Filed: June 29, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GSN GAMES, INC., f/k/a WORLDWINNER.COM, INC.,
`
`Petitioner,
`
`v.
`
`BALLY GAMING, INC.,
`
`Patent Owner of
`U.S. Patent No. 5,816,918 to Kelly et al.
`
`
`Covered Business Method Review No. TBD
`
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`PETITION FOR COVERED BUSINESS METHOD REVIEW UNDER
`35 U.S.C. §§ 321-329 AND § 18 OF THE LEAHY-SMITH AMERICA
`INVENTS ACT
`
`
`
`
`
`
`
`
`Filed on behalf of:
`GSN Games, Inc., f/k/a Worldwinner.com, Inc.
`By: Brenton R. Babcock
`Ted M. Cannon
`Michelle E. Armond
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2040 Main Street, 14th Floor
`Irvine, CA 92614
`Tel.: (949) 760-0404
`Fax: (949) 760-9502
`Email: BoxGSN14@knobbe.com
`
`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GSN GAMES, INC., f/k/a WORLDWINNER.COM, INC.,
`
`Petitioner,
`
`v.
`
`BALLY GAMING, INC.,
`
`Patent Owner of
`U.S. Patent No. 5,816,918 to Kelly et al.
`
`
`Covered Business Method Review No. TBD
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`PETITION FOR COVERED BUSINESS METHOD REVIEW UNDER
`35 U.S.C. §§ 321-329 AND § 18 OF THE LEAHY-SMITH AMERICA
`INVENTS ACT
`
`
`
`
`
`
`
`
`Filed on behalf of:
`GSN Games, Inc., f/k/a Worldwinner.com, Inc.
`By: Brenton R. Babcock
`Ted M. Cannon
`Michelle E. Armond
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2040 Main Street, 14th Floor
`Irvine, CA 92614
`Tel.: (949) 760-0404
`Fax: (949) 760-9502
`Email: BoxGSN14@knobbe.com
`
`
`
`
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page No.
`
`I.
`
`INTRODUCTION ......................................................................................... 1
`
`II. MANDATORY NOTICES (37 C.F.R. § 42.8(a)(1)) .................................... 2
`
`A.
`
`B.
`
`C.
`
`D.
`
`Real Party-In-Interest (37 C.F.R. § 42.8(b)(1)) .................................. 2
`
`Related Matters (37 C.F.R. § 42.8(b)(2)) ............................................ 3
`
`Lead and Backup Counsel (37 C.F.R. § 42.8(b)(3)) ........................... 4
`
`Service Information (37 C.F.R. § 42.8(b)(4)) ..................................... 5
`
`III.
`
`FEES (37 C.F.R. § 42.15) .............................................................................. 5
`
`IV. REQUIREMENTS FOR CBM REVIEW UNDER 37 C.F.R. §
`42.304 ............................................................................................................ 5
`
`A. Grounds for Standing (37 C.F.R. § 42.304(a)) ................................... 5
`
`1.
`
`2.
`
`Eligibility Requirements of 37 C.F.R. § 42.302 ....................... 5
`
`Timing Requirements of 37 C.F.R. § 42.303 ........................... 6
`
`B.
`
`The ’918 Patent is a Covered Business Method Patent ...................... 6
`
`1.
`
`The Challenged Claims Are Directed to Financial
`Activities in the Gaming Industry ............................................. 7
`
`a.
`
`b.
`
`c.
`
`Claim 1 Recites Financial Activities To
`Achieve A “Desired Profitability” In Offering
`Games ............................................................................. 8
`
`Other Claims Recite Financial Activities ..................... 10
`
`The Specification Confirms That The ’918
`Patent Is Directed to Financial Activities ..................... 12
`
`i
`
`
`
`TABLE OF CONTENTS
`(cont’d)
`
`Page No.
`
`2.
`
`The Challenged Claims Do Not Recite a
`“Technological Invention” ...................................................... 13
`
`a.
`
`b.
`
`The Challenged Claims Do Not Recite a
`Technological Feature That is Novel and
`Nonobvious Over the Prior Art .................................... 14
`
`The ’918 Patent Does Not Solve a Technical
`Problem Using a Technical Solution ............................ 15
`
`i.
`
`ii.
`
`The Alleged Problem Is Not Technical .............. 16
`
`The Challenged Claims Recite Well
`Known Gaming Devices and Equipment ........... 17
`
`C.
`
`Claims and Statutory Grounds (37 C.F.R. § 42.304(b)(1),
`(b)(2)) ................................................................................................ 19
`
`D.
`
`Claim Construction (37 C.F.R. § 42.304(b)(3)) ................................ 19
`
`1.
`
`2.
`
`3.
`
`“game apparatus” .................................................................... 19
`
`“receiving means for receiving monetary input from
`said player” (Claim 21) ........................................................... 21
`
`“means for providing a prize selection menu on said
`display device” (Claim 21) ..................................................... 22
`
`Person of Ordinary Skill in the Art ................................................... 23
`
`Unpatentability of Construed Claims (37 C.F.R. §
`42.304(b)(4)) ..................................................................................... 24
`
`E.
`
`F.
`
`G.
`
`Supporting Evidence (37 C.F.R. § 42.304(b)(5)).............................. 24
`
`V.
`
`SUMMARY OF THE ’918 PATENT ......................................................... 24
`
`ii
`
`
`
`TABLE OF CONTENTS
`(cont’d)
`
`Page No.
`
`A. Overview of the Patent ...................................................................... 24
`
`1.
`
`Claim 1 .................................................................................... 25
`
`B.
`
`Prosecution History ........................................................................... 27
`
`VI. AT LEAST ONE CLAIM OF THE ’918 PATENT IS
`UNPATENTABLE UNDER 35 U.S.C. § 101 ............................................ 28
`
`A.
`
`Alice Corp. Step One: The Claims Cover an Abstract Idea ............. 29
`
`1.
`
`2.
`
`3.
`
`The ’918 Patent Claims an Abstract Idea of Profitably
`Awarding Prizes to Game Players .......................................... 30
`
`The Patent Itself Concedes That the Abstract Idea Has
`Long Been Practiced in the Gaming Industry ......................... 35
`
`The ’918 Patent Preempts Long Practiced Ideas in the
`Gaming Industry ..................................................................... 37
`
`B.
`
`Alice Corp. Step Two: The ’918 Patent Provides No
`Additional Inventive Concept ........................................................... 38
`
`1.
`
`The Generic Game Apparatus Recited in The Claims
`Does Not Transform The ’918 Patent into a Patentable
`Invention ................................................................................. 39
`
`2.
`
`There Are No Inventive Concepts In The ’918 Patent ........... 42
`
`C.
`
`The Remaining Challenged Claims Are Not Patentable ................... 50
`
`VII. CONCLUSION ............................................................................................ 57
`
`
`
`iii
`
`
`
`TABLE OF CONTENTS
`
`Page No.
`
`Alice Corp. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) .................................................................................passim
`
`Arcade Planet, Inc. v. Euniverse, Inc.,
`No. 3-03-cv-00062 (D. Nev.) ............................................................................... 3
`
`B. Braun Med., Inc. v. Abbot Labs.,
`124 F.3d 1419 (Fed. Cir. 1997) .......................................................................... 21
`
`Bilski v. Kappos,
`130 S. Ct. 3218 (2010) ...................................................................... 28, 29, 30, 37
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014) ........................................................ 29, 30, 39, 42
`
`Content Extraction v. Wells Fargo Bank,
`776 F.3d 1343 (Fed. Cir. 2014) ........................................................ 30, 39, 40, 42
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) .................................................................................. 28, 29
`
`Net MoneyIN, Inc. v. VeriSign, Inc.,
`545 F.3d 1359 (Fed. Cir. 2008) .................................................................... 21, 22
`
`OIP Technologies, Inc. v. Amazon.com, Inc.,
`2015 WL 3622181 (Fed. Cir. Jun. 11, 2015) ................................................ 34, 35
`
`Planet Bingo, LLC v. VKGS LLC,
`576 Fed. Appx. 1005 (unpublished) ....................................................... 31, 33, 34
`
`Ultramercial, Inc. v. Hulu, LLC,
`772 F.3d 709 (Fed. Cir. 2014) .....................................................................passim
`
`OTHER AUTHORITIES
`35 U.S.C. § 101 .................................................................................................passim
`
`iv
`
`
`
`TABLE OF AUTHORITIES
`(cont’d)
`
`Page No(s).
`
`35 U.S.C. § 112 ............................................................................................ 21, 22, 27
`
`35 U.S.C. § 321 .......................................................................................................... 6
`
`AIA § 18 ......................................................................................................... 6, 10, 13
`
`37 C.F.R. § 42.8 ................................................................................................passim
`
`37 C.F.R. § 42.15 ....................................................................................................... 5
`
`37 C.F.R. § 42.300 ................................................................................................... 19
`
`37 C.F.R. § 42.301 ......................................................................................... 6, 10, 13
`
`37 C.F.R. § 42.302 ................................................................................................. 5, 6
`
`37 C.F.R. § 42.303 ..................................................................................................... 6
`
`37 C.F.R. § 42.304 ......................................................................................... 5, 19, 24
`
`157 CONG. REC. S1364 (daily ed. Mar. 8, 2011) ........................................... 7, 14, 15
`
`77 Fed. Reg. 48,734, 48,735-36 (Aug. 14, 2012) ................................................ 8, 13
`
`77 Fed. Reg. at 48,763-64 ........................................................................................ 18
`
`77 Fed. Reg. at 48764 .............................................................................................. 19
`
`
`
`v
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`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`TABLE OF EXHIBITS
`
`Exhibit No.
`
`Description
`
`U.S. Patent No. 5,816,918 (“the ’918 Patent”)
`
`Declaration of William K. Bertram (“Bertram Decl.”)
`
`File History for ’918 Patent (“ ’918 Patent File History”)
`
`I. Nelson Rose, Gambling and the Law (1986)
`Anthony N. Cabot, The Games People Play: Is it Time for New
`Legal Approach to Prize Games?
`I. Nelson Rose, Gambling and the Law – Update (1993)
`
`1001
`
`1002
`
`1003
`
`1004
`
`1005
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`1006
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`
`
`Table of Exhibits, Page 1
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`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`I.
`People have been playing games for prizes in the U.S. for decades. Children
`
`INTRODUCTION
`
`visit carnivals and arcades and throw basketballs into hoops, play video games, and
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`roll skee balls. They collect reams of tickets and trade them in for stuffed animals,
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`balls, and toy cars. Adults pay to enter poker tournaments in hopes of collecting a
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`tournament prize. The arcade owners and game operators that provide these games
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`have always needed to determine how to award prizes while still making a profit.
`
`The ’918 Patent claims these abstract ideas of profitably awarding prizes to
`
`game players. For example, Claim 1 covers the basic concepts of paying money to
`
`play games, providing a list of prizes, and then calculating how many tickets, or
`
`“prize credits,” should be redeemed for specific prizes based on a prize cost and
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`desired profitability level provided by the operator. Claim 34 applies this abstract
`
`idea to tournament games, where players pay money to enter a tournament and a
`
`portion of the entry fees are distributed to tournament winners as prizes. Even the
`
`’918 Patent acknowledges that these concepts have long been practiced in the
`
`gaming industry.
`
`In a long line of cases, and most recently in Alice Corp., the Supreme Court
`
`has instructed that abstract ideas are not patent eligible under 35 U.S.C. § 101.
`
`This is because abstract ideas are the building blocks of innovation that should be
`
`available to the public. Because the ’918 Patent is exclusively directed to abstract
`
`1
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`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`ideas used in the gaming industry, it is necessarily patent-ineligible. To hold
`
`otherwise would withdraw these ideas from the public domain and, among other
`
`things, foreclose many common and long-standing practices in the gaming
`
`industry. For these reasons, the ’918 Patent is invalid under § 101.
`
`II. MANDATORY NOTICES (37 C.F.R. § 42.8(A)(1))
`A. Real Party-In-Interest (37 C.F.R. § 42.8(b)(1))
`GSN Games, Inc. (“GSN”), formerly known as Worldwinner.com, Inc., is
`
`the Petitioner and a real party-in-interest for this petition for Covered Business
`
`Method patent review (“CBM Review”). Worldwinner.com, Inc. (which is now
`
`GSN Games, Inc.) is a named defendant in a co-pending lawsuit in which Plaintiff
`
`Bally Gaming, Inc. has accused it of infringing the ’918 Patent.
`
`GSN does not believe that any other entity sufficiently controls or funds this
`
`CBM Review to be considered to be a real party-in-interest in this CBM Review.
`
`Nevertheless, out of an abundance of caution, and to avoid any possible argument
`
`that GSN has failed to identify any entity that could be alleged to be a real-party in
`
`interest, GSN discloses the following:
`
`(1) SkillJam Technologies Corporation is the parent company, and owns
`
`100%, of GSN Games, Inc.
`
`(2) Game Show Network, LLC directly or indirectly owns 100% of SkillJam
`
`Technologies Corporation.
`
`2
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`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`(3) DirecTV and Sony Corporation indirectly own Game Show Network,
`
`LLC. In particular, Sony entity Sony Pictures Cable Ventures I Inc. is a majority
`
`shareholder of Game Show Network, LLC and DirecTV entity LDIG Gamenet,
`
`LLC is a minority shareholder of Game Show Network, LLC.
`
`(4) eUniverse, Inc., d/b/a Intermix Media is a defendant accused of
`
`infringing the ’918 Patent in co-pending district court litigation.
`
`(5) Other entities known or believed by GSN to be related to one or more of
`
`the foregoing entities include GameUniverse, Inc., CES Software PLC, SJ
`
`Acquisition Corporation, and Fun Technologies, Ltd.
`
`B. Related Matters (37 C.F.R. § 42.8(b)(2))
`U.S. Patent No. 5,816,918 (“the ’918 Patent”) is currently the subject of
`
`litigation in Arcade Planet, Inc. vs. Worldwinner.com Inc., No. 3-03-cv-00063 (D.
`
`Nev.) (“Worldwinner litigation”), and Arcade Planet, Inc. v. Euniverse, Inc., No.
`
`3-03-cv-00062 (D. Nev.) (“Euniverse litigation”).
`
`The ’918 Patent was also the subject of Reexamination No. 90/006,601,
`
`which was filed on April 15, 2003. An Ex Parte Reexamination Certificate for the
`
`’918 Patent issued on June 30, 2014, cancelling claims 35-37 and 40-44 and
`
`amending claims 34, 38-39, and 45-46. A large number of applications relating to
`
`the ’918 Patent are currently pending before the United States Patent & Trademark
`
`Office (“PTO”).
`
`3
`
`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`C. Lead and Backup Counsel (37 C.F.R. § 42.8(b)(3))
`
`Lead Counsel
`
`Back-up Counsel
`
`Brenton R. Babcock (Reg. No. 39,592)
`
`Ted M. Cannon (Reg. No. 55,036)
`
`brent.babcock@knobbe.com
`
`ted.cannon@knobbe.com
`
`BoxGSN14@knobbe.com
`
`BoxGSN14@knobbe.com
`
`Postal and Hand-Delivery Address:
`
`Postal and Hand-Delivery Address:
`
`Knobbe, Martens, Olson & Bear, LLP
`
`Knobbe, Martens, Olson & Bear, LLP
`
`2040 Main Street, 14th Floor
`
`2040 Main Street, 14th Floor
`
`Irvine, CA 92614
`
`Irvine, CA 92614
`
`T: (949) 760-0404; F: (949) 760-9502
`
`T: (949) 760-0404; F: (949) 760-9502
`
`Back-up Counsel
`
`Michelle E. Armond (Reg. No. 53,954)
`
`michelle.armond@knobbe.com
`
`BoxGSN14@knobbe.com
`
`Postal and Hand-Delivery Address:
`
`Knobbe, Martens, Olson & Bear, LLP
`
`2040 Main Street, 14th Floor
`
`Irvine, CA 92614
`
`T: (949) 760-0404; F: (949) 760-9502
`
`
`
`
`
`
`
`4
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`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`Service Information (37 C.F.R. § 42.8(b)(4))
`
`D.
`Service information for lead and back-up counsel is provided in the
`
`designation of lead and back-up counsel above. Petitioner GSN hereby consents to
`
`service by email at the following email address: BoxGSN14@knobbe.com.
`
`III. FEES (37 C.F.R. § 42.15)
`The undersigned authorizes the Office to charge $33,550 ($12,000 request
`
`fee; $18,000 post-institution fee; $250 fee for requesting review of 21 claims;
`
`$3,300 post-institution for requesting review of 21 claims) to Deposit Account
`
`No. 11-1410 for the fees set forth in 37 C.F.R. § 42.15(b) for this Petition for CBM
`
`Review. The undersigned further authorizes payment for any additional fees that
`
`might be due in connection with this Petition to be charged to the above referenced
`
`Deposit Account.
`
`IV. REQUIREMENTS FOR CBM REVIEW UNDER 37 C.F.R. § 42.304
`A. Grounds for Standing (37 C.F.R. § 42.304(a))
`Pursuant to 37 C.F.R. § 42.304(a), the ’918 Patent is eligible for CBM
`
`Review because Petitioner meets the eligibility requirements of 37 C.F.R. § 42.302
`
`and the ’918 patent is a covered business method (“CBM”) patent.
`
`Eligibility Requirements of 37 C.F.R. § 42.302
`
`1.
`Petitioner GSN Games, Inc., formerly known as Worldwinner.com, Inc., has
`
`been sued for infringement of the ’918 Patent in the Worldwinner litigation, and
`
`5
`
`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`thus Petitioner meets the requirements of AIA § 18(a)(1)(B) and 37 C.F.R.
`
`§ 42.302. Petitioner is not estopped from challenging the ’918 Patent on the
`
`grounds identified in 37 C.F.R. § 42.302(b).
`
`Timing Requirements of 37 C.F.R. § 42.303
`
`2.
`The requirements of 35 U.S.C. § 321(c) cannot be met for the ’918 Patent,
`
`and therefore post-grant review is not available. As such, a petition requesting
`
`CBM Review of the ’918 Patent may be filed at any time, per 37 C.F.R. § 42.303.
`
`The ’918 Patent is a Covered Business Method Patent
`
`B.
`The America Invents Act (“AIA”) and United States Patent and Trademark
`
`Office rules define a “covered business method patent” as “a patent that claims a
`
`method or corresponding apparatus for performing data processing or other
`
`operations used in the practice, administration, or management of a financial
`
`product or service, except that the term does not include patents for technological
`
`inventions.” AIA § 18(d)(1); 37 C.F.R. § 42.301(a). The AIA defines a two-part
`
`test to determine whether a patent is eligible for CBM Review: (1) the patent must
`
`claim a method or corresponding apparatus for performing data processing or other
`
`operations used in the practice, administration, or management of a “financial
`
`product or service;” and (2) the claimed invention must not be a “technological
`
`invention[].” Id. The claimed invention of the ’918 Patent satisfies both parts of
`
`the test.
`
`6
`
`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`1.
`
`The Challenged Claims Are Directed to Financial Activities
`in the Gaming Industry
`
`The Board has explained that the phrase “‘financial product or service’
`
`should be interpreted broadly.” Apple Inc. v. SightSound Techs., LLC, CBM2013-
`
`00020, Paper 14 at 11 (Oct. 8, 2013). It includes within its scope patents that claim
`
`“activities that are financial in nature, incidental to a financial activity or
`
`complementary to a financial activity.’” CRS Advanced Techs., Inc. v. Frontline
`
`Techs., Inc., CBM2012-00005, Paper 17 at 7 (Jan. 23, 2013) (quoting 77 Fed. Reg.
`
`48,735 (Aug. 14, 2012)).
`
`Patents are eligible for CBM Review if they cover “any ancillary activities
`
`related to a financial product or service, including . . . marketing, customer
`
`interfaces, Web site management and functionality, transmission or management of
`
`data, servicing, underwriting, customer communications, and back office
`
`operations-e.g., payment processing, stock clearing.” 157 CONG. REC. S1364–65
`
`(daily ed. Mar. 8, 2011) (statement of Sen. Schumer). Indeed, the Board has
`
`previously recognized that “[n]othing in the statute, its legislative history, or the
`
`rules requires that a covered business method patent include claim elements that
`
`map directly to financial products or services.” CRS Advanced Techs., CBM2012-
`
`00005, Paper 17 at 8.
`
`7
`
`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`Here, the claims and specification of the ’918 Patent show that the ’918
`
`Patent is directed to the financial activity of profitably awarding prizes to game
`
`players. Game players pay money to play games and win prizes. Game operators
`
`want to make money. This is quintessential financial activity.
`
`a.
`
`Claim 1 Recites Financial Activities To Achieve A
`“Desired Profitability” In Offering Games
`
`“A patent having one or more claims directed to a covered business method
`
`is a covered business method patent for purposes of the review, even if the patent
`
`includes additional claims.” Transitional Program for Covered Business Method
`
`Patents—Definitions of Covered Business Method Patent and Technological
`
`Invention; Final Rule, 77 Fed. Reg. 48,734, 48,736 (Aug. 14, 2012); see also
`
`Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., CBM2012-00002, Paper
`
`66 at 6 (Jan. 23, 2014) (entire patent eligible for CBM Review where “the subject
`
`matter of at least one claim is directed to a covered business method.”).
`
`The ’918 Patent includes at least one such claim directed to a covered
`
`business method, in the form of Claim 1, reproduced below:
`
`A method for providing a prize redemption system for a
`1.
`game apparatus, said prize redemption system being customizable by
`an operator, said method comprising:
`receiving a prize list on a game apparatus, said prize list
`including names of a plurality of prizes available to be won by
`playing said game apparatus, wherein said game apparatus
`
`8
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`
`
`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`receives monetary income from players in exchange for use of
`said game apparatus, and wherein said players may win prize
`credits by playing said game apparatus;
`receiving a cost of each of said prizes on said game
`apparatus; and
`determining on said game apparatus a prize cost to be
`associated with each of said plurality of prizes, said prize cost
`being in terms of prize credits and determined in view of a
`desired profitability of said game apparatus, and wherein a
`player of said game apparatus may select one of said prizes by
`exchanging a number of prize credits equal to said prize cost of
`said selected prize.
`’918 Patent, Ex. 1001 at Col. 43:33-52 (emphases added).
`
`Claim 1 is a method for profitably awarding prizes based on playing a game
`
`apparatus. It teaches that the game apparatus receives money from game players to
`
`play a game. ’918 Patent, Ex. 1001 at Col. 43:39-40. Players win “prize credits”
`
`that can be redeemed for prizes. Id. at Col. 43:49-52. The game apparatus is
`
`provided with the monetary cost of game prizes. Id. at Col. 43:43-44. The game
`
`apparatus then calculates how many “prize credits” are required for each prize to
`
`achieve “a desired profitability” level for the game apparatus. Id. at Col. 43:45-52.
`
`Claim 1 allows game operators to profitably provide prizes to game players
`
`who pay money to play games. Claim 1 recites receiving money from game
`
`players to play games. ’918 Patent, Ex. 1001 at Col. 43:39-40. That transfer of
`
`9
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`
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`funds is a financial activity. Apple, CBM2013-00020, Paper 14 at 13 (claim
`
`“recite[s] the electronic movement of money between financially distinct entities,
`
`which is an activity that is financial in nature.”). Achieving “a desired
`
`profitability” for games, ’918 Patent, Ex. 1001 at Col. 43:48, is also quintessential
`
`financial activity. The calculation of prize credits by the game apparatus to
`
`achieve the desired profitability is data processing. Id. at Col. 43:45-52. Thus, the
`
`plain language of the claim shows that Claim 1 is directed to “a method . . . for
`
`performing data processing or other operations used in the practice, administration,
`
`or management of a financial product or service.” 37 C.F.R. § 42.301(a); AIA
`
`§ 18(d)(1).
`
`b. Other Claims Recite Financial Activities
`In addition to Claim 1, other Challenged Claims are also directed to the
`
`concept of profitably awarding prizes to game players and recite financial
`
`activities. Independent Claims 15, 21, and 73 also recite receiving monetary
`
`income from players in exchange for playing games. ’918 Patent, Ex. 1001 at Col.
`
`45:3-5 (Claim 15: “game apparatus receives monetary income from players in
`
`exchange for use of said game apparatus”); id. at Col. 45:63-64 (Claim 21: game
`
`apparatus includes “receiving monetary input from said player”); id. at Col. 50:60-
`
`61 (Claim 73: “a monetary input device that receives monetary input from said
`
`player”).
`
`10
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`
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`Claims 15, 21, and 73 also recite how the game apparatus must award prizes
`
`based on a desired profit level or “payout value.” ’918 Patent, Ex. 1001 at Col.
`
`45:13-15 (Claim 15: “prize cost is determined in accordance with said desired
`
`amount of payout”); id. at Col. 46:5-9 (Claim 21: “each of said prizes having a
`
`prize credit cost which has been determined in accordance with a desired payout
`
`value of an operator of said game apparatus”); id. at Col. 50:53-56 (Claim 73:
`
`“prizes having a prize credit cost which has been determined in accordance with a
`
`desired payout value of an operator of said game apparatus”). The game operator
`
`can define the desired payout level. See, e.g., ’918 Patent, Ex. 1001 at Col. 45:7-
`
`10 (Claim 21: “payout input indicating a desired amount of payout that said
`
`operator wishes to provide back to players of said game apparatus in terms of a
`
`monetary value”).
`
`Reexamined Claim 34 applies this concept to networked tournament games.
`
`It recites that the game operator “receiv[es] monetary input from a player to allow
`
`said player to participate in a tournament.” ’918 Patent Reexam Certificate, Ex.
`
`1001 at Col. 1:28-30. Some of the player’s money is allocated to a “tournament
`
`prize value.” Id. at Col. 1:31-33. The tournament prize money is then paid out to
`
`the tournament winners. Id. at Col. 1:42-45. Reexamined Claim 39 specifies that
`
`the “tournament prize is cash.” Id. at Col. 2:28-30.
`
`11
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`
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`These claims explicitly recite that game players pay money to play games.
`
`The operators use the game machines to help them profitably award prizes to the
`
`game players. These payments of funds are quintessential financial activities.
`
`c.
`
`The Specification Confirms That The ’918 Patent Is
`Directed to Financial Activities
`
`The ’918 Patent specification is explicit that the claimed invention is
`
`directed to the financial activity of profitably awarding prizes to game players.
`
`Game operators want to make money. Game players want to spend money to play
`
`games for prizes. The Abstract of the invention on the first page of the patent
`
`states:
`
`The present invention provides a prize redemption system for use with
`one or more game apparatuses. A game is provided on a game
`apparatus for a player to play in exchange for monetary input, and
`prize credits are credited to the player based on the game outcome. A
`prize selection menu is then displayed by the game apparatus, the
`menu including one or more prizes, where the player may select a
`prize that has a prize cost within the player’s prize credit amount. The
`player is dispensed a specific prize ticket that is redeemable for the
`selected prize. The game apparatus can also provide specific prizes
`and tournament games played for a tournament prize contributed to by
`multiple players. An operator can adjust prizes and payout
`percentages of the system to achieve a desired profitability for game
`apparatuses. . . .
`’918 Patent, Ex. 1001 at Abstract (emphases added).
`
`12
`
`
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`The Abstract again confirms that the purpose of the invention is to allow
`
`game operators to offer prizes to game players while achieving their desired
`
`profitability level for their games. The transfer of money between game players
`
`and operators confirms this is a quintessential financial activity.
`
`2.
`
`The Challenged Claims Do Not Recite a “Technological
`Invention”
`
`The statutory definition of a CBM patent excludes patents for “technological
`
`inventions.” AIA § 18(d)(1); see also 37 C.F.R. § 42.301(a).
`
`Where, as here, the challenged patent is directed to methods for performing
`
`data processing used in the practice of a financial product or service, the USPTO
`
`Rules exclude from CBM Review only those patents where the “subject matter as a
`
`whole [a] recites a technological feature that is novel and unobvious over the prior
`
`art and [b] solves a technical problem using a technical solution.” 37 C.F.R. §
`
`42.301(b) (emphasis added). The Office Patent Trial Practice Guide clarifies that
`
`both prongs must be met before a patent is excluded from CBM Review. 77 Fed.
`
`Reg. 48,734, 48,735-36 (Aug. 14, 2012) (explaining that a conjunctive test
`
`represents “the best policy choice”). The legislative history further points out only
`
`“those patents whose novelty turns on a technological innovation over the prior art
`
`and are concerned with a technical problem which is solved with a technical
`
`solution and which requires the claims to state the technical features which the
`
`13
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`inventor desires to protect” should be excluded from CBM Review. 157 CONG.
`
`REC. S1364 (daily ed. Mar. 8, 2011).
`
`Here, the Challenged Claims do not recite a “technological invention” as
`
`they do not satisfy either prong of the test. Instead, the Challenged Claims do not
`
`include anything technological, but instead implement abstract ideas using
`
`conventional gaming devices and equipment.
`
`a.
`
`The Challenged Claims Do Not Recite a Technological
`Feature That is Novel and Nonobvious Over the Prior
`Art
`
`Exemplary independent Claim 1 recites an abstract idea that is devoid of any
`
`technological content. It simply describes the concept of profitably awarding
`
`prizes to game players. Claim 1 recites receiving a list of available prizes,
`
`receiving money from game players, receiving prize cost, and then determining
`
`how many redeemable “prize credits” per prize to achieve a desired profitability
`
`level. ’918 Patent, Ex. 1001 at Col. 43:33-52. There is nothing technological
`
`about this.
`
`The only equipment referenced in Claim 1 is a “game apparatus.” ’918
`
`Patent, Ex. 1001 at Col. 43:36. However, the ’918 Patent makes clear that this is a
`
`“generic game apparatus” with a “generic architecture.” ’918 Patent, Ex. 1001 at
`
`Col. 5:49-57 (emphases added); see infra § VI.B.1.
`
` A claim recites a
`
`“technological invention” only if it recites novel and not well-known components.
`
`14
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`
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`Bloomberg Inc. v. Markets-Alert PTY Ltd., CBM2013-00005, Paper 18 at 6-7
`
`(Mar. 29, 2013); see also CRS Advanced Techs., CBM2012-00005, Paper 17 at 9
`
`(generic hardware is not novel or unobvious under this standard). The ‘918 Patent
`
`acknowledges that the recited “game apparatus” refers to any of the various types
`
`of game apparatuses known in the gaming industry at the time. ’918 Patent, Ex.
`
`1001 at Col. 3:7-12, 5:49-63. This generic game apparatus does not impart
`
`anything technological to the ’918 Patent.
`
`b.
`
`The ’918 Patent Does Not Solve a Technical Problem
`Using a Technical Solution
`
`The Challenged Claims of the ’918 Patent purport to solve a commercial
`
`problem in the gaming industry—not a technical one—using well-known
`
`technology. Only “those patents whose novelty turns on a technological
`
`innovation . . . and are concerned with a technical problem which is solved with a
`
`technical solution and which requires the claims to state the technical features
`
`which the inventor desires to protect” may not be subject to CBM Review. 157
`
`CONG. REC. S1364 (daily ed. Mar. 8, 2011).
`
`The ’918 Patent claims do not meet the exception. The ’918 Patent is not
`
`concerned with a technical problem and the claims do not cover any technical
`
`features.
`
`15
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`
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`GSN v. Bally Gaming
`CBM Petition - U.S. Pat. 5,816,918
`
`i.
`The ’918 Patent explains that the invention overcomes purported problems
`
`The Alleged Problem Is Not Technical
`
`game operators experienced in maintaining their prize redemption systems. The
`
`patent explained that game operators must offer prizes profitably. This involved
`
`maintaining a prize booth and profitably calculating the number of tickets that
`
`could be redeemed for specific prizes:
`
`[o]perators must maintain a prize booth or vending machine which
`displays all the prizes the operator wishes to make available.
`Requiring even greater maintenance is the setting and adjustment of
`ticket costs or prices of the prizes. The operator must determine how
`many tickets are paid, on average, by each game in th
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