March 10, 2016

Know When to Fold ‘Em — Games are Unpatentable Abstract Ideas

In In re Smith, [2015-1664] (March 10, 2016) the Federal Circuit affirmed the rejection of claims in Smiths’ application for claiming patent-ineligible subject matter under 35 U.S.C. § 101, because the claims cover only the abstract idea of rules for playing a wagering game and use conventional steps of shuffling and dealing a standard deck of cards.

The Federal Circuit applied the now-familiar two-step test introduced in Mayo, and further explained in Alice, first determining whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea, and second examining the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.  On the first step, the Federal Circuit concluded that the claims, directed to rules for conducting a wagering game, compare to other fundamental economic practices found abstract by the Supreme Court.  The Federal Circuit agreed with the Board that a wagering game is, effectively, a method of exchanging and resolving financial obligations based on probabilities created during the distribution of the cards, and the Supreme Court has held that a method of exchanging financial obligations was drawn to an abstract idea.  The Federal Circuit also noted its own cases have denied patentability of similar concepts as being directed towards ineligible subject matter.

As to the second step, the Federal Circuit noted that abstract ideas, including a set of rules for a game, may be patent eligible if they contain an “‘inventive concept’ sufficient to transform the claimed abstract idea into a patent-eligible application.  However, appending purely conventional steps to an abstract idea does not supply a sufficiently inventive concept.  The Federal Circuit rejected that shuffling and dealing physical playing cards were not sufficient to bring the claims within patent eligible territory.