In another hopeful sign that “the exception won’t swallow the rule”, the Central District of California has refused to apply Alice to invalidate a software patent – U.S. Patent No. 8,393,969 – for player tracking in a gaming establishment.  In  this case, Ameranth_ Inc. v. Genesis Gaming Solutions_ Inc, case number 8:11-cv-00189, the defendants filed a motion for Summary Judgment of Patent Invalidity of the ’969 Patent.  Defendants asked the Court to rule that the asserted claims of the ’969 Patent fail 35 U.S.C.§ 101 because they are directed to the abstract idea of a customer loyalty program directed to poker players, without adding significantly more to that abstract idea.

System claim 27 of U.S. Patent No. 8,393,969 is set forth below:

27. A computer system for monitoring a physical casino poker game comprising:

a. a system database;

b. software enabled to set up and maintain poker game types and tables associated with said poker game types, wherein said software is configured to provide real time table availability status in the system database;

c. software enabled to facilitate the receipt of a poker player check-in input including player identification information and the player’s poker game type preference and identifying the particular player from the player check-in input utilizing a player database which includes information regarding previously registered players;

d. software enabled to determine table availability in real time for said particular player’s poker game type preference;

e. software enabled to add said particular player to a wait list for said poker game type preference if no matching table is currently available;

f. software enabled to display indicia identifying said particular player on a public wait list display,said public display including the display of information comprising at least two different poker game types and waiting players for each game type and wherein said display is suitable for viewing by a multiplicity of players or prospective players throughout the poker room;

g. software enabled to select said particular waiting player for an available table matching said waiting player’s selected game type when it is available and then assigning said player to that available table;

h. software enabled to receive check-out input regarding said particular player containing player identification information; wherein said software is configured to identify the particular player from the player check-out input information, to remove the player from the game and from the table, to update the table availability to reflect that a seat for the particular poker game type at said table is currently available;

i. software enabled to calculate the total elapsed time between receiving the check-in input and the check-out input of the particular player, wherein said software is configured to store the calculated playing time of said particular player in at least one of the system database or the player database;

j. wherein all of the said software is enabled to operate as a synchronized system.

In finding that the defendants had failed to meet the first step of the two part Alice test, the court said:

“Defendants argue that the Opposition does not dispute that poker has been played in gambling houses, riverboats,speakeasies and casinos in the United States for the past three hundred years,’ and that [t]he abstract concept of’ monitoring a physical casino poker game’ thus predates the abstract concept of a ’customer loyalty program’ for casinos.  … First, it is unclear what role Defendants believe the relative age of these abstract concepts plays in the § 101 analysis.  Second, Defendant ignores that the claims do not purport to cover the game of poker itself: they require nothing about cards, bets, or the mechanics of play. While it might be undisputed that people have hosted and watched poker games for as long as they have been played, that does not establish that the type of monitoring and player management required by the claims is an idea of similarly hoary provenance. Therefore, Defendants have not established even the first step of the Alice/Mayo test is satisfied for the system claims.”

In rejecting that a corresponding method claim improperly encompassed an abstract idea, the court noted that “one could implement many different player reward systems” that do not infringe the claims, and that therefore “the Defendants have not shown how these claims implicate the basic underlying concern that these patents tie up too much future use of the abstract idea of a player reward system.”

Defendants also attacked the claims on the basis that the Ameranth system was simply a software program that automates previously performed manual task[s] associated with operating a poker room.  The court noted that “mere generic computer implementation fails to transform an abstract idea into a patent-eligible invention: transformation requires an inventive concept . . . sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”

On the other hand, the court notes that “automation of manual tasks is not necessarily abstract”, and for this proposition, it cites to U.S. Patent No. 72 (1794) to Eli Whitney for a cotton gin, as “one familiar example of a solidly tangible automating machine.”  The court then insightfully observes that “[o]f course, one could posit a way of drafting even a claim to a cotton gin in a way that renders it abstract: a machine comprising metal and wood configured to remove cotton seeds from cotton fiber”, and draws a parallel to the Defendants argument:   “[r]ead most charitably, Defendants are arguing something like that—that the prior art shows that all of the steps in the claimed method were performed together previously, and the ’969 Patent merely says do that, on a computer, neatly fitting the Alice mold. But Defendants rely on multiple combinations of references to make that argument, and as couched by Defendants, those combinations seem more like an obviousness argument under 35 U.S.C. § 103 than a patent eligibility analysis under 35 U.S.C. § 101.”

While the application of the Alice test by any particular court is still highly unpredictable, it is encouraging for software innovators that an increasing number of software patents are being found 101 compliant under Alice, and that indeed, there is good reason to believe that once all is said and done, the “exception will not swallow the rule” after all.