Amaitis, Lee et al.

Patent Trials and Appeals Board

Dec 23, 2019

14485646 - (D) (P.T.A.B. Dec. 23, 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.
14/485,646 09/12/2014 Lee Amaitis 13-2396CIP 1589
63710 7590 12/23/2019
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
CLARKE JR, ROBERT T
ART UNIT PAPER NUMBER
3715
NOTIFICATION DATE DELIVERY MODE
12/23/2019 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):
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 LEE AMAITIS and ANDREW GARROOD
____________________

Appeal 2019-003661
Application 14/485,6461
Technology Center 3700
____________________

Before ANTON W. FETTING, PHILIP J. HOFFMANN, and
BRUCE T. WIEDER, Administrative Patent Judges.

HOFFMANN, Administrative Patent Judge.

DECISION ON APPEAL

STATEMENT OF THE CASE
Pursuant to 35 U.S.C. § 134(a), Appellant appeals from the
Examiner’s rejection of claims 31–38 and 41–52. 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. According to Appellant, the real party in interest is CFPH,
LLC. Appeal Br. 3.
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According to Appellant, the invention relates to a wager sell back
option. Spec., Title. Claims 31, 41, and 49 are the independent claims on
appeal. Below, we reproduce independent claim 31 as illustrative of the
appealed claims.
31. A method comprising:
receiving, by at least one processor of a server in
networked communication with a plurality of computers
configured to receive and transmit data indicating wagers, from
a user a request to place a first wager on a first outcome of an
event;
receiving, by the at least one processor, from at least one
other user at least one other wager, the at least one other wager
comprising at least one of (1) a second wager on the first
outcome of the event and (2) a different wager on a second
outcome of the event that is mutually exclusive to the first
outcome such that the first outcome and the second outcome
cannot both occur in the event;
after receiving the request to place the first wager and
prior to any determination of the first wager being a winning or
losing wager, calculating a refund amount for the first wager
based on a current probability that the first wager will be a
winning wager and risk management information associated
with the first wager and the at least one other wager, in which
the act of calculating the refund amount comprises calculating
the refund amount based at least in part on an amount of total
potential liability associated with paying payouts on bets that
would win as a result of the first outcome occurring;
causing to be presented to the user at an interface of an
electronic display device of a remote device, by the at least one
processor, indicia representing an option to receive the refund
amount in exchange for cancelling the first wager after the
request to place the first wager is received and prior to any
determination of the first wager being a winning or losing
wager;
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receiving, by the at least one processor from the remote
device, an indication that the user is exercising the option to
receive the refund amount in exchange for cancelling the first
wager after receiving the request to place the first wager and
prior to any determination of the first wager being a winning or
losing wager; and
responsive to the user exercising the option, cancelling
the first wager in exchange for the refund amount, wherein the
user is required to use at least a portion of the refund amount to
place another wager.

REJECTIONS AND PRIOR ART
The Examiner rejects the claims as follows:
I. Claims 31–38 and 41–52 under 35 U.S.C. § 101 as reciting only
patent-ineligible subject matter;
II. Claims 31, 32, 34–38, 41, 42, 44–50, and 52 under 35 U.S.C.
§ 103 as unpatentable over Brook et al. (US 8,475,267 B1, iss.
July 2, 2013) (hereinafter “Brook”) and Silvestro
(US 2009/0069075 A1, pub. Mar. 12, 2009); and
III. Claims 33, 43, and 51 under 35 U.S.C. § 103 as unpatentable
over Brook, Silvestro, and Kelly et al. (US 2009/0115133 A1,
pub. May 7, 2009) (hereinafter “Kelly”).

PRINCIPLES OF LAW CONCERNING 35 U.S.C. § 101
An invention is patent eligible if it claims a “new and useful process,
machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The
Supreme Court has long interpreted 35 U.S.C. § 101 to include implicit
exceptions, however: “[l]aws of nature, natural phenomena, and abstract
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ideas” are not patentable. E.g., Alice Corp. v. CLS Bank Int’l, 573 U.S. 208,
216 (2014) (citation omitted).
In determining whether a claim falls within an excluded category, the
Supreme Court’s two-step framework, described in Mayo and Alice, guides
us. See 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.” Id. 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 that the courts 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,
67 (1972)). Concepts that the courts determined to be patent eligible include
physical and chemical processes, such as “molding rubber products”
(Diamond v. Diehr, 450 U.S. 175, 191 (1981)); “tanning, dyeing, making
water-proof 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, although the claim at issue recited a mathematical formula,
the Supreme Court held that “a claim drawn to subject matter otherwise
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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.”).
Nonetheless, 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. (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.”).
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. (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.
2019 Revised Patent Subject Matter Eligibility Guidance
The U.S. Patent and Trademark Office recently published revised
guidance on the application of § 101. See 2019 Revised Patent Subject
Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (“Guidance”).
Under that Guidance, we first look to whether the claim recites:
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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 i) a fundamental economic
practice, or ii) managing personal behavior or relationships or
interactions between people, or mental processes); and
(2) additional elements that integrate the judicial
exception into a practical application (see MANUAL OF PATENT
EXAMINING PROCEDURE (“MPEP”) § 2106.05(a)–(c), (e)–(h)
(9th Ed., Rev. 08.2017, Jan. 2018)).
A practical application “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.” Guidance at 54.
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 either:
(3) adds a specific limitation beyond the judicial
exception which is not “well-understood, routine, [or]
conventional” in the field (see MPEP § 2106.05(d)); or
(4) simply appends well-understood, routine, and
conventional activities previously known to the industry,
specified at a high level of generality, to the judicial exception.
See generally Guidance.

ANALYSIS
Rejection I—§ 101 rejection of claims 31–38 and 41–52
Initially, we note that Appellant argues against the Examiner’s § 101
rejection of the claims as a group. See Appeal Br. 9–12. We choose
independent claim 31 for our analysis, and the remaining independent and
dependent claims stand or fall with claim 31. See 37 C.F.R. § 41.37
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(c)(1)(iv). For the following reasons, we sustain the Examiner’s rejection of
the claims as patent-ineligible.
We determine that in accordance with point (1) of the Guidance
referenced above, independent claim 31 recites at least one judicial
exception, including an abstract idea. More specifically, as described in
further detail, the abstract idea includes certain methods of organizing
human activity, such as a fundamental economic practice.
As set forth above, claim 31 recites the following:
31. A method comprising:
receiving, by at least one processor of a server in
networked communication with a plurality of computers
configured to receive and transmit data indicating wagers, from
a user a request to place a first wager on a first outcome of an
event;
receiving, by the at least one processor, from at least one
other user at least one other wager, the at least one other wager
comprising at least one of (1) a second wager on the first
outcome of the event and (2) a different wager on a second
outcome of the event that is mutually exclusive to the first
outcome such that the first outcome and the second outcome
cannot both occur in the event;
after receiving the request to place the first wager and
prior to any determination of the first wager being a winning or
losing wager, calculating a refund amount for the first wager
based on a current probability that the first wager will be a
winning wager and risk management information associated
with the first wager and the at least one other wager, in which
the act of calculating the refund amount comprises calculating
the refund amount based at least in part on an amount of total
potential liability associated with paying payouts on bets that
would win as a result of the first outcome occurring;
causing to be presented to the user at an interface of an
electronic display device of a remote device, by the at least one
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processor, indicia representing an option to receive the refund
amount in exchange for cancelling the first wager after the
request to place the first wager is received and prior to any
determination of the first wager being a winning or losing
wager;
receiving, by the at least one processor from the remote
device, an indication that the user is exercising the option to
receive the refund amount in exchange for cancelling the first
wager after receiving the request to place the first wager and
prior to any determination of the first wager being a winning or
losing wager; and
responsive to the user exercising the option, cancelling
the first wager in exchange for the refund amount, wherein the
user is required to use at least a portion of the refund amount to
place another wager.
Appeal Br., Claims App. (Claim 31). Consistent with the Specification’s
title—“Wager Sell Back Option” (see Spec., Title)—each of the steps in
independent claim 31’s body are directed to a method of wagering, and,
more specifically, to a method in which a wager is sold back. In particular,
the independent claim describes receiving bets (or “wagers”) from two (2)
bettors (“users”)—i.e., the claim expressly recites “receiving, by at least one
processor of a server in networked communication with a plurality of
computers configured to receive and transmit data indicating wagers, from a
user a request to place a first wager on a first outcome of an event,” and
“receiving, by the at least one processor, from at least one other user at least
one other wager, the at least one other wager comprising at least one of (1) a
second wager on the first outcome of the event and (2) a different wager on a
second outcome of the event that is mutually exclusive to the first outcome
such that the first outcome and the second outcome cannot both occur in the
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event.” Id. (emphases added). Claim 31 further recites calculating a refund
amount to be offered to the first bettor—i.e.,
after receiving the request to place the first wager and
prior to any determination of the first wager being a winning or
losing wager, calculating a refund amount for the first wager
based on a current probability that the first wager will be a
winning wager and risk management information associated
with the first wager and the at least one other wager, in which
the act of calculating the refund amount comprises calculating
the refund amount based at least in part on an amount of total
potential liability associated with paying payouts on bets that
would win as a result of the first outcome occurring.
Id. (emphasis added). The claim further recites presenting to the first bettor
the option to receive, and the first better selecting to receive, the refund
amount in exchange for cancelation of the first bet—i.e., “causing to be
presented to the user at an interface of an electronic display device of a
remote device, by the at least one processor, indicia representing an option
to receive the refund amount in exchange for cancelling the first wager after
the request to place the first wager is received and prior to any determination
of the first wager being a winning or losing wager,” and “receiving, by the at
least one processor from the remote device, an indication that the user is
exercising the option to receive the refund amount in exchange for
cancelling the first wager after receiving the request to place the first wager
and prior to any determination of the first wager being a winning or losing
wager.” Id. (emphases added). Finally, claim 31 recites canceling the first
bet placed by the first bettor—i.e., “responsive to the user exercising the
option, cancelling the first wager in exchange for the refund amount,
wherein the user is required to use at least a portion of the refund amount to
place another wager.” Id. (emphasis added).
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Taking bets from betters is a fundamental economic practice, and,
therefore, an abstract idea. See MPEP § 2106.04(a)(2)(I)(A); Alice, 573 U.S.
at 219–20 (“intermediated settlement” is a fundamental economic practice,
and, thus, an abstract idea); Bilski, 561 U.S. at 611 (“hedging” is a
fundamental economic practice, which is an abstract idea); In re Smith, 815
F.3d 816, 818–819 (Fed. Cir. 2016) (“Applicants’ 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.”); In re Marco Guldenaar Holdings B.V., 911 F.3d 1157 (Fed.
Cir. 2018) (holding ineligible claims directed to a set of rules for playing a
dice game).
In accordance with point (2) of the Guidance referenced above,
claim 31 does not recite any additional element that integrates the judicial
exception into a practical application—i.e., something that “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.” Guidance
at 54. The claim only generically recites the use of certain physical
hardware—“at least one processor,” “a server,” “an interface,” “an
electronic display device,” “a remote device”—and, thus, these components
do not meaningfully limit the claim. Further, in the Specification, Appellant
does not describe any of the claimed hardware in such a way as to indicate
that the hardware is anything other than generic. Thus, claim 31 does not
affect an improvement in any technology or technical field.
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Therefore, independent claim 31 is directed to the above-discussed
abstract idea, and does not integrate the judicial exception into a practical
application.
In accordance with points (3) and (4) of the Guidance referenced
above, claim 31 fails to recite a specific limitation beyond the judicial
exception which is not well understood, routine, and conventional in the
field, but instead simply appends well-understood, routine, and conventional
activities previously known to the industry, specified at a high level of
generality, to the judicial exception. Taking the claim elements separately,
the claimed hardware, as well as the functions performed by the claimed
hardware, are purely conventional. Specifically, claim 31 uses known,
generic components to perform their known, basic functions. Although,
arguably, the data processed and displayed differs, the claim recites the
hardware only at a high level of generality. In other words, here the claim
recites only well-understood, routine, and conventional functions. See Elec.
Power Grp. v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); see also
In re Katz, 639 F.3d 1303, 1316 (Fed. Cir. 2011) (“Absent a possible
narrower construction of the terms ‘processing,’ ‘receiving,’ and
‘storing,’ . . . those functions can be achieved by any general purpose
computer without special programming.”).
For the following reasons, when considered as an ordered
combination, claim 31’s hardware does not add anything that is not already
present when we consider the steps separately. The hardware and its
technological configuration remains the same before, during, and after
wagering. Thus, the claim amounts to nothing significantly more than
instructions to apply the abstract idea with generic hardware, and does not
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improve the hardware. Accordingly, the claim recitations are insufficient to
transform the abstract idea into a patent-eligible invention. See Alice, 573
U.S. at 225–26.
We have considered all of Appellant’s arguments in the Briefs, but
Appellant does not persuade us of error. We now address certain arguments
below.
Appellant argues that “the Office Action has failed set forth a prima
facie case under 35 U.S.C. §101 that the claim[s] are directed to an abstract
idea,” and that “the Office Action has failed to make a prima facie showing
that the claims do not add significantly more than the allegedly abstract
idea.” Appeal Br. 10, 11. These arguments are not persuasive of error,
however, because claim 31 is directed to an abstract idea, and does not
integrate the idea into a practical application, and claim 31 does not add
significantly more, for the reasons detailed above.
Appellant argues, with reference to BASCOM Glob. Internet Servs.,
Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), that “[r]ulings
by the Federal Circuit . . . make clear that the ability to implement individual
limitations or entire claims using conventional computer components
generic functions is not determinative of eligibility.” Appeal Br. 11. This is
not persuasive of error, however. Initially, we note that the Court in
BASCOM did not find claims eligible, but rather the Court found that the
appellee did not provide sufficient evidence to support a 12(b)(6) motion to
dismiss in which facts are presumed in the non-movant’s favor. Regardless,
the key fact in BASCOM was the presence of a structural change in
“installation of a filtering tool at a specific location, remote from the end
users, with customizable filtering features specific to each end user. This
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design gives the filtering tool both the benefits of a filter on a local computer
and the benefits of a filter on the ISP server.” BASCOM, 827 F.3d at 1350.
Appellant’s claim 31 has no analogous structural benefit.
Appellant argues (see Reply Br. 7) that the claims are eligible for
reasons similar to the reasons the claims in Core Wireless Licensing S.A.R.L.
v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018), are eligible. Core
Wireless states, in relevant part:
Claim 1 of the ’476 patent requires “an application summary
that can be reached directly from the menu,” specifying a
particular manner by which the summary window must be
accessed. The claim further requires the application summary
window list a limited set of data, “each of the data in the list
being selectable to launch the respective application and enable
the selected data to be seen within the respective application.”
This claim limitation restrains the type of data that can be
displayed in the summary window. Finally, the claim recites
that the summary window “is displayed while the one or more
applications are in an un-launched state,” a requirement that the
device applications exist in a particular state. These limitations
disclose a specific manner of displaying a limited set of
information to the user, rather than using conventional user
interface methods to display a generic index on a computer.
Core Wireless, 880 F.3d at 1362–63. Appellant’s claim 31 does not recite
an improved user interface in accordance with Core Wireless. Core
Wireless had an interface that assembled a limited number of applications
which could then be launched from that interface, while Appellant’s
claim 31 does not.
Therefore, based on the foregoing, we sustain the Examiner’s § 101
rejection of independent claim 31. Inasmuch as the remaining claims stand
or fall with claim 31, we also sustain the rejection of claims 32–38 and 41–
52.
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Rejection II—§ 103(a) rejection of claims 31, 32, 34–38, 41, 42, 44–
50, and 52
As set forth above, independent claim 31 recites, in relevant part,
after receiving the request to place the first wager and
prior to any determination of the first wager being a winning or
losing wager, calculating a refund amount for the first wager
based on a current probability that the first wager will be a
winning wager and risk management information associated
with the first wager and the at least one other wager, in which
the act of calculating the refund amount comprises calculating
the refund amount based at least in part on an amount of total
potential liability associated with paying payouts on bets that
would win as a result of the first outcome occurring.
Appeal Br., Claims App. (emphases added). In the Appeal Brief, Appellant
argues that neither reference discloses calculating a refund amount based on
“the ‘total potential liability[,]’ . . . [i.e.,] a total liability associated with
paying multiple payouts on multiple bets.” Id. at 8. Instead, according to
Appellant, Brook’s calculations are “an amount that would be paid on a
single bet, and thus [Brook] does not disclose or suggest an amount of total
potential liability ‘associated with paying payouts on bets.’” Id. at 9.
Further, according to Appellant, Silvestro also does not disclose such a
calculation. Id.
Assuming arguendo that we agree with Appellant, in response to
Appellant’s argument in the Appeal Brief, the Examiner determines “that it
would have been obvious . . . to modify the method of Brook” to base the
calculation on the total potential liability associated with paying payouts on
bets, as claimed. Answer 5; see also id. at 3–6. Appellant, however, in the
Reply Brief, does not address this determination. Thus, Appellant does not
persuade us that the Examiner’s determination that, based on portions of
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Brook, it would have been obvious to modify Brook to base the calculation
on the total potential liability, is in error. Therefore, we must sustain the
Examiner’s obviousness rejection of claim 31. Inasmuch as Appellant does
not argue separately against the Examiner’s obviousness rejection of claims
32, 34–38, 41, 42, 44–50, and 52 that the Examiner rejects with claim 31, we
also sustain the obviousness rejection of these claims.

Rejection III—§ 103(a) rejection of claims 33, 43, and 51
Appellant does not argue separately against the Examiner’s
obviousness rejection of dependent claims 33, 43, and 51. Thus, inasmuch
as we sustain the Examiner’s obviousness rejections of the independent
claims from which claims 33, 43, and 51 depend, we also sustain the
rejection of these dependent claims.

CONCLUSION
We AFFIRM the Examiner’s rejections of claims 31–38 and 41–52
under §§ 101 and 103(a).
In summary:
Claims
Rejected
35
U.S.C.
§
Basis/Reference(s) Affirmed Reversed
31–38, 41–52 101 Eligibility 31–38, 41–52
31, 32, 34–38,
41, 42, 44–50,
52
103(a) Brook, Silvestro 31, 32, 34–38,
41, 42, 44–50,
52

33, 43, 51 103(a) Brook, Silvestro,
Kelly
33, 43, 51
Overall
Outcome
31–38, 41–52
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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.
§ 41.50(f).

AFFIRMED