UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT AND TRIAL AND APPEAL BOARD
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`GSN GAMES, INC., f/k/a WORLDWINNER.COM, INC.,
`Petitioner,
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`v.
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`BALLY GAMING, INC.,
`Patent Owner.
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`PATENT OWNER’S PRELIMINARY RESPONSE UNDER 37 CFR 42.20
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`Case No. CBM2015-00155
`Patent No. 5,816,918
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`

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`
`
`I.
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`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`TABLE OF CONTENTS
`
`THE PETITION SHOULD BE DENIED BECAUSE IT PRESENTS THE
`SAME OR SUBSTANTIALLY THE SAME ARGUMENTS
`PREVIOUSLY PRESENTED IN ANOTHER PROCEEDING BEFORE
`THE OFFICE ................................................................................................... 1
`
`II.
`
`INTRODUCTION ........................................................................................... 3
`
`III. OVERVIEW OF U.S. PATENT NO. 5,816,918 ............................................ 6
`
`IV. CLAIM TERMS REQUIRING CONSTRUCTION ..................................... 11
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`A.
`
`B.
`
`C.
`
`D.
`
`E.
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`F.
`
`“game apparatus” ................................................................................ 12
`
`“receiving means for receiving monetary input from said player” ..... 12
`
`“means for providing a prize selection menu on said display device,
`said prize selection menu presenting a plurality of prizes, 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” ............................................................................................ 13
`
`“means for providing a specific prize goal during said game of skill
`played on said game apparatus” .......................................................... 17
`
`“means for selecting a prize credit game for receiving said prize
`credits based on said game score” ....................................................... 16
`
`“a game processor for controlling a game on said game apparatus, said
`game providing a number of prize credits to a player in connection
`with said player playing said game, said game processor also
`providing a prize selection menu, said prize selection menu presenting
`a plurality of prizes, 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” ............................................... 20
`
`V.
`
`THE PETITION DOES NOT DEMONSTRATE THAT IT IS MORE
`LIKELY THAN NOT THAT THE ‘918 PATENT IS CBM-ELIGIBLE. ... 23
`
`i
`
`

`
`
`
`A.
`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`The Petition does not demonstrate that the challenged claims are
`directed to a “method or correspond apparatus for performing data
`processing or other operations used in the practice, administration, or
`management of a financial product of service”................................... 23
`
`B.
`
`Petitioner has Failed to Carry its Burden to Demonstrate that the ’918
`Patent is not Directed to a “Technological Invention” ....................... 27
`
`1.
`
`2.
`
`The petition’s discussion of the “technological invention” issue
`is conclusory and not supported by evidence. .......................... 27
`
`The ‘918 patent claims as a whole provide novel and non-
`obvious technical solutions to address technical problems in
`prior art incentive-based gaming systems. ................................ 32
`
`VI. THE PETITION FAILS TO SHOW IT IS MORE LIKELY THAN NOT
`THAT THE CHALLENGED CLAIMS DO NOT RECITE PATENTABLE
`SUBJECT MATTER UNDER 35 U.S.C. § 101. .......................................... 34
`
`A.
`
`Petitioner has the burden of demonstrating each element in the Alice
`framework for subject matter eligibility. ............................................ 34
`
`B. Alice Step One: Petitioner has failed to show that it is more likely
`than not that the claims of the ’918 patent are directed to an abstract
`idea. ..................................................................................................... 39
`
`1.
`
`2.
`
`3.
`
`The petition makes an over-broad characterization of the
`challenged claims to allege an inappropriate abstract idea. ...... 39
`
`The petition mischaracterizes the specification of the ’918
`patent and conflates novelty with patent eligibility. ................. 45
`
`The ’918 Patent is not directed to an abstract idea. .................. 47
`
`C. Alice Step Two: The ’918 Patent claims significantly more than an
`abstract idea. ........................................................................................ 53
`
`1.
`
`2.
`
`The petition fails to address each claim element and fails to
`show that the claims lack an inventive step. ............................. 53
`
`Claims 21-33 and 73-77 require a special-purpose computer to
`perform the function of determining prize credit costs. ........... 60
`
`ii
`
`

`
`
`VII. CONCLUSION. ............................................................................................. 64
`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`
`
`
`
`iii
`
`

`
`
`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`TABLE OF AUTHORITIES
`
`Alice Corp. Pty., Ltd. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014) ............................................. 35, 36, 37, 38, 45, 53, 54, 64
`
`Ass’n for Molecular Pathology v. Myriad Genetics, Inc.,
`133 S. Ct. 2107 (2013) ........................................................................................ 35
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) ................................................................................ 35, 42, 64
`
`Chicago Mercantile Exch., Inc. v. 5th Mkt., Inc.,
`CBM2015-00061 (PTAB Jul. 16, 2015)...... ………………15, 34, 38, 60, 61, 62
`
`Content Extraction and Transmission, LLC v. Wells Fargo Bank,Nat’l Ass’n,
`776 F.3d 1343 (2014) .......................................................................................... 37
`
`CRS Adv. Techs. v. Frontline Techs., Inc.,
`CBM 2012-00005, (PTAB Jan. 30, 2013) .................................................... 26, 27
`
`CLS Bank Int'l v. Alice Corp. Pty., Ltd.,
`717 F.3d 1269, 1298 (Fed. Cir. 2013) ................................................................ 45
`
`DDR Holdings, LLC v. Hotels.com,
`773 F.3d 1245 (Fed. Cir. 2014) ........................................................ 37, 38, 44, 50
`
`Diamond v. Diehr,
`450 U.S. 175 (1981) ............................................................. 36, 47, 49, 52, 53, 54
`
`Diamond v. Chakrabarty,
`447 U.S. 303 (1980) ............................................................................................ 35
`
`E*Trade Fin. Corp. v. Droplets, Inc.,
` CBM 2014-00123 (PTAB Oct. 30, 2014) ............................................. 27, 28, 29
`
`Eon Corp. IP Holdings LLC v. AT&T Mobility LLC,
`785 F.3d 616 (Fed. Cir. 2015) ................................................................ 15, 23, 63
`
`Ex parte Erol et al.,
`Appeal 2011-001143 (PTAB Mar. 13, 2013) ......................................... 22, 23, 62
`
`Ex parte Lakkala et al.,
`Appeal 2011-001526 (PTAB Mar. 13, 2013) ............................................... 22, 23
`
`iv
`
`

`
`
`Ex parte Smith,
`Appeal 2012-007631 (PTAB Mar. 14, 2013) ............................................... 22, 23
`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`Experian Mkting Solutions, Inc. v. RPost Communications, Ltd.,
` CBM 2014-00010 (PTAB Apr. 22, 2014) ................................................... 28, 29
`
`Finisar Corp. v. The DirecTV Grp.,
`523 F.3d 1323 (Fed. Cir. 2008) .......................................................................... 60
`
`Gottschalk v. Benson,
`409 U.S. 63 (1972) ........................................................................................ 35, 64
`
`GSI Commerce Solutions, Inc. v. Arunachalam,
`CBM 2014-00101, (PTAB Oct. 7, 2014) ..................................................... 27, 28
`
`In re Katz Interactive Call Processing Patent Litigation,
`639 F.3d 1303 (Fed. Cir. 2011) .............................................................. 15, 23, 63
`
`Mass. Inst. of Tech. & Elecs. for Imaging, Inc. v. Abacus Software,
`462 F.3d 1344 (Fed. Cir. 2006) .................................................................... 22, 23
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) .................................................................................. 35, 36
`
`Messaging Gateway Solutions, LLC v. Amdocs, Inc.,
`2015 WL 1744343 (D.Del., Apr. 15, 2015). ...................................................... 40
`
`Meitzner v. Mindick,
`549 F.2d 775 (CCPA 1977) ................................................................................ 29
`
`Nazomi Communications, Inc. v. Samsung Telecommunications, Inc.,
`2012 WL 967968 (N.D. Cal., July 5, 2012). ...................................................... 41
`
`OIP Techs., Inc. v. Amazon.com, Inc.,
`No. 2012-1696, 2015 WL 3622181 (Fed. Cir. June 11, 2015) ..................... 43, 44
`
`Planet Bingo, LLC. v. VKGS LLC,
`576 Fed. Appx. 1005 (Fed. Cir. 2014) .......................................................... 42, 43
`
`Parker v. Flook,
`437 U.S. 584 (1978) ............................................................................................ 64
`
`v
`
`

`
`
`Salesforce.com. Inc. v. Applications in Internet Time LLC,
`CBM 2014-00162 (PTAB Feb. 2, 2015) ...................................................... 25, 26
`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`SAP Am., Inc. v. Versata Dev. Grp., Inc.,
`CBM2012-00001 (PTAB Jan. 9, 2013), aff’d sub nom., Versata
`Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015) ..................... 24
`
`Smartflash LLC v. Apple Inc.,
`2015 WL 661174 (E.D. Tex., Feb. 13, 2015) ..................................................... 41
`
`Ultramercial, Inc. v. Hulu, LLC,
`772 F.3d 709 (2014) ............................................................................................ 36
`
`Unified Patents, Inc. v. Personal Web Techs., LLC,
`IPR2014-00702, Paper 13 (PTAB July 24, 2014) ............................................ 1, 2
`
`Versata Dev. Grp., Inc. v. SAP Am., Inc.,
`793 F.3d 1306 (Fed. Cir. 2015) .............................................................. 25, 26, 37
`
`Williamson v. Citrix Online, LLC,
`792 F.3d 1339 (Fed. Cir. 2015) (en banc) .................................................... 22, 63
`
`Watts v. XL Sys., Inc.,
`232 F.3d 877 (Fed. Cir. 2000) ............................................................................ 22
`
`Statutes
`
`35 U.S.C. § 101 ......... 2, 4, 5, 6, 28, 29, 30, 31, 32, 34, 35, 36, 40, 45, 47, 49, 60, 64
`
`35 U.S.C. § 112 ¶ 6 ................................................. 13, 14, 17, 19, 21, 22, 23, 60, 63
`
`35 U.S.C. § 316(b) ..................................................................................................... 2
`
`35 U.S.C. § 324 ........................................................................................................ 34
`
`35 U.S.C. § 325(d) ................................................................................................. 1, 3
`
`Leahy-Smith America Invents Act,
`Pub. L. No. 112-29, § 18, 125 Stat. 284, 329-331 (2011) ...................... 25, 26, 27
`
`Rules
`
`37 CFR 42.65 ........................................................................................... 6, 11, 40, 46
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`vi
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`

`
`
`37 CFR 42.201(a) ..................................................................................................... 25
`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`37 CFR 42.207 ........................................................................................................... 3
`
`37 CFR 42.208(a) ....................................................................................................... 3
`
`37 CFR 42.300(a) ....................................................................................................... 3
`
`37 CFR 42.300(b) .................................................................................................... 12
`
`37 CFR 42.301(a) ..................................................................................................... 22
`
`37 CFR 42.301(b) .............................................................................................. 27, 29
`
`37 CFR 42.304(a) ....................................................................................................... 3
`
`37 CFR 42.304(b)(5) ................................................................................................ 24
`
`Other Authorities
`
`77 Fed. Reg. 48,756 (Aug. 14, 2012) ...................................................................... 27
`
`77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012) ......................................................... 28
`
`2014 Interim Guidance on Patent Subject Eligibility,
`USPTO, Dec. 15, 2014 ....................................................................................... 43
`
`Manual of Patent Examining Procedure, § 608.01(c)(2) ............................ 46, 48, 52
`
`Manual of Patent Examining Procedure, § 2181 .................................................... 23
`
`vii
`
`

`
`CBM2015-00155
`U.S. Patent No. 5,816,918
`
`
`THE PETITION SHOULD BE DENIED BECAUSE IT PRESENTS
`I.
`THE SAME OR SUBSTANTIALLY THE SAME ARGUMENTS
`PREVIOUSLY PRESENTED IN ANOTHER PROCEEDING BEFORE THE
`OFFICE.
`
`
`
`35 U.S.C. § 325(d) provides that, “during the pendency of any post-grant
`
`review under this Chapter, the Director may determine the manner in which the
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`post-grant review or other proceeding or matter may proceed” and specifically
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`allows the Director to “reject the petition or request because [] the same or
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`substantially the same prior art or arguments previously were presented to the
`
`Office.” 35 U.S.C. § 325(d).
`
`
`
`The Board has previously exercised its discretion to deny a petition for a
`
`trial before the Board. For example, in Unified Patents, Inc. v. Personal Web
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`Techs., LLC, IPR2014-00702, Paper 13 (PTAB July 24, 2014), the Board denied a
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`petition for inter partes review (“IPR”), where the petition was the third IPR
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`petition filed against the patent at issue. Each of the three petitions asserted the
`
`same grounds of unpatentability, but Unified Patents, Inc. was a third party with
`
`respect to the previous petitions. The Board recognized that the petitioner would
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`“not have an opportunity to submit arguments or evidence,” but given that the
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`claims were already under review on the same grounds as stated in the petition, the
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`Board was already going to decide whether the asserted grounds had merit. Unified
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`1
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`

`
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`Patents, Paper 13 at 7-8. The Board justified its decision to deny the petition by
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`citing to 35 U.S.C. § 316(b), which requires the Director to consider “the efficient
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`administration of the Office” with respect to trials before the Board. 35 U.S.C. §
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`316(b).
`
`
`
`The petition here, which asserts unpatentability solely under § 101, was filed
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`after the petition in CBM2015-00154. Petitioners in both cases are defendants in a
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`consolidated lawsuit, yet they filed two independent petitions on two consecutive
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`days for CBM review asserting precisely the same grounds of unpatentability –
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`subject matter ineligibility under § 101. Patent Owner can think of no good reason
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`why the defendant Petitioners could not join together in filing a single petition for
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`CBM review. Instead, Petitioners are trying to force Patent Owner to
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`simultaneously defend two independent CBM proceedings asserting the same
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`grounds of unpatentability. Patent Owner also wonders whether this is a thinly-
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`veiled attempt to, in effect, double the page limits for presenting unpatentability
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`arguments under a single ground of unpatentability. By forcing Patent Owner to
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`defend two CBM reviews at the same time, Petitioners are abusing the process and
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`rules of the Office. Further, granting this petition – particularly where both
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`Petitioners are defendants in a consolidated lawsuit and each assert identical
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`grounds of unpatentability – is plainly inefficient in contradiction of § 316(b). See
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`2
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`

`
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`United Patents, Paper 13 at 8 (denying a petition in part out of concerns for
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`efficiency).
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`
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`The petition here is the second-filed of two petitions asserting identical
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`grounds of unpatentability over the same patent. The first-filed petition challenged
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`every claim existing in the re-examined patent, while the current petition
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`challenges less than every claim. Therefore, at least every claim challenged under
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`the current petition is already before the Board. Consequently, for at least the
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`foregoing reasons, the Board should exercise its discretion to deny this later-filed
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`petition under 35 U.S.C. § 325(d).
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`II.
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`INTRODUCTION
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`
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`Pursuant to 37 CFR 42.207 and 37 CFR 42.300(a), Patent Owner Bally
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`Gaming, Inc. submits to the Patent Trial and Appeal Board (“Board”) herewith its
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`Preliminary Response to the petition in this proceeding.
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`
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`U.S. Patent No. 5,816,918 (the “’918 patent”) was duly issued by the U.S.
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`Patent and Trademark Office (“USPTO”) on October 6, 1998. An ex parte
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`reexamination proceeding based on a third-party request was instituted June 3,
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`2003. After a protracted reexamination proceeding, the reexamination certificate
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`issued on June 30, 2014. Thus, the claims of the ’918 patent were twice confirmed
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`as patentable.
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`3
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`

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`As stated in 37 CFR 42.304(a), Petitioner bears the burden of
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`“demonstrat[ing] that the patent for which review is sought is a covered business
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`method [(“CBM”)] patent.” Under 37 CFR 42.208(a), the petition must also
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`“demonstrate that it is more likely than not that at least one of the claims
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`challenged in the petition is unpatentable.” The petition fails to meet its burden for
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`two main reasons. First, the petition does not “demonstrate” by reference to any
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`credible evidence that the ’918 patent is eligible for CBM patent review and
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`instead relies on conclusory statements and attorney arguments to make such a
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`demonstration. Second, the petition does not “demonstrate” that it is more likely
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`than not that at least one of the challenged claims of the ’918 patent is
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`unpatentable, specifically under its single claim that the patent is directed to patent-
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`ineligible subject matter under 35 U.S.C. § 101, because it misapplies the Supreme
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`Court’s test under Alice Corp. (“Alice test”).
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`
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`The petition argues that the claims of ’918 patent cover a “method or
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`corresponding apparatus for performing data processing or other operations used in
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`the practice, administration, or management of a financial product or service”
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`because the invention of the ’918 patent “is directed to the financial activity of
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`profitably awarding prizes to game players.” See Petition at 8. But the claims are
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`not directed to the practice, administration or management of any financial
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`products or services. Without any analysis and using only conclusory statements,
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`4
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`

`
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`the petition cites language from the claims of the ’918 patent asserting that the
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`claims “recite that game players pay money to play games,” and blankly states that
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`such actions are “quintessential financial activities.” Petition at 12. While the
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`petition recites the language of claims, the petition completely fails to explain why
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`the claims cover “financial activities.”
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`
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`The petition next fails to show that the claimed subject matter is not a
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`technological invention and relies solely on conclusory statements and attorney
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`argument. The petition asserts, without any support in evidence, that elements of
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`the claims of the ’918 patent were well known and completely ignores claim
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`elements that specifically differentiate over the state of the art and that specifically
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`provide a technical solution to solve a technical problem. As initially determined
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`in the original prosecution, and confirmed in reexamination, the ’918 patent recites
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`a technological feature that is novel and unobvious over the prior art and solves a
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`technical problem using a technical solution. There are two different sets of claims
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`in the ’918 patent. One set, including independent claims 1, 15, 34, 38, 39, 45, 47
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`and 59, is directed to combinations of detailed steps for implementing a
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`customizable prize redemption system using specific algorithms on a gaming
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`apparatus. The other set of claims are means-plus-function claims, which include
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`independent claims 21 and 73 and require a specific special-purpose computer.
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`5
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`

`
`The petition’s sole claim of unpatentability, that the ’918 patent is directed
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`
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`toward patent ineligible subject matter under § 101, fails to properly apply the
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`Alice test and alleges an overbroad “abstract idea” of “profitably awarding prizes
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`to game players.” The petition continues to conflate novelty with patent
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`ineligibility in an attempt to misdirect the Board. The petition further misapplies
`
`the second step of the Alice test and fails to demonstrate that it is more likely than
`
`not that the ’918 patent does not contain an inventive step. Further, the Bertram
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`declaration on which the petition relies is more argument than evidence and is not
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`entitled to weight under 37 CFR 42.65 for failing to set forth the underlying facts
`
`or data on which Mr. Bertram’s conclusory opinions are based and for being more
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`argument than expert testimony.
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`
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`The petition does not carry its burden of demonstrating that the ’918 patent
`
`is eligible for CBM patent review and that it is more likely than not that any of the
`
`challenged claims of the patent recite patent-ineligible subject matter under 35
`
`U.S.C. § 101. The Board should deny institution of CBM review.
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`III. OVERVIEW OF U.S. PATENT NO. 5,816,918
`
`
`
`The claims of the ’918 patent are directed to a method for providing a prize
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`redemption system for a game apparatus where the system is customizable to the
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`game operator. Claim 1 recites a method of receiving a prize list on the game
`
`apparatus including the names of prizes available to be won by playing the
`
`6
`
`

`
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`apparatus. The apparatus receives money from players to use, e.g. play, the
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`apparatus. The method further includes receiving a cost of each prize. The
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`gaming apparatus determines a prize cost in terms of prize credits taking into
`
`account a desired profitability. A player may exchange prize credits equal to the
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`prize cost for a selected prize.
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`Other claims recite different embodiments and some are directed to an
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`apparatus (See claim 21). The current claims were initially allowed by the USPTO
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`and many withstood a reexamination challenge asserting invalidity under §102 and
`
`§103 without amendment.
`
`The claims of the ’918 patent introduce new methods and systems that did
`
`not exist in any form prior to the invention. As summarized in the SUMMARY
`
`section of the ’918 patent, the invention generally pertains to “a prize redemption
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`system and method for use with one or more game apparatuses …[where]
`
`[p]layers may win ‘prize credits’ by playing the game apparatus, and then may
`
`select a prize from a prize menu offered on the game apparatus.” Exhibit 1001 at
`
`2:62-65. In some claimed embodiments, the invention generally provides that
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`“prize information is automatically determined for each of the prizes, the prize
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`information being determined in view of a desired profitability of the game
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`apparatus.” Id. at 4:1-4.
`
`7
`
`

`
`The claims of the ’918 patent are directed to a specific technological
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`
`
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`invention that solves a technical problem using a technical solution. The claimed
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`invention utilizes specifically-recited, unconventional components combined in a
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`novel way to allow a gaming operator to establish a particular level of profitability
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`and operate an incentive-based gaming system without the time or knowledge
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`regarding game payouts and prize redemption that would otherwise be required.
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`Particularly, the operator enters certain information to the system of the claimed
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`invention implemented on a game apparatus, such as the actual cost of the prizes
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`and a desired level of profitability or payout percentage, id. at 3:1-3, and the
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`claimed prize redemption system executes specific algorithms designed to adjust
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`the prize cost for each prize, which is the value a player must attain in order to
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`redeem a prize. Id., e.g., at 2:62-3:7 and 36:22-37:45. The claimed prize
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`redemption system can continually adjust the prize cost in response to real-world
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`activities, such as actual cost increases of the prizes or the amount of credits won
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`by the players. Id. at 25:24-30. In this manner, the system of the ’918 patent
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`maintains a precise level of profitability by determining prize costs despite a large
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`number of variables which would otherwise affect profitability. See, e.g., id. at
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`1:54-2:4. The invention thus solves a problem identified by the inventors that was
`
`unsolved prior to the introduction of computers to the gaming industry.
`
`8
`
`

`
`Some claims are means-plus-function claims and necessarily recite an
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`CBM2015-00155
`U.S. Patent No. 5,816,918
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`
`
`
`inventive special-purpose computer that executes one or more specific algorithms
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`set forth in the specification of the ’918 patent that are designed to maintain a
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`precise level of profitability for a gaming operator. Id.at 36:21-38:43. These
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`algorithms take into account a number of variables, such as actual prize costs,
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`profitability parameters, and amount of prize credits won at each game, and
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`precisely adjusts the prize cost. Id. The prize cost is, for example, the amount of
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`prize credits that a player needs to redeem a particular prize. Id. at 36:22-23.
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`Moreover, the special-purpose computer dynamically updates the prize cost in
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`response to real-world activities, such as increased prize credit payouts on a
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`particular gaming machine through increasing skill of the players. Id. at 36:56-
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`37:8. The claimed special-purpose computer provides novel, non-conventional,
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`and technical components combined in a novel manner that provide the primary
`
`technical solution to the technical problem covered by the independent claims.
`
`The inventive special-purpose computer provides the ability for owners of certain
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`establishments, such as bars and restaurants, to operate an incentive-based gaming
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`and redemption system with little know-how or time required. Further, the
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`inventive special-purpose computer provides gaming operators with the ability to
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`maintain a vast array of potential prizes and make a precise, predetermined profit
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`without having to worry about certain variables, such as the number of credits won
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`by players. See, e.g., id. at 36:21-37:48.
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`
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`The operator provides the actual cost of a prize and the desired profitability
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`in terms of a global payout percentage. Id. at 36:22-24. The inventive system first
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`divides the actual cost of the prize (“A”) by the global payout percentage expressed
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`as a decimal (“P”), which results in “the amount of revenue required to achieve the
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`desired payout percentage.” Id. at 36:29-30. This can be expressed as R=A/P. Id.
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`at 36:27. Second, “the average number of prize credits or tickets T that are known
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`to be awarded per game is determined (average ticket payout)” and “continually
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`readjusted by monitoring each game played” to “obtain a precise prize credit
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`payout average.” Id. at 36:36-38, 36:56-62. Third, “[o]nce the average number of
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`prize credits T awarded per game is known, this value can be converted to a value
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`V using the cost per game C, where V=T/C.” Id. at 37:21-25. V thus represents the
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`amount of prize credits awarded per dollar of revenue. Fourth, V is then multiplied
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`by the previously-found value R to achieve the prize cost (“PC”), represented as
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`PC=R*V. Id. at 37:30-34.
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`
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`Thus, the inventive system executes specific algorithms on game
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`apparatuses to calculate a prize cost for a prize precisely, yielding a technical
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`solution to the technical problem in the prior art. This prize cost determination is
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`done for every prize, ensuring that a precise level of profitability is maintained
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`regardless of the prize selection or number of offered games. The algorithms are
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`adaptable to a tournament setting as well.
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`
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`The claims of the ’918 patent, twice confirmed by the USPTO as patentable,
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`require this non-conventional, technical solution and cover patentable subject
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`matter. Claim 21, for example, is an apparatus claim reciting a “means for
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`providing a prize selection menu on said display device, said prize selection menu
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`presenting a plurality of prizes, each of said prizes having a prize credit cost which
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`has been determined in accordance with a desired payout value of an operator of
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`said game apparatus.” Other independent claims recite variations of this. Reading
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`this limitation in light of the specification, it becomes clear that a special purpose
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`computer, utilizing a processor specially programmed to execute the above-
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`described price-determining algorithm, performs this step.
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`
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`In light of the claims as explained, it is clear that the challenged claims are
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`not directed to or preempt the overbroad alleged abstract idea of “profitably
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`awarding prizes to game players.” See Petition at 30.
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`IV. CLAIM TERMS REQUIRING CONSTRUCTION
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`
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`The Petitioner discusses claim interpretation on pages 19-23 of the petition.
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`On page 23 of the petition, the Petitioner alleges the level of ordinary skill in the
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`art, claiming that a person with such skill would have “a Bachelor of Science
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`degree in science or engineering, and at least two years of experience in the
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`gaming industry, or equivalent training or experience.” Petitioner cites to the
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`U.S. Patent No. 5,816,918
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`Bertram Declaration for its claim, but Mr. Bertram provides no factual basis for his
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`opinions, which are thus entitled to little or no weight under 37 CFR 42.65.
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`Exhibit 1002 at ¶8. Nonetheless, solely for the purpose of determining whether the
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`Board should institute a CBM based on the petition as filed in this proceeding,
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`Patent Owner agrees that the terms of the challenged claims should receive their
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`“broadest reasonable construction in light of the specification.” 37 CFR 42.300(b).
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`Patent Owner discusses the construction of the relevant claim terms below.
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`
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`A.
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`“game apparatus”
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`Claim Term (Claims 1, 3, 15-18, 20-
`
`Broadest Reasonable Construction
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`22, 24, 25, 28, 32-34, 39, 73-75, 77)
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`“game apparatus”
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`the component of the gaming system on
`which a player and game operator may
`interact with the system.
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`
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`The specification notes that a game apparatus contains one or more gaming
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`architectures “to provide game play functions” and “access [to] other game units
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`and servers through networks.” Exhibit 1001 at 5:52-54. The game apparatus is
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`the foundational structure on which inventive components and methods are
`
`implemented. Patent Owner notes that, while the term “game apparatus,” alone
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`and divorced from any context, may appear generic and conventional, nothing in
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`the specification expressly limits the game apparatus to being composed of generic
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`or conventional components. Indeed, as the claims illustrate, inventive
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`components that execute specific algorithms can be – and are – implemented on
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`top of this foundational piece.
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`
`
`B.
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`“receiving means for receiving monetary input from said player”
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`Claim Term (Claim 21)
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`Broadest Reasonable Construction
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`“receiving means for receiving
`monetary input”
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`This is a means-plus-function claim
`limitation under 35 U.S.C. §112 ¶6.
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`The claimed function is: receiving
`monetary input.
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`The associated structure from the patent
`specification is: a monetary input
`device, such as currency deposit slot, a
`debit or credit card reader, cybercash
`or electronic currency acceptor, player
`account identifier, or equivalent.
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`
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`Patent Owner generally agrees with Petitioner that the claim term refers to a
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`“monetary input device.” See generally id. at 6:34-63. Patent Owner contends that
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`the function of receiving monetary input is facially