule as it implemented, say, how that’s done, is not—I’m not particular about how it is—as long as it’s possible to implement the game rules, I’m not particular about how it’s implemented. Ex. 10 (Yoshimi Dep. Tr.) at 142:6–24. Similarly, Konami defines the inventions claimed in the patents-in-suit broadly so as to cover any and all methodologies that the hardware and software might use to select the consecutive run of symbols. See Konami Br. at 43–49. As such, the asserted claims are directed to abstract ideas. b. The Asserted Claims Are Drafted in Functional Terms Patent claims that are functional in nature—i.e., patent claims attempting to cover what an invention “does” as opposed to what the invention “is” (see, e.g., Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1, 9 (1946))—are also generally understood to be directed to abstract ideas. Electric Power Gp., LLC v. Alstom S.A., 830 F.3d 1350, 2016 U.S. App. LEXIS 13861, at *15 (Fed. Cir. 2016) (“[T]he essentially result-focused, functional character of claim language has been a frequent feature of claims held ineligible under § 101 . . . .”). “A patent may issue ‘for the means or method of producing a certain result, or effect, and not for the result or effect produced.’ . . . We therefore look to whether the claims in these patents 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.” McRO, Inc. v. Bandai Namco Games Amer. Inc., __ F.3d __, 2016 U.S. App. LEXIS 16703, at *28 (Fed. Cir. Sept. 13, 2016) (citations omitted). Here, the asserted claims are all fundamentally functional. They are all directed to the abstract concept of game rules that dictate what should be displayed to the user when the game is played—i.e., results or effects. See Ex. 10 (Yoshimi Dep. Tr.) at 142:6–12 (“The invention is Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 34 of 39 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 game rules.”); 147:21–148:6; Ex. 11 (Yoshimi Dep. Tr.) at 32:23–25; 50:2–13 (“[T]his patent relates to the game rules.”); 50:22–51:6; 52:2–15. In contrast, the asserted claims are not directed to a specific hardware/software means or methods for implementing the game rules, and they certainly do not involve any specific improvements to gaming-oriented computer hardware or software. The hardware components recited in the claims—“processor,” “game controller,” “memory device,” and “display device”—are simply generic computer components recited in the claims without any description of how they specifically should be programmed and operated to achieve the claimed results and effects. For example, although Konami itself has stated that “[a]ll modern gaming machines, whether land-based or web-based, are implemented by software executed by a computer processor,” there is absolutely no mention of software in the claims, and no specific software code or algorithms are disclosed in the specification, despite the fact that such code would be necessary to implement the claimed inventions. See Ex. 1 at 3:39–41; 6:62–65. Given the claims’ lack of technological details, it is readily apparent that the patent claims constitute purely functional claiming and, in consequence, are directed to abstract ideas. See, e.g., Hewlett Packard Co. v. ServiceNow, Inc., No. 14-cv-00570-BLF, 2015 U.S. Dist. LEXIS 29384, at *21 (N.D. Cal. Mar. 10, 2015) (“The court concludes that HP’s proposed construction does not go beyond the kind of ‘functional and generic’ description of ‘generic computer components configured to implement the [abstract] idea’ that the Supreme Court rejected in Alice.”). c. In the Asserted Claims, the Generic Computer Components Do Not Solve a Technological Problem; They Are Merely Used as Tools to Implement the Abstract Idea Where patent claims involve computer-related technology, a court should consider whether the focus of the claims is on a “specific asserted improvement in computer capabilities” (which may be patent eligible subject matter) or instead is on “a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool” (which is not patent eligible). Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016). Where a claim recites “generalized steps to be performed on a computer using conventional computer activity,” the Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 35 of 39 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 claim is directed to an abstract idea. In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 612 (Fed. Cir. 2016). For example, in TLI Communications, the patent at issue involved apparatus, system, and method claims related to the recording and storing of digital images. See id. at 609. The Federal Circuit found that the patent claims were directed to an abstract idea because, although the claims recited generic computer-related components such as a “telephone unit” and a “server,” the patent “fail[ed] to provide any technical details for the tangible components, but instead predominately describe[d] the system and methods in purely functional terms.” Id. at 612 (emphasis added). As a result, the court found that the patent was not directed to a “technological problem” related to telephone or server technology, but rather was directed to the abstract idea of classifying and storing digital images in an organized manner. See id. at 613. Likewise, although the asserted claims here recite certain generic computer components (“processor,” “game controller,” “memory device,” and “display device”), the patents do not purport to be solving a technological problem associated with the functioning of a computer. Rather, the claims “predominantly describe the system and methods in purely functional terms” and what is claimed and disclosed does not go beyond “conventional computer activity.” See id. at 612. Thus, as in TLI Communications, the claims are directed to an abstract idea. 3. The Mere Implementation of an Abstract Idea Using Generic Computer Components Is Legally Insufficient to Create Patent Eligibility Once it is determined that the claims are directed to an abstract idea, the Court must then examine the elements of the claims in order to ascertain whether there is an additional “inventive concept” included that is sufficient to “transform” the abstract idea into patent eligible subject matter. See Alice, 134 S. Ct. at 2357. When conducting this analysis, the most important inquiry is to look to the language of the claims themselves. See Accenture, 728 F.3d at 1345. Significantly, however, “[i]t is well-settled that the mere recitation of concrete, tangible components is insufficient to confer patent eligibility to an otherwise abstract idea.” TLI Commc’ns, 823 F.3d at 613. “[A]fter Alice, there can remain no doubt: recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible. The bare fact Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 36 of 39 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 that a computer exists in the physical rather than purely conceptual realm is beside the point.” Mortgage Grader, Inc. v. First Choice Loan Servs., 811 F.3d 1314, 1325 (Fed. Cir. 2016); see also Intellectual Ventures I, 792 F.3d at 1371 (“Requiring the use of a ‘software’ ‘brain’ ‘tasked with tailoring information and providing it to the user’ provides no additional limitation beyond applying an abstract idea, restricted to the Internet, on a generic computer.”); Accenture, 728 F.3d at 1345 (“Accenture’s attempts to limit the abstract concept to a computer implementation and to a specific industry thus do not provide additional substantive limitations to avoid preempting the abstract idea . . . .”). In consequence, when evaluating whether a sufficiently “inventive concept” exists, any such generic computer limitations must be “set aside” (i.e., subtracted out of the analysis) before considering what is left. Id. The asserted claims at issue here all recite that the abstract ideas (game rules) are implemented using conventional computer components: “processor,” “game controller,” “memory device,” and “display device.” Again, the use of such generic components does not elevate the abstract ideas at issue to patent eligible subject matter. See, e.g., TLI Commc’ns, 823 F.3d at 613. What is needed is a separate “inventive concept.” Alice, 134 S. Ct. at 2357. Once the generic computer components are subtracted out of the analysis, it is apparent that what is left are merely abstract ideas: a simple set of game rules. Again, game rules are nothing more than abstract ideas, in and of themselves. See In re Smith, 815 F.3d at 819 (“[W]e conclude that the rejected claims, describing a set of rules for a game, are drawn to an abstract idea.”). As such, the asserted claims include nothing that “transforms” the claims into patent eligible subject matter, and the claims are all invalid under § 101. IV. CONCLUSION For all of the foregoing reasons, High 5 respectfully requests that the Court enter summary judgment in High 5’s favor that all asserted claims of the Konami patents-in-suit are invalid pursuant to 35 U.S.C. § 112 ¶¶ 2 and 6 and 35 U.S.C. § 101. Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 37 of 39 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 DATED this 21st day of October, 2016. HOLLAND & HART LLP By /s/ Robert C. Ryan Robert C. Ryan, Esq. 5441 Kietzke Lane, Second Floor Reno, NV 89511 Phone: (775) 327-3000 Fax: (775) 786-6179 rcryan@hollandhart.com Ryan A. Loosvelt, Esq. 9555 Hillwood Drive, Second Floor Las Vegas, NV 89134 Phone: (702) 669-4600 Fax: (702) 669-4650 RALoosvelt@hollandhart.com Christopher B. Hadley, Esq. (Admitted pro hac vice) 222 South Main St., Suite 2200 Salt Lake City, UT 84101 Phone: (801) 799-5873 Fax: (801) 618-4238 cbhadley@hollandhart.com Teague I. Donahey (Admitted pro hac vice) HOLLAND & HART LLP 800 West Main Street, 17th Floor Boise, ID 83702 Phone: (208) 383-3988 Fax: (208) 343-8869 tidonahey@hollandhart.com Attorneys for High 5 Games, LLC Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 38 of 39 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 H O L LA N D & H A R T L L P 54 41 K IE T ZK E L A N E S E C O N D F L O O R R E N O , N V 8 95 11 CERTIFICATE OF SERVICE I hereby certify that on the 21st day of October, 2016, a true and correct copy of the foregoing DEFENDANT HIGH 5 GAMES, LLC’S MOTION FOR SUMMARY JUDGMENT THAT THE ASSERTED PATENT CLAIMS ARE INVALID UNDER 35 U.S.C. §§ 101 AND 112 ¶¶ 2 AND 6 was filed using the Court’s ECF system on the following attorneys of record: Robert Hernquist (Nevada Bar No. 10616) HOWARD & HOWARD ATTORNEYS PLLC Wells Fargo Tower, Suite 1000 3800 Howard Hughes Parkway Las Vegas, NV 89169-5980 Telephone: (702) 257-1483 | Facsimile: (702) 567-1568 Email: RHernquist@HowardandHoward.com Patrick M. McCarthy (Michigan Bar No. P49100) (admitted pro hac vice) HOWARD & HOWARD ATTORNEYS PLLC One North Main Building, Suite 410 101 North Main Street Ann Arbor, Michigan 48104-1475 Telephone: (734) 222-1483 | Fax: (734) 761-5957 Email: PMcCarthy@HowardandHoward.com Kristopher K. Hulliberger (admitted pro hac vice) HOWARD & HOWARD ATTORNEYS PLLC 450 W. 4th Street Royal Oak, Michigan 48067 Telephone: (248) 723-0453 | Fax: (248) 645-1568 Email: kkh@h2law.com PMcCarthy@HowardandHoward.com Attorneys for Plaintiff /s/ Teague I. Donahey Teague I. Donahey Case 2:14-cv-01483-RFB-NJK Document 92 Filed 10/21/16 Page 39 of 39
