Michael C. Caldarone et al.

Patent Trials and Appeals Board

Aug 2, 2019

13873065 - (D) (P.T.A.B. Aug. 2, 2019)

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.
13/873,065 04/29/2013 Michael C. Caldarone 45MP-214354 9707
159291 7590 08/02/2019
Esplin & Associates, PC
5411 Avenida Encinas
Suite 100
Carlsbad, CA 92008
EXAMINER
COBURN, CORBETT B
ART UNIT PAPER NUMBER
3715
NOTIFICATION DATE DELIVERY MODE
08/02/2019 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):
Docketing@esplin.legal
PTOL-90A (Rev. 04/07)

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

Ex parte MICHAEL C. CALDARONE and STEPHANIE K. SCHULTZ
____________

Appeal 2017-0091391
Application 13/873,0652
Technology Center 3700
____________

Before MICHAEL C. ASTORINO, KENNETH G. SCHOPFER, and
BRADLEY B. BAYAT, Administrative Patent Judges.

SCHOPFER, Administrative Patent Judge.

DECISION ON APPEAL
This is an appeal under 35 U.S.C. § 134(a) from the rejection of
claims 1–18. An oral hearing was held on May 30, 2019. We have
jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 Our decision references the Appeal Brief (“Appeal Br.,” filed Dec. 19,
2016), the Reply Brief (“Reply Br.,” filed June 13, 2017), the Examiner’s
Answer (“Ans.,” mailed Apr. 13, 2017), and the Final Office Action (“Final
Act.,” mailed July 15, 2016).
2 According to Appellants, the real party in interest is Kabam, Inc. Appeal
Br. 2.
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BACKGROUND
According to Appellants, the Specification “relates generally to
demand-based determinations using virtual containers.” Spec. ¶ 1.
CLAIMS
Claims 1 and 10 are the independent claims on appeal. Claim 10 is
illustrative of the appealed claims and recites:
10. A computer-implemented method of facilitating demand-
based determinations using virtual containers, the method being
implemented on a computer system that includes one or more
physical processors configured by machine-readable instructions
to perform the method, the method comprising:
executing a game instance of a game space for an online
game, and using the game instance to generate game state
information that is transmitted to client computing platforms
associated with users over a network;
facilitating presentation of views of the game space to the
users by effectuating transmission of the game state information
over the network to the client computing platforms associated
with the users, wherein execution of the game instance further
enables interaction of the users with the online game and/or each
other by performing operations in the game instance in response
to commands received over the network from client computing
platforms associated with the users;
generating the virtual containers, wherein the virtual
containers include a first virtual container, and wherein container
instances of the first virtual container are configured to be
activated by the users in the game space to obtain item instances
of a first virtual item or item instances of other virtual items in
accordance with probabilities that a container instance of the first
virtual container will provide one or more of the item instances
of the first virtual item or the item instances of the other virtual
items upon activation;
obtaining requests transmitted over the network from at
least some of the client computing platforms associated with the
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users, wherein the requests include information requesting the
container instances of the first virtual container; and
determining the probabilities based on an amount of the
requests such that a first probability that individual ones of the
container instances of the first virtual container will provide at
least one of the item instances of the first virtual item upon
activation is determined based on the amount of the requests,
such that a quantity of the item instances of the first virtual item
provided is determined based on the first probability.
Appeal Br. 26.
REJECTION
The Examiner rejects claims 1–18 under 35 U.S.C. § 101 as claiming
ineligible subject matter.
DISCUSSION
Standard for Patent Eligibility
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. Pty. 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
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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,
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 (1853))); 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. (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
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mathematical formula to a known structure or process may well be deserving
of patent protection.”).
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 and quotation marks 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 United States Patent and Trademark Office (USPTO) recently
published revised guidance on the application of the Alice and Mayo
framework. USPTO’s January 7, 2019 Memorandum, 2019 Revised Patent
Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (“Revised Guidance”).
Under that guidance, we first look to whether the claim recites:
(1) (see Revised Guidance Step 2A – Prong One) 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) (see Revised Guidance Step 2A – Prong Two) additional elements
that integrate the judicial exception into a practical application (see
MPEP §§ 2106.05(a)–(c), (e)–(h)).3
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
(see Revised Guidance Step 2B):
(3) adds a specific limitation beyond the judicial exception that are 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 Revised Guidance.
Analysis
Appellants argue the pending claims as a group. See Appeal Br. 6–21.
We select independent claim 10 as representative. The remaining claims fall
with claim 10. See 37 C.F.R. §41.37(c)(1)(iv).
Step 2A, Prong One
The Examiner first determines that the claims “are directed to a
method of selling a chance at receiving a virtual item in a videogame, which
is an abstract idea.” Final Act. 2. The Examiner finds that:

3 We acknowledge that some of these considerations may be properly
evaluated under Step 2 of Alice (Step 2B of Office guidance). Solely for
purposes of maintaining consistent treatment within the Office, we evaluate
it under Step 1 of Alice (Step 2A of Office guidance). See Revised
Guidance.
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The method includes generating virtual containers where
instances of the virtual containers are configured to be activated
by players to obtain instances of virtual items, which may be a
first virtual item or another virtual item according to a probability
based on the amount of requests obtained by at least some of the
users for the first virtual container such that the probability that
the first virtual container will provide an instance of the first
virtual item is based on the amount of requests such that a
quantity of an item instances of the first virtual item provided is
determined based on the first probability.
Id.
We agree with the Examiner that claim 10 recites a judicial exception
in the form of an abstract idea. Claim 10 includes the steps of “generating
the virtual containers . . .;” “obtaining requests . . . the requests include
information requesting the container instances of the first virtual container;”
and “determining the probabilities based on an amount of the requests such
that a first probability that individual ones of the container instances of the
first virtual container will provide at least one of the item instances of the
first virtual item upon activation is determined based on the amount of the
requests, such that a quantity of the item instances of the first virtual item
provided is determined based on the first probability.” Thus, the claim
provides steps for creating virtual containers that may or may not have
certain virtual items; obtaining user requests for information regarding the
virtual containers; and determining a probability related to whether the
virtual container will include a virtual item based on the number of requests
received.
Further, the Specification describes problems associated with pricing
virtual items where “it may be difficult for [a] service or content provider to
isolate information regarding the different prices for the same virtual items
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to any particular user group” such that “a low price offered to one user group
. . . may likely become known to all other users in the virtual space and
cause the value of the virtual item to be anchored to the low offered price.”
Spec. ¶ 2. The Specification discloses “a system configured to facilitate
demand-based determinations using virtual containers.” Id. at ¶ 3. The
Specification discloses that the system is configured to determine “a
probability that a container instance of the virtual container will provide an
item instance of the new virtual item upon activation.” Id. at ¶ 4. The
Specification states that “a price for an item instance of the new virtual item
may be set based on the determined total number of requests” so that the
price of the item may be “optimized.” Id.
Thus, the Specification discloses that the invention is related to
creating virtual items in a virtual space, determining probabilities that a user
requesting a virtual container will receive a container including a virtual
item, and setting prices for items based on the number of user requests. This
disclosure shows that the steps of claim 10 are part of a process for
determining the price for virtual items, as the Examiner determines. See
also Claims 14–17. We agree with the Examiner that at least the generating,
obtaining, and determining steps of the claim recite steps in a method of
selling a chance at receiving a virtual item. Like the concept of
intermediated settlement in Alice, and the concept of hedging in Bilski, the
concept of determining probability of receiving, and prices for, virtual items
recited in claim 10 “is a fundamental economic practice long prevalent in
our system of commerce.” Alice, 573 U.S. at 219–220 (citations and internal
quotation marks omitted).
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Additionally, we find that the mere determination of probabilities
recited in claim 10 is akin to certain games of chance that have been held to
be abstract ideas. For example, in In re Smith, 815 F.3d 816 (Fed. Cir.
2016), the court concluded that the claimed “method of conducting a
wagering game” using playing cards was drawn to an abstract idea. The
court likened the claimed method to the method of exchanging financial
obligations at issue in Alice. Id. at 819. The court also found that the
method of conducting a wagering game was similar to the subject matter
held to be patent-ineligible in Planet Bingo, LLC v. VKGS LLC, 576 F.
App’x 1005, 1008 (Fed. Cir. 2014) (determining that the claims recite
methods for “managing a game of Bingo” “similar to the kind of ‘organizing
human activity’ at issue in Alice”). Smith, 815 F.3d at 819. Additionally, in
In re Guldenaar, 911 F.3d 1157, 1160 (Fed. Cir. 2018), the court concluded
that the claimed “method of playing a dice game” is directed to a method of
conducting a wagering game, which like the patent-ineligible claims in
Smith is drawn to an abstract idea.
Thus, we find that the claimed process is a fundamental economic
practice, which is one of the set of possible methods of organizing human
activity that is an abstract idea. Thus, claim 10 recites a judicial exception,
i.e., an abstract idea.
Step 2A, Prong Two
Having determined that claim 10 recites a judicial exception, we next
consider whether there are additional elements in the claim that integrate the
judicial exception into a practical application. See Revised Guidance
Step 2A–Prong Two. Here we look to see if, for example, (i) any additional
elements of the claims reflects an improvement in the functioning of a
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computer or to another technological field, (ii) an application of the judicial
exception with, or by use of, a particular machine, (iii) a transformation or
reduction of a particular article to a different state or thing, or (iv) a use of
the judicial exception in some other meaningful way beyond generally
linking the use of the judicial exception to a particular technological
environment. See Revised Guidance, 84 Fed. Reg. at 55; see also MPEP
§ 2106.05(a)–(c), (e)–(h).
The Examiner determines that the claims do “not include additional
elements that are sufficient to amount to significantly more than the judicial
exception because the claims are carried out by generic computers
performing generic functions.” Final Act. 3. The Examiner finds that
“[p]roviding processors configured by machine readable instructions . . . is
merely a description of a generic computer” and “[e]xecuting game space
over a network merely provide the environment of use – i.e., a videogame.”
Id.
We agree with the Examiner, and we determine that the claim does
not integrate the judicial exception into a practical application under
Step 2A, Prong Two. In addition to the claim limitations addressed above as
part of the recited abstract idea, claim 10 also recites that the method is
“implemented on a computer system that includes one or more physical
processors configured by machine-readable instructions.” We see nothing in
the Specification that indicates the method steps are performed by any
specialized computer equipment. For example, the Specification discloses
that the processors “may include one or more of a digital processor, an
analog processor, a digital circuit designed to process information, an analog
circuit designed to process information, a state machine, and/or other
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mechanisms for electronically processing information.” Spec. ¶ 63. Further,
the Specification discloses that “computing platform 104 may include one or
more processors configured to execute computer program modules,” and
“may include one or more of a desktop computer, a laptop computer, a
handheld computer, a netbook, a smartphone, a gaming console, and or other
computing platforms.” Id. at ¶ 59. Thus, the descriptions of the components
used do not indicate that the claims reflect any improvement in the
functioning of a computer or the use of a particular machine, which may
indicate that the additional elements represent a practical application of the
abstract.
Claim 10 also recites the steps of “executing a game instance of a
game space for an online game, and using the game instance to generate
game state information that is transmitted to client computing platforms
associated with users over a network” and “facilitating presentations of
views of the game space” allowing for “interaction of the users with the
online game and/or each other.” We agree with the Examiner that these
steps merely provide the environment in which the abstract idea is
performed, i.e., they relate to the execution of the video game in which the
virtual containers are generated and requested. Thus, we find that these
additional elements merely generally link the use of the abstract idea to a
particular technological environment, i.e. a video game.
Finally, we find no indication in the Specification, nor do Appellants
direct us to any indication, that the steps recited in independent claim 1
invoke any assertedly inventive programming, require any specialized
computer hardware, or other inventive computer components, i.e., a
particular machine, or effects a transformation or reduction of a particular
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article to a different state or thing. Nor do we find anything of record, short
of attorney argument, that attributes any improvement in computer
technology and/or functionality to the claimed invention or that otherwise
indicates that the claimed invention “appl[ies], rel[ies] on, or us[es] 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 Revised Guidance, 84 Fed. Reg.
at 55.
Appellants argue that the claimed invention provides solutions to
problems related to pricing virtual container instances. Appeal Br. 14–15.
Appellants assert that “[t]he claimed invention provides a solution
necessarily rooted in computer technology to address a problem specifically
pertaining to a virtual game space for an online game.” Id. at 15. However,
we are not persuaded that the problems discussed are technical problems or
that they exist only in the realm of online gaming. Appellants describe
problems related to pricing of items in a virtual space so that a content
provider can obtain “maximum profits.” Id. at 14. But pricing of items and
services in order to obtain the largest profit is a problem faced by any
provider of goods or services. Appellants also describe that because of “the
nature of a closed virtual space in which the users participate in an online
game and, because the users may interact with one another, it may be
difficult for the . . . provider to isolate information regarding the different
prices for the same virtual items to any particular user group.” Id. We fail
to see why this particular pricing issue is unique to virtual environments or
on-line games. Any goods or services provider may encounter such
problems when they seek to price their goods or services at different levels
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for different groups of consumers. Thus, we find that the problems
discussed by Appellants are business problems and not technical issues.
Appellants also cite McRO to assert that the claims here recite
functionality and processes that would not be carried out in the same manner
if performed by humans and that “a human could not and/or would not
facilitate demand-based determinations using virtual containers as
specifically recited by the present claims.” Appeal Br. 15–16 (citing McRO,
Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016)). In
McRO the court asked whether the claim as a whole “focus[es] on a specific
means or method that improves the relevant technology” or is “directed to a
result or effect that itself is the abstract idea and merely invoke[s] generic
processes and machinery.” McRO, 837 F.3d at 1314–15 (Claims determined
not abstract because they “focused on a specific asserted improvement in
computer animation.”). The claims in McRO were directed to a system of
lip synchronization and facial expressions of animated characters, and the
court concluded that the computerized system in McRO operated by rules
whose implementation was not previously available manually. Id. at 1316.
We are not persuaded that the claims here are similar to those presented in
McRO. In particular, we fail to see, and Appellants do not explain, how
claim 10 includes any process that would not or could not be done by a
human. Claim 10 recites a process for obtaining the probability that a
container includes an item, but such process is only included at a high level
of generality in that it is simply “based on an amount of requests” and
without any specific means for obtaining the probability. We cannot
conclude that the claim includes a specific set of rules akin to those
presented in McRO.
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Based on the foregoing, we determine that the claim does not include
any practical application of the recited abstract idea. Thus, because the
claims recite an abstract idea and do not integrate the abstract idea into a
practical application, we determine that the claims are directed to an abstract
idea under the Alice and Mayo framework.
Step 2B
Turning to Step 2B of the of the Revised Guidance, we must
determine whether the additional elements (1) add a specific limitation or
combination of limitations that is not well-understood, routine, and
conventional activity in the field, which is indicative that an inventive
concept may be present or (2) simply appends well-understood, routine,
conventional activities previously known to the industry, specified at a high
level of generality, to the judicial exception, which is indicative that an
inventive concept may not be present. See Revised Guidance, 84 Fed. Reg.
at 56.
As discussed above, the claimed additional elements include a
computer system, which is described at a high level of generality in the
Specification, and limitations that execute a game and facilitation
presentation, i.e., display, views of a game. The Specification only discloses
that the computer system performs routine tasks related to processing
information or executing software modules, which would include processing
the software for executing a game and displaying game views. See, e.g.,
Spec. ¶ 63. This provides sufficient evidence that these elements are not
well-understood or used in a manner that is not routine or conventional. See
In re Katz, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible
narrower construction of the terms ‘processing,’ ‘receiving,’ and ‘storing,’
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discussed below, those functions can be achieved by any general purpose
computer without special programming”); Inventor Holdings, LLC v. Bed
Bath & Beyond, Inc., 876 F.3d 1372, 1378 (Fed. Cir. 2017) (holding that
considering claims reciting data retrieval, analysis, modification, generation,
display, and transmission as an “‘ordered combination’” reveals that they
“amount to ‘nothing significantly more’ than an instruction to apply [an]
abstract idea” using generic computer technology) (internal citation
omitted).
Further, Appellants argue that the claims are not well-understood,
routine, or conventional because “the specific manner in which the
probabilities associated with the container instances are determined and/or
provide one or more item instances of one or more virtual items, provide an
inventive concept that amounts to significantly more than selling an item in
a videogame.” Reply Br. 12. Appellants do not provide further explanation.
We are not persuaded. Claim 10 requires that a probability is determined
based on a number of requests without any further details regarding how that
probability is obtained and then requires only that a quantity of items
provided is determined based on that probability without further
implementation details. We fail to see how these claim elements, recited
without specific implementation details, provide evidence of an inventive
concept.
Appellants also argue that the claims “provide significantly more than
selling a chance at receiving a virtual item in a videogame.” Appeal Br. 18.
Appellants assert that the claims “provide a discrete implementation that
amounts to significantly more than any abstract concept related to a lottery
or raffle.” Id. at 19 (citing BASCOM Global Internet Services, Inc. v. AT&T
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Mobility LLC, 827 F.3d 1341). Appellants assert that “[t]he present claims
are similar to those in BASCOM because the additional limitations,
considered collectively, describe a specific and discrete implementation of
selling a chance at receiving a virtual item in a videogame.” Id. at 20.
In BASCOM, the Federal Circuit held that the second step of the
Mayo/Alice framework was satisfied because the claimed invention
“represents a ‘software-based invention[ ] that improve[s] the performance
of the computer system itself.’” BASCOM, 827 F.3d at 1351 (stating that
like DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256 (Fed. Cir.
2014), where the patent “claimed a technical solution to a problem unique to
the Internet,” the patent in BASCOM claimed a “technology-based
solution . . . to filter content on the Internet that overcomes existing
problems with other Internet filtering systems . . . making it more dynamic
and efficient”) (citations omitted). Thus, even if we were to agree that the
claims here represent a “discrete implementation” of an abstract concept
related to a raffle or lottery, the Appellants have not explained how the
claims represent any technical solution to a technical problem or result in an
improvement in the performance of the computer, as discussed above. And
the mere recitation of rules for a different type of raffle or lottery is not
enough to show that the claims include eligible subject matter. See Smith,
815 F.3d 816.
Determination Regarding Patent Eligibility
Based on the foregoing, we are not persuaded of error in the
Examiner’s rejection of claim 10 as claiming ineligible subject matter.
Accordingly, we sustain the rejection of claim 10 and claims 1–9 and 11–18,
which fall with claim 10.
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CONCLUSION
We AFFIRM the rejection of claims 1–18.
No time period for taking any subsequent action in connection with
this appeal may be extended under 37 C.F.R. § 1.136(a)(1)(iv).

AFFIRMED