[00:00:03] Speaker 04:
We have two cases on our calendar this morning.

[00:00:08] Speaker 04:
Both patent cases, one from the district court, one from the pre-cab.

[00:00:14] Speaker 04:
And the first one is Konami Gaming, Corp.

[00:00:18] Speaker 04:
v. Hi-Fi Games, 2018-1723.

[00:00:23] Speaker 04:
Mr. Hullberger.

[00:00:28] Speaker 04:
Hullberger, sorry.

[00:00:30] Speaker 00:
Good morning, your honors.

[00:00:31] Speaker 00:
May it please the court.

[00:00:32] Speaker 00:
Chris Holleberger of Howard and Hound Attorneys on behalf of the appellant, Konami Gaming, Inc.

[00:00:38] Speaker 00:
We're here this morning.

[00:00:39] Speaker 00:
The district court's opinion must be reversed for at least three reasons.

[00:00:42] Speaker 00:
First, as to the claim construction, the court failed to apply the proper claim and unmistakable, the clear and unmistakable disclaimer standard in construing notional non-visible inner real.

[00:00:54] Speaker 00:
and then went on to apply that improper construction to claims that did not.

[00:00:58] Speaker 02:
Why at page 3 do you say the court granted summary judgment on September 30, 2017, and nearly five months later issued the written order on February 22?

[00:01:09] Speaker 02:
What's the relevance of that five months?

[00:01:11] Speaker 00:
So this particular claim construction hearing lasted about four days, three days, and then another day.

[00:01:17] Speaker 00:
And it was very lengthy, and there was a lot of discussion of trying to explain the technology.

[00:01:24] Speaker 00:
that additional time is significant to the understanding, perhaps, of where the opinion was drafted or how it came out.

[00:01:32] Speaker 00:
How?

[00:01:34] Speaker 00:
I think it was just a misunderstanding, largely, of how the technology operated over and over and over again.

[00:01:39] Speaker 02:
Well, it does operate over and over and over again, yes.

[00:01:42] Speaker 00:
Certainly, Your Honor, and the invention it does, yes.

[00:01:45] Speaker 04:
Counsel, the trial court found these claims to be means plus function.

[00:01:53] Speaker 04:
because they, in effect, recited means with function and no structure.

[00:02:01] Speaker 04:
And so how do you get around the indefiniteness?

[00:02:07] Speaker 04:
When a MPF claim recites no structure at all, then claims are indefinite.

[00:02:17] Speaker 00:
So these claims don't recite the word means as their initial stepping off point.

[00:02:22] Speaker 00:
It was a presumption against, but the court found the presumption rebutted.

[00:02:27] Speaker 00:
Correct.

[00:02:27] Speaker 00:
And as part of that analysis, the court has to, when the term means is not present, they have to address this rebuttable presumption that it was not intended to be means.

[00:02:37] Speaker 00:
And as a part of that test, the court has to consider how these terms are used in the industry and whether or not they have a meaning for structure.

[00:02:46] Speaker 02:
Where did the court

[00:02:49] Speaker 02:
Conclude that random number generation was not well known in the record.

[00:02:54] Speaker 00:
I would I would say I would direct your honor to You cite me in a J a 9 and 10 I don't see that Throughout his opinion your honor

[00:03:13] Speaker 00:
The judge identifies this Notional Non-Visible Interreal as a unique process or a new process.

[00:03:19] Speaker 00:
And he does it on pages seven and eight, nine, 24, 25.

[00:03:23] Speaker 02:
And at least on page nine, the significance there was he was... He said it's not a standard part of a random number of generators programming.

[00:03:37] Speaker 02:
Correct.

[00:03:38] Speaker 02:
Where does he say random number of generation is not well known?

[00:03:41] Speaker 02:
I take that as the opposite.

[00:03:45] Speaker 02:
that there is such a standard thing.

[00:03:47] Speaker 00:
I'm sorry, Your Honor, could you say that again, please?

[00:03:49] Speaker 02:
OK.

[00:03:50] Speaker 02:
You say, on page 27 of the Blue Brief, the court erred by concluding random number generation was not well known, and that the process for translating generated random numbers into random selections was not both well known and standard.

[00:04:08] Speaker 02:
Where did he say, because you cite me to 9 and 10, and I look at that, and I see the opposite.

[00:04:15] Speaker 00:
Well, and I think that's our point, is we believe that it is well-known, and as part of the analysis in this question.

[00:04:21] Speaker 02:
No, no.

[00:04:22] Speaker 02:
Where did he say, Judge Boehler?

[00:04:26] Speaker 02:
Correct.

[00:04:26] Speaker 02:
Yeah.

[00:04:27] Speaker 02:
Where did he say that it was not well-known?

[00:04:30] Speaker 00:
In his claim construction for this particular term, he says that- Show me.

[00:04:36] Speaker 00:
Sure.

[00:04:37] Speaker 00:
Well, OK.

[00:04:44] Speaker 02:
There's an extensive record here, so give us a moment to page to it.

[00:04:49] Speaker 00:
I'm sorry, Your Honor?

[00:04:50] Speaker 02:
We have six volumes, so give us a minute when you tell us what page.

[00:05:03] Speaker 00:
It had to do with the claim construction analysis for notional non-visible inter-reel.

[00:05:10] Speaker 00:
And I would say, Your Honor, it says on pages six, seven,

[00:05:13] Speaker 00:
and 8, where in construing notional non-visible inner real, Judge Bullware looks at the prosecution history.

[00:05:23] Speaker 00:
And in it, when the examiner says, notional non-visible inner real, I understand that to be a random number generator in a lookup table, he concludes that, and this is page 8, lines 10 through 12,

[00:05:44] Speaker 00:
The court says, this is to say that notional non-visible inner real cannot simply represent the use of a random number generator with a lookup table to randomly select symbols.

[00:05:57] Speaker 00:
And that's exactly what.

[00:05:58] Speaker 02:
How on earth does that tell me that a random number generator is not well known?

[00:06:10] Speaker 00:
Well, I think that sentence says that

[00:06:12] Speaker 00:
It can't be just a random number generator, because it has to be something more.

[00:06:20] Speaker 00:
It can't simply represent the use of this random number generator lookup table.

[00:06:25] Speaker 00:
And he wants something more.

[00:06:26] Speaker 02:
I guess we're talking past each other, but unfortunately for you, when you talk past me, it doesn't help you.

[00:06:36] Speaker 00:
Understood.

[00:06:36] Speaker 00:
Well, Your Honor, I'd point you to also page nine, appendix page nine, lines 10 through 12.

[00:06:42] Speaker 00:
where it says, a game developer would need to know the specific requirements of the game to determine which random number generators would properly serve the needs of the game.

[00:06:52] Speaker 00:
OK.

[00:06:53] Speaker 02:
And how does that say random number generation is not well known?

[00:06:57] Speaker 02:
So again, it seems to say the opposite to me.

[00:07:00] Speaker 02:
The court is saying random number generation is well known, but you need to do this.

[00:07:07] Speaker 00:
The use of the random number generator and how it's selected

[00:07:11] Speaker 00:
how it generates a number for use in the games is well known.

[00:07:15] Speaker 00:
It absolutely is.

[00:07:16] Speaker 02:
And the court says that, right?

[00:07:18] Speaker 00:
Well, he doesn't, because when it gets to the algorithm step of the Means Plus Functions test, he says, you have to tell me the specific process that you use for random number generation.

[00:07:30] Speaker 00:
And he required an algorithm or a specific algorithm to be recited.

[00:07:36] Speaker 00:
And the experts testified that random number generation

[00:07:39] Speaker 02:
Cite me to that line.

[00:07:41] Speaker 02:
Sure.

[00:07:44] Speaker 02:
Because I think he said a lot more than that.

[00:08:05] Speaker 00:
I mean, I can cite you.

[00:08:06] Speaker 00:
High fives, expert.

[00:08:08] Speaker 00:
which is APPX 2697.

[00:08:11] Speaker 00:
Wait, wait, wait, wait, wait.

[00:08:14] Speaker 02:
You just told me the judge said something.

[00:08:16] Speaker 02:
That's what I asked you for.

[00:08:19] Speaker 02:
I'm sorry.

[00:08:19] Speaker 04:
I thought you... Why don't you look it up and bring it to us on rebuttal?

[00:08:23] Speaker 00:
Okay.

[00:08:24] Speaker 04:
You want to get the 101 argument?

[00:08:27] Speaker 00:
Sure.

[00:08:27] Speaker 00:
Thank you.

[00:08:28] Speaker 00:
So on the 101 analysis, the court aired in holding that the claims were game rules.

[00:08:33] Speaker 00:
and then erred in relying on the improper claim construction of notional non-visible inner reel to find the inventive concept.

[00:08:40] Speaker 05:
If it's not game reels, what in your view is a proper description of what the claim is?

[00:08:46] Speaker 00:
So this claim very specifically recites the structure of the game reel, and it defines the different sections.

[00:08:52] Speaker 00:
So it's got a section of fixed symbols and a section of what they call a consecutive run of identical symbols.

[00:08:58] Speaker 00:
And it picks or selects this identical symbol

[00:09:01] Speaker 00:
and inserts it into that consecutive run, each game the game is played.

[00:09:06] Speaker 00:
That's a set of rules.

[00:09:07] Speaker 00:
I'm sorry, sir?

[00:09:08] Speaker 00:
A set of rules for how it functions.

[00:09:11] Speaker 00:
Well, I mean, the rule for how it functions is it's going to spin like a standard old video electronic slot machine.

[00:09:17] Speaker 00:
That's nothing new.

[00:09:18] Speaker 00:
The new aspect of this was the structure of the reel and the fact that you have these defined sections where every game you get a new reel.

[00:09:27] Speaker 00:
You get a new set of symbols.

[00:09:29] Speaker 00:
And what that led to was,

[00:09:31] Speaker 00:
trying to attract or keep the player attention during the game because the symbols are changing.

[00:09:39] Speaker 00:
So the first game, you might have a consecutive reel of aces, and then that would generate a lot of excitement.

[00:09:44] Speaker 00:
And then the next game, you have nines, and then kings, and then wilds.

[00:09:48] Speaker 00:
And so that structure changes.

[00:09:49] Speaker 02:
Correct me if I'm wrong, but again, I think we're talking two different things.

[00:09:53] Speaker 02:
Aren't the game rules what the Nevada gaming commission or the gaming board approves?

[00:10:01] Speaker 02:
in, I think it was Smith, that you're talking about, well, you put an ace down and then you put a king down and so on.

[00:10:11] Speaker 02:
And these are the rules of the game.

[00:10:13] Speaker 02:
So the rule of the slot machine game would be if you promise to pay out 98.7%, you have to set the machine at 98.7%.

[00:10:22] Speaker 02:
Correct.

[00:10:24] Speaker 02:
But this is something different than game rules.

[00:10:28] Speaker 02:
Absolutely.

[00:10:29] Speaker 02:
Game methodology.

[00:10:31] Speaker 02:
in this instance, it's a way of convincing the player that, gee, they came really close and they ought to put another quarter in.

[00:10:39] Speaker 00:
Well, I mean, that is that philosophical.

[00:10:42] Speaker 00:
Judge Wallach is the kind of basis of all casino games making the player think they're going to win.

[00:10:48] Speaker 02:
But at least as a result... No, no.

[00:10:50] Speaker 02:
What I said was that it interests them in the game and so on.

[00:10:54] Speaker 00:
I'm not saying they're being... No, no, and I appreciate that.

[00:10:58] Speaker 00:
I think that is a aspect of it, but I think the

[00:11:01] Speaker 00:
ability to maintain that 98.6 payout while simultaneously giving various different symbols that are selected each game, that is a game math improvement.

[00:11:14] Speaker 00:
And the improvement to the game... But it's not a game rule.

[00:11:17] Speaker 00:
Correct.

[00:11:17] Speaker 00:
I don't believe that it is.

[00:11:19] Speaker 00:
And I think in Ray Smith is distinguishable because that was all about, you know, this course said that that was an economic fundamental principle of determining wagers and, you know, resolving the bets.

[00:11:30] Speaker 00:
That's not what these claims are directed towards.

[00:11:33] Speaker 02:
I can't agree with you.

[00:11:36] Speaker 02:
I think if you showed how it functioned, you might have something.

[00:11:40] Speaker 02:
But I don't see that.

[00:11:45] Speaker 00:
Your Honor, I've exceeded my 10 minute opening.

[00:11:47] Speaker 00:
Are there any other questions?

[00:11:50] Speaker 04:
You could continue, but we'll save the time for rebuttal if you like.

[00:11:54] Speaker 00:
Thank you.

[00:12:00] Speaker 03:
I have nine minutes, but I suspect I'm not going to be using it all and ceding it to my partner Take down a heat for the balance.

[00:12:09] Speaker 03:
I'm up here for nine minutes Initially, all right.

[00:12:12] Speaker 03:
My name is Bob Ryan.

[00:12:13] Speaker 03:
I'm may please the court I'm with Holland and Hart and I represent high five my partner take down a heat

[00:12:20] Speaker 03:
is with me and will argue the 101 issues.

[00:12:22] Speaker 03:
I'm here to argue 112.

[00:12:24] Speaker 03:
You mean we can't ask you a 101 issue?

[00:12:26] Speaker 03:
Well, you may, but I would prefer that I defer to him.

[00:12:29] Speaker 03:
So if you'd like to get into 101 to start.

[00:12:31] Speaker 04:
By splitting up, representing the same client, you are inhibiting the court from asking freely asking questions.

[00:12:37] Speaker 03:
Well, you're welcome to ask me anything you'd like, Your Honor.

[00:12:40] Speaker 03:
But there was so much raised in the 112 arguments presented by Konami.

[00:12:45] Speaker 03:
in what we would call a scattered unapproached briefing before the court that we felt the need to divide it up.

[00:12:50] Speaker 04:
It exceeds the capacity of one lawyer.

[00:12:52] Speaker 04:
Excuse me?

[00:12:52] Speaker 04:
It exceeds the capacity of one lawyer.

[00:12:55] Speaker 03:
It was challenging for me to prepare for 112.

[00:12:58] Speaker 03:
Well, let's argue the way you want.

[00:13:00] Speaker 03:
Thank you, Your Honor.

[00:13:00] Speaker 03:
I appreciate it very much.

[00:13:02] Speaker 03:
I don't believe I have a lot to say about it based on what I've just heard.

[00:13:07] Speaker 03:
But let me say this, if I may.

[00:13:10] Speaker 03:
First of all,

[00:13:11] Speaker 03:
I want this court to understand this is not about invalidating a large swath of patents in the gaming industry.

[00:13:18] Speaker 02:
Would you agree this is not about rules?

[00:13:21] Speaker 03:
It's partially about rules.

[00:13:23] Speaker 03:
What's the rule?

[00:13:25] Speaker 03:
One of them is that there's a consecutive string of identical symbols that are replaced during playing of the game.

[00:13:33] Speaker 03:
That's in all claims.

[00:13:37] Speaker 02:
Does the gaming commission

[00:13:39] Speaker 02:
approve or require that as part of a slot machine licensing?

[00:13:44] Speaker 03:
No.

[00:13:44] Speaker 02:
What would happen is... How would it be the rules of the game?

[00:13:47] Speaker 03:
Well, that's one of the rules of the game is that there's this substitution that takes place in that consecutive string during the playing of the game, which is, of course, an ultimate outcome of the game.

[00:13:58] Speaker 02:
As I understand it, the player pushes the button on these electronic ones, and instantly the machine knows, decides,

[00:14:08] Speaker 02:
based on an algorithm, whether they won or lost.

[00:14:11] Speaker 03:
That's correct.

[00:14:12] Speaker 02:
Right away.

[00:14:12] Speaker 02:
And then it's simply showing them some entertainment before they know if they won or lost and how much.

[00:14:21] Speaker 02:
That's correct, Your Honor.

[00:14:26] Speaker 02:
And it strikes me that that's the rule.

[00:14:29] Speaker 02:
The gaming commission would say, as I said, your opponent, if you say 98.7, you have to

[00:14:37] Speaker 02:
pay out 98.7.

[00:14:39] Speaker 02:
And in the old days, when slots were mechanical, the roles were that the machines had to be honest, that they had to be well maintained and so on.

[00:14:52] Speaker 02:
But I'm trying to draw a distinction between this and Smith, for example, where the roles of that thing were not patentable.

[00:15:05] Speaker 03:
We believe the rules of this are not patentable as well, including because... So no slots can be licensed?

[00:15:12] Speaker 03:
No, no.

[00:15:12] Speaker 03:
Slots can be licensed and can be patentable generally, we believe.

[00:15:17] Speaker 03:
But not in a case like this, where you have nothing really that's any different than what pre-existed.

[00:15:24] Speaker 02:
Is that a rule?

[00:15:25] Speaker 02:
Pardon me?

[00:15:27] Speaker 02:
I tend to agree with you.

[00:15:28] Speaker 03:
OK.

[00:15:28] Speaker 02:
But how is that a rule, as opposed to means plus function?

[00:15:33] Speaker 03:
Well, it's both.

[00:15:35] Speaker 03:
It's an ultimate outcome in that it's to the extent that the rule, which Mr. Yoshimi invented, supposedly, is the ultimate outcome of the game.

[00:15:47] Speaker 03:
What the player sees as an aristocrat, the line gaming case before the court, which the court decided, which I think has a far more extensive disclosure about how to do things than this case.

[00:16:01] Speaker 03:
where it's just a wish list of what would appear at the ultimate interface to the user.

[00:16:10] Speaker 03:
Those are the rules.

[00:16:11] Speaker 03:
The rules being what is it going to look like to the user when they play this game?

[00:16:17] Speaker 03:
Being the ultimate outcome of the game, which is what's claimed.

[00:16:21] Speaker 03:
And you can't do that unless you teach an algorithm, according to Aristocrat and many other cases like Noah.

[00:16:28] Speaker 03:
And it follows directly from Williamson.

[00:16:31] Speaker 03:
in our view?

[00:16:33] Speaker 03:
Did I answer your honest question?

[00:16:35] Speaker 02:
Well, not from my viewpoint.

[00:16:38] Speaker 02:
And that is, I would view that, in effect, as advertising.

[00:16:43] Speaker 02:
And if you come up with a new invention that advertises the game or entertains the player in a different manner, and you have patentable content, I think you can patent it.

[00:17:01] Speaker 02:
I think their problem is that they didn't tell you what they were doing.

[00:17:05] Speaker 02:
That's right.

[00:17:05] Speaker 02:
They did not.

[00:17:06] Speaker 02:
That doesn't tell you.

[00:17:07] Speaker 03:
They didn't.

[00:17:08] Speaker 03:
That's the point.

[00:17:09] Speaker 03:
We agree with your honor completely on that point.

[00:17:12] Speaker 03:
What they did is they have a very, very high level concept that's not implemented in the teaching.

[00:17:19] Speaker 03:
There's nothing, there's no samples for how to do any of this.

[00:17:23] Speaker 03:
It's an idea.

[00:17:25] Speaker 03:
This is a wish list patent.

[00:17:26] Speaker 03:
Wouldn't it be nice if I could fly to the moon

[00:17:29] Speaker 03:
drop a lunar excursion module, and bring it back to the earth.

[00:17:33] Speaker 05:
Are you talking 101 now or 112?

[00:17:36] Speaker 03:
It's both.

[00:17:37] Speaker 03:
I believe it's both, Your Honor.

[00:17:39] Speaker 03:
The same deficiencies lead to the same issue of inclusion on both sides.

[00:17:43] Speaker 05:
Why isn't a game controller structured?

[00:17:46] Speaker 05:
Pardon me?

[00:17:46] Speaker 05:
Why isn't a game controller structured?

[00:17:49] Speaker 05:
It could be.

[00:17:49] Speaker 05:
Are these various reels aren't those parts?

[00:17:51] Speaker 03:
They're parts, but they don't inherently perform what the game does.

[00:17:56] Speaker 03:
A processor

[00:17:59] Speaker 03:
does not inherently perform this game.

[00:18:01] Speaker 05:
If it did, it would be prior art and it would be anticipation.

[00:18:04] Speaker 05:
Virtually every, if you define a machine, automobile, it performs functions.

[00:18:10] Speaker 03:
Yes.

[00:18:10] Speaker 05:
The mere fact that structure performs some functions doesn't mean that it automatically, if you have it in a claim that it's a means plus function.

[00:18:18] Speaker 03:
That's right.

[00:18:19] Speaker 03:
That's right.

[00:18:20] Speaker 05:
So your adversary's argument is everybody in this industry understands what these structural pieces of a slot machine are.

[00:18:29] Speaker 05:
a controller of this, that, and these reels, right?

[00:18:32] Speaker 05:
And those are all structural.

[00:18:34] Speaker 03:
There's not a conventional way to generate a reel.

[00:18:36] Speaker 03:
Every company does it differently.

[00:18:38] Speaker 05:
What about how you're generating?

[00:18:39] Speaker 05:
I mean, the thing, the reel.

[00:18:42] Speaker 05:
Right.

[00:18:42] Speaker 05:
It's structural.

[00:18:43] Speaker 05:
Now, in this case, it's all being done electronically, right?

[00:18:48] Speaker 03:
It's automated.

[00:18:49] Speaker 03:
It's virtual.

[00:18:49] Speaker 05:
So it's a virtual piece of hardware.

[00:18:53] Speaker 03:
Right.

[00:18:53] Speaker 05:
A thing.

[00:18:54] Speaker 03:
Right.

[00:18:55] Speaker 05:
So why isn't that thing structured?

[00:18:58] Speaker 03:
It is structure.

[00:19:00] Speaker 03:
There's an algorithm that's required to generate it, but it's not in the patent, right?

[00:19:05] Speaker 03:
You have to have an algorithm to generate that real.

[00:19:08] Speaker 05:
Are you telling me that every claim that claims structure, where the structure performs a function, automatically becomes a mean plus function claim?

[00:19:16] Speaker 03:
In this case, yes.

[00:19:17] Speaker 05:
Are you telling me everyone?

[00:19:19] Speaker 03:
Every claim.

[00:19:19] Speaker 05:
No, no, no.

[00:19:20] Speaker 05:
I know in this case I'm making a hypothetical.

[00:19:23] Speaker 03:
OK, forgive me.

[00:19:24] Speaker 05:
So you take a structure, like a machine.

[00:19:27] Speaker 03:
Right.

[00:19:27] Speaker 05:
machine performs functions.

[00:19:29] Speaker 03:
Right.

[00:19:30] Speaker 05:
The fact that the machine performs function doesn't convert the machine structure claim into a mean plus function claim, right?

[00:19:37] Speaker 03:
If I recite structure in the claim sufficient to perform the function.

[00:19:41] Speaker 03:
But if I claim a function of the machine and that function is not routinely done by a well-known structure in the industry or a set of them, then it's a functional specification and you are tied to then

[00:19:56] Speaker 03:
The description in the spec.

[00:19:59] Speaker 04:
The structure in the structure in the spec.

[00:20:02] Speaker 03:
Yes.

[00:20:02] Speaker 03:
If there's structure in the spec.

[00:20:04] Speaker 03:
If there's structure in the spec.

[00:20:05] Speaker 05:
I'm just talking about how you go about deciding whether the claim is a mean plus function claim in the first place.

[00:20:11] Speaker 05:
When there is no means plus siding, there is a presumption that the structure you're claiming is sufficient structure.

[00:20:22] Speaker 05:
When you read the way our law reads,

[00:20:26] Speaker 05:
If you haven't used the magic words, means plus or step plus, right?

[00:20:30] Speaker 05:
Right.

[00:20:31] Speaker 05:
It's presumptively a structural patent.

[00:20:34] Speaker 03:
Presumptively.

[00:20:35] Speaker 05:
Presumptively.

[00:20:35] Speaker 03:
That's correct.

[00:20:36] Speaker 05:
Right.

[00:20:37] Speaker 05:
So how do we know that the structure we cited in this, the pieces of the slot machine aren't sufficient structure?

[00:20:47] Speaker 03:
Because what's claimed is the ultimate outcome.

[00:20:50] Speaker 03:
An ultimate outcome, this court has repeatedly stated.

[00:20:54] Speaker 05:
A piece of structure that achieves the outcome.

[00:20:57] Speaker 03:
They don't recite that.

[00:20:58] Speaker 05:
Automobile capable of carrying people.

[00:21:02] Speaker 03:
If you recited an automobile capable of carrying people, that would not be structured, right?

[00:21:07] Speaker 03:
It wouldn't be sufficient to identify everything that's in that automobile.

[00:21:11] Speaker 03:
But we're not talking about an automobile here.

[00:21:13] Speaker 03:
We're talking about a computer, a general purpose computer.

[00:21:17] Speaker 03:
And this court's law is well established that once we're to a general purpose computer, and this was an aristocrat, it started there dominantly.

[00:21:27] Speaker 03:
Once you're to a general-purpose computer, if you're claiming the ultimate outcome of what happens at the interface to the user, that's function, which it is.

[00:21:38] Speaker 03:
Because there's no teaching for how to get there.

[00:21:41] Speaker 03:
How to do it is not taught.

[00:21:43] Speaker 03:
And this under this court's law.

[00:21:45] Speaker 03:
The how are the acts.

[00:21:47] Speaker 03:
The how is the structure.

[00:21:49] Speaker 03:
It's not there.

[00:21:50] Speaker 04:
Well, acts relate to method claims.

[00:21:52] Speaker 04:
That's correct.

[00:21:53] Speaker 04:
This isn't a method claim.

[00:21:55] Speaker 03:
There are some method claims, Your Honor.

[00:21:56] Speaker 02:
In the industry, is it unknown to have an algorithm that generates all three wheels at once?

[00:22:07] Speaker 02:
All three wheels.

[00:22:09] Speaker 03:
Could one of skill in the art do that?

[00:22:11] Speaker 03:
Yes.

[00:22:13] Speaker 03:
How they would do it would be in innumerably different ways.

[00:22:17] Speaker 02:
I understand that.

[00:22:18] Speaker 02:
Yes.

[00:22:19] Speaker 02:
So my point is that

[00:22:21] Speaker 02:
It's not like a mechanical device.

[00:22:24] Speaker 02:
It isn't.

[00:22:25] Speaker 02:
The reels can just be the result of one generation.

[00:22:30] Speaker 03:
That's right.

[00:22:30] Speaker 02:
And in effect, they may well be.

[00:22:34] Speaker 02:
They could be, but... Then you'd have sub-routines and sub-programs.

[00:22:39] Speaker 03:
Right, but there's nothing in the specification about how to... Exactly.

[00:22:43] Speaker 02:
I understand that.

[00:22:43] Speaker 02:
Yes.

[00:22:44] Speaker 02:
I'm drawing towards the question you were asked about the different reels

[00:22:49] Speaker 02:
being generated differently.

[00:22:51] Speaker 02:
And that's not necessarily true, because you said it was.

[00:22:55] Speaker 03:
No, it is.

[00:22:56] Speaker 03:
They could all.

[00:22:56] Speaker 03:
They could be, or they could not be.

[00:22:58] Speaker 03:
They are.

[00:22:59] Speaker 03:
The manufacturers, all the manufacturers do their own programming.

[00:23:02] Speaker 03:
Nobody copies anybody else.

[00:23:03] Speaker 03:
They can't.

[00:23:04] Speaker 03:
That's highly proprietary.

[00:23:07] Speaker 04:
Mr. Ryan, you wanted to split your time.

[00:23:10] Speaker 03:
Yes, I do.

[00:23:11] Speaker 04:
Mr. Donhee has six minutes.

[00:23:18] Speaker 01:
May it please the court, Ted Donahey.

[00:23:21] Speaker 01:
I'm here to address the 101 issues.

[00:23:23] Speaker 01:
I want to directly address your game rules questions.

[00:23:29] Speaker 01:
I think it's important to recognize that there are two alternative ways to affirm the court on Alice step one.

[00:23:35] Speaker 01:
Number one is the game rule issues that you were addressing.

[00:23:38] Speaker 01:
But number two, there's a line of cases, Apple v. Amaranth, et cetera, that hold that when a claim is directed to functionality, functional claiming, without

[00:23:49] Speaker 01:
a specific set of concrete implementation of that functionality, that that also invokes the abstract idea as a step one problem.

[00:23:58] Speaker 01:
So whether you conceptualize it as a game rule issue or a functional claiming issue, either way, we still have claims that are directed to an abstract idea.

[00:24:08] Speaker 04:
Most of these claims, or many of them, are to a gaming machine.

[00:24:15] Speaker 04:
Section 101 expressly provides for

[00:24:19] Speaker 04:
eligibility for machines?

[00:24:21] Speaker 01:
Well, that's in the preamble, Your Honor, and the patentee has taken the position that gaming machine is not a limitation on the invention at all.

[00:24:31] Speaker 01:
And so I don't think that's an issue here.

[00:24:34] Speaker 01:
Moreover, I will note that under Alice, conventional generic computing components are not enough to elevate an abstract idea to a patentable invention.

[00:24:48] Speaker 01:
And that's really what we have here.

[00:24:50] Speaker 05:
But according to the dialogue that was going on earlier, Judge Wallach and your other colleague, there was a question about whether or not this was an abstract idea in the first place.

[00:25:01] Speaker 05:
If it's not an abstract idea, then if you're 101 goes away.

[00:25:07] Speaker 05:
If it's not an abstract idea, so what if it's a mean plus function claim that doesn't have enough structure in the spec?

[00:25:15] Speaker 05:
That doesn't mean it falls under 101.

[00:25:18] Speaker 01:
Your honor is correct that if this were understood as being something more than a mere abstract idea under the law, it would be patentable under the law.

[00:25:29] Speaker 05:
What's your response to the, I won't put words in Judge Wallach's mouth, but I heard him say that this is not a game rule.

[00:25:38] Speaker 01:
Well, I don't believe that Smith ties the concept of game rules to the regulations.

[00:25:44] Speaker 01:
There's nothing in Smith that suggests that.

[00:25:46] Speaker 01:
And I will note that Smith was recently reaffirmed in the Goldinart case, which came down in December after the briefing was complete.

[00:25:54] Speaker 01:
That's 9-11 F-3, 1157.

[00:25:56] Speaker 01:
And that was a dice game.

[00:26:00] Speaker 01:
And nothing in that case.

[00:26:01] Speaker 02:
Printed matter.

[00:26:02] Speaker 02:
Hm?

[00:26:02] Speaker 02:
Printed matter.

[00:26:04] Speaker 01:
Correct.

[00:26:05] Speaker 01:
Nothing in that case suggested that the game rule concept was tied to regulations.

[00:26:11] Speaker 01:
Everything in those cases indicates that when you're talking about

[00:26:14] Speaker 01:
patents that are directed to rules for a game.

[00:26:17] Speaker 01:
They're talking about the rules for how the game is played, what the game is at an abstract conceptual level.

[00:26:26] Speaker 01:
And I think the import of those holdings is that if all you're claiming is how to play a game at a very high level in an abstract sense, that's an abstract idea.

[00:26:35] Speaker 01:
And if you want a patent on that, you have to take it to the next step.

[00:26:39] Speaker 01:
You have to talk about a particular technological implementation of that game.

[00:26:44] Speaker 01:
Here we don't have that.

[00:26:45] Speaker 01:
These patents are really hollow shells that are directed to the game features and the game functionality without any concrete way of implementing the game.

[00:26:54] Speaker 01:
And that's the problem, both from 112 and 101.

[00:26:57] Speaker 01:
It's a similar set of issues.

[00:27:01] Speaker 01:
The other thing.

[00:27:02] Speaker 05:
Oh, there's an amicus brief in this case, isn't there?

[00:27:07] Speaker 01:
Yeah, so IGC.

[00:27:08] Speaker 05:
The amicus brief says, don't throw the baby out with a bat.

[00:27:11] Speaker 01:
Yeah.

[00:27:12] Speaker 01:
Right?

[00:27:12] Speaker 01:
Well, we're certainly, to reiterate, we're certainly not arguing that all human patents are invalid.

[00:27:20] Speaker 01:
That's not the point here at all.

[00:27:22] Speaker 05:
So why aren't they?

[00:27:24] Speaker 05:
How do you save the baby?

[00:27:27] Speaker 05:
What's the opinion look like that you agree with that invalidates these claims on 101 but leaves room for some other slot machine maker

[00:27:41] Speaker 01:
You have to salvage their claim.

[00:27:44] Speaker 01:
Sorry, yes.

[00:27:45] Speaker 01:
You have to look at each patent on its own, and you have to look at what's being claimed and what's disclosed.

[00:27:55] Speaker 01:
Gaming patents are no different.

[00:27:56] Speaker 05:
Take another patent in the same field where we would conclude its game rules, assuming that the patentee can invent the rules instead of the gaming commission.

[00:28:07] Speaker 05:
So we have an abstract idea.

[00:28:11] Speaker 05:
How much, what has to go into the patent to save it under step two, to save a slot machine patent?

[00:28:19] Speaker 01:
Details about how the game is going to be implemented.

[00:28:23] Speaker 01:
That needs to be the invention that's being claimed for patent, patentability.

[00:28:30] Speaker 05:
Merely- Would you say that if you wrote one of these claims in mean plus function format on purpose, and then disclose specific algorithms,

[00:28:39] Speaker 01:
That would be an excellent example.

[00:28:41] Speaker 05:
In your spec, so you satisfied, I mean, really very specific algorithms were tied exactly to the function so that it was just a neat little package on 112.

[00:28:51] Speaker 05:
That would satisfy the second step of Alice.

[00:28:54] Speaker 01:
That definitely could.

[00:28:57] Speaker 01:
Gaming patents in this sense are no different than patents in other fields.

[00:29:00] Speaker 01:
You need to have meat on the bones.

[00:29:03] Speaker 01:
And that's what's absent here, and that's what's creating the problem.

[00:29:07] Speaker 01:
It's not necessarily

[00:29:08] Speaker 01:
a gaming patent issue.

[00:29:10] Speaker 01:
Now, perhaps IGT has patents that were issued pre-ALICE, and maybe it's concerned about them.

[00:29:20] Speaker 01:
That's a different question.

[00:29:24] Speaker 01:
And I see I'm out of time.

[00:29:25] Speaker 04:
Thank you, counsel.

[00:29:26] Speaker 01:
Thank you.

[00:29:29] Speaker 04:
Mr. Hollenberger has some rebuttal time.

[00:29:32] Speaker 00:
Thank you, your honors.

[00:29:34] Speaker 00:
To quickly address the random number generator of Judge Wallach.

[00:29:37] Speaker 02:
Yes.

[00:29:38] Speaker 00:
So again, I would point to pages 9 and 10 in the brief and how you get there, the reason that- In the appendix, you mean?

[00:29:46] Speaker 00:
Appendix 9 and 10, correct.

[00:29:48] Speaker 00:
And it starts at line 20 on page 9, appendix 9 through page, line 7 on page 10.

[00:29:55] Speaker 00:
And the reason this was cited for random number generator is not well known is what this court did is it interpreted notional non-visible inter-reel.

[00:30:06] Speaker 00:
And random number generator doesn't appear in the claim.

[00:30:08] Speaker 00:
Notional non-visible inner reel, he said, needed this unique process of a random number generator lookup table.

[00:30:16] Speaker 00:
And in 9 and on the 10, he says that random number generator requires a process.

[00:30:22] Speaker 00:
And then you have to do something with the output of that process.

[00:30:25] Speaker 00:
And it's not a standard part of these game developer kits, which at that time it was.

[00:30:29] Speaker 00:
And that's an incorrect conclusion.

[00:30:32] Speaker 00:
And it goes on to say that this process is not a standard algorithm or set of programming associated with a generic

[00:30:37] Speaker 00:
processor or game controller.

[00:30:39] Speaker 00:
And our citation to this is because that is random number generators were standard.

[00:30:45] Speaker 00:
They had standard algorithms at that time, and they were widely known and used.

[00:30:50] Speaker 00:
And this passage demonstrates the confusion as to what was necessary in the claim.

[00:30:57] Speaker 02:
Wait, wait, wait, wait, wait, wait, wait, wait.

[00:31:01] Speaker 02:
What the court says is, as plaintiff's own expert testified,

[00:31:08] Speaker 02:
There must be after the generation of a large number from the random number generator.

[00:31:13] Speaker 02:
And then he puts in quotes a process to turn this large number into a random selection that would compress that number into a random selection within the range of positions on each real close quote.

[00:31:26] Speaker 02:
That's your expert testifying, is it not?

[00:31:29] Speaker 00:
Yes, sir.

[00:31:30] Speaker 02:
Okay.

[00:31:30] Speaker 02:
He said that's not a standard part of a random number generator's program.

[00:31:38] Speaker 02:
Is that correct?

[00:31:39] Speaker 02:
He does say that.

[00:31:40] Speaker 02:
Yes.

[00:31:40] Speaker 02:
No.

[00:31:41] Speaker 02:
Is that correct?

[00:31:43] Speaker 02:
That it's not a standard?

[00:31:45] Speaker 02:
I mean, random number generators are used in decoding and intelligent all over all kinds of things.

[00:31:53] Speaker 02:
Yes.

[00:31:54] Speaker 02:
That's not a standard part, is it?

[00:31:56] Speaker 00:
The standard part is turning it into a selection in the slot machine.

[00:31:59] Speaker 00:
That is correct.

[00:31:59] Speaker 00:
That would not be the standard random number generator.

[00:32:02] Speaker 00:
And that's why this court got it wrong.

[00:32:04] Speaker 00:
because it was requiring so much more on a term of notional non-visible inner real, or the term randomly select in the later patents.

[00:32:12] Speaker 00:
Random number generator doesn't appear anywhere.

[00:32:15] Speaker 00:
And to address some of this means plus function analysis that goes along with it, one of the problems in this opinion is they talk about Williamson.

[00:32:24] Speaker 00:
And the court cites to a passage of Williamson as the standard and actually drops out the word term.

[00:32:32] Speaker 00:
So the court said,

[00:32:33] Speaker 00:
And this is on appendix page 12, line 6 to 8, in talking about the presumption.

[00:32:45] Speaker 00:
And the court says all that he's got to find is that the claim fails to recite sufficient structure, as opposed to a claim term that fails to recite sufficient structure.

[00:32:54] Speaker 00:
High Five advocated to this court that, and as we heard earlier, if you have a function and a claim, it means plus function.

[00:33:01] Speaker 00:
And in this particular case,

[00:33:03] Speaker 00:
Konami sets forth processor, a well-known structure, game controller, well-known structure in this industry.

[00:33:09] Speaker 00:
There were 800,000 devices on the floor.

[00:33:12] Speaker 00:
And for all of those reasons, these elements are being used for their well-known purpose, processor to execute a game, a display device to display.

[00:33:24] Speaker 00:
This isn't all of the other cases where you have Williamsons, which is doing some function that's not the standard or co-extensive with the device itself.

[00:33:34] Speaker 00:
Thank you, Your Honors.

[00:33:34] Speaker 04:
Thank you, Counsel.

[00:33:35] Speaker 04:
We'll take the case on the right.