Ameranth, Inc. v. Genesis Gaming Solutions, Inc.
`
`United States District Court for the Central District of California
`
`November 12, 2014, Decided; November 12, 2014, Filed
`
`CASE NO. SACV 11-00189 AG (RNBx); (Consolidated with SACV 13-00720 AG (RNBx))
`
`Reporter
`2014 U.S. Dist. LEXIS 175600
`
`INC., Plaintiff, v. GENESIS GAMING
`AMERANTH,
`SOLUTIONS, INC., ET AL., Defendants.
`
`Subsequent History: Dismissed without prejudice by, in
`part, Dismissed by,
`in part Ameranth, Inc. v. Genesis
`Gaming Solutions, Inc., 2015 U.S. Dist. LEXIS 53639 (C.D.
`Cal., Apr. 22, 2015)
`
`Counsel:
`[*1] For Ameranth Inc, a Delaware corporation,
`Plaintiff (8:11-cv-00189-AG-RNB): Brandon J Witkow,
`Witkowlaw APLC, Woodland Hills, CA; Edward George
`Dane, Peter E Gratzinger, Munger Tolles and Olson LLP,
`Los Angeles, CA; Ethan M Watts, Watts Law Offices, San
`Diego, CA; John W Osborne, PRO HAC VICE, Osborne
`Law LLC, Cortlandt Manor, NY; Michael D Fabiano,
`Fabiano Law Firm PC, San Diego, CA.
`
`For Genesis Gaming Solutions, Inc., a Texas Corporation,
`formerly known as, Genesis Gaming Solutions Inc., a
`Nevada corporation, Defendant (8:11-cv-00189-AG-RNB):
`David B Abel, Law Office of David B Abel, Manhattan
`Beach, CA; G Roland Love, Jeffrey A Tinker, PRO HAC
`VICE, Winstead PC, Dallas, TX; Jordan B Kushner, DLA
`Piper LLP, Los Angeles, CA; Ronald C Gorsche, PRO HAC
`VICE, Ronald C Gorsche PLLC, Las Vegas, NV.
`
`For IT Casino Solutions LLC, a California limited liability
`company, Defendant, Cross Defendant, Counter Claimant
`(8:11-cv-00189-AG-RNB): Daphne L Burton, Burton IP
`Law Group, Los Angeles, CA.
`
`For California Commerce Club Inc, a California corporation,
`Defendant (8:11-cv-00189-AG-RNB): G Roland Love, PRO
`HAC VICE, Jeffrey A Tinker, Winstead PC, Dallas, TX;
`Jordan B Kushner, DLA Piper LLP, Los Angeles, [*2] CA;
`Ronald C Gorsche, PRO HAC VICE, Ronald C Gorsche
`PLLC, Las Vegas, NV; David B Abel, Law Office of David
`B Abel, Manhattan Beach, CA.
`
`For California Commerce Club Inc, a California corporation,
`Cross
`Claimant,
`Counter
`Claimant
`(8:11-cv-00189-AG-RNB): David B Abel, Law Office of
`David B Abel, Manhattan Beach, CA; G Roland Love, PRO
`
`HAC VICE, Winstead PC, Dallas, TX; Jordan B Kushner,
`DLA Piper LLP, Los Angeles, CA; Ronald C Gorsche, PRO
`HAC VICE, Ronald C Gorsche PLLC, Las Vegas, NV.
`
`For Ameranth Inc, a Delaware corporation, Counter
`Defendant (8:11-cv-00189-AG-RNB): Brandon J Witkow,
`Witkowlaw APLC, Woodland Hills, CA; John W Osborne,
`PRO HAC VICE, Osborne Law LLC, Cortlandt Manor, NY;
`Michael D Fabiano, Fabiano Law Firm PC, San Diego, CA;
`Peter E Gratzinger, Munger Tolles and Olson LLP, Los
`Angeles, CA.
`
`For Genesis Gaming Solutions Inc, a Texas corporation,
`California Commerce Club Inc, a California corporation,
`Counter Claimants(8:11-cv-00189-AG-RNB): Jordan B
`Kushner, DLA Piper LLP, Los Angeles, CA; Ronald C
`Gorsche, PRO HAC VICE, Ronald C Gorsche PLLC, Las
`Vegas, NV; David B Abel, Law Office of David B Abel,
`Manhattan Beach, CA.
`
`For California Commerce Club Inc, a California corporation,
`[*3] Cross Claimant (8:11-cv-00189-AG-RNB): David B
`Abel, Law Office of David B Abel, Manhattan Beach, CA;
`Jordan B Kushner, DLA Piper LLP, Los Angeles, CA;
`Ronald C Gorsche, PRO HAC VICE, Ronald C Gorsche
`PLLC, Las Vegas, NV.
`
`For Genesis Gaming Solutions Inc, a Texas corporation,
`Counter Claimant (8:11-cv-00189-AG-RNB): Ronald C
`Gorsche, PRO HAC VICE, Ronald C Gorsche PLLC, Las
`Vegas, NV; David B Abel, Law Office of David B Abel,
`Manhattan Beach, CA.
`
`Inc, a Delaware corporation, Plaintiff
`For Ameranth,
`(8:13-cv-00720-AG-RNB): Brandon J Witkow, LEAD
`ATTORNEY, Witkowlaw APLC, Woodland Hills, CA; Ethan
`M Watts, LEAD ATTORNEY, Watts Law Offices, San
`Diego, CA; John W Osborne, PRO HAC VICE, Osborne
`Law LLC, Cortlandt Manor, NY; Michael D Fabiano,
`Fabiano Law Firm PC, San Diego, CA.
`
`For Genesis Gaming Solutions, Inc., a Texas corporation,
`Defendant (8:13-cv-00720-AG-RNB): David B Abel, Law
`
`Exhibit 2004
`ServiceNow v. HP
`CBM2015-00077
`
`

`

`2014 U.S. Dist. LEXIS 175600, *4
`
`Page 2 of 8
`
`Office of David B Abel, Manhattan Beach, CA; G Roland
`Love, Jeffrey A Tinker, PRO HAC VICE, Winstead PC,
`Dallas, TX; Ronald C Gorsche, Ronald C Gorsche PLLC,
`Las Vegas, NV.
`
`For IT Casino Solutions LLC, a California limited liability
`company, Defendant (8:13-cv-00720-AG-RNB): Daphne L
`Burton, Burton IP Law Group, [*4] Los Angeles, CA.
`
`a California
`Inc.,
`For California Commerce Club,
`corporation, doing business as Commerce Casino, Defendant
`(8:13-cv-00720-AG-RNB): David B Abel, LEAD
`ATTORNEY, Law Office of David B Abel, Manhattan
`Beach, CA; G Roland Love, Jeffrey A Tinker, PRO HAC
`VICE, Winstead PC, Dallas, TX; Ronald C Gorsche, Ronald
`C Gorsche PLLC, Las Vegas, NV.
`
`For Hawaiian Gardens Casino, a California corporation,
`Defendant
`(8:13-cv-00720-AG-RNB): Meenakshi Kala
`Sarvaiya, SoCal IP Law Group LLP, Westlake Village, CA.
`
`For Ameranth, Inc, a Delaware corporation, Ameranth, Inc,
`a Delaware corporation, Ameranth,
`Inc, a Delaware
`corporation, Ameranth, Inc, a Delaware corporation, Counter
`Defendants (8:13-cv-00720-AG-RNB): J Witkow, LEAD
`ATTORNEY, Witkowlaw APLC, Woodland Hills, CA; Ethan
`M Watts, LEAD ATTORNEY, Watts Law Offices, San
`Diego, CA; John W Osborne, PRO HAC VICE, Osborne
`Law LLC, Cortlandt Manor, NY; Michael D Fabiano,
`Fabiano Law Firm PC, San Diego, CA.
`
`For Genesis Gaming Solutions, Inc., a Texas corporation,
`California Commerce Club, Inc., a California corporation,
`Counter Claimants (8:13-cv-00720-AG-RNB): G Roland
`Love, Jeffrey A Tinker, PRO HAC VICE, Winstead PC,
`Dallas, TX.
`
`For IT Casino [*5] Solutions LLC, a California limited
`liability
`company,
`Counter
`Claimant
`(8:13-cv-00720-AG-RNB): Daphne L Burton, Burton IP
`Law Group, Los Angeles, CA.
`
`Judges: Andrew J. Guilford, United States District Judge.
`
`Opinion by: Andrew J. Guilford
`
`Opinion
`
`ORDER DENYING DEFENDANTS’ MOTION FOR
`SUMMARY JUDGMENT OF INVALIDITY OF THE
`’969 PATENT UNDER 35 U.S.C. § 101
`
`1. INTRODUCTION
`
`Plaintiff Ameranth, Inc. (″Plaintiff″) alleges that Defendants
`California Commerce Club, Inc. (″Commerce″), Genesis
`Gaming Solutions, Inc. (″Genesis″), and IT Casino Solutions,
`LLC (″ITCS″) (collectively, ″Defendants″) infringe three
`patents, including U.S. Patent No. 8,393,969 (″’969 Patent″),
`titled ″Products and Processes for Operations Management
`of Casino, Leisure and Hospitality Industry.″ (Compl.,
`SACV 13-00720, Dkt. No. 1; Compl., SACV 11-00189,
`Dkt. No. 1.) The ’969 Patent claims computerized systems
`and methods for monitoring a physical casino poker game.
`
`Commerce and Genesis filed a motion for Summary
`Judgment of Patent Invalidity of the ’969 Patent (″Motion″)
`on October 7, 2014. (Dkt. No. 72 (unless specified, docket
`entries in this Order refer to SACV 13-00720, the case in
`which Defendants filed the Motion).) ITCS joined in the
`Motion on October 13, 2014. (Dkt. No. 73.) Defendants ask
`the Court to rule that the asserted claims [*6] fail 35 U.S.C.
`§ 101 because they are directed to the abstract idea of ″a
`customer loyalty program directed to poker players,″ without
`adding ″significantly more″ to that abstract idea. (Dkt. No.
`72 at 8, 13).
`
`Plaintiff filed an opposition on October 20, 2014. (Dkt. No.
`74.) Defendants filed a reply on October 27, 2014. (Dkt. No.
`76.) The Motion is DENIED.
`
`2. BACKGROUND
`
`Plaintiff filed this case on February 2, 2011, asserting
`infringement of United States Patent Nos. 7,431,650 (″’650
`Patent″) and 7,878,909 (″’909 Patent″). (Compl., SACV
`11-00189, Dkt. No. 1 at 8, 12.) On August 29, 2011, the
`Court granted the parties’ stipulation to stay the case
`pending reexaminations of the ’650 and ’909 Patents.
`(SACV 11-00189, Dkt. No. 64.) On May 6, 2013, Plaintiff
`filed Case No. SACV 13-00720, asserting the ’969 Patent,
`which issued on March 12, 2013. On August 9, 2013, the
`Court lifted the stay in SACV 11-00189 because the USPTO
`had completed its reexaminations of the ’650 and ’909
`Patents. (SACV 11-00189, Dkt. No. 87.) On August 12,
`2013,
`the Court ordered Case No. SACV 13-0720
`consolidated into Case No. SACV 11-0189.
`(SACV
`11-00189, Dkt. No. 88.)
`
`The Court issued its Claim Construction Order on May 2,
`2014. (SACV 11-00189, Dkt. No. 164.) On August 4, 2014,
`the Court granted in part and denied in part Commerce’s
`motion for summary [*7] judgment of non-infringement of
`the ’650 Patent. (SACV 11-00189, Dkt No. 197.) Genesis’s
`
`

`

`2014 U.S. Dist. LEXIS 175600, *7
`
`Page 3 of 8
`
`motion for summary judgment of non-infringement of the
`’650 and ’909 Patents is set for hearing on December 15,
`2014. (Dkt. No. 210.) Trial is set for February 10, 2015.
`(Scheduling Order, Dkt. No. 90.)
`
`3. LEGAL STANDARD
`
`3.1 SUMMARY JUDGMENT
`
`Summary judgment is appropriate where the record, read in
`the light most favorable to the non-moving party, shows that
`″there is no genuine issue as to any material fact and . . . the
`moving party is entitled to a judgment as a matter of law.″
`Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S.
`317, 322-23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).
`Material facts are those necessary to the proof or defense of
`a claim, as determined by reference to substantive law.
`Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.
`Ct. 2505, 91 L. Ed. 2d 202 (1986). A factual issue is genuine
`″if the evidence is such that a reasonable jury could return
`a verdict for the nonmoving party.″ Id. In deciding a motion
`for summary judgment, ″[t]he evidence of the nonmovant is
`to be believed, and all justifiable inferences are to be drawn
`in his favor.″ Id. at 255.
`
`The burden initially is on the moving party to show the
`absence of a genuine issue of material fact or that the
`non-moving party will be unable to make a sufficient
`showing on an essential element of its case for which it
`bears the burden of proof. [*8] Celotex, 477 U.S. at 322-23.
`Only if the moving party meets its burden must
`the
`non-moving party produce evidence to rebut the moving
`party’s claim. If the non-moving party establishes the
`presence of a genuine issue of material fact, then the motion
`will be denied. Nissan Fire & Marine Ins. Co. v. Fritz Co.,
`Inc., 210 F.3d 1099, 1103 (9th Cir. 2000) (citing Celotex,
`477 U.S. at 322).
`
`3.2 PATENTABLE SUBJECT MATTER
`
`″Whoever 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.″ 35 U.S.C. § 101. ″[T]his provision contains an
`important
`implicit exception: Laws of nature, natural
`phenomena, and abstract ideas are not patentable.″ Alice
`Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354, 82 L.
`Ed. 2d 296, 189 L. Ed. 2d 296 (2014) (quoting Association
`for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct.
`2107, 2116, 186 L. Ed. 2d 124 (2013)). The Supreme Court
`has ″described the concern that drives this exclusionary
`
`principle as one of pre-emption.″ Id. That is, ″[l]aws of
`nature, natural phenomena, and abstract ideas are the basic
`tools
`of
`scientific
`and
`technological work,″
`and
`″monopolization of those tools through the grant of a patent
`might tend to impede innovation more than it would tend to
`promote it, thereby thwarting the primary object of the
`patent laws. . . . see U.S. Const., Art. I, § 8, cl. 8 (Congress
`’shall have Power . . . To promote the Progress of Science
`and useful Arts’).″ Id. (some internal
`citations,
`[*9]
`quotations, and modifications omitted).
`
`″Accordingly, in applying the § 101 exception, we must
`distinguish between patents that claim the ’buildin[g]
`block[s]’ of human ingenuity and those that integrate the
`building
`blocks
`into
`something more,
`thereby
`’transform[ing]’ them into a patent-eligible invention.″ Id.
`(citations omitted.) The Supreme Court has established a
`two-part test to make that distinction. ″First, we determine
`whether the claims at issue are directed to one of those
`patent-ineligible concepts. If so, we then ask, ’[w]hat else is
`there in the claims before us?’″ Id. at 2355 (quoting Mayo
`Collaborative Services v. Prometheus Laboratories, Inc.,
`132 S. Ct. 1289, 1296-97, 182 L. Ed. 2d 321 (2012) (citation
`omitted)). ″To answer that question, we consider the elements
`of each claim both individually and ’as an ordered
`combination’ to determine whether the additional elements
`’transform the nature of the claim’ into a patent-eligible
`application.″ Id. (quoting Mayo, 132 S. Ct. at 1297-98). ″We
`have described step two of this analysis as a search for an
`’inventive concept’—i.e., an element or combination of
`elements that is ’sufficient to ensure that the patent in
`practice amounts to significantly more than a patent upon
`the [ineligible concept] itself.’″ Id. (quoting Mayo, 132 S.
`Ct. at 1294).
`
`Judges of this Court have recognized that the two steps of
`the Alice/Mayo test [*10] ″are easier to separate in recitation
`than in application.″ Wolf v. Capstone Photography, Inc.,
`Case No. CV 13-09573 CAS, Dkt. No. 49 at 17, 2014 U.S.
`Dist. LEXIS 156527 (C.D. Cal. Oct. 28, 2014) (quoting
`Eclipse IP LLC v. McKinley Equip. Corp., No. SACV
`14-00742 GW, 2014 U.S. Dist. LEXIS 125395, 2014 WL
`4407592, at *2-3 (C.D. Cal. Sept. 4, 2014) (″Describing this
`as a two-step test may overstate the number of steps
`involved.″)). But it is clear that ″the mere recitation of a
`generic computer cannot
`transform a patent-ineligible
`abstract idea into a patent-eligible invention.″ Alice, 134 S.
`Ct. at 2358.
`
`Recitation of generic computer implementation does not
`transform an abstract idea because it is insufficient, for
`patent eligibility purposes, to either state an abstract idea
`
`

`

`2014 U.S. Dist. LEXIS 175600, *10
`
`Page 4 of 8
`
`″while adding the words ’apply it’″ or to limit the use of an
`abstract idea ″to a particular technological environment.″ Id.
`(quoting Mayo, 132 S.Ct. at 1294, Bilski v. Kappos, 561
`U.S. 593, 610-611, 130 S. Ct. 3218, 177 L. Ed. 2d 792
`(2010)). ″Stating an abstract idea while adding the words
`’apply it with a computer’ simply combines those two steps,
`with the same deficient result. Thus, if a patent’s recitation
`of a computer amounts to a mere instruction to ’implemen[t]’
`an abstract idea ’on . . . a computer,’ that addition cannot
`impart patent eligibility.″ Id. (citations omitted).
`
`4. ANALYSIS
`
`Defendants assert that ″[t]he ’969 Patent is directed to the
`abstract concept of a customer [*11]
`loyalty program, and
`more specifically to computer automation of a player
`rewards system within a poker room.″ (Mot., Dkt. 72 at 1.)
`
`4.1 THE SYSTEM CLAIMS
`
`As to the system claims, the Motion falters at the first step
`of the Alice analysis: identifying the abstract idea to which
`the claims are purportedly directed. Plaintiff points out that
`the independent system claim, claim 27, does not include a
`customer loyalty or compensation system at all. (Opp’n,
`Dkt. No. 74 at 13-14.) And of the eleven asserted claims that
`depend from claim 27, only one requires a compensation
`system. That makes ″a customer loyalty program″ a poor
`candidate for the abstract concept allegedly wrapped up in
`the claims. Claim 27 provides:
`
`27. A computer system for monitoring a physical casino
`poker game comprising:
`
`a. a system database;
`
`b. software enabled to set up and maintain poker game
`types and tables associated with said poker game types,
`wherein said software is configured to provide real time
`table availability status in the system database;
`
`c. software enabled to facilitate the receipt of a poker
`player check-in input including player identification
`information and the player’s poker game type preference
`and [*12]
`identifying the particular player from the
`player check-in input utilizing a player database which
`includes information regarding previously registered
`players;
`d. software enabled to determine table availability in
`real time for said particular player’s poker game type
`preference;
`e. software enabled to add said particular player to a
`waitlist for said poker game type preference if no
`matching table is currently available;
`
`f. software enabled to display indicia identifying said
`particular player on a public waitlist display, said public
`display including the display of information comprising
`at least two different poker game types and waiting
`players for each game type and wherein said display is
`suitable for viewing by a multiplicity of players or
`prospective players throughout the poker room;
`
`g. software enabled to select said particular waiting
`player for an available table matching said waiting
`player’s selected game type when it is available and
`then assigning said player to that available table;
`
`h. software enabled to receive check-out input regarding
`said particular player containing player identification
`information; wherein said software is configured to
`identify the particular [*13] player from the player
`check-out input information, to remove the player from
`the game and from the table,
`to update the table
`availability to reflect that a seat for the particular poker
`game type at said table is currently available;
`
`i. software enabled to calculate the total elapsed time
`between receiving the check-in input and the check-out
`input of the particular player, wherein said software is
`configured to store the calculated playing time of said
`particular player in at least one of the system database
`or the player database;
`
`j. wherein all of the said software is enabled to operate
`as a synchronized system.
`
`There is nothing in claim 27 about a loyalty program. In
`their reply brief, Defendants respond to this absence by
`arguing that limitation ″i″ involves storing playing time, and
`″the purpose of calculating and storing the playing time is
`part and parcel to the customer loyalty program.″ (Reply,
`Dkt. 76 at 5.) Defendants cite no authority for the proposition
`that the abstract idea in step one of the Alice/Mayo test can
`be something that the claimed invention might be useful for,
`as opposed to what the claim itself covers. And Defendants
`do not show that calculating and storing [*14] playing time
`is only useful for a customer loyalty program.
`
`if claim 27 is not
`Defendants then ask: ″Alternatively,
`directed to a customer loyalty program, the court must still
`determine what is the abstract idea behind claim 27?″, and
`suggest that another possible abstract idea candidate would
`be ″monitoring a physical casino poker game,″ which is the
`language of the claims’ preamble. (Id.) From the phrasing,
`it is unclear whether Defendants really intended to conclude
`that statement with a question mark. But whether intended
`as a question or not, the answer is ″no,″ the Court must not
`so determine.
`
`

`

`2014 U.S. Dist. LEXIS 175600, *14
`
`Page 5 of 8
`
`It is not the Court’s role to develop winning theories for the
`parties. See Data Distrib. Techs., LLC v. Brer Affiliates, Inc.,
`Civ. No. 12-4878, 2014 U.S. Dist. LEXIS 115543, 2014 WL
`4162765, at *13 (D.N.J. Aug. 19, 2014) (declining to
`formulate for the plaintiff a plausible claim construction that
`would show an inventive concept sufficient to pass 35
`U.S.C. § 101). Defendants bear several burdens here. ″A
`patent shall be presumed valid.″ 35 U.S.C. § 282. Invalidity
`must be shown by ″clear and convincing evidence.″ See
`Wolf, CV 13-09573 CAS, 2014 U.S. Dist. LEXIS 156527,
`*12, n.1 (C.D. Cal. Oct. 28, 2014) (holding that the ″clear
`and convincing″ standard applies to § 101 determinations).
`And as the party moving for summary judgment, Defendants
`have the burden of establishing the absence of genuinely
`disputed issues of material fact. Celotex, 477 U.S. at 323.
`And [*15] Courts ″need not consider arguments raised for
`the first time in a reply brief.″ Zamani v. Carnes, 491 F.3d
`990, 997 (9th Cir. 2007). Defendants have not sustained
`their burdens, and the Court cannot be asked in the reply
`papers to sustain it for them.
`
`Defendants argue that the ″Opposition does not dispute that
`’poker has been played in gambling houses, riverboats,
`speakeasies and casinos in the United States for the past
`three hundred years,’″ and that ″[t]he abstract concept of
`’monitoring a physical casino poker game’ thus predates the
`abstract concept of a ’customer loyalty program’ for casinos.″
`(Reply, Dkt. No. 76 at 5.) First, it is unclear what role
`Defendants believe the relative age of these abstract concepts
`plays in the § 101 analysis. Second, Defendant ignores that
`the claims do not purport to cover the game of poker itself:
`they require nothing about cards, bets, or the mechanics of
`play. While it might be undisputed that people have hosted
`and watched poker games for as long as they have been
`played, that does not establish that the type of monitoring
`and player management required by the claims is an idea of
`similarly hoary provenance.
`
`Therefore, Defendants have not established even the first
`step of the Alice/Mayo test is satisfied [*16] for the system
`claims.
`
`4.2 THE METHOD CLAIMS
`
`Defendants theory is slightly better for the method claims.
`Independent claim 1 concludes with steps l and m,
`″transmitting the total elapsed time to a compensation
`system″ and ″calculating an amount of compensation for the
`particular player based on the total elapsed time and storing
`the calculated compensation in at least one of a system
`database or the player database.″ But even so, it is hard to
`say that claim 1 is directed to ″the abstract concept of a
`
`customer loyalty program, and more specifically to computer
`automation of a player rewards system within a poker room″
`when it
`includes key steps that are not related to the
`compensation system recited in the claim. Claim 1 provides:
`
`1. A computerized method for monitoring a physical
`casino poker game comprising:
`
`a. receiving a poker player check-in input containing
`player identification information and player poker game
`type preference;
`
`b. identifying a particular player in a player database
`from the player check-in input;
`
`c. determining the seating availability for said particular
`player’s poker game type preference from a table
`availability database including game types in real time;
`
`d. adding [*17] said particular player to a waitlist for
`said poker game type preference if no matching table
`for said game type is currently available;
`
`e. displaying indicia identifying said particular player
`on a public waitlist display, said public display including
`the display of information comprising at
`least
`two
`different poker game types and waiting players for each
`game type and wherein said public display is suitable
`for viewing by a multiplicity of players or prospective
`players throughout the poker room;
`
`f. selecting a table for said particular waiting player
`matching said waiting player’s selected game type
`when it is available and then assigning said player to
`that available table;
`
`g. receiving check-out input regarding said particular
`player containing player identification information;
`
`h. identifying the particular player from the player
`check-out input information;
`
`i. removing the player from the game and from the
`table;
`
`j. updating the table availability to reflect that a seat for
`the particular poker game type at said table is currently
`available;
`
`k. ascertaining the total elapsed time between receiving
`the check-in input and the check-out input of the player;
`
`transmitting the total
`l.
`compensation system; and
`
`[*18]
`
`elapsed time to a
`
`m. calculating an amount of compensation for the
`particular player based on the total elapsed time and
`
`

`

`2014 U.S. Dist. LEXIS 175600, *18
`
`Page 6 of 8
`
`storing the calculated compensation in at least one of a
`system database or the player database.
`
`Steps that could be omitted while leaving intact a player
`reward system include at least steps c, d, e, and f, which
`cover determining seating availability, adding players to
`waitlists, putting player identifying information on a public
`waitlist display, and assigning a player to a table. Defendants
`have not persuasively explained why all this should be
`ignored when identifying the abstract idea to which the
`claim is directed.
`
`And even assuming that those elements should be ignored in
`the first step, as to the second Alice/Mayo step, asking
`whether
`there is ″significantly more″ in the claims,
`Defendants have not shown why these other elements are
`insufficient. Put differently, one could implement many
`different player reward systems that do not infringe the
`claims. See Eclipse IP, 2014 U.S. Dist. LEXIS 125395, 2014
`WL 4407592 at *5 (″the question in the abstract idea context
`is whether there are other ways to use the abstract idea in the
`same field,″ which can show that the preemption concern is
`not implicated). [*19] Thus, Defendants have not shown
`how these claims implicate ″the basic underlying concern
`that these patents tie up too much future use″ of the abstract
`idea of a player reward system. Mayo, 132 S. Ct. at 1302.
`
`4.3 THE ASSERTED PRIOR ART
`
`the
`Defendants argue that certain prior art shows that
`abstract concept of ″a customer loyalty program directed to
`poker players . . . was practiced prior to the date of the
`invention . . . .″ (Mot., Dkt. No. 72 at 8.) Defendants cite
`one of Plaintiff’s press releases stating that ″in 2004 . . .
`Ameranth designed and developed a software program that
`automates previously performed manual task[s] associated
`with operating a poker room.″ (Mot., Dkt. No. 72 at 12
`(citing Ex. 12, Dkt. No 72-16 at 303).) Of course, mere
`generic computer implementation fails to transform an
`abstract idea into a patent-eligible invention: transformation
`requires an ″inventive concept . . . ″sufficient to ensure that
`the patent in practice amounts to significantly more than a
`patent upon the [ineligible concept] itself.″ Alice, 134 S.Ct.
`at 2355 (quoting Mayo, 132 S.Ct. at 1294).
`
`But automation of manual tasks is not necessarily abstract.
`U.S. Patent No. 72 (1794) to Eli Whitney for a cotton gin is
`one familiar example of a solidly tangible automating
`machine. [*20] Of course, one could posit a way of drafting
`even a claim to a cotton gin in a way that renders it abstract:
`″a machine comprising metal and wood configured to
`remove cotton seeds from cotton fiber.″ Read most
`
`charitably, Defendants are arguing something like that—that
`the prior art shows that all of the steps in the claimed
`method were performed together previously, and the ’969
`Patent merely says ″do that, on a computer,″ neatly fitting
`the Alice mold. But Defendants
`rely on multiple
`combinations of references to make that argument, and as
`couched by Defendants, those combinations seem more like
`an obviousness argument under 35 U.S.C. § 103 than a
`patent eligibility analysis under 35 U.S.C. § 101. And
`Defendants have not established the admissibility of the key
`evidence they rely upon for that argument.
`
`4.3.1 The Kessman Testimony is Inadmissible
`
`The most analogous prior art appears to be the description
`of the paper-and-pencil system at a casino described by
`Marc Kessman, an inventor of the ’969 Patent. In testimony
`in a previous case, Kessman stated that at some time before
`his invention,
`the Mohegan Sun casino tracked poker
`players’ time on cards that would be manually tabulated.
`(Mot., Dkt. No. 72 at 9 (citing Kessman Depo, Ex. [*21] 8,
`Dkt. No. 72-12 at 40:8-41:9).) Defendants combine this
`purported practice with a poker book’s description of
`pre-invention poker room waitlist practice (discussed in
`Section 4.4.2), and a patent describing player rewards
`system in the prior art. (Mot., Dkt. No. 72 at 10-11.)
`
`Kessman gave the testimony at issue at his deposition in
`Ameranth, Inc. v. Kessman, CV 08-851 JAP, 2009 WL
`3156749 (D. Del.), which was not a patent case. ″Plaintiff
`objects to the Kessman testimony because the cited testimony
`lacks foundation (Fed. R. Evid. 901, 902); is inadmissible
`hearsay evidence (Fed. R. Evid. 801, 802), and the citations
`fail to state how the witness has personal knowledge of the
`alleged facts asserted (Fed. R. Evid. 602).″ (Objections to
`Evidence Offered in Supp. of Mot. (″Objection″), Dkt. No.
`75 at 4.) Plaintiff acknowledges that a deposition may be
`used as substantive evidence in other litigation under FRE
`804(b)(1) if Kessman was unavailable under FRE 804(a),
`but argues that there has been no such showing in this case.
`(Id.)
`
`Defendants respond that Kessman is unavailable because he
`lives in New York and the Court denied Defendants’ ex
`parte application to allow his deposition after the discovery
`cut-off. (Reply, Dkt. No. 76 at 3 n.4.) But Defendants do not
`show that Kessman was not subject to compulsory process
`[*22] during the discovery period. And Defendants cite no
`authority for the proposition that their own inability to meet
`the standard for ex parte relief transforms Kessman into an
`unavailable witness. Defendants served Kessman with a
`subpoena in October 2013, initiated a request to depose him
`
`

`

`2014 U.S. Dist. LEXIS 175600, *22
`
`Page 7 of 8
`
`in January 2014, and then waited over six months to ″review
`any documents Mr. Kessman might produce″ before again
`requesting his deposition in August 2014. (SACV 11-00189
`AG (RNBx), Ex Parte Application, Dkt. No. 201 at ¶¶ 7,
`10.) In short,
`that Defendants did not seek to compel
`Kessman’s deposition does not make him unavailable for
`purposes of summary judgment.
`
`Defendants also do not show, as required by FRE
`804(b)(1)(B), that Plaintiff had ″an opportunity and similar
`motive to develop [the testimony] by direct, cross-, or
`redirect examination.″ The prior case was ″a breach of
`contract and fraud action having nothing to do with the
`patents in suit.″ (Objection, Dkt. No. 75 at 5.) ″The ’similar
`motive’ requirement is inherently factual and depends, at
`least in part, on the operative facts and legal issues and on
`the context of the proceeding.″ U.S. v. Geiger, 263 F.3d
`1034, 1038 (2001); see also Lohrmann v. Pittsburgh Corning
`Corp., 782 F.2d 1156, 1160-61 (4th Cir. 1986) (party who
`deposed witness in a first case involving a different [*23]
`cause of action did not have the same motive to develop the
`testimony as the second case, even though both cases
`involved the party’s attempt to avoid liability for asbestos
`exposure). Nor do Defendants show that
`the Kessman
`deposition may be used due to exceptional circumstances
`under Fed. R. Civ. P. 32(a)(4)(E) or that the use of the
`deposition is authorized because this is ″a later action
`involving the same subject matter between the same parties.″
`Fed. R. Civ. P. 32(a)(8).
`
`The Court therefore sustains Plaintiff’s objection to the
`Kessman Declaration.
`
`4.3.2 The Carson Book is Inadmissible
`
`Another key item of evidence cited by Defendants is
`Carson, ″The Complete Book of Hold ’Em Poker: A
`Comprehensive Guide to Playing and Winning″ (2001)
`(″Carson″). Defendants use Carson to establish the fact that
`poker room waitlists were managed in a certain way before
`the invention. (Mot., Dkt. No. 72 at 11; Reply, Dkt. No. 76
`at 16.) While Carson appears to be prior art under 35 U.S.C.
`§ 102, Plaintiff objects that the book is being used as expert
`opinion without a showing that
`the author is qualified
`expert, and that Defendants use the book to establish the
`truth of the matter asserted without establishing a hearsay
`exception. (Objection, Dkt. no. 75 at 5-7.) [*24] Plaintiff
`argues prophylactically that Defendant has not qualified the
`book as a learned treatise under FRE 803(18). (Id. at 6-7.)
`Defendants do not respond to Plaintiff’s objections to
`Carson.
`
`Carson is hearsay, and no hearsay exception has been
`shown. The Court sustains the objection to Carson on that
`basis.
`
`4.3.3 Conclusion
`
`the
`Therefore, Defendants have not demonstrated that
`claims simply cover generic computer implementation of
`the way poker rooms were managed before the invention.
`
`4.4 THE CITED RECENT USPTO ACTIVITY IS
`IMMATERIAL
`
`ITCS’s Notice of Joinder points out that a USPTO examiner
`recently rejected one of Ameranth’s pending patent
`applications because (1) it was not patentably distinct from
`the ’969 Patent, and (2) it failed 35 U.S.C. § 101. (Dkt. No.
`73-2 at 2-3, U.S. Pat. App. No. 13/759,203, August 21, 2014
`Non-Final Rejection at ¶¶ 4-21).) In response to the rejection,
`Plaintiff revised the claims by changing several terms, such
`as: ″processor″ to ″application software program server,″
`″public display″ to ″public display device,″ associating each
`said server with a system database, and further limiting the
`claims to ″poker″ tournaments. (Dkt. No. 73-4, U.S. Pat.
`App. No. 13/759,203, September 2, 2014 Response to
`Office [*25] Action at 1-2.)
`
`These changes are minor. But on November 5, 2014, the
`USPTO issued a notice of allowability. (Dkt. No. 80-1.) So,
`what started as a point for the Defendants has shifted to a
`point for the Plaintiff. But the back-and-forth at the USPTO
`on a related but unissued patent is of very limited relevance
`here