Amaitis, Lee et al.

Patent Trials and Appeals Board

Aug 26, 2021

2019003649 (P.T.A.B. Aug. 26, 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.
12/979,546 12/28/2010 Lee Amaitis 10-2292 3186
63710 7590 08/26/2021
INNOVATION DIVISION
CANTOR FITZGERALD, L.P.
110 EAST 59TH STREET (6TH FLOOR)
NEW YORK, NY 10022
EXAMINER
LEICHLITER, CHASE E
ART UNIT PAPER NUMBER
3715
NOTIFICATION DATE DELIVERY MODE
08/26/2021 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
mcatarino@cgolaw.com
patentdocketing@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 2019-003649
Application 12/979,546
Technology Center 3700
____________

Before MICHAEL L. HOELTER, BRANDON J. WARNER, and
PAUL J. KORNICZKY, Administrative Patent Judges.

WARNER, 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 7–18 and 22–25, which are all the
pending claims, under 35 U.S.C. § 101 as being directed to patent-ineligible
subject matter. Appeal Br. 6; see Final Act. 2–13. We have jurisdiction
over the appeal under 35 U.S.C. § 6(b).
We AFFIRM.

1 We use the word “Appellant” to refer to the “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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CLAIMED SUBJECT MATTER
Appellant’s disclosed invention relates to “offering wagering
opportunities, receiving wager requests, balancing risk, determining wager
requests to accepted based on risk, forming wagers based on wager request,
and/or performing other actions by one or more apparatus.” Spec., Abstract.
Claim 7, reproduced below, is the sole independent claim appealed and is
representative of the subject matter on appeal.
7. An apparatus comprising:
a network interface;
a memory;
at least one processor to:
transmit, via the network interface, a graphical user
interface to a plurality of remote devices, the graphical user
interface rendering a plurality of future wagering opportunities,
each future wagering opportunity being defined by particular
odds for each of at least two outcomes of an event, in which the
particular odds are held constant for a limited amount of time;
receive, via the network interface from a first remote
device, a first wager request for a given future wagering
opportunity defined by the particular odds;
receive, via the network interface from a second remote
device, a second wager request for the given future wagering
opportunity defined by the particular odds;
insert data indicative of the first wager and the second
wager in a queue data structure in the memory;
in response to determining that the future wagering
opportunity is a current wagering opportunity, remove the first
wager and the second wager from the queue data structure;
receive, via the network interface, information
comprising a first outcome of the at least two outcomes during
the amount of time;
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receive, via the network interface, further information
comprising a second outcome of the at least two outcomes
during the amount of time;
approve a first portion of the first wager request and a
second portion of the second wager request based on a
cumulative risk of accepting both the first portion and the
second portion;
offset a first risk associated with entering into the first
wager on the first outcome with a second risk associated with
entering into the second wager on the second outcome to
identify the cumulative risk;
receive, via the network interface, a third wager on the
current wagering opportunity from a third remote device;
determine a third risk for the third wager based on a first
obligation that would result if the first outcome of the event
occurs;
determine the first risk based on a second obligation that
would result if the first portion is accepted, in which the first
portion is associated with the first outcome;
determine the second risk based on a third obligation that
would result if the second portion is approved, in which the
second portion is associated with the second outcome, in which
the second risk offsets at least a part of the first risk and the
third risk; and
determine the first portion and the second portion that
should be accepted so that the first risk and third risk off set by
the second risk is lower than the third risk.

EVIDENCE
The Examiner relies on the following evidence in rejecting the claims
on appeal:
Callahan US 6,396,473 B1 May 28, 2002
Kelly US 2009/0228906 A1 Sept. 10, 2009
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ANALYSIS
A patent may be obtained for “any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
thereof.” 35 U.S.C. § 101. The Supreme Court has consistently held that
this provision contains an important implicit exception: laws of nature,
natural phenomena, and abstract ideas are not patentable. See Alice Corp. v.
CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014); Gottschalk v. Benson, 409
U.S. 63, 67 (1972) (“Phenomena of nature, though just discovered, mental
processes, and abstract intellectual concepts are not patentable, as they are
the basic tools of scientific and technological work.”).
Notwithstanding that a law of nature or an abstract idea, by itself, is
not patentable, an application of these concepts may be deserving of patent
protection. See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132
S. Ct. 1289, 1293–94 (2012). In Mayo, the Court stated that “to transform
an unpatentable law of nature into a patent-eligible application of such a
law, one must do more than simply state the law of nature while adding the
words ‘apply it.’” Mayo, 132 S. Ct. at 1294 (citation omitted).
In Alice, the Court reaffirmed the framework set forth previously in
Mayo “for distinguishing patents that claim laws of nature, natural
phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts.” Alice, 134 S. Ct. at 2355. The first step in
the analysis is to “determine whether the claims at issue are directed to one
of those patent-ineligible concepts.” Id. If the claims are directed to a
patent-ineligible concept, then the second step in the analysis is to consider
the elements of the claims “individually and ‘as an ordered combination”’ to
determine whether there are additional elements that “‘transform the nature
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of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132
S. Ct. at 1298, 1297).
In other words, the second step is 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
on the [ineligible concept] itself.’” Id. (brackets in original) (quoting Mayo,
132 S. Ct. at 1294). The prohibition against patenting an abstract idea
“cannot be circumvented by attempting to limit the use of the formula to a
particular technological environment or adding insignificant postsolution
activity.” Bilski v. Kappos, 561 U.S. 593, 610–11 (2010) (citation and
internal quotation marks omitted). The Court in Alice noted that “[s]imply
appending conventional steps, specified at a high level of generality,” was
not “enough” [in Mayo] to supply an “‘inventive concept.’” Alice, 134
S. Ct. at 2357 (quoting Mayo, 132 S. Ct. at 1300, 1297, 1294).
The U.S. Patent and Trademark Office (“USPTO”) has published
revised guidance for use by USPTO personnel in evaluating subject matter
eligibility under 35 U.S.C. § 101. 2019 Revised Patent Subject Matter
Eligibility Guidance (“2019 Revised Guidance”), 84 Fed. Reg. 50 (Jan. 7,
2019). The 2019 Revised Guidance “extracts and synthesizes key concepts
identified by the courts as abstract ideas to explain that the abstract idea
exception includes” the following three groupings: (1) mathematical
concepts; (2) certain methods of organizing human activity, e.g.,
fundamental economic principles or practices, commercial or legal
interactions; and (3) mental processes. Id. at 52.
Under the 2019 Revised Guidance, in determining whether a claim is
patent-eligible, we first look to whether the claim recites a judicial
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exception, including one of the enumerated groupings of abstract ideas
(“Step 2A, Prong 1”). Id. at 54. If so, we next consider whether the claim
includes additional elements, beyond the judicial exception, “that integrate
the [judicial] exception into a practical application,” i.e., apply, rely on, or
use 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. (“Step 2A, Prong 2”). Id. at 54–55.
If the claim (1) recites a judicial exception and (2) does not integrate
that exception into a practical application, we then look to whether the claim
“[a]dds a specific limitation or combination of limitations” that is not “well-
understood, routine, conventional activity in the field” or simply “appends
well-understood, routine, conventional activities previously known to the
industry, specified at a high level of generality, to the judicial exception”
(“Step 2B”). Id. at 56.
The claims at issue here involve rules for conducting a wagering
arrangement that are implemented using generic computer components
including a processor that can transmit a graphical user interface to render
wagering opportunities defined by particular odds, accept wagers, determine
risks, and offset risks. See Appeal Br., Claims App.; Final Act. 5–7.
The Examiner determines that the claims are directed to patent-
ineligible subject matter because, considering all elements both individually
and in combination, the claims are directed to an abstract idea without
significantly more. See Final Act. 2–13; Ans. 13–19. In light of the
principles above, and for the reasons discussed below, we agree with the
Examiner’s conclusion that the claims are directed to patent-ineligible
subject matter.
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Appellant states, without explanation, that “the claims generally recite
operations between an apparatus and two mobile devices remote from the
server,” and then simply asserts, again without explanation, that the cases
cited by the Examiner “do not uniquely match the facts of the instant case.”
Appeal Br. 8 (emphasis omitted). We are not persuaded by Appellant’s
blanket assertions.
In the first step of the Alice analysis, “the decisional mechanism
courts now apply is to examine earlier cases in which a similar or parallel
descriptive nature can be seen—what prior cases were about, and which way
they were decided.” Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d
1288, 1294 (Fed. Cir. 2016), cert. denied, 138 S. Ct. 469 (2017) (citing Elec.
Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353–54 (Fed. Cir. 2016)).
To this end, the Examiner calls attention to In re Smith, 815 F.3d 816 (Fed.
Cir. 2016), where the Federal Circuit already considered claims similar to
subject matter of this type—namely, “rules for playing a wagering game”
(id. at 817)—and affirmed a determination of patent-ineligibility for
similarly structured claims directed to rules for conducting a wagering game.
Final Act. 7–8; Ans. 16–18. In Smith, the Federal Circuit has already
decided that rules for playing a wagering game, implemented using
conventional elements, constitutes ineligible subject matter. Likewise, as
the Examiner explains, the presently recited rules for conducting a wagering
arrangement, also implemented using conventional elements, are similarly
ineligible. See Ans. 13–19. Appellant does not apprise us of a meaningful
distinction in the form or type of the claims between those presently recited
and those previously adjudicated in Smith.
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Under Step 2A, Prong One of the 2019 Revised Guidance, we
consider whether the claims recite a judicial exception, i.e., an abstract idea,
law of nature, or natural phenomenon. 2019 Revised Guidance, 84 Fed.
Reg. at 51–54. For abstract ideas, we contemplate whether a claim
limitation or combination of limitations falls within the enumerated
groupings of abstract ideas set forth in the 2019 Revised Guidance. Id.
As discussed above, the claims at issue here recite generic computer
components to implement rules for a wagering arrangement, including
accepting and resolving wagers based on balancing of risk. See Appeal Br.,
Claims App. Specifically, absent the recitation of using a network interface,
a memory, and a processor, the claims recite rules for conducting a wagering
arrangement, as the Examiner determines. See Final Act. 5–7. Accordingly,
the claims recite certain methods of organizing human activity, such as a
fundamental economic principle or practice (including mitigating risk),
which is an abstract idea. See 2019 Revised Guidance, 84 Fed. Reg. at 52;
see also Ans. 15–16 (explaining the same conclusion). The claims,
therefore, recite a judicial exception.
Turning to Step 2A, Prong Two of the 2019 Revised Guidance, we
next consider whether the claims recite any additional elements that
integrate the judicial exception into a practical application. 2019 Revised
Guidance, 84 Fed. Reg. at 54–55. Apart from the limitations reciting
abstract ideas, the claims include generic computer components including a
network interface, a memory, and a processor. See Appeal Br., Claims
App.; Final Act. 5–7. Here, the computer components are recited at a high
level of generality, without any meaningful detail about their structure or
configuration; accordingly, the recited computer components do not reflect a
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particular machine and do not reflect an improvement in the functioning of a
computer or an improvement to another technology or technical field. In
other words, there is no indication that the claimed invention is implemented
using other than generic computer components to perform generic computer
functions. “[A]fter Alice, there can remain no doubt: recitation of generic
computer limitations does not make an otherwise ineligible claim patent-
eligible.” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256
(Fed. Cir. 2014). In sum, the claims do not include any additional elements,
considered individually and in combination, that integrate the judicial
exception into a practical application. Consequently, the claims are directed
to the judicial exception.
Finally, under Step 2B of the 2019 Revised Guidance, we consider
whether the claims include any additional elements, alone or in combination,
that are not well-understood, routine, conventional activity in the field.
2019 Revised Guidance, 84 Fed. Reg. at 56. This step of the analysis
considers only additional elements, as limitations reciting a judicial
exception cannot supply an inventive concept. 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 set forth above, the
only additional elements beyond the judicial exception involve the use of
generic computer components specified at a high level of generality to
perform generic computer functions, e.g., receiving and processing
information. However, this is no more than the inclusion of generic
computer components to “apply” the abstract idea, and off-the-shelf,
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conventional computer components can perform the functions of receiving
and providing the wager data recited in these limitations. See In re Katz
Interactive Call Processing Patent Litig., 639 F.3d 1303, 1316 (Fed. Cir.
2011). Thus, the claims do not include any additional elements, alone or in
combination, that represent something other than well-understood, routine,
conventional activity in the field.
To the extent that Appellant suggests that the alleged novelty of some
particularities of the wagering arrangement rules or the risk determinations
made by the processor should indicate that the claims are transformed into
patent-eligible subject matter, this suggestion is misplaced. An allegation
that claims are novel does not conflict with the Examiner’s conclusion of
ineligibility under § 101 because “a claim for a new abstract idea is still an
abstract idea.” Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138,
1151 (Fed. Cir. 2016) (citing Mayo, 132 S. Ct. at 1304). Whether a claimed
concept is “[g]roundbreaking, innovative, or even brilliant . . . does not by
itself satisfy the § 101 inquiry.” Ass’n for Molecular Pathology v. Myriad
Genetics, Inc., 133 S. Ct. 2107, 2117 (2013). Consequently, under the
second step of the Alice analysis, an abstract idea does not transform into an
eligible inventive concept just because the Examiner has not cited prior art
that discloses or suggests it. Indeed, “[t]he ‘novelty’ of any element or steps
in a process, or even of the process itself, is of no relevance in determining
whether the subject matter of a claim falls within the § 101 categories of
possibly patentable subject matter.” Diamond v. Diehr, 450 U.S. 175,
188–89 (1981).
Given the binding precedent of our reviewing courts, we agree with
the Examiner’s conclusion that the present claims remain directed to patent-
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ineligible subject matter, particularly in light of the explanation provided at
pages 3–19 of the Examiner’s Answer, where the Examiner applies the
principles discussed above. In short, Appellant does not apprise us of a
material difference in the form, structure, or substantive content of the
recitations, between the claims recited here and those claims already
determined to be patent-ineligible by our reviewing courts. Thus, for this
reason and those explained above, we are obliged to sustain the Examiner’s
rejection.
In view of the foregoing, as the Examiner correctly concludes, the
claims are directed to a judicial exception without significantly more to
transform the nature of the claims into a patent-eligible application. We are
not persuaded, on the record before us, that the Examiner erred in rejecting
the claims under 35 U.S.C. § 101. Therefore, we sustain the Examiner’s
rejection.

DECISION
We AFFIRM the Examiner’s decision rejecting claims 7–18 and
22–25 under 35 U.S.C. § 101 as being directed to patent-ineligible subject
matter.
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).

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CONCLUSION
In summary:

Claim(s)
Rejected 35 U.S.C. § Reference(s)/Basis Affirmed Reversed
7–18,
22–25 101 Eligibility
7–18,
22–25

AFFIRMED