Planet Bingo, LLC v. VKGS LLC (Fed. Cir. 2014)

By Michael Borella --

Planet Bingo is the assignee of U.S. Patent Nos. 6,398,646 and 6,656,045, both directed to computer-implemented methods and systems for managing bingo games.  Planet Bingo filed an infringement action in the United States District Court for the Western District of Michigan, alleging that VKGS infringed both patents.  The District Court granted VKGS's motion for summary judgment of non-infringement, on the grounds that the asserted claims fail to meet the patentable subject matter requirements of 35 U.S.C. § 101.

Applying the plurality holding from the Federal Circuit's en banc decision in CLS Bank v. Alice Corp., the District Court found that the use of a computer in the method claims "adds nothing more than the ability to manage Bingo more efficiently," and that "the limitations of the system claims are the same as the limitations of the method claims that failed to result in an inventive concept."  The District Court further determined that the system claims employ a computer "only for its most basic functions," including "storing numbers, assigning identifiers, allowing for basic inputs and outputs, printing of a receipt, displaying of numbers, and/or matching for verification."

Planet Bingo appealed.  The Federal Circuit panel of Judges Taranto, Bryson, and Hughes heard the case and affirmed.

An exemplary claim of the '646 patent recites:

1.  A system for managing a game of Bingo which comprises:
    (a) a computer with a central processing unit (CPU) and with a memory and with a printer connected to the CPU;
    (b) an input and output terminal connected to the CPU and memory of the computer; and
    (c) a program in the computer enabling:
        (i) input of at least two sets of Bingo numbers which are preselected by a player to be played in at least one selected game of Bingo in a future period of time;
        (ii) storage of the sets of Bingo numbers which are preselected by the player as a group in the memory of the computer;
        (iii) assignment by the computer of a player identifier unique to the player for the group having the sets of Bingo numbers which are preselected by the player wherein the player identifier is assigned to the group for multiple sessions of Bingo;
        (iv) retrieval of the group using the player identifier;
        (v) selection from the group by the player of at least one of the sets of Bingo numbers preselected by the player and stored in the memory of the computer as the group for play in a selected game of Bingo in a specific session of Bingo wherein a number of sets of Bingo numbers selected for play in the selected game of Bingo is less than a total number of sets of Bingo numbers in the group;
        (vi) addition by the computer of a control number for each set of Bingo numbers selected for play in the selected game of Bingo;
        (vii) output of a receipt with the control number, the set of Bingo numbers which is preselected and selected by the player, a price for the set of Bingo numbers which is preselected, a date of the game of Bingo and optionally a computer identification number; and
        (viii) output for verification of a winning set of Bingo numbers by means of the control number which is input into the computer by a manager of the game of Bingo.

Writing for a unanimous panel, Judge Hughes applied the two prong test from the recent Supreme Court Alice Corp. v. CLS Bank opinion to determine the patent-eligibility of the claims.  First, he found that the claims were directed to the abstract idea of "managing a game of Bingo."  In supporting this point, Judge Hughes noted that Planet Bingo's invention was similar to the methods of organizing human activity that were found to be abstract ideas in CLS Bank as well as Bilski v. Kappos.

With respect to the second prong of the test, Judge Hughes noted that the claims require physical components including "a computer with a central processing unit," "a memory," "an input and output terminal," "a printer," and so on.  However, one of the outcomes of CLS Bank is that implementing an abstract idea on generic computer hardware "cannot impart patent-eligibility."  Consequently, Judge Hughes found that the claims lacked an inventive concept that would transform them into a patent-eligible application of the incorporated abstract idea.

Given the Supreme Court's patent-eligibility test in CLS Bank, as well as the nature of Planet Bingo's claim language, this conclusion is not surprising.  Unfortunately, the panel doesn't provide any further insight into the nature of an "abstract idea" or an "inventive concept."

Nonetheless, in an interesting side-issue, Judge Hughes wrote that "[t]he district court correctly concluded that managing the game of bingo consists solely of mental steps which can be carried out by a human using pen and paper."  Thus, like the claims in Gottschalk v. Benson, the steps could be performed by "existing computers long in use" as well as mentally.

Planet Bingo argued that "in real world use, literally thousands, if not millions of preselected Bingo numbers are handled by the claimed computer program," thus rendering the invention impossible to be carried out manually.  However, as pointed out by Judge Hughes, the claims do not require this volume of transactions.  Instead, the claims require at most "two sets of bingo numbers" and "a player."  He wrote "[w]e need not, and do not, address whether a claimed invention requiring many transactions might tip the scales of patent eligibility, as the claims fall far short of capturing an invention that necessarily handles thousands, if not millions of bingo numbers or players."

So, the Federal Circuit appears to be leaving open an avenue of establishing the patent-eligibility of computer-implemented claims directed to an abstract idea -- so long as those claims recite a volume of transactions or processing that would be impossible or impractical for a human to perform mentally or on paper.  But how would one claim such an invention?  Merely adding a limitation along the lines of, e.g., "wherein at least 100,000 transactions are processed" might not be enough.  In addition to such language, the patentee would likely have to explain in the patent's specification what types of results are possible to obtain using at least 100,000 transactions that might not be obtainable without computer implementation.  Or, that these results can be obtained in a time frame that is required from a user experience point of view (e.g., the 5 or fewer seconds that a web page takes to load), but cannot be performed manually in anywhere near that time frame.  In another possible angle, the patentee could potentially establish, preferably in claim language, that the computer-implemented invention has an accuracy that is superior to any known manual or automated technique for solving the same problem, and that this accuracy allows the invention to be applied in new ways.

As far as I know, these types of arguments have never been addressed by the Federal Circuit.  Given Judge Hughes' treatment of this issue, however, it may just be a matter of time before such an issue is brought before the Court.

Planet Bingo, LLC v. VKGS LLC (Fed. Cir. 2014)
Nonprecedential disposition
Panel: Circuit Judges Taranto, Bryson, and Hughes
Opinion by Circuit Judge Hughes

Comments

[EG]

Michael,

Cases like these show why the current patent-eligibility standard ("inventive concept") concocted by Our Judicial Mount Olympus in Alice Corp. has hopelessly and nonsensically comingled Sections 101, 102 and 103.

[Mike Borella]

True, but at this point I think the debate needs to shift to how we prosecute applications and conduct litigation in view of CLS Bank being a reality. Unfortunately, there are more questions than answers.

[Skeptical]

Mike, much as I disagreed (respectfully) with Dr. Noonan, the time is now to draw the line in the sand and rebuke the Court for its overstepping and writing (poorly - as in impermissibly vague) of patent law.

Remember - ANY adjustment you make now in light of the decisions can easily be wiped away by the Court, as they have shown a visceral disdain for scriviners fully complying with the words of Congress, and yet - in the Court's eyes - merely trying to get around the Court's own implicit - and policy-driven - writings. You very much risk a massive waste of your client's funds REacting now (in any manner), writing and prosecuting applications that at some distant future point can be simply negated by a Court that has the power to use words that it refuses to define.

[EG]

Mike,

I hear you. But as you admit in your response to my comment, how do you counsel clients rationally about a decision that "has more questions than answers"? The problem is Our Judicial Mount Olympus won't adhere to what the patent statutes actually say. Where are these so-called "exceptions" described in the patent statutes? Answer: they're not which means Our Judicial Mount Olympus is abrogating its responsibility to interpret the law as Congress has enacted it.

Worse yet, they keep hurling "thunderbolts" at the Federal Circuit that create a chaotic mess, then leave it to the Federal Circuit to unravel this mess that they, the Royal Nine, created. How would you like the Federal Circuit telling us, like the Alice Corp decision did, that "it's not our job to define what an "abstract idea," it's up to you to figure it out with whatever 'crystal ball' you've got." commingle the patent statutes with

No one is above the law and that includes Our Judicial Mount Olympus, whether they like it or not.

[Mike Borella]

I'm not trying to say that the Court is right here - I think it's munging of 101 and 103, as well as the vagueness of the Mayo test, are a mess.

However, we do need to advise clients, and there is advice to be given, especially about how to write claims and specifications, as well as manage portfolios, in a post-CLS-Bank world.

[Skeptical]

Mike,

I agree with you to a point and sharply disagree with to another.

Yes, clients need advice and we need to give it - agreed.

No, what that advice is - is not ascertainable right now. Certainly not with any certainty.

Yes, we need to "give it our best shot," because - in part - as Dr. Noonan asked, what else can we do? But giving it our best shot is far from what we can - and should be doing. It may be a part of what we are doing, but it cannot and it better not be the sum total of what we are doing.

At a minimum, we need to be advising clients that no matter how we apply our scrivining talents, the Supreme Court can years from now wipe out all value without explaining any details or providing any "correct" way of doing things. Our clients need to understand that ALL bets are off when NO guidance is truly available.

A more progressive step is to enjoin the battle and try to get Congress to act like it did in 1952. This anti-patent Supreme Court is not the first time in our history that the Supreme Court has been anti-patent.

Congress does have the capability of limiting Supreme Court review. This perhaps is the best path forward.

Unfortunately, those in power in Congress have not shown interest in reclaiming what is their power per the constitution. Will that change in the short term? Alas, I remain...

[EG]

"However, we do need to advise clients, and there is advice to be given, especially about how to write claims and specifications, as well as manage portfolios, in a post-CLS-Bank world."

Mike,

How, pray tell, do we "advise clients" (and "what advice [is there] to be given" in view of this utterly rudderless and subjective standard for patent-eligibility when no one (including the Royal Nine) will define for us "mere mortals" what an "abstract idea" is or give us an example of that "something more" (other a vague reference to Diehr)? And now we've got another of these nonsensical Alice-style decisions (BuySafe v. Google) that came out yesterday, now by a 2-judge panel, and again authored by Taranto who, as far as I can tell, doesn't know squat about patent law?

I'm to the point of recommending to clients who have data processing/management methods/systems potentially in the "Alice Zone" that they file provisional and wait to see how the Federal Circuit/USPTO further responds to this Alice inanity. Frankly, unless Congress steps in (unlikely in the foreseeable future) the rectify this mess created by Our Judicial Mount Olympus, as well as chastising the Royal Nine for overreaching by "making law" (that's what the Royal Nine has done), instead of interpreting the express language of the patent statutes (as enacted by Congress), the patent-eligibility of data processing/management methods/systems will remain a quagmire

[Mike Borella]

EG,

Until Congress steps in, if they step in, the reality is that claimed data processing methods are going to have to have enough supporting evidence that they provide an improvement to a technical (non-financial) process. For instance, a set of results that demonstrate that the claimed method provides better accuracy with the same processing requirements, or the same accuracy with less processing requirements, than the prior art.

I'm not saying that this will do the trick in all cases, but if the words of the Court are going to be followed, it should.

At the rate that patents are falling under the Alice test these days it may be a matter for time before the industry begins lobbying Congress for a fix.

[EG]

"[T]he reality is that claimed data processing methods are going to have to have enough supporting evidence that they provide an improvement."

Mike,

I hear you (sigh). The problem is that "improvement" relates to patentability under 35 USC 103, not patent-eligibility under 35 USC 101. Also, what your suggesting is a "technical art" standard for patent-eligibility under 35 USC 101 which is required, for example, in Europe, but up to now, has not been the requirement for patent-eligibility in U.S. Also, Congress has already recently stated which so-called "business methods" (i.e., tax avoidance schemes) aren't patent-eligible under 35 USC 101. Why can't Our Judicial Mount Olympus (for once) acknowledge when Congress has spoken explicitly on the patent-eligibility issue?

[EG]

Mike,

As Harold Wegner points out regarding the more recent BuySafe v. Google case, some members of the Federal Circuit resort to "myths" (not facts) in supporting these patent-eligibility decisions under 35 USC 101, for example, patents as inhibiting further discovery: "The panel quotes with approval recent Supreme Court mythology that 'patent law not inhibit further discovery….' by granting patents to basic concepts. (emphasis added). The idea that patents block research is contrary to two centuries of case law dating back to Joseph Story: 'There is a fundamental right of the public to experiment on a patented invention.'"

This whole "mythology" about "patents inhibiting future discovery" that the Royal Nine, as well "some members of the Federal Circuit" perpetuate (without any citing any factual record to support that "mythology") reminds me of a quote by Judge Sporklin (D.C. District Court) in U.S. v. Microsoft where he ruled that a consent decree between the FTC and Microsoft in an antitrust case was "not in the public interest" under the Tunney Act based on an insufficient factual record to support it. Sporklin wryly noted that Tunney Act courts "are not mushrooms to be placed in a dark corner and sprinkled with fertilizer." "Fertilizer" was an obvious reference to manure. Similarly, I and others members of the patent law bar don't enjoy (or respect) being treated by the Royal Nine, as well as certain members of the Federal Circuit as "mushrooms to be placed in a dark corner to be sprinkled with [manure]."