In Re: Ray Smith, Amanda Tears Smith, 2015-1664 (Fed. Cir. 2016)(Available Here), involved a computer program configured as a method of conducting a wagering game. The Court of Appeals for the Federal Circuit held that this claimed method of conducting a wagering game was drawn to abstract idea and the claims did not define patentable eligible subject matter under the Patent Act, 35 U.S.C. Section 101. The Ray Smith decision continues the nearly two (2) year old trend that many computer program patents and patent applications are classified as being drawn to patent ineligible subject matter under the Supreme Court case of Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).
The patent application was titled “Blackjack Variation” and related to a wagering game utilizing real or virtual standard playing cards. The patent examiner rejected the patent as patent-ineligible subject matter under §101, applying the machine-or-transformation test in Bilski v. Kappos, 561 U.S. 593 (2010). The Patent Trial and Appeal Board (“Board”) affirmed the rejection applying the Alice Corp test. Applying Alice Corp test step 1, the Board determined that independent claim 1 is directed to a set of rules for conducting a wagering game which constitutes a patent-ineligible abstract idea. Applying the second Alice Corp test step, the Board concluded that shuffling and dealing cards are conventional in the gambling art and does not add enough to the claims to render them patent eligible. The applicants appealed.
The Federal Circuit applied the Mayo-Alice test. First, it determined whether the claims at issue are directed to a patent-ineligible subject matter by determining that the claimed concept was an abstract idea. Second, it examined the elements of the claim to determine whether the claim contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014).
On the first step, the Court found that applicant’s claims were directed to rules for conducting a wagering game and compared to other fundamental economic practices that were found abstract by the Supreme Court, such as Alice’s method of exchanging financial obligations and Bilski’s method of hedging risk.
The Federal Circuit also considered whether there was an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. The Court found that shuffling and dealing physical cards does not transform the abstract idea, but rather are purely conventional activities. The Court noted that not all gaming arts would be foreclosed from patent protection, as a game using a new or original deck of cards could potentially survive step two of Alice.
The Federal Circuit declined to address applicant’s arguments that the PTO’s 2014 Interim Guidance on Patent Subject Matter Eligibility exceeds the scope of § 101 because the challenge to the Guide was not properly before the Court. The Court had previously determined that the Guidance is not binding on the Court. See In re Fisher, 421 F.3d 1365, 1372 (Fed. Cir. 2005).
