The Software IP Report

A Rare Case? Motion for Judgment on the Pleadings Granted Based on Unpatentable Subject Matter

Patent claims directed to “the offer and sale of items to players in the course of gaming” recited an “unpatentable abstract idea,” held the court in Gametek LLC v. Zynga, Inc., No. CV 13-2546 RS (N.D. Cal. April 25, 2014).  This holding came in response to defendants’ motions under FRCP 12 for judgment on the pleadings.  The court explained that “despite the presumption that every issued patent is valid, this appears to be the rare case in which the defendants have met their burden at the pleadings stage to show by clear and convincing evidence that [U.S. Patent No. 7,076,445 ] claims an unpatentable abstract idea.”

Claim 1 of the ‘445 patent was representative; its preamble recited “[a] method of managing the operation of a game which includes a game environment, and is programmed to control a gaming action for at least one of a plurality of users, said managing method using a programmed computer to effect the following steps.”  The recited steps all related to tracking user activity, managing a user account, and conducting a transaction for a user to purchase items in the game. The dependent claims simply spelled out various details of video gaming, such as providing background images, manging player skill levels, etc.

Before even beginning its legal analysis, the court discounted the recitation of a “programmed computer:”

Although the claim preamble requires “us[e of] a programmed computer to effect” the claimed method steps, the specification suggests the method may be performed with or without a computer, and provides as non-computer illustrations the process by which a municipality might provide a system for certain drivers to pay for the right to drive above the speed limit or the process by which a golfer might purchase the advantage of additional golf strokes during a match. Neither the claim nor the specification provides any details on the “programmed computer” or how implementation of the method steps by means of a computer would differ substantively from non-computer practice.

Turning to its legal analysis, the court quoted the Federal Circuit’s statement in  Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1338 (Fed. Cir. 2013), that dismissal “at the pleading stage for lack of patentable subject matter” would be a rare event, given the presumption of a patent claim’s validity absent clear and convincing evidence to the contrary.  In this case, using the “abstract idea” test set forth in Bilski v. Kappos, 130 S. Ct. 3218, 3225, 177 L. Ed. 2d 792 (2010), there was such evidence.

The defendants argued that “the ‘445 patent embodies the abstract idea of allowing players to purchase additional objects during a game.”  The court thought this was a “fair reading,” and noted that the plaintiff “offer[ed] no meaningful alternative.”

The claimed abstract idea was not limited by a meaningful inventive concept.  Although the plaintiff required that “twelve specific steps” were required by its claim, these steps were “nothing more than a teased-out version of the basic steps of any commercial transaction.”    The recited steps “when taken as a whole” were “nothing more than the general practice necessary to execute the abstract idea” of conducting a transaction to sell game items.  And, as the court telegraphed from the beginning, the machine-or-transformation test could not save the asserted patent claims.  Even if ‘445 patent claims recited aspects of a computer video game, the patent “reveals nothing as to the specification of the computer or how it is part of the solution rather than merely the environment in which the abstract idea is practiced.”

A take-away: one might question how “rare” this case is, or perhaps how rare such cases will become.  Given present trends, and certain outliers notwithstanding, and regardless of the Supreme Court’s upcoming decision reviewing the Federal Circuit’s en banc muddle in CLS Bank v. Alice Corp., perhaps what this case illustrates is that any patent claims embodying a method of conducting a business transaction may not withstand scrutiny for patent-eligibility under 35 U.S.C. § 101.