Miller, Kenneth L. et al.

Patent Trials and Appeals Board

Jul 1, 2020

14668348 - (D) (P.T.A.B. Jul. 1, 2020)

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.
14/668,348 03/25/2015 Kenneth L. Miller 12-2347CIP 9215
63710 7590 07/01/2020
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
HALL, SHAUNA-KAY N
ART UNIT PAPER NUMBER
3715
NOTIFICATION DATE DELIVERY MODE
07/01/2020 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):
lkorovich@cantor.com
patentdocketing@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 KENNETH L. MILLER, CRAIG LIPKA, and QUINTON
SINGLETON
Appeal 2019-001662
Application 14/668,348
Technology Center 3700
Before JENNIFER D. BAHR, BRETT C. MARTIN, and LISA M. GUIJT,
Administrative Patent Judges.
MARTIN, 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 1–4 and 6–9. Claim 5 was canceled
during prosecution. We have jurisdiction under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word Appellant to refer to “applicant” as defined in 37 C.F.R.
§ 1.42. Appellant identifies the real party in interest as CFPH, LLC. Appeal
Br. 3.
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Application 14/668,348
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CLAIMED SUBJECT MATTER
The claims are directed to an event wagering with group and/or in run
options. Claim 1, reproduced below, is illustrative of the claimed subject
matter:
1. A method comprising:
determining, by a computing system, a first target odds for a
first group of race participants;
determining, by the computing system, a second target odds
for a second group of race participants;
adding, by the computing system, a favorite participant of a
race to the first group;
adding, by the computing system, a longshot participant of
the race to a third group of race participants;
adding, by the computing system, a first set of participants to
the first group such that the collective odds of the first set
combined with the favorite approximates the first target odds;
adding, by the computing system, a second set of participants
to the second group such that the collective odds of the second
set approximates the second target odds;
presenting, by the computing system, the first group, second
group, and third group for wagering by users, in which presenting
the first group, second group and third group includes presenting
the first group as a red roulette option, presenting the second
group as a black roulette option and presenting the third group as
a green roulette option; and
determining, by the computing system, a winning group
based on which participant of the race wins the race.
REJECTIONS
Claims 1–4 and 6–9 stand rejected under 35 U.S.C. § 101 as being
directed to non-statutory subject matter. Ans. 3.

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OPINION
Patent Eligibility
In issues involving subject matter eligibility, our inquiry focuses on
whether the claims satisfy the two-step test set forth by the Supreme Court in
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). The Supreme Court
instructs us to “first determine whether the claims at issue are directed to a
patent-ineligible concept,” id. at 216–18, and, in this case, the inquiry
centers on whether the claims are directed to an abstract idea. If this initial
condition is met, we then move to the second step, in which we “consider
the elements of each claim both individually and ‘as an ordered
combination’ to determine whether the additional elements ‘transform the
nature of the claim’ into a patent-eligible application.” Id. at 217 (quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79, 78
(2012)). The Supreme Court describes the second step as a search for “an
‘inventive concept’—i.e., an element or combination of elements that is
‘sufficient to ensure that the patent in practice amounts to significantly more
than a patent upon the [ineligible concept] itself.’” Id. (quoting Mayo, 566
U.S. at 72–73).
The USPTO published revised guidance on the application of § 101.
2019 Revised Patent Subject Matter Eligibility Guidance (“Guidance”), 84
Fed. Reg. 50 (Jan. 7, 2019).2 Under that guidance, we first look to whether
the claim recites:

2 In response to received public comments, the Office issued further
guidance on October 17, 2019, clarifying the 2019 Revised Guidance.
USPTO, October 2019 Update: Subject Matter Eligibility,
https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_
update.pdf.
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(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, and
mental processes) (“Step 2A, Prong One”); and
(2) additional elements that integrate the judicial exception into a
practical application (see MPEP § 2106.05(a)–(c), (e)–(h) (9th ed.
Rev. 08.2017, Jan. 2018)) (“Step 2A, Prong Two”).
Only if a claim (1) recites a judicial exception and (2) does not integrate that
exception into a practical application, do we then look, under “Step 2B,” 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 generally Guidance.
ANALYSIS
Claim Grouping
Appellant argues the independent claims as a group for the purpose of
the rejection under a judicial exception to § 101. Appeal Br. 5‒7. As to this
rejection, we select claim 1 as representative of the group, and the remaining
independent claims stand or fall with claim 1. See 37 C.F.R.
§ 41.37(c)(1)(iv).

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Examiner’s Findings and Conclusion
In the first step of the Alice inquiry, the Examiner rejects the claims,
stating that the claims are drawn to the abstract idea of “of providing rules
for playing a game using conventional steps.” Ans. 7. The Examiner further
explains that the claims are “essentially a method of organizing human
activity” and that they are “also comparable to using an algorithm or formula
to determine a particular winning player.” Ans. 8. At Alice step 2, the
Examiner additionally determines that the claims do not add a meaningful
limitation to the abstract idea so as to amount to significantly more than the
judicial exception because they implement the abstract idea on generic
processors that perform generic computer functions. Ans. 9.
Analysis According to the Guidance
Step One: Does Claim 1 Fall within a Statutory Category of § 101?
We first examine whether the claim recites one of the enumerated
statutory classes of subject matter, i.e., process, machine, manufacture, or
composition of matter, eligible for patenting under 35 U.S.C. § 101.
Claim 1 is drawn to a method, which is one of the statutory classes (i.e., a
manufacture) under 35 U.S.C. § 101.
Step 2A, Prong One: Does Claim 1 Recite a Judicial Exception?
We next look to whether the claim recites 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, and mental processes.
In this instance, claim 1 recites steps that amount to presenting rules
for a game and/or certain methods of organizing human activity by
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providing a method for a player to wager on a game. Specifically, the claim
recites:
determining, by a computing system, a first target odds for a
first group of race participants;
determining, by the computing system, a second target odds
for a second group of race participants;
adding, by the computing system, a favorite participant of a
race to the first group;
adding, by the computing system, a longshot participant of
the race to a third group of race participants;
adding, by the computing system, a first set of participants to
the first group such that the collective odds of the first set
combined with the favorite approximates the first target odds;
adding, by the computing system, a second set of participants
to the second group such that the collective odds of the second
set approximates the second target odds;
presenting, by the computing system, the first group, second
group, and third group for wagering by users, in which presenting
the first group, second group and third group includes presenting
the first group as a red roulette option, presenting the second
group as a black roulette option and presenting the third group as
a green roulette option; and
determining, by the computing system, a winning group
based on which participant of the race wins the race.

Although these steps are claimed as being run by a computer, the
activities themselves are all rules for playing a game and/or organizing
human activity. We, therefore, determine that claim 1 recites at least the
abstract idea of rules for playing a game and/or organizing human activity,
which is a judicial exception to patent-eligible subject matter.
Step 2A, Prong Two: Does Claim 1 Recite Additional Elements that
Integrate the Judicial Exception into a Practical Application?
Following our Office guidance, having found that claim 1 recites a
judicial exception, we next determine whether the claim recites “additional
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elements that integrate the exception into a practical application” (see MPEP
§§ 2106.05(a)–(c), (e)–(h)). See Guidance, 84 Fed. Reg. at 54. As noted
above, each of the claimed steps is recited as being performed by a computer
device specified at a high level of generality and, does not result in an
improvement in the functioning of a computer or other technology or
technological field. The recitations of the generic structures with which the
recited steps are performed are merely instructions to use a generic computer
system as a tool to perform the abstract idea. Thus, claim 1 does not apply,
rely on, or use the abstract idea in a manner that imposes a meaningful limit
on those steps. Rather, the claim is simply a drafting effort designed to
monopolize the abstract idea steps of claim 1. See MPEP § 2106.05(f) (“Use
of a computer or other machinery in its ordinary capacity for . . . tasks (e.g.,
to receive, store, or transmit data) or simply adding a general purpose
computer or computer components after the fact to an abstract idea . . . does
not provide significantly more.”).
In short, the additional elements discussed above: (1) do not result in
an improvement to the functioning of a computer or other technology;
(2) are not any particular machine; (3) do not effect a transformation of a
particular article to a different state; and (4) are not applied in any
meaningful way beyond generally linking the use of the judicial exception to
a particular technological environment. See MPEP §§ 2106.05(a)–(c), (e)–
(h); Guidance, 84 Fed. Reg. at 55. Consequently, the claimed invention does
not integrate the abstract idea into a “practical application.”
For these reasons, the additional elements of claim 1 do not integrate
the judicial exception into a practical application. Thus, claim 1 is directed
to an abstract idea, which is a judicial exception to patent-eligible subject
matter under 35 U.S.C. § 101.
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Step 2B: Does Claim 1 Recite an Inventive Concept?
We next consider whether claim 1 recites any additional elements,
individually or as an ordered combination, that transform the abstract idea
into a patent-eligible application, e.g., provide an inventive concept. Alice,
573 U.S. at 217–18. Claim 1 consists wholly of steps that recite abstract
ideas that are performed by a generic computer and thus does not recite any
such additional elements.
According to Office guidance, under Step 2B, “examiners should . . .
evaluate the additional elements individually and in combination . . . to
determine whether they provide an inventive concept (i.e., whether the
additional elements amount to significantly more than the exception itself).”
See Guidance, 84 Fed. Reg. at 56 (emphasis added). Thus, the second step
of the inquiry (Step 2B) looks at the additional elements in combination.
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.”).
As noted above, the computer is invoked as a conventional tool to
perform the claimed method steps. Apart from being used to perform the
abstract idea itself, the generic computer system components only serve to
perform well-understood determining, adding, presenting, etc.). See
FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1096 (Fed. Cir.
2016) (“[T]he use of generic computer elements like a microprocessor or
user interface do not alone transform an otherwise abstract idea into patent-
eligible subject matter.”). In our view, claim 1 fails to add a specific
limitation beyond the judicial exception that is not “well-understood,
routine, conventional” in the field, but instead “simply appends well-
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understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception.”
See Guidance, 84 Fed. Reg. at 56. That is, claim 1 is not directed to a
specific application designed to achieve an improved technological result, as
opposed to being directed to merely ordinary functionality of the above-
recited additional elements to apply an abstract idea. For the reasons
discussed above, we find no additional element, alone or in combination,
recited in claim 1 that contains any “inventive concept” or adds anything
“significantly more” to transform the abstract concept into a patent-eligible
application. See Alice, 573 U.S. at 221.
Appellant’s Contentions
Appellant asserts that the Examiner “fails to identify any abstract idea
to which the claims are allegedly directed” and rather “the Office Action
recites the claim limitations.” Appeal Br. 6. This argument does not
acknowledge that the Examiner does specifically state that the claims merely
present rules for playing a game and/or organizing human activity, which is
a proper identification of the abstract idea. Appellant also asserts that the
Examiner “does not cite similar precedential cases as required by PTO
examination guidelines” as well as that “[n]one of Smith, Alice or Bilski
include similar claims to those presented here.” Id. Appellant, however,
offers no explanation as to why the claims are dissimilar to the cases cited
by the Examiner. We agree with the Examiner that the claims are directed to
rules for playing a game, similar to In re Smith, 815 F.3d 816 (Fed. Cir.
2016), using an algorithm to determine a particular winning player as in Ex
parte Wong, 12030393 (PTAB Feb. 29, 2016) , and organizing human
activities as described in Bilski and Alice. Ans. 7, 11–12.
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Appellant also asserts that “any issues of abstract ideas should be
mooted given the absence of prior art rejections.” Appeal Br. 6. The
Examiner, however, is correct that “[a] novel abstract idea is still an abstract
idea, and any novelty of a judicial exception cannot serve as the basis for
patent-eligibility.” Ans. 12 (citing Genetic Technologies Limited v. Merial
L.L.C. (Fed. Cir. 2016). The lack of a prior art rejection does not
automatically transform the claims into eligible subject matter.
In the Reply Brief, Appellant changes focus to the Examiner’s finding
that the claims are drawn to financial transactions and that this amounts to
“overgeneralizing the claimed subject matter and ignoring the claimed
operations.” Reply Br. 2. As noted above, however, the Examiner does not
rely solely on the finding that the claims represent a financial transaction.
The Examiner bases the rejection on the premise that the claims merely
present rules for playing a game and thus are tantamount to organizing
human activity. The Examiner’s original rejection properly addresses the
claim language and explains why the claims overall are directed to an
abstract idea. We do not find that the Examiner’s additional discussion of
financial transactions alters the rejection as it was originally described in the
Final Rejection and re-presented in the Answer. Accordingly, we sustain the
Examiner’s rejection.
CONCLUSION
The Examiner’s rejection is AFFIRMED.
More specifically,
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DECISION SUMMARY
Claims
Rejected
35 U.S.C. § Reference(s)/Basis Affirmed Reversed
1–4, 6–9 101 Eligibility 1–4, 6–9
Overall
Outcome:
1–4, 6–9

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