Lawrence Hodgson

Patent Trials and Appeals Board

Sep 17, 2021

2021000710 (P.T.A.B. Sep. 17, 2021)

UNITED STATES PATENT AND TRADEMARK OFFICE
UNITED STATES DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
Address: COMMISSIONER FOR PATENTS
P.O. Box 1450
Alexandria, Virginia 22313-1450
www.uspto.gov
APPLICATION NO. FILING DATE FIRST NAMED INVENTOR ATTORNEY DOCKET NO. CONFIRMATION NO.
15/485,898 04/12/2017 Lawrence J. Hodgson 309003-220 6122
24628 7590 09/17/2021
HUSCH BLACKWELL LLP
HUSCH BLACKWELL SANDERS LLP WELSH & KATZ
120 S RIVERSIDE PLAZA
22ND FLOOR
CHICAGO, IL 60606
EXAMINER
COBURN, CORBETT B
ART UNIT PAPER NUMBER
3799
MAIL DATE DELIVERY MODE
09/17/2021 PAPER
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.
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte LAWRENCE J. HODGSON
____________

Appeal 2021-000710
Application 15/485,898
Technology Center 3700
____________

Before BIBHU R. MOHANTY, KENNETH G. SCHOPFER,
ROBERT J. SILVERMAN, Administrative Patent Judges.

MOHANTY, Administrative Patent Judge.

DECISION ON APPEAL
STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant1 appeals from the
Examiner’s decision to reject claims 1–20. We have jurisdiction under
35 U.S.C. § 6(b).

SUMMARY OF THE DECISION
We AFFIRM.

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42(a). Appellant identifies the real party in interest as Incredible Techs.
Inc. (Appeal Br. 1).
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Application 15/485,898

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CLAIMED SUBJECT MATTER
The Appellant’s claimed invention relates to a wagering system and
method using shadow wagering (Spec., page 1, lines 12–14). Claim 1,
reproduced below with the italics added, is representative of the subject
matter on appeal.

1. A method of conducting a shadow wagering system,
comprising:
a shadow wagering server electronically receiving
transmission of shadow wager criteria from an electronic
access device located outside a plurality of gaming venues, the
shadow wager criteria comprising game selection criteria, a
per-game wagering condition, and shadowing termination
criteria;
wherein, the game selection criteria comprises at least
one of a designated gaming venue, a designated type of game, a
designated game theme, or a designated base player;
wherein, the per-game wagering condition comprises at
least one of a fixed value or a percentage of a base game wager;
wherein, the shadowing termination criteria comprises at
least one of an amount corresponding to total money wagered,
an amount corresponding to total money won, an amount
corresponding to total money lost, a fixed number of wagers, or
a fixed time period;
the shadow wagering server receiving game play data
and wagering conditions from a plurality of base games
available for play at the plurality of gaming venues from a
plurality of electronic game-play aggregator modules
located at the plurality of gaming venues, the plurality of
electronic game-play aggregator modules being located
remotely from the shadow wagering server;
the shadow wagering server identifying the wagering
conditions;
the shadow wagering server identifying matching ones of
the plurality of base games by comparing the game selection
criteria to the wagering conditions;
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the shadow wagering server selecting one or more
playable games from the matching ones of the plurality of base
games;
the shadow wagering server detecting a respective
outcome of each of the one or more playable games from the
game play data; and
when the respective outcome of any of the one or more
playable games is a winning outcome, the shadow wagering
server awarding a prize based on the per-game wagering
condition.

THE REJECTION
The following rejection is before us for review:
Claims 1–20 are rejected under 35 U.S.C. § 101 as being directed to
non-statutory subject matter.

FINDINGS OF FACT
We have determined that the findings of fact in the Analysis section
below are supported at least by a preponderance of the evidence.2

ANALYSIS
Rejection under 35 U.S.C. § 101
The Appellant argues that the rejection of claim 1 is improper because
the claim is not directed to an abstract idea (Appeal Br. 10–13; Reply Br. 1,
2). The Appellant argues further that the claim is “integrated into a practical

2 See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1427 (Fed. Cir. 1988)
(explaining the general evidentiary standard for proceedings before the
Patent Office).
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application” and “significantly more” than an abstract concept (Appeal Br.
13–17; Reply Br. 5–11).
In contrast, the Examiner has determined that the rejection of record is
proper (Final Action 2–5; Ans. 3–11).
We agree with the Examiner. An invention is patent eligible if it
claims a “new and useful process, machine, manufacture, or composition of
matter.” 35 U.S.C. § 101. However, the Supreme Court has long interpreted
35 U.S.C. § 101 to include implicit exceptions: “[l]aws of nature, natural
phenomena, and abstract ideas” are not patentable. E.g., Alice Corp. v. CLS
Bank Int’l, 573 U.S. 208, 216 (2014).
In determining whether a claim falls within an excluded category, we
are guided by the Supreme Court’s two-step framework, described in Mayo
and Alice. Id. at 217–18 (citing Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 75–77 (2012)). In accordance with that framework,
we first determine what concept the claim is “directed to.” See Alice,
573 U.S. at 219 (“On their face, the claims before us are drawn to the
concept of intermediated settlement, i.e., the use of a third party to mitigate
settlement risk.”); see also Bilski v. Kappos, 561 U.S. 593, 611 (2010)
(“Claims 1 and 4 in petitioners’ application explain the basic concept of
hedging, or protecting against risk . . . .”).
Concepts determined to be abstract ideas, and thus patent ineligible,
include certain methods of organizing human activity, such as fundamental
economic practices (Alice, 573 U.S. at 219–20; Bilski, 561 U.S. at 611);
mathematical formulas (Parker v. Flook, 437 U.S. 584, 594–95 (1978)); and
mental processes (Gottschalk v. Benson, 409 U.S. 63, 69 (1972)). Concepts
determined to be patent eligible include physical and chemical processes,
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such as “molding rubber products” (Diamond v. Diehr, 450 U.S. 175, 192
(1981)); “tanning, dyeing, making waterproof cloth, vulcanizing India
rubber, smelting ores” (id. at 182 n.7 (quoting Corning v. Burden, 56 U.S.
252, 267–68 (1854))); and manufacturing flour (Benson, 409 U.S. at 69
(citing Cochrane v. Deener, 94 U.S. 780, 785 (1876))).
In Diehr, the claim at issue recited a mathematical formula, but the
Supreme Court held that “[a] claim drawn to subject matter otherwise
statutory does not become nonstatutory simply because it uses a
mathematical formula.” Diehr, 450 U.S. at 187; see also id. at 191 (“We
view respondents’ claims as nothing more than a process for molding rubber
products and not as an attempt to patent a mathematical formula.”). Having
said that, the Supreme Court also indicated that a claim “seeking patent
protection for that formula in the abstract . . . is not accorded the protection
of our patent laws, and this principle cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment.”
Id. (internal citation omitted) (citing Benson and Flook); see, e.g., id. at 187
(“It is now commonplace that an application of a law of nature or
mathematical formula to a known structure or process may well be deserving
of patent protection.”).
In January 2019, the USPTO published revised guidance on the
application of § 101. 2019 Revised Patent Subject Matter Eligibility
Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”). Under the
Guidance, we first look to whether the claim recites:
(1) any judicial exceptions, including certain groupings of
abstract ideas (i.e., mathematical concepts, certain methods of
organizing human activity such as a fundamental economic
practice, or mental processes); and
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(2) additional elements that integrate the judicial exception into
a practical application, i.e., evaluate whether the claim
“appl[ies], rel[ies] on, or use[s] the judicial exception in a
manner that imposes a meaningful limit on the judicial
exception, such that the claim is more than a drafting effort
designed to monopolize the judicial exception.” (see Guidance,
84 Fed. Reg. at 54; see also MPEP § 2106.05(a)–(c), (e)–(h)).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look to whether the claim:
(3) adds a specific limitation beyond the judicial exception that
is not “well-understood, routine, conventional” in the field (see
MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, conventional
activities previously known to the industry, specified at a high
level of generality, to the judicial exception.
See Guidance.
If the claim is “directed to” an abstract idea, we turn to the second
step of the Alice and Mayo framework, where “we must examine the
elements of the claim to determine whether it contains an ‘inventive
concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-
eligible application.” Alice, 573 U.S. at 221 (citation omitted). “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].’” Id. (alterations in original) (quoting Mayo, 566 U.S. at 77).
“[M]erely requir[ing] generic computer implementation[] fail[s] to transform
that abstract idea into a patent-eligible invention.” Id.
The Specification states that the invention generally relates to a
wagering system and method using shadow wagering (page 1, lines 12–14).
Here, the Examiner has determined that claim 1 sets forth a method of
organizing human activities and fundamental economic practice related to
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“wagering” (Ans. 3). We substantially agree with the Examiner. We
determine that the claim sets forth the subject matter in italics above which
describes the concept of: [1] “receiving transmission of shadow wager
criteria . . . the shadow wager criteria comprising game selection criteria, a
per-game wagering condition, and shadowing termination criteria”; [2]
“receiving game play data and wagering conditions from a plurality of base
games available for play at the plurality of gaming venues”; [3] “identifying
the wagering conditions”; [4] “identifying matching ones of the plurality of
base games by comparing the game selection criteria to the wagering
conditions”; [5] “selecting one or more playable games from the matching
ones of the plurality of base games”; [6] “detecting a respective outcome of
each of the one or more playable games from the game play data”; and [7]
“when the respective outcome of any of the one or more playable games is a
winning outcome . . . awarding a prize based on the per-game wagering
condition”; which is a certain method of organizing human activities and
fundamental economic practice in maintaining a shadow wagering system,
i.e. a judicial exception. In buySAFE, Inc. v. Google Inc., 765 F.3d 1350,
1355 (Fed. Cir. 2014) it was held that claims drawn to creating a contractual
relationship and long-familiar commercial transactions was held to be
directed to an abstract idea. See Electric Power Group, LLC v. Alstom S.A.,
830 F.3d 1350 (Fed. Cir. 2016) where collecting information, analyzing it,
and displaying results from certain results of the collection and analysis was
held to be an abstract idea. A method, like the claimed method, that is “a
process that employs mathematical algorithms to manipulate existing
information to generate additional information is not patent eligible.”
Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351
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(Fed. Cir. 2014). In re Smith, 815 F.3d 816, 817 (Fed. Cir. 2016), held that a
“method of conducting a wagering game” was found to be an abstract
concept. In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1160 (Fed.
Cir. 2018) it was held that claims directed to a method of playing a dice
game were directed to a wagering game with the probabilities based on dice
and drawn to an abstract concept.
The Appellant has also argued that the claim is not directed to a
contract and is distinct from In re Smith which was related to “rules for a
wagering game” as opposed to the claim at issue setting forth aggregating
data and finding matching conditions to enable a shadow wager (Reply Br.
1–4).
We have considered but reject these arguments. Here, considering the
claim as whole, the claimed “shadow wagering” method sets up a shadow
wager criteria for a playable game and matches that with a base game and
awards a prize if the outcome of the playable game is met. Here, the claim
sets forth a method of organizing human activities as being a fundamental
economic practice in the formation of a wagering contract and is an abstract
concept.
We next determine whether the claim recites additional elements in
the claim to integrate the judicial exception into a practical application. See
Guidance, 84 Fed. Reg. at 54–55. The Revised Guidance references the
MANUAL OF PATENT EXAMINING PROCEDURE (“MPEP”) § 2106.05(a)–(c)
and (e)–(h).
Here, the claims do not improve computer functionality, improve
another field of technology, utilize a particular machine, or effect a
particular physical transformation. Rather, we determine that nothing in the
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claims imposes a meaningful limit on the judicial exception, such that the
claims are more than a drafting effort to monopolize the judicial exception.
For example, in the claim, the additional elements beyond the abstract
idea is the recited “server.” The Specification at page 3 describes using
generic computer components such as a smartphone or computer. The
claimed limitations of “receiving,” “identifying,” “selecting,” “detecting,”
and “awarding” as recited do not purport to improve the functioning of the
computer itself, do not improve the technology of the technical field, and do
not require a particular machine. Rather, they are performed using generic
computer components. Further, the claim as a whole fails to effect any
particular transformation of an article to a different state. The recited steps
in the claim fail to provide meaningful limitations to limit the judicial
exception. In this case, the claim merely uses the claimed computer
elements as a tool to perform the abstract idea.
Considering the elements of the claim both individually and as “an
ordered combination” the functions performed by the computer system at
each step of the process are purely conventional. Each step of the claimed
method does no more than require a generic computer to perform a generic
computer function. Thus, the claimed elements have not been shown to
integrate the judicial exception into a practical application as set forth in the
Revised Guidance which references the MANUAL OF PATENT EXAMINING
PROCEDURE (“MPEP”) § 2106.05(a)–(c) and (e)–(h).
Turning to the second step of the Alice and Mayo framework, we
determine that the claim does not contain an inventive concept sufficient to
“transform” the abstract nature of the claim into a patent-eligible application.
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Considering the claim both individually and as an ordered combination fails
to add subject matter beyond the judicial exception that is not well-
understood, routine, and conventional in the field. Rather the claim uses
well-understood, routine, and conventional activities previously known in
the art and they are recited at a high level of generality. The Specification at
page 3 for example describes using conventional computer components such
as a smartphone or a computer in a conventional manner. The claim
specifically includes recitations for computers to implement the method but
these computer components are all used in a manner that is well-understood,
routine, and conventional in the field. Here, the claimed generic computer
components which are used to implement the claimed method are well
understood, routine, or conventional in the field. Here, the claim has not
been shown to be “significantly more” than the abstract idea.
For these above reasons the rejection of claim 1 is sustained. The
Appellant has provided the same arguments for the remaining claims which
are drawn to similar subject matter and the rejection of these claims is
sustained for the same reasons given above.

CONCLUSIONS OF LAW
We conclude that Appellant has not shown that the Examiner erred in
rejecting claims 1–20 under 35 U.S.C. § 101 as being directed to non-
statutory subject matter.

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DECISION SUMMARY
In summary:
Claims
Rejected
35 U.S.C.
§
Reference(s)/Basis Affirmed Reversed
1–20 101 Eligibility 1–20

TIME PERIOD FOR RESPONSE
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)(1)(iv).
AFFIRMED