Ex Parte Amaitis et al

Patent Trial and Appeal Board

Dec 21, 2018

13617299 (P.T.A.B. Dec. 21, 2018)

UNITED STA TES p A TENT AND TRADEMARK OFFICE
APPLICATION NO. FILING DATE
13/617,299 09/14/2012
63710 7590 12/26/2018
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
FIRST NAMED INVENTOR
Lee M. Amaitis
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www .uspto.gov
ATTORNEY DOCKET NO. CONFIRMATION NO.
05-7186-Cl 8267
EXAMINER
DEODHAR, OMKAR A
ART UNIT PAPER NUMBER
3714
NOTIFICATION DATE DELIVERY MODE
12/26/2018 ELECTRONIC
Please find below and/or attached an Office communication concerning this application or proceeding.
The time period for reply, if any, is set in the attached communication.
Notice of the Office communication was sent electronically on above-indicated "Notification Date" to the
following e-mail address(es):
patentdocketing@cantor.com
lkorovich@cantor.com
phowe@cantor.com
PTOL-90A (Rev. 04/07)
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
Ex parte LEE M. AMAITIS and JOSEPH M. ASHER
Appeal2017-002037
Application 13/617,299 1
Technology Center 3700
Before MICHAEL C. ASTORINO, CYNTHIA L. MURPHY, and
ALYSSA A. FINAMORE, Administrative Patent Judges.
ASTORINO, Administrative Patent Judge.
DECISION ON APPEAL
The Appellants appeal under 35 U.S.C. § 134 from the Examiner's
decision rejecting claims 1-10 under 35 U.S.C. § 101 because the claimed
invention is directed to patent-ineligible subject matter. We have
jurisdiction over the appeal under 35 U.S.C. § 6(b ).
We AFFIRM.
1 According to the Appellants, "[t]he real party in interest of the present
application is CFPH, LLC." Appeal Br. 3 (Because the pages of the Appeal
Brief are not numbered, we regard the page bearing the title "APPEAL
BRIEF UNDER 37 C.F.R. § 41.37" as the first page and the pages that
follow as being numbered sequentially thereafter.).
Appeal2017-002037
Application 13/617,299
STATEMENT OF THE CASE
Subject Matter on Appeal
Claims 1, 2, 3, and 7 are the independent claims on appeal. Claim 1,
reproduced below, is illustrative of the subject matter on appeal.
1. A method for betting, comprising:
establishing a first betting option that permits a
bettor to place a bet that designates a participant of a race, one
of a plurality of designable points within the course of the race,
and a range of times, the race having a plurality of participants,
the bet to pay if the designated participant arrives at a
designated point within the designated range of times;
receiving a plurality of bets from betters, each
designating respective participants, points, and ranges of times,
at least one bet designating the finish of the race as its
designated point;
during running of the race, measuring actual times
for the participants designated by the bets at the designated
points; and
determining which of the plurality of bets are
winning bets based at least in part upon the determination of
the actual time and the corresponding bets;
wherein at least one bet comprises a plurality of
bet components and at least one bet component is associated
with a bet matrix, the matrix having a plurality of columns
extending in a first direction and a plurality of rows extending
in a second direction, each column of the bet matrix
corresponding with an intermediate point in the race event; and
for at least one of the plurality of columns in the bet matrix,
populating that column with numbers identifying the one or
more possible fractional times determined for the intermediate
point corresponding with that column such that at least one
fractional time is located in each row intersecting that column,
a particular bet component is a winning bet component if the
bet matrix includes a particular number of matched entries
aligned consecutively in a particular direction in the bet
matrix;
2
Appeal2017-002037
Application 13/617,299
the bets being divided into a plurality of betting
pools, wherein a at least two of the betting pools are associated
with respective intermediate points of the race;
the bets being received on a betting exchange.
ANALYSIS
In contesting the rejection, the Appellants emphasize certain
limitations of claim 1, but otherwise present arguments without regard to
any particular claim. Appeal Br. 6-10; Reply Br. 2---6. Thus, we focus our
attention on independent claim 1, and we address limitations of other claims
to the extent that they are argued separately.
Under 35 U.S.C. § 101, a patent may be obtained for "any new and
useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof." The Supreme Court, however, has long
interpreted § 101 to include an implicit exception: "[l]aws of nature, natural
phenomena, and abstract ideas are not patentable." See, e.g., Alice Corp.
Pty. Ltd. v. CLS Banklnt'l, 134 S. Ct. 2347, 2354 (2014) (internal quotations
and citation omitted).
The Supreme Court, in Alice, reiterated the two-step framework
previously set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. 66, 77-80 (2012), "for distinguishing patents
that claim laws of nature, natural phenomena, and abstract ideas from those
that claim patent-eligible applications of those concepts." Alice Corp., 134
S. Ct. at 2355. The first step in that analysis is to "determine whether the
claims at issue are directed to one of those patent-ineligible concepts" (id.),
e.g., to an abstract idea. If the claims are not directed to a patent-ineligible
concept, the inquiry ends. Otherwise, the inquiry proceeds to the second
step where the elements of the claims are considered "individually and 'as
3
Appeal2017-002037
Application 13/617,299
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, 566 U.S. at 79, 78). This is a search for an "inventive
concept," i.e., an element or combination of elements sufficient to ensure
that the claim amounts to "significantly more" than the abstract idea itself.
Id.
The Court acknowledged in Mayo that "all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena,
or abstract ideas." Mayo, 566 U.S. at 71. Therefore, the Federal Circuit has
instructed that claims are to be considered in their entirety to determine
"'whether their character as a whole is directed to excluded subject matter."'
McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1312 (Fed.
Cir. 2016) (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d
1343, 1346 (Fed. Cir. 2015)).
Turning to Appellants' arguments, the Appellants assert that the
Examiner failed to establish a prima facie case due to a lack of evidence, and
because placing a wager "does not fall into any of the categories of abstract
idea identified by the courts." Appeal Br. 7; see id. at 8; Reply Br. 2. The
Appellants also argue that the Examiner failed to make a prima facie
showing that the claims do not add something significantly more than the
abstract idea. Appeal Br. 7-9; Reply Br. 4--5. The Appellants' arguments
are not persuasive of Examiner error.
The Federal Circuit has repeatedly observed that "the prima facie case
is merely a procedural device that enables an appropriate shift of the burden
of production." Hyatt v. Dudas, 492 F.3d 1365, 1369 (Fed. Cir. 2007)
(citing In re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992)). The court has,
4
Appeal2017-002037
Application 13/617,299
thus, held that the USPTO carries its procedural burden of establishing a
prima facie case when its rejection satisfies the requirements of 35 U.S.C.
§ 132 by notifying the applicant of the reasons for the rejection, "together
with such information and references as may be useful in judging of the
propriety of continuing the prosecution of [the] application." See In re Jung,
637 F.3d 1356, 1362 (Fed. Cir. 2011) (alteration in original). Thus, the
Office must set forth the statutory basis of the rejection in a sufficiently
articulate and informative manner as to meet the notice requirement of
§ 132. Id.; see also Chester v. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990)
("Section 132 is violated when a rejection is so uninformative that it
prevents the applicant from recognizing and seeking to counter the grounds
for rejection.").
In rejecting the claims under § 101, the Examiner analyzes claim 1
using the Mayol Alice two-step framework. Under the first step of the Alice
framework, the Examiner determined that "[t]he claims are directed to the
abstract idea of placing wagers." Final Act. 3. Also, the Examiner
determined that
the claims are directed to the abstract ideas of rules for betting
on a race and a table for recording the bets and outcomes.
Collectively, these rules define options for placing bets and
receiving payouts on a race. When viewed together therefore,
these rules also represent the management of a game, i.e. the
construct of accepting wagers, resolving conditions and paying
out money.
Ans. 3 ( emphasis added). 2 The Examiner further explained that rules for
betting on a race and a table for recording the bets and outcomes is similar to
2 The Appellants assert that the Examiner introduced a new ground of
rejection in the Answer due to the change identification of the alleged
5
Appeal2017-002037
Application 13/617,299
other concepts the courts have held to be abstract ideas, such as the concept
of a wagering game in In re Smith, 815 F.3d 816 (Fed. Cir. 2016). See
Ans. 3-9; see also Final Act. 2-3; see also Amdocs (Isr.) Ltd. v. Openet
Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016) ("[T]he decisional
mechanism courts now apply is to examine earlier cases in which a similar
or parallel descriptive nature can be seen-what prior cases were about, and
which way they were decided."). Under the second step, the Examiner
explained the claim does not include additional elements that are sufficient
to amount to significantly more than the abstract idea because they amount
to mere instructions for implementing the abstract idea on a generic
computing device. See Final Act. 3.
Accordingly, the Examiner sufficiently informs the Appellants that
the claim is patent ineligible. Furthermore, there is no indication that the
Appellants do not recognize or understand the Examiner's rejection, as the
Appellants' understanding is manifested in the arguments traversing it. The
Examiner's rejection, therefore, satisfies the notice requirement of§ 132 and
sets forth a prima facie case of patent-ineligible subject matter.
abstract idea. See Reply Br. 2. And, the Appellants assert "[t]o consider this
new ground of rejection now would violate Applicants due process rights,"
but the Appellants "nonetheless provide a response to the new grounds." Id.
We note that the issue of whether an Examiner's Answer includes a new
ground of rejection is a petitionable matter that does not fall within the
Board's jurisdiction, and, therefore, we do not address this issue. See 37
C.F.R. § 41.40(a) ("Any request to seek review of the primary examiner's
failure to designate a rejection as a new ground of rejection in an examiner's
answer must be by way of a petition to the Director under § 1.181" and
"[f]ailure of appellant to timely file such a petition will constitute waiver of
any arguments that a rejection must be designated as a new ground of
rejection."); Manual of Patent Examining Procedure (MPEP) § 1002.02(c).
6
Appeal2017-002037
Application 13/617,299
Under the first step of the Alice framework, the Appellants argue that
"the claims are clearly not directed to placing a wager" and that
"[!]imitations include language such as establishing a first betting option,
receiving a plurality of bets and so on." Appeal Br. 8. The Appellants'
argument is not persuasive of Examiner error.
The record reflects that the Examiner looks to the intrinsic evidence of
the claim language and the elements thereof as factors in determining that
the claim, as a whole, is directed to rules for betting on a race and a table for
recording the bets and outcomes. See Ans. 3-9; see also Final Act. 2-3. We
note for emphasis that the preamble of claim 1 provides for "[a] method of
betting" that comprises among other things the steps of "establishing a first
betting option," "receiving a plurality of bets," "measuring actual times for
the participants designated by the bets," "determining which of the plurality
of bets are winning bets." Appeal Br., Claims App. And, the Specification
further supports the Examiner's determination, for example: the Title page
provides for a "BETS REGARDING INTERMEDIATE POINTS IN A
RACE EVENT USING FRACTIONAL TIMING"; "[t]his invention relates
in general to betting on events and, more particularly, to a system and
method for providing bets regarding intermediate points in a race event
using fractional timing" (Spec. ,r 2); and that embodiments include
"method[ s] of providing and managing bets" (Spec. ,r,r 5-7).
Further, the Examiner determined that the concept of rules for betting
on a race and a table for recording the bets and outcomes, or, more broadly,
placing wagers (see Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229, 1240
(Fed. Cir. 2016) ("An abstract idea can generally be described at different
levels of abstraction.")) is similar to concepts the courts have held to be
7
Appeal2017-002037
Application 13/617,299
abstract ideas. Here, the Examiner cites to In re Smith, among others, to
support the determination that the claims are directed to an abstract idea.
Ans. 4--5. We agree with the Examiner's determination. As the court
explained, a wagering game is a method of exchanging and resolving
financial obligations, comparable to "other 'fundamental economic
practice[ s] "' and a "claimed 'method of conducting a wagering game' is
drawn to an abstract idea much like Alice's method of exchanging financial
obligations and Bilski's method of hedging risk." Smith, 815 F.3d at 818-19
(Fed. Cir. 2016); see id. at 819 ( concluding that "claims [] describing a set of
rules for a game[] are drawn to an abstract idea").
The Appellants acknowledge the Examiner's reliance on Smith, but
suggest that Smith does not apply for reasons that pertain to step two of the
Mayo/Alice two-step framework, i.e., whether an element or combination of
elements is sufficient to ensure that the claim amounts to "significantly
more" than the abstract idea itself. See Reply Br. 2-3. The Appellants do
not argue the relevance of Smith as to step one of the Mayo/Alice two-step
framework, i.e., whether the claims are directed to an abstract idea. See id.
The Appellants also argue that the claims are like the claims in Enfzsh,
LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016), "are directed to the
added functionality of a computer that is not an abstract idea at all." Reply
Br. 3 (quoting Enfzsh, 822 F.3d at 1335 ("Software can make non-abstract
improvements to computer technology just as hardware improvements can,
and sometimes the improvements can be accomplished through either
route.")). The Appellants' argument is not persuasive. First, the Appellants
fail to explain how the claims are directed to added functionality of a
computer like those in Enfzsh. Second, we fail to understand how the claims
8
Appeal2017-002037
Application 13/617,299
are directed to improvements in computer hardware or software. Instead, as
discussed above, the record supports the Examiner's determination that the
claims are directed to rules for betting on a race and a table for recording the
bets and outcomes. See Enfish, 822 F.3d at 1336 (focusing on whether the
claim is "an improvement to [the] computer functionality itself, not on
economic or other tasks for which a computer is used in its ordinary
capacity"). Additionally, claim 1 fails to recite or require the use of a
computer at all. And other claims that call for a "computer device," or the
like, are directed to generic computing equipment; for example, claim 7 calls
for a "computing device" to perform the steps of receiving a bet from a
bettor, determining whether the bet is a winning bet, and transmitting an
indication of whether the bet is a winning bet to the bettor. See, e.g., Spec.
,r 36 ("Processor 70 may comprise any suitable processor that executes
betting system software application 7 4 or other computer instructions, such
as a central processing unit (CPU) or other microprocessor, and may include
any suitable number of processors working together."), ,r 41 ("Processor 70
may determine payouts 80 for each winning bets 12.").
Accordingly, the Appellants do not apprise us of error in the
Examiner's determination that claim 1 is directed to an abstract idea under
the first step of the Alice analysis. We, therefore, tum to Appellants'
arguments under the second step.
The Appellants point to the lack of discussion about the limitations of
the pending claims, evidence, and a prior art rejection (e.g., novelty),
indicates that the claims contain significantly more than the alleged abstract
idea of rules for betting on a race and a table for recording the bets and
9
Appeal2017-002037
Application 13/617,299
outcomes. See Appeal Br. 8-9; Reply Br. 4--5. We find these arguments
unpersuasive of error.
Initially, we note that the limitations the Appellants assert amount to
significantly more - e.g., the body of claim 1 (Reply Br. 4--5)- actually
describe the abstract idea. Claim limitations describing the ineligible subject
matter, e.g., the abstract idea, cannot satisfy the second step of the Alice
analysis. See BSG Tech. LLC v. BuySeasons, Inc., 899 F.3d 1281, 1290
(Fed. Cir. 2018) ("It has been clear since Alice that a claimed invention's use
of the ineligible concept to which it is directed cannot supply the inventive
concept that renders the invention 'significantly more' than that ineligible
concept."); Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018)
(Moore, J., concurring) ("[ A ]nd Berkheimer ... leave[ s] untouched the
numerous cases from [the Federal Circuit] which have held claims ineligible
because the only alleged 'inventive concept' is the abstract idea.)."
Moreover, the Examiner correctly identified the additional elements
as the computer components - e.g., "computing device" in claim 7 (Ans. 6)
- and correctly determines that the recited components are generic. In
doing so, the Examiner determined that the claim limitations, individually
and as an ordered combination, "amount to merely applying the abstract idea
using conventional computing devices, much like the claims in Alice." Id.
We agree and adopt the Examiner's analysis as our own. Id. at 6-7.
Further, we note that the Specification explains that the claimed "computing
system," "computing device," and "non-transitory medium" refer to generic
elements. For example, the Specification is clear that:
Processor 70 may comprise any suitable processor that
executes betting system software application 7 4 or other
computer instructions, such as a central processing unit ( CPU)
10
Appeal2017-002037
Application 13/617,299
or other microprocessor, and may include any suitable number
of processors working together. Memory 72 may comprise one
or more memory devices suitable to facilitate execution of the
computer instructions, such as one or more random access
memories (RAMs), read-only memories (RO Ms), dynamic
random access memories (DRAMs ), fast cycle RAMs
(FCRAMs ), static RAM (SRAMs ), field-programmable gate
arrays (FPGAs ), erasable programmable read-only memories
(EPROMs ), electrically erasable programmable read-only
memories (EEPROMs ), or any other suitable volatile or non-
volatile memory devices.
Spec. ,r 36; see also id. ,r 31 ("[C]ustomers 20 may use a computer, a
personal digital assistant (PDA), a cell-phone, a remote paging device, an
electronic mail communication device, a handheld betting device, or any
other suitable mobile device."), ,r 47 ("In general, each communication
network 18 may include any interconnection found on any communication
network, such as a local area network (LAN), metropolitan area network
(MAN), wide area network (WAN), the Internet, portions of the Internet, or
any other data exchange system."). Additionally, the Specification is clear
that "[i]ntermediate point recording devices 102 and finish line recording
devices 106 may comprise any devices suitable for recording the actual
positions and/or fractional times of race participants"; e.g., "a teletimer, a
camera and/or other suitable timing and recording devices." Spec. ,r 49.
The Appellants also argue that the claims of the present case are
similar to those in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245
(Fed. Cir. 2014). See Appeal Br. 9--10; Reply Br. 5---6. In DDR Holdings,
the Federal Circuit determined that the claims addressed the problem of
retaining website visitors who, if adhering to the routine, conventional
functioning of Internet hyperlink protocol, would be transported instantly
11
Appeal2017-002037
Application 13/617,299
away from a host's website after clicking on an advertisement and activating
a hyperlink. DDR Holdings, 773 F.3d at 1257. The Federal Circuit, thus,
held that the claims were directed to statutory subject matter because they
claim a solution "necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer networks."
Id. The court cautioned that "not all claims purporting to address Internet-
centric challenges are eligible for patent." Id. at 1258. And the court
contrasted the claims to those at issue in Ultramercial Inc. v. Hulu, LLC, 772
F.3d 709 (Fed. Cir. 2014), in that, in DDR Holdings, the computer network
was not operating in its "normal, expected manner" and the claims did not
"recite an invention that is ... merely the routine or conventional use of the
Internet." Id. at 1258-59.
The Appellants assert that "claims solve a problem related to
computer technology to improve the functionality of gaming providers that
arise from the realm of computer systems by adding an ability to use
intermediate point information." Appeal Br. 9. In support of this argument,
the Appellants compare "[ t ]raditional racing[, which] is tied to a single
instance at a final physical location" (Reply Br. 5) with the claims, which
"allow access to otherwise unplayable games options" (Appeal Br. 10) by
measuring and using intermediate point information (see Reply Br. 5---6).
However, unlike DDR Holdings, the problems pertaining to
improving betting or wagering existed prior to the Internet. See Spec. ,r 12
( explaining that the invention has the advantage of providing "more betting
events and types of bets ... to customers for each race event"). Further, the
purported solution is not necessarily rooted in computer technology as it
does not require the use of a computer. Supra. And, the Appellants do not
12
Appeal2017-002037
Application 13/617,299
direct attention to, and we do not see, where the claimed subject matter
provides for an improvement in the technology or technical functioning of
these systems. See Ans. 8 ("But for the mere appendage of a computing
device, the claimed invention has nothing to do with computing
technologies.").
The Appellants argue that the claims presently on appeal are similar to
the claims in BASCOM Globs. Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341, 1350 (Fed. Cir. 2016), because "the claims here apply ideas
related to gaming in a more efficient manner creating an invention that
improves the performance of computerized gaming technology." Reply
Br. 6. The Appellants' argument is not persuasive. For reasons similar to
those discussed above, the claimed invention does not improve the
performance of computerized gaming technology. Instead, the claimed
invention improves the fundamental economic practice of race betting by
providing more betting options and applies this solution in a computer
environment, which is not sufficient for patent eligibility. See Alice Corp.,
134 S. Ct. at 23 5 8 ( explaining that limiting the use of an abstract idea to a
particular technological environment is not sufficient for patent eligibility).
Further, the Examiner correctly explains that "novelty does not equate
to eligibility." Ans. 8. Although the second step is termed a search for an
"inventive concept," the analysis is not an evaluation of novelty or non-
obviousness, but rather, a search for "an element or combination of elements
that is 'sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself."' Alice
Corp., 134 S. Ct. at 2355. An abstract idea does not transform into an
inventive concept just because the prior art does not disclose or suggest it.
13
Appeal2017-002037
Application 13/617,299
See Mayo, 566 U.S. at 90. "Groundbreaking, innovative, or even brilliant
discovery does not by itself satisfy the§ 101 inquiry." Ass 'nfor Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013). Indeed,
"[t]he 'novelty' of any element or steps in a process, or even of the process
itself, is of no relevance in determining whether the subject matter of a claim
falls within the§ 101 categories of possibly patentable subject matter."
Diamond v. Diehr, 450 U.S. 175, 188-89 (1981).
The Appellants argue that claims in the present case "are quite
specific in the arrangement of the bet matrix and betting pools" and "there is
no preemption of the 'rules for betting on a race and a table for recording
bets and outcomes' because other arrangement of tables or pools may be
used, for example." Reply Br. 4. The Appellants' argument is not
persuasive. "The Supreme Court has made clear that the principle of
preemption is the basis for the judicial exceptions to patentability" and "[ fJor
this reason, questions on preemption are inherent in and resolved by the
§ 101 analysis." Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1379 (Fed. Cir. 2015) (citing Alice, 134 S. Ct. at 2354). For the reasons
discussed above, the Appellants do not apprise us of error in the Examiner's
determination that the claimed subject matter is patent ineligible in
accordance with the § 101 analysis set forth in Alice.
In view of the foregoing, we have considered all of the Appellants'
arguments, on pages 6-10 of the Appeal Brief and on pages 2---6 of the Reply
Brief, but they do not apprise us of error in the rejection. Accordingly, we
sustain the rejection of claims 1-10.
14
Appeal2017-002037
Application 13/617,299
DECISION
We AFFIRM the Examiner's decision rejecting claims 1-10.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a). See 37 C.F.R.
§ 1.136(a)(l)(iv).
AFFIRMED
15