What’s in a Claim? • gaming

Many patent cases turn on the words of the claims, and the Federal Circuit spends a lot of time interpreting those words. Last week was no exception. Here’s the Federal Circuit’s latest take on claim construction and drafting.

Claim Construction Is a Gamble… Literally

IGT v. Bally Gaming International, Inc., Nos. 2010-1364, -1365 (Fed. Cir. Oct. 6, 2011) (Judges Newman, Lourie, and Moore)

Federal Circuit opinions have all sorts of useful information, and they’re not just about patent law. Last week, the court looked at patents covering slot machines. You might be able to glean some tips to increase your chances of hitting the jackpot—from somewhere besides this guy.

IGT owns two patents that involve a computerized slot machine network. These patents claim methods for payout bonuses or rewards over and above the “normal” payout scheme. A computerized controller monitors the slot machines. The computer program gives a payment “command” when a certain condition occurs. (The patents call this occurrence a “predetermined event.”) The goal of these promotions is to encourage people to play slots during slower times.

Bally offers two promotions, Power Rewards and Power Winners, that IGT accused of infringement. Power Rewards, a.k.a, the “Play X, Get Y” promotion, gives bonus payouts based on how much money a player spends at a particular machine. Multiple people can win during the promotion time frame.

With the Power Winners promotion, the system decides whether it will give a bonus and then randomly picks one player to win the bonus. Power Winners has two ways of paying players. One way, called ACSC, gives the player a “Promo” code that she activates at the machine. The other, SDS/CMP, just tells the player that she won the promotion, and she gets paid through the casino’s accounting system.

On summary judgment, the district court found that the Power Rewards promotion and the ACSC version of the Power Winners promotion infringe IGT’s patents. The court also granted summary judgment of noninfringement for the SMS/CMP version of Power Winners.

The crux of the district court’s ruling was its construction of six claim terms, and that’s what the Federal Circuit dealt with. The court adopted the district court’s constructions for almost all terms. Here are a few particularly interesting points from its claim construction analysis.

  • “One.” Bally argued that “one” should mean “one and only one” in reference to how many bonus commands are sent out. This construction would mean that the Power Rewards promotion, which allows multiple winners, wouldn’t infringe. Bally relied on another casino games case that involved IGT, WMS Gaming, for support. The Federal Circuit said WMS Gaming was different, and reminded Bally that claims have to be construed in context.
  • “Predetermined Event.” Bally argued that the random selection of a winner couldn’t be a “predetermined event” because, well, “random” and “predetermined” seem to cancel each other out. The court disagreed. It said, in the context of the patent, that “predetermined event” simply requires that some established condition is met: “The predetermined event can include random events (so long as they are predetermined).” (See page 14.) Got that?
  • “Command.” The district court construed “command” in these patents to require “the gaming device [to] pay out extra money it would not have paid in its previous configuration.” The Federal Circuit modified the district court’s construction, but concluded that the revised construction didn’t change the outcome in this case.

If you’re thinking about playing claim construction roulette, take a look at the IGT opinion.

Looking for Studs in All the Wrong Places

Zircon Corp. v. Stanley Black & Decker, Inc., No. 2010-1405 (Fed. Cir. Oct. 5, 2011) (Judges Lourie, Mayer, and O’Malley) (nonprecedential)

Schoolhouse Rock! gave us Multiplication Rock, but Zircon could have used some songs about subtraction versus division. And if someone were to write a song about how imprecise claim drafting can have big consequences, it would be useful too.

Zircon owns a patent for a stud finder, which is used to locate studs (of the metal frame construction, not dating, variety) behind walls. Stud finders work by measuring a change in capacitance—the ability to store an electrical charge—behind a wall. Basically, a stud stores more electrical charge than regular wall board, so the capacitance for a part of a wall that covers a stud is higher than a part that doesn’t. Stud finders measure this change through either the subtraction method or the division method. The subtraction method compares two numbers and gives the difference as an absolute value, while the division method gives a ratio.

Zircon sued Stanley for patent infringement because of Stanley’s stud finder, which uses only the subtraction method. The central dispute was over the claim construction of “ratio.” Zircon argued that the term “ratio” should be construed to cover both the subtraction and division methods.

The Federal Circuit disagreed. Looking at the specification, the plain meaning, and the prosecution history, the court said that Zircon’s patent describes both methods in its specification. During prosecution, though, Zircon modified its claims to cover “computing a ratio.” None of the claims use the term “comparing,” the term that the specification uses when discussing the subtraction method. So, according to the court, the patent claims only cover the division method.

The Federal Circuit didn’t stop there. The court applied the “disclosure-dedication rule,” which is basically the “loose lips sink ships” patent doctrine. If a patent discloses particular subject matter but doesn’t claim it, then the unclaimed subject matter is “dedicated” to the public—that is, anyone can use it without violating the patent. The court concluded that Zircon talked about the subtraction method in the specification, but the claims didn’t cover that method. So, the subtraction method is available for Stanley to use in its stud finder.

Here’s the electrifying Zircon case.

Out, Damn’d Spot! Out I Say!

In re Lawnie H. Taylor, No. 2011-1275 (Fed. Cir. Oct. 6, 2011) (Judges Linn, Prost, and Reyna) (nonprecedential) (per curiam)

Patent prosecution is a complicated process, and sometimes, in the back and forth between applicant and examiner, explanations get a little messy. Unfortunately, Taylor’s applied-for stain removal method couldn’t clean up his patent prosecution.

During prosecution, the patent examiner rejected all the claims in Taylor’s application as obvious or anticipated. The examiner also rejected some claims under 35 U.S.C. § 112, ¶2, the section of the statute that deals with claim drafting. Taylor appealed to the Board of Patent Appeals and Interferences (BPAI), who reversed the claim drafting rejection but kept the anticipation and obviousness rejections.

When Taylor appealed to the Federal Circuit, though, his main argument responded to the claim drafting rejection, which the BPAI had already reversed. Taylor didn’t explain why his application is not anticipated or non-obvious. The court affirmed the BPAI’s conclusion that Taylor’s application is not patentable.

See if you think the court missed a spot in the In re Taylor opinion.