[00:00:00] Speaker 04: Let me please proceed. [00:00:09] Speaker 01: Your honors, my name is Mark Lippman. [00:00:12] Speaker 01: May I please court? [00:00:15] Speaker 01: In this, my 50th year of practicing intellectual property law, this is the first time I've had the honor and the privilege of being here. [00:00:23] Speaker 01: But I'm at this court at a time when there is a pall over patent field [00:00:29] Speaker 01: because of patent eligibility as being imposed by the four Supreme Court cases of Bielski, Mayo, Myriad, and Alice. [00:00:40] Speaker 01: These are having more than just a chilling effect on patentability. [00:00:45] Speaker 01: It's a cryogenic effect that is killing inventive technology, inventive ideas in the field. [00:00:52] Speaker 04: Yes, but even if I agreed with you, which by the way I do, [00:00:57] Speaker 04: I'm bound by those four cases. [00:00:59] Speaker 04: I mean, hey, I wrote dissents in those cases. [00:01:01] Speaker 04: So I'm on record. [00:01:02] Speaker 04: Nobody is confused about what I thought should happen in those cases. [00:01:06] Speaker 01: Yes. [00:01:07] Speaker 04: But I'm bound by them. [00:01:08] Speaker 04: And so I have to faithfully follow them because that is my job. [00:01:12] Speaker 01: I agree. [00:01:12] Speaker 01: And I will give you a route wherein we can stay fully within the bounds of all four cases and come to a conclusion that they're being misapplied in the field of technology specifically represented by these claims. [00:01:27] Speaker 01: The objective of these decisions was a fundamental principle of patent and eligibility for an abstract idea because of fear of monopolization of basic tools of science and technology. [00:01:44] Speaker 04: Instead of the rhetoric, just go to the heart of this. [00:01:46] Speaker 04: Why is this not an abstract idea? [00:01:47] Speaker 04: It's a claim to a game, not the game of blackjack. [00:01:51] Speaker 01: It's not claims to a rule of game. [00:01:56] Speaker 01: It is claims to a method of conducting a wagering game comprising physical steps. [00:02:04] Speaker 01: As previously stated, nothing is abstract about performing actual physical acts on physical material. [00:02:14] Speaker 01: Here, I was very careful in drafting the claims to make sure that these were physical playing cards on which physical steps are very significant [00:02:26] Speaker 01: impact were performed, specifically the first step of randomization. [00:02:31] Speaker 01: It may seem trivial. [00:02:33] Speaker 01: Shuffling the card is more than just a trivial event. [00:02:37] Speaker 01: Two articles they cited. [00:02:39] Speaker 00: Why is that not falling into the idea of conventional activity that doesn't transform an abstract idea? [00:02:47] Speaker 01: It transforms the cards and it puts the abstract idea, if this were an abstract idea, and I'll get to that point, [00:02:55] Speaker 01: into the physical realm. [00:02:58] Speaker 00: It might transform the cards. [00:03:00] Speaker 00: I guess it changed the whole thing. [00:03:02] Speaker 00: But how does it transform the abstract idea of a wagering game or placing wagering with certain steps? [00:03:12] Speaker 01: All right. [00:03:13] Speaker 01: If an abstract idea is something that can be performed by the mind, if I were up here and I'd say, let's play blackjack, you have two cards, I have two cards, [00:03:25] Speaker 01: I have the ace king of spades. [00:03:27] Speaker 01: What do you have? [00:03:28] Speaker 01: You say, well, I know this game. [00:03:29] Speaker 01: I've got the ace king of spades. [00:03:30] Speaker 01: You've invalidated the underlying principle of random events being created by physical objects in the play of the wagering game. [00:03:40] Speaker 01: It is the physical objects that enable the embodiment of the wagering event. [00:03:46] Speaker 04: I guess here's the problem. [00:03:47] Speaker 04: If instead of claiming blackjack using cards, if instead this was simply [00:03:55] Speaker 04: well-known game of Blackjack played on the internet. [00:04:00] Speaker 01: And then you have a generic computer executing software. [00:04:06] Speaker 01: Nothing. [00:04:06] Speaker 01: It is, in effect, I'm not going to argue. [00:04:09] Speaker 03: You have a generic deck of cards. [00:04:11] Speaker 03: I mean, you have it. [00:04:12] Speaker 03: You didn't invent a new deck of cards with different suits, with different numbers, with different things in them. [00:04:19] Speaker 03: You're using a conventional deck of cards, right? [00:04:22] Speaker 01: Definitely. [00:04:22] Speaker 03: It created a new rule for Blackjack. [00:04:25] Speaker 01: is more than a new rule. [00:04:27] Speaker 01: It is a way of using those cards and the values of those cards in a new way. [00:04:33] Speaker 03: It has to be... That's a new rule. [00:04:35] Speaker 03: I mean, I'm sorry, but you can come up with thousands and thousands of games using the standard 52 deck of cards with the four suits. [00:04:43] Speaker 03: You're not inventing a new deck of cards, you're inventing a new way of using those cards to come up with a new game. [00:04:49] Speaker 03: How isn't that a quintessential abstract idea? [00:04:51] Speaker 01: It is not an abstract idea because it requires [00:04:55] Speaker 01: the physical elements of the cards themselves, the values of the cards, the determination of the cards, but the randomization is, in fact, critical in the play of this game. [00:05:08] Speaker 01: When Henry Webb came up here, the decision there was based on the fact that all he said was use cards, use a device, or a table, merely looking for a physical embodiment somewhere they could hang his hat on. [00:05:23] Speaker 01: That did not rise to the level of the actual fact that this is not abstract because the physical cards are required and being required to be treated with specific physical mannerism. [00:05:41] Speaker 01: As I said, it is a physical act and not an abstract act because of the randomization and then the subsetting of those cards in the specific physical positions [00:05:51] Speaker 01: in steps A, B, and C in the claims. [00:05:55] Speaker 00: How do you distinguish planet bingo, then, which did involve at least the idea of bingo cards and bingo numbers? [00:06:04] Speaker 00: How do you distinguish that case? [00:06:06] Speaker 01: Well, with the bingo card, all you do with the bingo card is person putting coin. [00:06:11] Speaker 01: There, he's actually transforming the card based on the physical events, but that's trivial. [00:06:19] Speaker 01: I have to randomize the cards, which is not trivial. [00:06:21] Speaker 03: Can I just be clear? [00:06:22] Speaker 03: When you say randomize the cards, you mean shuffling, right? [00:06:26] Speaker 01: Creating a, yes. [00:06:28] Speaker 01: That is one alternative description for it. [00:06:31] Speaker 03: But how different is shuffling from creating random bingo cards with different numbers in the grid? [00:06:39] Speaker 01: Well, in the play of the bingo, you don't create random bingo cards. [00:06:43] Speaker 01: They're pre-printed. [00:06:44] Speaker 01: You take them. [00:06:45] Speaker 01: You select them, and then you daub them. [00:06:47] Speaker 01: It's the numbers that are generated. [00:06:50] Speaker 03: Or you randomize them before you print them. [00:06:53] Speaker 03: I mean, you don't use the same set of bingo cards every time. [00:06:55] Speaker 03: Everybody gets a new card. [00:06:58] Speaker 01: That may be. [00:06:58] Speaker 01: But in the present event, the randomization is much more critical in this event. [00:07:04] Speaker 01: In the case I cited as an appendix 274 to 276, in Connecticut, [00:07:12] Speaker 01: The casinos would bring pre-randomized sets of cards to the gaming table. [00:07:18] Speaker 01: Those cards would be dealt out and used. [00:07:21] Speaker 01: In one event, the cards were not randomized. [00:07:24] Speaker 01: The first cards out were ace of spades, deuce of spades, three of spades, four of spades. [00:07:28] Speaker 01: Every player at that table knew it was not randomized. [00:07:32] Speaker 01: They knew the outcomes and events. [00:07:35] Speaker 01: They won a million and a half dollars and a single shoe. [00:07:38] Speaker 01: And then the casino, which had control of the cards, went to court. [00:07:42] Speaker 01: and said the fact of the absence of randomization was so significant that it breached the social contract and the legal contract between the player and the casino. [00:07:57] Speaker 01: And the casino won on that because the randomization was such a critical transformation of a set of cards as to breach those events. [00:08:06] Speaker 00: Would you agree that the test requires that not [00:08:11] Speaker 00: that not the cards, but that the abstract idea be transformed, right? [00:08:16] Speaker 00: That's the test in Alice. [00:08:17] Speaker 00: It has to be transformation of the abstract idea, not transformation of cards. [00:08:22] Speaker 01: Well, the abstract idea here is transformed by the presence of the physical cards. [00:08:30] Speaker 01: The patent office implied that if I transformed the individual cards rather than the entire set, it might be patentable. [00:08:41] Speaker 01: But to follow that logic, that would mean I'd have to change the numbers in the cards after they were dealt, which would make the game illegal and absurd. [00:08:50] Speaker 01: It is the transformation of the set of cards that, in fact, is an essential step in this that renders it physical. [00:08:59] Speaker 01: One concept I would like to introduce, which is within the scope of the four cases and also the patent office guidelines, is what I'd like to refer to as proportionality. [00:09:10] Speaker 01: The objective of the four decisions was, as stated, to prevent... Can I ask you this? [00:09:16] Speaker 03: If we agree with you, doesn't that mean that any time somebody comes up with a new card game with new rules, that that's patentable? [00:09:26] Speaker 01: Only if it's novel and unobvious. [00:09:29] Speaker 01: And in this case, the subject matter here was found to be novel. [00:09:34] Speaker 03: I'm just talking about under 101. [00:09:35] Speaker 01: Well, not just any card game, the way in which it's physically performed. [00:09:39] Speaker 01: You have to randomize the cards. [00:09:41] Speaker 03: OK, let's assume that every card game, because I grew up playing card games, you always shuffle the cards before you play almost any card game that I know of. [00:09:48] Speaker 03: So let's set that off the table. [00:09:50] Speaker 03: I don't find anything very useful about this randomization or shuffling. [00:09:54] Speaker 03: If we accept your logic, any time somebody comes up with a novel and non-obvious new game of cards, it's patentable in your view. [00:10:05] Speaker 01: that has been done, yes, and that has been done for many years. [00:10:08] Speaker 01: There are many significant new card games that have been introduced and they'll either fail or succeed. [00:10:16] Speaker 01: But this problem is in applying the standard of avoiding monopolization of basic scientific tools and technology and avoiding impeding the development of science and the arts [00:10:34] Speaker 01: And applying that to a different card game is, one, the use of a thermonuclear device as a mousetrap. [00:10:42] Speaker 01: It'll kill the mice, but it's not going to be socially useful. [00:10:45] Speaker 00: Can I ask you, as you can tell, we're concerned about your argument about the shuffling being transformation. [00:10:52] Speaker 00: Do you have another argument on what is transformation or what could be transformative in the claim? [00:10:57] Speaker 00: And also, you said that you're going to talk about why the claims weren't abstract. [00:11:01] Speaker 01: Yes. [00:11:02] Speaker 01: The transformative part is, as I indicated, if you did this as an abstract idea and played cards this way with mental cards, then you do truly have an abstract idea. [00:11:16] Speaker 01: But the physicality of the cards makes it non-abstract. [00:11:21] Speaker 01: And so far as the transformation is concerned, it is non-abstract because it is physical cards with physical [00:11:30] Speaker 01: identifying features on them that are clearly used and clearly required to be used in the claims. [00:11:38] Speaker 01: It is a physical event with physical materials. [00:11:41] Speaker 01: The only way it's abstract and therefore would be subject to the prohibition would be in the fact that you are just inventing the numbers and everything in your head by creating a false impression of playing cards mentally and then every game would be a tie. [00:12:00] Speaker 01: every game would be a win if you mentally select the right cards. [00:12:06] Speaker 01: The critical issue is the physicality of the system in that critical step of randomization, even though it does transform the abstract idea of the format in which the wager is resolved [00:12:23] Speaker 01: into a physical setting that makes it real. [00:12:27] Speaker 04: You suggested that other card games have been patented. [00:12:31] Speaker 04: Can you give me some examples? [00:12:33] Speaker 04: I mean, I know Monopoly was patented. [00:12:35] Speaker 01: Three-card poker, four-card poker, crazy four-card poker. [00:12:42] Speaker 03: Have they ever been upheld by this court? [00:12:48] Speaker 01: Not by this court, but by this time they're expired. [00:12:51] Speaker 01: There is even a [00:12:53] Speaker 01: group in the Patent Office of Playing Card Games. [00:12:57] Speaker 04: Well... There's an art group? [00:12:59] Speaker 04: A playing card game art group? [00:13:01] Speaker 01: Playing card game art group. [00:13:04] Speaker 04: Do you have to have a technical background? [00:13:07] Speaker 01: 27-11, 27-17 is the art unit group. [00:13:11] Speaker 01: So it's got to be there. [00:13:13] Speaker 01: I will wait on my time for rebuttal. [00:13:16] Speaker 04: Thank you very much. [00:13:21] Speaker 03: I want to hear about this playing card hearing. [00:13:23] Speaker 04: Yeah, me too. [00:13:31] Speaker 02: Thank you, Judge Morame. [00:13:32] Speaker 02: Please, to the court. [00:13:33] Speaker 04: It's been my impression that the PTO has sort of adopted the position that games are not going to, in general, be patent-eligible post-Bilski. [00:13:44] Speaker 04: a correct position, games as a whole basically, any kind of card game, so even though Mr. Lippman can point to patents that issued a long time ago, none of those would have been allowed now. [00:13:56] Speaker 02: That's correct, Your Honor. [00:13:57] Speaker 02: In fact, the government argued in Bilski that things like card games should not be eligible. [00:14:02] Speaker 02: They should fall. [00:14:03] Speaker 03: I assume you mean card games using the standard deck. [00:14:05] Speaker 03: I mean, if you invent some kind of whole new system that doesn't use the standard [00:14:11] Speaker 03: 52-card deck, then maybe that might be different. [00:14:14] Speaker 02: That might be different, Your Honor. [00:14:15] Speaker 02: That deck of cards that Your Honor is referring to would not be conventional, and the agency would then go on and look at perhaps the printed matter doctrine and perhaps 102 and 103. [00:14:27] Speaker 04: But what does that mean now? [00:14:29] Speaker 04: Just to be clear, your position is card games using a conventional deck are a non-starter. [00:14:35] Speaker 04: But what about, I mean, now Skippo, Uno, you know, I mean, these are [00:14:40] Speaker 04: maybe not novel, whatever, but you imagine somebody came up with them today. [00:14:43] Speaker 04: These are card games, but based on a novel deck. [00:14:46] Speaker 04: Would the agency's position be that those are abstract ideas because all games, especially card games, are abstract ideas? [00:14:55] Speaker 04: Or is the agency's position limited to card games using a conventional deck? [00:14:59] Speaker 02: Well, the agency would apply the ALICE test. [00:15:01] Speaker 02: And so it would say that a game is an abstract idea, but it would then look and see whether [00:15:06] Speaker 04: Any game is an abstract idea. [00:15:08] Speaker 04: Any game. [00:15:09] Speaker 04: Is that what you're saying? [00:15:10] Speaker 02: A set of rules for a game, yes, Your Honor. [00:15:12] Speaker 02: But the second step, whether or not there is something in the claim that is not conventional routine, that has an inventive concept, I think something like Skip Boa, at the time they were invented, might well meet that test and might escape from the Alice test in that sense. [00:15:30] Speaker 02: And I think, as Your Honor alluded to earlier, [00:15:33] Speaker 02: The USPTO has, in fact, changed in response to the Bill Scheme AO. [00:15:38] Speaker 02: In Alice's cases, we are now evaluating claims differently than we used to. [00:15:46] Speaker 02: Pre-Alice, we used to say that a computer was enough to bring you into the physical realm and make you patent eligible. [00:15:52] Speaker 02: Yeah, me too. [00:15:53] Speaker 02: The same thing for a deck of playing cards. [00:15:55] Speaker 02: And now that Alice has said it's not true for a computer, we don't see a way to distinguish the playing cards from the computer. [00:16:03] Speaker 02: If there are no further questions, I'll yield the remainder of my time. [00:16:24] Speaker 01: Again, the Patent Office has stated its position as an absolute holding that playing cards [00:16:30] Speaker 01: games or events in any format are not going to be patentable. [00:16:35] Speaker 01: If you look at what he says about the novel deck, all that is is different printing and cards. [00:16:41] Speaker 01: It used to be that the mere printed content on material would not be evasive. [00:16:47] Speaker 03: Well, that might not be true. [00:16:48] Speaker 03: I mean, that might be true if it was a 52-card deck in different kind of suits or characters, things like that. [00:16:56] Speaker 03: But if you invent some kind of new deck that uses [00:16:59] Speaker 03: only 12 cards or 3,000 cards. [00:17:02] Speaker 03: I mean, you know, there's all kinds of games out there that don't use standard decks that, you know, they may be invalid for other reasons, but they're not just printed matter. [00:17:11] Speaker 01: That goes to novelty and unobviousness, but not to abstract idea. [00:17:15] Speaker 03: The abstract... Well, yeah, because there may be an abstract idea at the heart of them, but by creating a novel and different set of things, [00:17:26] Speaker 03: They're taking them out, but the problem is you have an abstract idea that you're implementing on a conventional deck of cards. [00:17:32] Speaker 01: Yes. [00:17:33] Speaker 01: I would like to get one point across, and that is going back to what the objective of the cases was to prohibit monopolization, the basic tools of science, and not to impede the development of technology by allowing a patent on an abstract idea. [00:17:52] Speaker 01: If you look at the scope [00:17:54] Speaker 01: of what might be an abstract idea here. [00:17:57] Speaker 01: The rules, if you interpret it that way, rather than the physical method of implementing a specific physical card game, the potential for damage in monopolizing basic scientific tools is nonexistent. [00:18:16] Speaker 01: I would think that the weight necessary to balance that out, to make it patent eligible, [00:18:22] Speaker 01: should also be proportionately much less. [00:18:25] Speaker 01: Thank you very much.