Another Gaming Patent Struck Down as IneligibleBot M8 LLC, a patent assertion entity, was unsuccessful in its effort to have the Federal Circuit reverse the lower court’s invalidity finding related to one of six different patents asserted against Sony in Northern District of California. In fact, the Federal Circuit was so unpersuaded by Bot M8’s arguments that it devoted less than a page of the 25-page opinion to this portion of the appeal. That being said, the little that was written is yet another reminder to draft and prosecute software/gaming patent applications with patent eligibility attacks in mind.

Since the court found “no need to discuss [the district court’s § 101] analysis in any detail,” and instead found claim 1 of U.S. Patent No. 7,338,363 (“the ’363 patent”) ineligible under § 101 for the reasons explained by the district court, we need to take a look at the lower court’s analysis of the purported improved gaming machine to gain insight. A quick background recap: Sony moved for summary judgment of invalidity of claim 1 of the ʼ363 patent under 35 U.S.C. § 101 after the infringement claims in the other four asserted patents were dismissed for failure to state a claim. Sony’s main argument was that claim 1 of the ’363 patent was directed to the abstract idea of “adding numbers (i.e., ‘game results’) in order to generate further numbers (i.e., ‘total result’ and ‘specification value’).”

The lower court found that the ʼ363 patent met step 1 of Alice in that it was directed to the abstract idea and failed step 2 of Alice since the court found no inventive concept. At step 1, the abstract idea was deemed to be “increasing or decreasing the risk-to-reward ratio, or more broadly the difficulty, of a multi-player game based upon previous aggregate results.” The lower court opined that “[a]t the most specific, claim 1 of the ’363 patent doesn’t actually teach how to increase or decrease the difficulty of a slot machine, or any gaming machine for that matter, based on prior results to keep players engaged.” Instead, “a game machine that updates the game conditions based on past results to keep players engaged” is merely a result, not the necessary means or process to achieve that result.

Looking at the claim itself (reproduced below for ease of reference), it might seem that, because it expressly features a gaming machine, it is a sufficiently tangible invention.

1. A first gaming machine for transmitting/receiving data to/from a server, comprising:

a specification value setting device for setting at least one specification value as a control condition for game control;

a transmitting device for transmitting data of a game result to the server;

a gaming machine determining device for determining a second gaming machine operated by a co-player;

a total result data receiving device for receiving from the server data of a total game result achieved by the first gaming machine and the second gaming machine based on the data of the game result transmitted by the transmitting device;

a specification value determining device for determining a specification value based on the data of the total game result received by the total result data receiving device; and

a specification value renewing device for renewing to replace the specification value set by the specification value setting device with the specification value determined by the specification value determining device.

However, step 1 of Alice looks to the focus of the claim and its character as a whole to determine whether a claim recites an abstract idea. Here, the tangible component (i.e., the gaming machine) merely limits the abstract idea to a particular environment. In other words, the focus of the claim was not the machine, but instead the abstract idea of increasing or decreasing the odds or difficulty of a gaming machine based upon the players’ winnings or losses. And, there is nothing in the claim that recites how the conditions of the game change based on the game results.

Moving on to step 2, the court deemed the claim elements to merely describe “generic and functional hardware” to accomplish the abstract duties. More specifically, transmitting data, determining a specification value, and replacing a specification value were considered conventional computer tasks. The court also noted that, while sometimes the order of claim elements can transform an invention into patentable subject matter, there was nothing in the order of the elements in claim 1 of the ʼ363 patent that saved it from the ineligible fate. In short, the court found that “neither the patent specification, patent owner, or patent owner’s experts articulate a technological problem solved by the ’363 patent.”

How could this claim have been written differently to be patent eligible? Perhaps the claim might have included more detail on how the game specification value increases if the players perform well and how the game specification value decreases if the players perform poorly. But, keep in mind, the specification needs to be written in a way that supports the claim language. Here, the written description was also found lacking since it only “partially illuminates the parameters to change, the payout parameters, and the driving variable, the actual prior payout.” The lower court found that the descriptions were vague and qualitative and failed to provide any teaching of threshold values that trigger changed game parameters. And, let’s face it, predicting patent ineligibility attacks is difficult, especially since different jurisdictions (and even judges within the same jurisdictions) interpret § 101 differently. This highlights why careful and creative drafting from the onset and diligence during prosecution are so critical in patent applications related to software and gaming.

On a closing note, even though Bot M8 lost this battle, its war against Sony is not over. In fact, the infringement claims of two other asserted patents were revived by the Federal Circuit in this same opinion. To read more about the Federal Circuit’s view of the lower court’s demands on Bot M8 for sufficiently pleading its infringement allegations, click here.

Stanford’s Method for Inferring Haplotype Phase is Not Patent EligibleStanford University applied for a U.S. patent for statistical methods of predicting haplotype phase. In 2019, the Patent Trial and Appeal Board rejected the application as ineligible subject matter. Last week, a panel of the U.S. Court of Appeals for the Federal Circuit affirmed.

The opinion is interesting for being related to two, often separate fields: software and medicine (specifically genetics and bioinformatics). So, let’s look at what the Federal Circuit said about this computerized method for haplotype estimation.

Haplotype estimation

Gene sequencing is common for determining the genes present in an individual. But standard sequencing techniques cannot always resolve which parent a group of alleles came from — known as haplotype phasing. Stanford’s application describes statistical methods for resolving the haplotype phases for a group of unrelated individuals.

The key statistical model in this technique is a hidden Markov model (HMM). In an HMM, you assume that an observable process is being influenced by something unobservable — “hidden states.” Then, by studying the process, you can learn about the hidden state. In the present case, the observable genotype is assumed to be influenced by the unobservable haplotype. By studying the genotypes of many unrelated individuals, the HMM allows estimation of the individuals’ haplotypes.

The ’982 Application

In U.S. Patent Application No. 13/486,982, Stanford describes a computerized method of estimating (inferring) haplotype phase in a collection of unrelated individuals. The ’982 Application includes two independent claims, of which Claim 1 is representative.

  1. A computerized method for inferring haplotype phase in a collection of unrelated individuals, comprising:

receiving genotype data describing human genotypes for a plurality of individuals and storing the genotype data on a memory of a computer system;

imputing an initial haplotype phase for each individual in the plurality of individuals based on a statistical model and storing the initial haplotype phase for each individual in the plurality of individuals on a computer system comprising a processor a memory [sic];

building a data structure describing a Hidden Markov Model, where the data structure contains:

a set of imputed haplotype phases comprising the imputed initial haplotype phases for each individual in the plurality of individuals;

a set of parameters comprising local recombination rates and mutation rates;

wherein any change to the set of imputed haplotype phases contained within the data structure automatically results in re-computation of the set of parameters comprising local recombination rates and mutation rates contained within the data structure;

repeatedly randomly modifying at least one of the imputed initial haplotype phases in the set of imputed haplotype phases to automatically re-compute a new set of parameters comprising local recombination rates and mutation rates that are stored within the data structure;

automatically replacing an imputed haplotype phase for an individual with a randomly modified haplotype phase within the data structure, when the new set of parameters indicate that the randomly modified haplotype phase is more likely than an existing imputed haplotype phase;

extracting at least one final predicted haplotype phase from the data structure as a phased haplotype for an individual; and

storing the at least one final predicted haplotype phase for the individual on a memory of a computer system.

The novelty of the ’982 Application is in the specific HMM employed. By using imputed haplotypes as the hidden states, Stanford’s method improves the accuracy of haplotype predictions. Importantly, while the claim does attempt to recite hardware limitations, the CAFC noted that “it is hard to imagine a patent claim that recites hardware limitation in more generic terms” than does Claim 1.

Stanford’s computational method of genome analysis fails the Alice test

In applying the first step of the test set forth by the Supreme Court in Alice, the CAFC agreed with the board in that the ’982 Application is directed to “mathematical calculations and statistical modeling.” This is not surprising given the nature of the claims, which even recite specific mathematical formulas. Nor did the recited steps of “receiving, … imputing, … extracting, … and storing” data convert the math into a practical application. According to the Federal Circuit, those steps are too generic and could be implemented with a regular computer.

The CAFC also agreed with the board in that the claims of the ’982 Application do not improve a technological process. In its brief and during oral argument, Stanford leaned heavily on Enfish, arguing that its claims represent an improvement to a technological process in bioinformatics. It based that claim on improvements in accuracy and efficiency of its method over the prior art. The U.S. government argued that any improvement was only to the math itself — an improvement to abstract math is still only abstract math. The court agreed that “[t]he different use of a mathematical calculation, even one that yields different or better results, does not render patent eligible subject matter.”

Finally, as noted above, the court found no inventive concept that could rescue the claims. The steps of manipulating data could be performed on a generic computer. Even considered as an ordered combination, the claimed method is only a “basic tool[] of scientific … work.”

Practice points

First, preserve all arguments so that you can avoid waiver on appeal. At the board, Stanford failed to raise increased efficiency as a technical improvement of its method. When Stanford attempted to argue this point at the CAFC, the court refused to address it since the argument had been waived.

Second, as the U.S. Government said during oral arguments, “narrow math is still math.” No matter how specific the method, it must be more than an abstract idea. The degree of preemption by the ’982 Application would have been narrow to none. But while preemption is a mark of ineligibility, “the absence of complete preemption does not demonstrate patent eligibility.”

Finally — given the complexity and ever-changing nature of the law of subject-matter eligibility under § 101 — involve experienced counsel early. Problems with the initial application can be difficult to correct later, so it is beneficial to frame the application correctly in the first instance. Bradley’s attorneys have significant experience with subject matter eligibility and would be glad to assist with the prosecution of software- and data-related inventions.

“Anything You Say …” -- Terms with Inconsistent Definitions Are IndefiniteLast week, the U.S. Court of Appeals for the Federal Circuit (CAFC) held the term “computer” to be indefinite. That such a familiar term could be indefinite should warn patent practitioners to take care when arguing the scope of a term — even in otherwise unrelated proceedings, possibly separated by years.

Infinity Computer Products, Inc., owns a U.S. patent on using a fax machine as a printer/scanner for a personal computer. As detailed below, one element of an independent claim was “a passive link between the facsimile machine and the computer.” The prosecution history had inconsistent definitions of “passive link,” creating indefiniteness about where the “passive link” begins and the “computer” ends. The CAFC ruled that both terms were therefore indefinite, which invalidated the claim.

Indefinite claims are invalid

Patents — being a kind of sanctioned monopoly — must give the public notice about their precise scope. Conversely, the public needs clear notice of what is still open to them. To this end, Section 112 of the Patent Act requires claims “particularly pointing out and distinctly claiming the subject matter” of the patent. If a patent’s claims fail to do that, we say it is invalid for indefiniteness.

The Supreme Court set the gold standard for indefiniteness in Nautilus v. BioSig: “[A] patent is invalid for indefiniteness if its claims, read in light of … the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” One way to fail is for the specification or the prosecution history to use inconsistent definitions of a claim term. For example, in Teva Pharmaceuticals v. Sandoz, the claim at issue had used the term “molecular weight.” But the specification did not say which of three competing definitions of “molecular weight” was intended. In fact, the prosecution history reflected use of two different and inconsistent definitions. So Teva Pharmaceuticals’ patent was invalid for indefiniteness.

Infinity’s claims are indefinite due to conflicting definitions

But how could a term so well understood as is “computer” be indefinite, even to one skilled in the art of interfacing a fax machine with a PC? The answer lies in its interaction with the other indefinite term: “passive link.” Infinity had conceded that, for the claims to be definite, one skilled in the art must be “reasonably certain where the passive link ends and the computer begins.” Indefiniteness in the term “passive link” infected the term “computer” with the same degree of indefiniteness.

Initial prosecution

The term “passive link” is not in the specification, nor was it in the originally submitted claims. Instead, “passive link” had been added during prosecution to overcome a prior-art reference, “Perkins.” Between the fax machine and the PC, Perkins includes an intervening component, e.g., a fax modem. The intervening component could even be a card located “in the computer.” So, Infinity had limited its claims to a passive link between the fax and PC, distinguishing itself from Perkins as not requiring “any intervening apparatus.” More specifically, Infinity had argued that Perkins’ intervening component “should be regarded as a peripheral device” because it “processes data before it is transmitted to the I/O bus of the computer.” Infinity had argued that its own invention had no such intervening device, because the passive link connects directly to the I/O bus of the computer. Crucially, to make this distinction, Infinity relied on drawings that had been added to the specification in a continuation-in-part. The USPTO issued a patent to Infinity on the basis of this distinction (the “’811 Patent”).

Later reexamination

Later the ’811 Patent was subjected to reexamination. This time, the prior art at issue (“Kenmochi”) preceded Infinity’s continuation-in-part. So, Infinity needed to argue the claims were supported by drawings in the original parent application. But each of those earlier figures depicted, internal to the computer, circuitry similar to the internal card of Perkins — i.e., an “intervening component.” To survive the reexamination, then, Infinity fatally argued that “the use of a modulation procedure within the PC and facsimile machine … does not insert an intervening apparatus.”

Infinity had therefore assigned “passive link” to two different, inconsistent scopes. During initial prosecution, to overcome Perkins, “passive link” excluded devices with an internal-card fax modem between the fax machine and the PC. But during reexamination, to pre-date Kenmochi, the scope “passive link” must include such devices. In the first instance, the passive link ends at the port of the computer. In the second instance, the passive link extends all the way through to the I/O bus.

Litigation with Oki Data

The conflicting definitions proved to be a time bomb for Infinity. In litigating the ’811 Patent against Oki Data Americas in the District of Delaware, Oki Data exploited the latent inconsistency. The District Court held the ’811 Patent invalid for indefiniteness. The CAFC agreed.

In its opinion, the CAFC analogized Infinity’s position to that of Teva Pharmaceuticals. Without a consistent definition of “passive link,” one skilled in the art could not know what scope remained open to the public. There could be no reasonable certainty “where the passive link ends and where the computer begins.” So, the ’811 Patent failed to meet the standard for claims under Section 112.

Infinity as the Miranda of patent law

The lesson here is hard, but clear. Say little, and be consistent. Infinity was in a tough spot: Threading the needle between Perkins and Kenmochi would be difficult for anyone (especially if Infinity was unaware of Kenmochi until the reexamination). However, had the “passive link” amendment been left to speak for itself — rather than arguing in detail about the “intervening component” theory — Infinity would have had more room to construe the term carefully. Importantly, it may have been able to delay giving any definition until the reexamination. In that case, Oki Data could not have complained about inconsistent definitions, because there would only have been one. Patent practitioners are friendly, and we often want to help the USPTO side with our clients. But remember: Anything you say can and will be used against you.