Paper 8
`Enter: January 21, 2016
`
`Trials@uspto.gov
`571-272-7822
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GSN GAMES, INC.,
`Petitioner,
`
`v.
`
`BALLY GAMING, INC.,
`Patent Owner.
`____________
`
`Case CBM2015-00155
`Patent 5,816,918
`____________
`
`
`Before MICHAEL P. TIERNEY, PATRICK R. SCANLON, and
`HYUN J. JUNG, Administrative Patent Judges.
`
`JUNG, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`Enter: January 21, 2016
`
`Trials@uspto.gov
`571-272-7822
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GSN GAMES, INC.,
`Petitioner,
`
`v.
`
`BALLY GAMING, INC.,
`Patent Owner.
`____________
`
`Case CBM2015-00155
`Patent 5,816,918
`____________
`
`
`Before MICHAEL P. TIERNEY, PATRICK R. SCANLON, and
`HYUN J. JUNG, Administrative Patent Judges.
`
`JUNG, Administrative Patent Judge.
`
`DECISION
`Institution of Covered Business Method Patent Review
`37 C.F.R. § 42.208
`
`
`
`
`
`
`
`CBM2015-00155
`Patent 5,816,918
`
`I.
`
`INTRODUCTION
`
`
`
`GSN Games, Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”),
`
`requesting institution of a covered business method patent review of claims
`
`1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75, and 77 of U.S. Patent No.
`
`5,816,918 (Ex. 1001, “the ’918 patent”). Bally Gaming, Inc. (“Patent
`
`Owner”) filed a Preliminary Response (Paper 7, “Prelim. Resp.”).1 We have
`
`jurisdiction under 35 U.S.C. § 324.
`
`
`
`Upon consideration of the Petition and the Preliminary Response, we
`
`determine that it is more likely than not that Petitioner would prevail with
`
`respect to claims 1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75, and 77 of the
`
`’918 patent. 35 U.S.C. § 324(a). Accordingly, we institute a covered
`
`business method patent review as to claims 1, 3, 15–22, 24, 25, 28, 32–34,
`
`39, 73–75, and 77 for the reasons that follow.
`
`
`
`
`
`A. Related Proceedings
`
`The ’918 patent is the subject of Arcade Planet, Inc. v.
`
`Worldwinner.com, Inc., No. 3:03-cv-00063 (D. Nev.) and Arcade Planet,
`
`Inc. v. eUniverse, Inc., No. 3:03-cv-00062 (D. Nev.). Pet. 3; Paper 5, 2.
`
`
`
`The ’918 patent was the subject of Reexamination No. 90/006,601,
`
`and an ex parte Reexamination Certificate issued on June 30, 2014 that
`
`canceled claims 35–37 and 40–44 and amended claims 34, 38, 39, 45, and
`
`46. Additionally, claims 1–34, 38, 39, and 45–77 of the ’918 patent have
`
`
`1 The Notice of Filing Date Accorded to Petition indicates “Mailed: July 23,
`2015,” but our filing system indicates that the Notice was entered on July 22,
`2015. The Preliminary Response was filed on October 23, 2015. In the
`event that the Preliminary Response is considered filed late, we excuse the
`late filing because consideration of the Preliminary Response on the merits
`would be in the interests of justice. 37 C.F.R. § 42.5(c)(3).
`
`
`
`2
`
`
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`CBM2015-00155
`Patent 5,816,918
`
`been challenged in related covered business method patent review
`
`CBM2015-00154.
`
`
`
`
`
` B. The ’918 Patent (Ex. 1001)
`
`The ’918 patent relates to “redemption games allowing a player to
`
`receive one or more prizes in connection with playing the game.” Ex. 1001,
`
`1:16–19. Figure 1 of the ’918 patent is reproduced below.
`
`
`
`
`
`
`
`
`
`Figure 1 is a block diagram of a game apparatus. Id. at 4:62–63,
`
`5:49–51. The ’918 patent states that “prize information is automatically
`
`determined for each of the prizes, the prize information being determined in
`
`view of a desired profitability of the game apparatus.” Id. at 4:1–4. Figure 1
`
`shows “a generic architecture using components typical to game apparatuses
`
`suitable for use with” the ’918 patent. Id. at 5:54–57. “Game unit 10 can
`
`take a variety of forms, including a video game apparatus having one or
`
`more display screens, a mechanical game having playing pieces and/or other
`
`moving mechanical parts, a personal computer system, a ‘network
`
`
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`3
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`CBM2015-00155
`Patent 5,816,918
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`computer’, a television including or connected to a microprocessor . . . , or
`
`other apparatus.” Id. at 5:57–63.
`
`Game unit 10 can include game processor 12, monetary input device
`
`14, player input device 16, game output device 18, universal ticket dispenser
`
`20 that can dispense vouchers for redeeming prizes, specific prize ticket
`
`dispenser 22, and communication device 24 for optionally communicating
`
`with other game apparatuses. Id. at 6:10–14, 11:35–39.
`
`
`
`Game processor 12 can be “implemented within a standard personal
`
`computer, workstation, network computer, or similar device” and “can
`
`include a well-known microprocessor such as a Pentium-based
`
`microprocessor.” Id. at 13:37–39, 14:61–63. Monetary input device 14 can
`
`be, for example, a coin deposit slot or a debit or credit card reader. Id. at
`
`6:34–50. Player input device 16 can be buttons, keyboards, dials, joystick
`
`controls, touch screen, track ball, mouse, gun device, steering wheel, foot
`
`pedals, speech input, or any other input used in playing a game. Id. at 7:4–
`
`10. Game output device is preferably display screen 56, and game processor
`
`12 “utilizes appropriate display drivers, graphics chips, and/or other well-
`
`known components to display and update images on the display screen.” Id.
`
`at 8:13–16. “[T]ickets can be dispensed from ticket dispensing mechanisms
`
`well-known to those skilled in the art.” Id. at 8:36–37. “Communication
`
`device 24 can be implemented as any one of many devices well known to
`
`those skilled in the art.” Id. at 12:31–32.
`
`Another embodiment of game unit 10 can be used for linked or
`
`networked game play using communication device 24 to implement
`
`tournament games. Id. at 13:48–57, 15:5–8, 17:66–67. With reference to a
`
`flowchart shown in Figure 9, the ’918 patent describes the adjustment of
`
`
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`4
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`CBM2015-00155
`Patent 5,816,918
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`prize characteristics that utilizes equations solving for revenue required,
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`value, prize cost, ratio 488, and multiplier. Id. at 32:24–38:33.
`
`Of the challenged claims, claims 1, 15, 21, 34, 39, and 73 are
`
`independent, and claims 34 and 39 were amended during reexamination.
`
`Claim 1 is reproduced below:
`
`1. A method for providing a prize redemption system for
`a game apparatus, said prize redemption system being
`customizable by an operator, said method comprising:
`receiving a prize list on a game apparatus, said prize list
`including names of a plurality of prizes available to be won by
`playing said game apparatus, wherein said game apparatus
`receives monetary income from players in exchange for use of
`said game apparatus, and wherein said players may win prize
`credits by playing said game apparatus;
`receiving a cost of each of said prizes on said game
`apparatus; and
`determining on said game apparatus a prize cost to be
`associated with each of said plurality of prizes, said prize cost
`being in terms of prize credits and determined in view of a
`desired profitability of said game apparatus, and wherein a player
`of said game apparatus may select one of said prizes by
`exchanging a number of prize credits equal to said prize cost of
`said selected prize.
`
`C. Challenge
`
`Petitioner challenges claims 1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75,
`
`
`
`
`
`and 77 as unpatentable under 35 U.S.C. § 101. Pet. 19, 24.
`
`
`
`II. ANALYSIS
`
`
`
`A. Petitioner’s Eligibility to File a Petition
`
`Section 18 of the Leahy-Smith America Invents Act, Pub. L. No. 112-
`
`29, 125 Stat. 284 (2011) (“AIA”) governs the transitional program for
`
`
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`5
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`CBM2015-00155
`Patent 5,816,918
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`covered business method patent reviews. Section 18(a)(1)(B) of the AIA
`
`sets forth that a person may not file a petition for such a review “unless the
`
`person or the person’s real party in interest or privy has been sued for
`
`infringement of the patent or has been charged with infringement under the
`
`patent.”
`
`The parties state that the ’918 patent is asserted against Petitioner in
`
`Arcade Planet, Inc. v. Worldwinner.com, Inc., No. 3:03-cv-00063 (D. Nev.).
`
`Pet. 5–6; Paper 5, 2. On the current record, we are satisfied that Petitioner
`
`meets the eligibility requirement of § 18(a)(1)(B).
`
`B. Whether the ’918 Patent is a Covered Business Method Patent
`
`A covered business method patent “claims a method or corresponding
`
`apparatus for performing data processing or other operations used in the
`
`practice, administration, or management of a financial product or service,
`
`except that the term does not include patents for technological inventions.”
`
`AIA § 18(d)(1); 37 C.F.R. § 42.301(a). To determine whether a patent is
`
`eligible for a covered business method patent review, the focus is on the
`
`claims. See Transitional Program for Covered Business Method Patents—
`
`Definitions of Covered Business Method Patent and Technological
`
`Invention, 77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012) (Final Rule). A
`
`patent need have only one claim directed to a covered business method to be
`
`eligible for review. Id.
`
`Also, the legislative history of the AIA “explains that the definition of
`
`covered business method patent was drafted to encompass patents ‘claiming
`
`activities that are financial in nature, incidental to a financial activity or
`
`complementary to a financial activity.’” Id. at 48,735 (quoting 157 Cong.
`
`Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer)).
`
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`6
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`CBM2015-00155
`Patent 5,816,918
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`
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`
`
`1. Financial Product or Service
`
`Petitioner argues that the claims and Specification of the ’918 patent
`
`are “directed to the financial activity of profitably awarding prizes to game
`
`players” and that players paying money to play games and win prizes and
`
`game operators wanting to make money are financial activities. Pet. 8.
`
`Petitioner argues that claim 1’s recitation of a method “wherein said game
`
`apparatus receives monetary income from players” and “said prize cost
`
`being in terms of prize credits and determined in view of a desired
`
`profitability of said game apparatus” are financial activities. Id. at 8–10.
`
`Petitioner also argues that claims 15, 21, and 73 “recite receiving monetary
`
`income from players in exchange for playing games” and “recite how the
`
`game apparatus must award prizes based on a desired profit level or ‘payout
`
`value.’” Id. at 10–11. Petitioner also asserts that reexamined claim 34
`
`recites “receiving monetary input from a player to allow said player to
`
`participate in a tournament by playing said game as a tournament game.” Id.
`
`at 11. Petitioner further cites the Abstract to assert that the ’918 patent is
`
`directed to financial activities. Id. at 12–13.
`
`Patent Owner responds that the “challenged claims are simply not
`
`directed to a ‘financial product or service’” and Petitioner “stretches the
`
`concept of ‘financial product or service’ far from where the ordinary
`
`meaning of these words takes it and the statutory and legislative scheme.”
`
`Prelim. Resp. 25–26. Patent Owner argues that claims are instead directed
`
`to technology common in business environments with no particular relation
`
`to the financial services sector. Id. at 26. Patent Owner also contends that
`
`the cited portions of the Specification “do not suffice to show that [the] ’918
`
`patent claims an activity that is financial in nature, only that . . . the ’918
`
`
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`7
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`CBM2015-00155
`Patent 5,816,918
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`patent may incidentally, in a few minor instances, at most use some financial
`
`data.” Id.
`
`We agree with Petitioner that the language of claims 1, 15, 21, 34, and
`
`73 establishes that these claims are for a method or apparatus for performing
`
`data processing or other operations used in a financial product or service.
`
`Contrary to Patent Owner’s arguments, “as a matter of statutory
`
`construction, the definition of ‘covered business method’ is not limited to
`
`products and services of only the financial industry, or to patents owned by
`
`or directly affecting the activities of financial institutions such as banks and
`
`brokerage houses” and that the “plain text of the statutory definition
`
`contained in § 18(d)(1) . . . on its face covers a wide range of finance-related
`
`activities.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1325
`
`(Fed. Cir. 2015). The challenged claims of the ’918 patent recite, for
`
`example, receiving monetary income or input to play a game, which is an
`
`activity that is financial in nature.
`
`
`
`
`
`2. Technological Invention
`
`The definition of “covered business method patent” in Section
`
`18(d)(1) of the AIA excludes patents for “technological inventions.” To
`
`determine whether a patent is for a technological invention, we consider
`
`“whether the claimed subject matter as a whole recites a technological
`
`feature that is novel and unobvious over the prior art; and solves a technical
`
`problem using a technical solution.” 37 C.F.R. § 42.301(b).
`
`Petitioner argues that the challenged claims do not recite a novel and
`
`unobvious technological feature because they “implement abstract ideas
`
`using conventional gaming devices and equipment.” Pet. 14. In particular,
`
`Petitioner asserts that exemplary independent claim 1 is “devoid of any
`
`
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`8
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`CBM2015-00155
`Patent 5,816,918
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`technological content” because it only refers to a “game apparatus” which
`
`can be a generic game apparatus with generic architecture. Id. at 14–15
`
`(citing Ex. 1001, 3:7–12, 5:49–63, 43:33–52).
`
`Patent Owner responds that “it is not contested in this proceeding that
`
`the claims as a whole are novel and are not directed to combinations that
`
`would have been obvious,” which “is a strong indication that even Petitioner
`
`recognizes that the invention is not a combination that merely ‘achieve[s] the
`
`normal, expected, or predictable result of that combination.’” Prelim. Resp.
`
`28–29 (alteration in original). Patent Owner also argues that Petitioner
`
`“conflates the technological invention inquiry with the patentable subject
`
`matter inquiry . . . without providing the evidentiary support necessary that
`
`the ’918 patent does not claim a technological invention.” Id. at 29. Patent
`
`Owner also contends that the Petition asserts without evidence that the steps
`
`of claim 1 can be performed by a human and cites no evidence that the
`
`asserted well-known and conventional technologies “are indeed existing,
`
`conventional or well-known.” Id. at 30 (citing Pet. 16–17). Patent Owner
`
`further asserts that the Petition does not discuss the combination of
`
`technologies, such as computer hardware, communication, or computer
`
`networks. Id. (citing Pet. 18). As for the generic game apparatus, Patent
`
`Owner asserts that Petitioner cites to the specification, not the claims which
`
`recite more than a simple game apparatus. Id. at 31.
`
`As stated above, a patent need have only one claim directed to a
`
`covered business method to be eligible for review, and Petitioner asserted
`
`claim 1 as exemplary. Pet. 14. We agree with Petitioner that exemplary
`
`claim 1 only refers to a “game apparatus.” See id. at 14–15. On the current
`
`record, we are not persuaded that “game apparatus” further includes a
`
`
`
`9
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`CBM2015-00155
`Patent 5,816,918
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`combination of technologies or that claim 1 requires such a combination, in
`
`a manner sufficient to rise to the level of a technological invention as
`
`asserted by Patent Owner. Petitioner also cites the Specification of the ’918
`
`patent as evidence that the method of claim 1 can be implemented on
`
`conventional gaming devices and equipment, contrary to Patent Owner’s
`
`assertion of no evidence. See id. at 14–15, 17–19.
`
`Petitioner also argues that the challenged claims solve a commercial
`
`problem, not a technical one, using well-known technology. Pet. 15.
`
`Specifically, Petitioner asserts that the ’918 patent “overcomes purported
`
`problems game operators experienced in maintaining their prize redemption
`
`systems” by “calculating prize credit cost ‘automatically’ based on cost,
`
`prize data, and profitability levels provided by the game operator,” which is
`
`“bookkeeping,” not a technical problem. Id. at 16–17 (citing Ex. 1001,
`
`1:52–65, 3:1–3). Petitioner also asserts that “a human could perform all of
`
`the steps of Claim 1” and that the challenged claims recite well known
`
`gaming devices and equipment. Id. at 17–19 (citing Ex. 1001, 1:34–40,
`
`2:37–47, 3:7–12, 5:49–57, 43:33–52).
`
`Patent Owner responds that Petitioner ignores the problem discussed
`
`in the ’918 patent and solved by the claimed invention’s use of specific
`
`algorithms that precisely calculate prize costs, so that game operators would
`
`not need to make crude estimates. Prelim. Resp. 32–33 (citing Ex. 1001,
`
`1:66–2:4). Patent Owner asserts that “at least the means-plus-function
`
`claims require the use of a special computer that executes specific
`
`algorithms,” which is a technical solution and improvement over prior art
`
`systems. Id. at 33–34 (citing Ex. 1001, 36:22–37:45). These arguments are
`
`unpersuasive because they do not explain how claim 1, which Petitioner
`
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`10
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`CBM2015-00155
`Patent 5,816,918
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`contends is exemplary, requires a specific algorithm. See Pet. 14. On the
`
`present record, we agree with Petitioner that the ’918 patent does not solve a
`
`technical problem. See id. at 15–17.
`
`In view of the foregoing, we conclude that the ’918 patent is a covered
`
`business method patent under AIA § 18(d)(1).
`
`B. Claim Construction
`
`Consistent with the statute and the legislative history of the AIA, the
`
`Board will interpret claims using the broadest reasonable construction. See
`
`37 C.F.R. § 42.300(b); In re Cuozzo Speed Techs., LLC, 793 F.3d 1268,
`
`1275–79 (Fed. Cir. 2015). Claim terms are given their ordinary and
`
`customary meaning, as understood by one of ordinary skill in the art in the
`
`context of the entire disclosure. In re Translogic Tech., Inc., 504 F.3d 1249,
`
`1257 (Fed. Cir. 2007).
`
`Petitioner proposes constructions for “game apparatus,” “receiving
`
`means for receiving monetary input from said player,” and “means for
`
`providing a prize selection menu on said display device.” Pet. 19–23.
`
`Patent Owner proposes alternate constructions for these terms. Prelim.
`
`Resp. 12–17. Patent Owner additionally proposes an interpretation for “a
`
`game processor for controlling a game on said game apparatus. . . .” Id. at
`
`21–23. For purposes of this Decision, we need not construe these terms or
`
`any other term expressly. See, e.g., Wellman, Inc. v. Eastman Chem. Co.,
`
`642 F.3d 1355, 1361 (Fed. Cir. 2011) (“[C]laim terms need only be
`
`construed ‘to the extent necessary to resolve the controversy.’”) (quoting
`
`Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir.
`
`1999)).
`
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`11
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`Patent 5,816,918
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`We note that Patent Owner relies on its proposed constructions for
`
`“means for providing a prize selection menu on said display device . . . ” and
`
`“a game processor for controlling a game on said game apparatus . . . ” in its
`
`arguments that the challenged claims are directed to patent-eligible subject
`
`matter. However, on the present record, Patent Owner’s asserted
`
`constructions are unpersuasive as it is not clear at this time how they are
`
`supported by the record.
`
`Patent Owner also proposes interpretations for terms in claims 23 and
`
`26 (Prelim. Resp. 17–20), but Petitioner does not challenge those claims.
`
`
`
`
`
`C. Asserted Ground under 35 U.S.C. § 101
`
`Petitioner challenges claims 1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75,
`
`and 77 as unpatentable under 35 U.S.C. § 101 with citations to the
`
`Declaration of William K. Bertram, Ph.D. (Ex. 1002, “Bertram
`
`Declaration”). Pet. 24–57.
`
`
`
`
`
`
`
`1. Analysis under Alice
`
`In Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), the Supreme
`
`Court recently clarified the process for analyzing claims to determine
`
`whether claims are directed to patent-ineligible subject matter. In Alice, the
`
`Supreme Court applied the framework set forth previously in Mayo
`
`Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289
`
`(2012), “for distinguishing patents that claim laws of nature, natural
`
`phenomena, and abstract ideas from those that claim patent-eligible
`
`applications of these concepts.” Alice, 134 S. Ct. at 2355. The first step in
`
`the analysis is to “determine whether the claims at issue are directed to one
`
`of those patent-ineligible concepts.” Id. If they are directed to a patent-
`
`ineligible concept, the second step in the analysis is to consider the elements
`
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`12
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`of the claims “individually and ‘as an ordered combination”’ to determine
`
`whether there are additional elements that “‘transform the nature of the
`
`claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at
`
`1297, 1298). In other words, the second step is to “search for an ‘inventive
`
`concept’—i.e., an element or combination of elements that is ‘sufficient to
`
`ensure that the patent in practice amounts to significantly more than a patent
`
`upon the [ineligible concept] itself.’” Id. (alteration in original)
`
`(quoting Mayo, 132 S. Ct. at 1294). Further, the “prohibition against
`
`patenting abstract ideas ‘cannot be circumvented by attempting to limit the
`
`use of the formula to a particular technological environment’ or adding
`
`‘insignificant postsolution activity.”’ Bilski v. Kappos, 561 U.S. 593, 610–
`
`11 (2010) (quoting Diamond v. Diehr, 450 U.S.175, 191–92 (1981)).
`
`First, we must determine whether the claims at issue are directed to an
`
`abstract idea. Alice, 134 S. Ct. at 2355. Petitioner argues that the ’918
`
`patent is “directed to the abstract idea of profitably awarding prizes to game
`
`players” and that the challenged independent claims describe the abstract
`
`idea broadly. Pet. 25, 30–35 (citing Ex. 1001, 1:28–44, 1:56–59, 2:9–15,
`
`43:36–52, 45:20–24, 45:32–34, 45:56–46:14; Ex. 1002 ¶¶ 17–19, 27, 41, 42,
`
`45). Petitioner additionally contends that the abstract idea of profitably
`
`awarding prizes to game players is well-known, long-practiced, and
`
`established in the gaming industry. Id. at 35–38 (citing Ex. 1001, 1:49–59,
`
`1:61–63, 2:34–36; Ex. 1002 ¶¶ 18–20, 27, 30, 31–36; Ex. 1005; Ex. 1006).
`
`Patent Owner responds that Petitioner makes an over-broad
`
`characterization to allege an abstract idea, supported by “only a few lines of
`
`the ’918 patent that describe only one of the goals of the patent” and “is
`
`excessively detached from the specificity and the plain language of the
`
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`13
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`claimed invention, and the overall intrinsic evidence pertaining to the
`
`patent.” Prelim. Resp. 39–42 (citing Pet. 30–31), 45. Patent Owner also
`
`argues that the ’918 patent is not directed to managing any specific game but
`
`“directed toward a prize redemption system that can be implemented on any
`
`game apparatus seeking to provide prizes to players playing a game” and
`
`“directed toward a concrete application . . . that solves identified problems
`
`specifically arising in the realm of gaming.” Id. at 42–45 (addressing Pet.
`
`30, 33). Patent Owner also asserts that the Petition “fails to address certain
`
`claim elements” and “mischaracterizes the prior art discussed in the patent.”
`
`Id. at 46–47 (citing Pet. 36). Patent Owner contends that independent claims
`
`21 and 73 contain limitations that require execution of specific algorithms on
`
`a special-purpose computer. Id. at 42. Patent Owner further contends that
`
`Petitioner’s arguments regarding novelty are irrelevant, conclusory, and
`
`unsupported. Id. at 47–48.
`
`Additionally, Patent Owner represents that the ’918 patent provides “a
`
`gaming apparatus with a customizable prize redemption system providing an
`
`operator the ability to obtain different ‘desired level[s] of profitability,’”
`
`“enables gaming operators to precisely calculate prize costs using a specific
`
`algorithm executed by a special-purpose computer,” “is not limited to the
`
`abstract use of these algorithms,” and is similar to the patent at issue in
`
`Diehr. Id. at 48–50 (alteration in original) (citing Ex. 1001, 1:49–2:4, 3:1–7,
`
`44:56–45:34). Patent Owner also argues that the challenged claims are
`
`directed to “a prize redemption system applying specific algorithms – that
`
`solves identified problems specifically arising in the realm of gaming – the
`
`burdensome maintenance and involvement required of game operators,” that
`
`is asserted to be “a specific application” and “a concrete improvement to
`
`
`
`14
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`CBM2015-00155
`Patent 5,816,918
`
`technology in the gaming marketplace.” Id. at 50–52 (citing Ex. 1001, 1:49–
`
`2:4, 4:41–54). Patent Owner further asserts that the ’918 patent would not
`
`monopolize and preempt any long-practiced use in the gaming industry. Id.
`
`at 52–53 (citing Pet. 37).
`
`The subject matter of the challenged claims, when considered as a
`
`whole, is directed to an abstract idea; namely, profitably awarding prizes to
`
`game players. Specifically, we are persuaded that the idea of profitably
`
`awarding prizes to game players represents a “disembodied concept,” a basic
`
`building block of human ingenuity and rises to the level of an abstract idea.
`
`
`
`After determining whether the claims are directed to a patent-
`
`ineligible concept, the elements of each claim are considered “both
`
`individually and ‘as an ordered combination’ to determine whether the
`
`additional elements ‘transform the nature of the claim’ into a patent eligible
`
`application.” Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S.Ct. at 1297,
`
`1298). “A claim that recites an abstract idea must include ‘additional
`
`features’ to ensure ‘that the [claim] is more than a drafting effort designed to
`
`monopolize the [abstract idea],’” and the “transformation into a patent-
`
`eligible application requires ‘more than simply stat[ing] the [abstract idea]
`
`while adding the words “apply it.’” Id. at 2357 (alterations in original)
`
`(quoting Mayo, 132 S.Ct. at 1294, 1297). The Alice Court indicated that
`
`“claims to a computer system and a computer-readable medium” may be “no
`
`different from the method claims [at issue] in substance” if the claims “recite
`
`a handful of generic computer components configured to implement the
`
`[abstract] idea.” Id. at 2360.
`
`Petitioner asserts that “the additional claim limitations merely recite
`
`well-known, conventional, or routine activities.” Pet. 35. Petitioner also
`
`
`
`15
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`
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`CBM2015-00155
`Patent 5,816,918
`
`argues that the challenged claims recite methods performed on a generic
`
`game apparatus that “does not transform the claims into a patent-eligible
`
`invention.” Id. at 40–41 (citing Ex. 1001, 3:7–12, 5:49–57). Petitioner
`
`further argues that the challenged independent claims recite conventional
`
`steps or activities performed by generic equipment or an individual. Id. at
`
`41–50 (citing Ex. 1001, 1:34–48, 1:52–54, 1:56–69, 8:13–18, 14:13, 14:16,
`
`14:30, 43:33–52, 44:60–45:35, 45:58–46:14; Ex. 1002 ¶¶ 18–24, 27–30, 34–
`
`44), 56–57 (citing Ex. 1001, 1:24, 1:33, 2:47–49, 2:52–54; Ex. 1002 ¶¶ 45,
`
`46, 58). Petitioner provides similar arguments for the challenged dependent
`
`claims. Id. at 50–56 (citing Ex. 1001, 1:35–42, 1:56–59, 2:37–41, 2:36–49,
`
`2:64–3:1, 6:46–50, 7:18–22, 7:29–32, 8:35–36, 43:60–65, 45:35–55, 46:15–
`
`16, 46:23–30, 46:41–44, 46:54–65, 51:5–11, 52:5–9; Ex. 1002 ¶¶ 48–57).
`
`Patent Owner responds that the challenged claims are similar to the
`
`patent at issue in Diehr and that the challenged claims transform monetary
`
`input into prizes and include “meaningful limitations . . . that limit the scope
`
`. . . and sufficiently tie the claimed invention to a machine.” Prelim. Resp.
`
`54–55 (citing Ex. 1001, 44:60–45:35, 45:56–57). Patent Owner argues that
`
`the Petition does not analyze each claim limitation fully and ignores
`
`algorithms discussed in the Specification and incorporated into the claims.
`
`Id. at 55–58 (citing Pet. 39, 42; Ex. 1001, 37:23, 37:49–64, 37:67–38:6,
`
`38:20–26, 40:9–13). Patent Owner also contends that reexamined claims 34,
`
`38, and 45 include an inventive concept for maintaining a particular level of
`
`profitability. Id. at 58–60. Patent Owner also argues that claims 21–33
`
`contain a means-plus-function limitation that requires a special-purpose
`
`computer to execute an algorithm set forth in the ’918 patent Specification
`
`and thus, add meaningful limitations to these claims to pass muster under the
`
`
`
`16
`
`
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`CBM2015-00155
`Patent 5,816,918
`
`second step of Alice. Id. at 60–62 (citing Ex. 1001, 36:22–37:45). Patent
`
`Owner makes a similar argument with respect to claims 73–77 because it
`
`contends that “processor” should be considered a “nonce word,” so that
`
`these claims would also contain a means-plus-function limitation that
`
`requires a special-purpose computer to execute an algorithm set forth in the
`
`’918 patent Specification. Id. at 63–64 (citing Ex. 1001, 36:22–37:45).
`
`
`
`Petitioner provides sufficient evidence on this record that the claims
`
`do not require more than a generic computer or individual performing
`
`conventional steps. Patent Owner’s arguments are not persuasive because
`
`they do not indicate how the cited evidence fails to support Petitioner’s
`
`assertions and because the current record does not indicate that the claims
`
`require a special-purpose computer executing an algorithm.
`
`
`
`We decline to exercise our discretion under 35 U.S.C. § 325(d), as
`
`urged by Patent Owner, because we are not persuaded that Petitioner here
`
`presents the same or substantially the same arguments as Petitioner in Case
`
`CBM2015-00154. Prelim. Resp. 1–3.
`
`
`
`Accordingly, the information in the Petition demonstrates it is more
`
`likely than not that claims 1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75, and 77
`
`of the ’918 patent are unpatentable under 35 U.S.C. § 101.
`
`
`
`
`
`III. CONCLUSION
`
`
`
`For the foregoing reasons, we determine that the information in the
`
`Petition in view of the Preliminary Response demonstrates that it is more
`
`likely than not that claims 1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75, and 77
`
`of the ’918 patent are unpatentable.
`
`
`
`17
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`
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`CBM2015-00155
`Patent 5,816,918
`
`
`
`At this stage of the proceeding, the Board has not made a final
`
`determination as to the patentability of any challenged claim or any
`
`underlying factual and legal issues.
`
`
`
`IV. ORDER
`
`Accordingly, it is:
`
`ORDERED that, pursuant to 35 U.S.C. § 324(a), a covered business
`
`method patent review of U.S. Patent No. 5,816,918 is hereby instituted on
`
`the ground that claims 1, 3, 15–22, 24, 25, 28, 32–34, 39, 73–75, and 77 are
`
`unpatentable under 35 U.S.C. § 101;
`
`FURTHER ORDERED that pursuant to 35 U.S.C. § 324(d) and
`
`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial, the trial
`
`commencing on the entry date of this Decision; and
`
`FURTHER ORDERED that the trial is limited to the ground identified
`
`above, and no other grounds are authorized.
`
`
`
`
`
`
`
`
`
`18
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`
`
`CBM2015-00155
`Patent 5,816,918
`
`For PETITIONER:
`
`Brenton R. Babcock
`Ted M. Cannon
`Michelle E. Armond
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2BRB@knobbe.com
`2tmc@knobbe.com
`2mea@knobbe.com
`
`
`For PATENT OWNER:
`
`Barry E. Bretschneider
`John M. Mueller
`BAKER & HOSTETLER LLP
`bbretschneider@bakerlaw.com
`
`
`
`
`19
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