https://www.imgl.org/sites/default/files/media/ustablegamespatents_johnartz_cglautumn2012.pdf

https://www.uspto.gov/sites/default/files/patents/law/exam/bilski_guidance_27jul2010.pdf

U.S.Table Games Patents Facing Unprecedented Challenges

Blackjack, craps, roulette, poker, and baccarat are table games that have entertained gamblers around the world for hundreds of years.1 To enjoy blackjack, poker and baccarat, all one needs is a deck of cards and an understanding of the rules. Similarly, craps and roulette can be readily enjoyed by one armed with knowledge of the game and dice or a roulette wheel, respectively. The simplicity of these games likely contributes to their strong popularity and, despite their long histories, they are still played in virtually every casino around the world. The success of these games has inured to the benefit – including through revenue generation – of the proprietors who have made these games available.

While these table games are still widely successful, new table games a re constant ly being explored, developed, and introduced with the hope that they can capture at least some of the same success (and revenue) as the prior long standing table games. Success in the gaming industry, however, is not only predicted on the popularity of the game itself, but often resides in the ability of a company to obtain a patent and thus exclusively manufacture, market, and sell the game. Accordingly, most companies seek to secure patents for any table and card game developments in the hopes they can avail themselves of these significant benefits. However, the United States Patent and Trademark Off ice (USPTO) has begun to question whether table games are the proper subject of a patent.

The traditional blackjack, craps, roulette, poker and baccarat games – which all predate the U.S. patent system – are not the subject of U.S. Patents. However, over the last twenty years, the USPTO has awarded patents to inventors for various improvements and variations of these traditional games. For example, over that period, patents have been awarded for brand new table games which incorporate different rules and set ups2, improvements on existing table games3, and new betting options and/or payouts for existing games4. Like with most developments, the owners of these patents hope to take advantage of the exclusivity they afford in the event the patented game experiences success in the marketplace.

As is known, the patent system will reward any person with a patent who invents “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof ” as long as the other conditions for patentability are satisfied. 35 U.S.C. §101. As indicated above, inventions for new methods (processes) of playing card games or other table games have been uniformly accepted by the USPTO for the last couple of decades, without any objection as to whether they constitute patentable subject matter. Now, however, the patentability of table games and card games in the U.S. is under attack with the USPTO beginning to reject patent applications directed to table game methods under the premise that some are directed to non-patentable subject matter.5

Part of the attack stems from a recent decision of the United States Court of Appeals for the Federal Circuit (“CAFC”) – the court having exclusive jurisdiction over any appeal involving patents. In that case, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), the CAFC considered the issues of when method claims qualify for patent protection in the U.S. In Bilski, the court held that patent claims directed toward a method of hedging risks in commodities trading were not patentable as they constituted an abstract idea. In so doing, the court relied on the machine-or-transformation test, which essentially provides that a claim needs to recite some kind of a machine or some sort of transformation to qualify for patentability.6 In response to the Bilski decision, the USPTO has issued guidelines to its examiners as to how to evaluate whether method claims constitute patentable subject matter, including the machine or transformation test.7

 While the Bilski decision dealt with business method patents, the USPTO has taken the posit ion that the decision also applies to table game methods. Of particular interest is the fact that the USPTO continues to issue patents for table and card game methods that are played in an electronic environment, such as on an electronic gaming device or over the Internet. The USPTO apparently believes that an electronic version of these table games employs a machine (i.e., computer) and thus electronic table games constitute patentable subject matter. However, according to the USPTO, the identical table game method performed in a gaming floor environment does not satisfy the requirements for patentability. Thus, a company that invents a new table or card game can secure a patent for the electronic version, but not the version played on the casino floor.

A review of the USPTO records indicate that owners of many patent applications that seek protection for the floor version of new table games, are of the opinion that the USPTO has incorrectly denied them patent protection. Accordingly, many have filed appeals within the USPTO. In support of these appeals, many claims directed to card games in a non-electronic environment specifically recite structure in the form of the playing cards themselves, which arguably satisfies the machine portion of the machine-or-transformation test. Alternatively, many claims directed to card games in a non-electronic environment recite transformation of the playing cards, e.g., dealing hands (some face up, some face down), dealing further cards, drawing cards, and flipping cards over, any of which arguably satisfy the transformation portion of the machine-or-transformation test.

 Most of these appeals are still pending and are awaiting a decision. To the extent any decision requires a review outside of the USPTO, an appeal to the Federal Circuit is also available. While the belief is that these appeals will ultimately be successful, there are no guarantees; and in any event, a final resolution still appears to be a couple years away. In the short term, companies will likely face challenges securing patent rights and the exclusivity afforded thereby for new table or card games. To address this issue, patent applicants could limit the claims to an electronic environment. Alternatively, patent applicants should look for creative ways to include structural element s in the claims, such as the table, bet t ing implements or other features attendant to the game.

 John Artz is a partner in the Intellectual Property Practice Area of Dickinson Wright PLLC and is co-chair of the Firm’s Intellectual Property Litigation Group. He is also a member of the Firm’s Gaming Practice Group. John can be reached at jsartz@dickinsonwright.com.

 1. Blackjack dates back to England and at least the 1700s. http://www.casino.org/games/blackjack/history.php. Craps dates back to at least 17th century France with modern day craps taking shape in America in the 19th century. http://www.worlds-best-online-casinos.com/Articles/craps-history.html. Baccarat was introduced in France in the late 1400s. http://www.gambling-baccarat.com/baccarat_history.htm. Roulette appears to date back to England in the 1500s and may have origins all the way back to Ancient Rome. http://www. casinonavigator.com/games-strategies/roulette-history/. Poker is thought to have its origins in France in the 15th century. http://www.cardschat.com/poker/history/.

2. See e.g., U.S. Patent No. 5,997,002.

3. See e.g., U.S. Patent Nos. 6,702,289 and 8,128,472.

4. See e.g., U.S. Patent Nos. 5,788,574 and 6,450,500.

 5. This issue applies only to table game methods that are played in gaming establishments, such as casinos, and not the identical method played on an electronic device or the Internet. The USPTO has determined that the electronic versions of table game methods employ structure (i.e., a computer) that is not present in the table game version. Indeed, the USPTO continues to issue patents for inventions related to such games played in an electronic environment.

6. The Supreme Court affirmed the CAFC decision, but held that the machine-or-transformation test is not the sole test for determining patentability as other criteria for making this determination were also available. Bilski v. Kappos, 130 S. Ct. 3218 (2010).

7. http://www.uspto.gov/patents/law/exam/bilski_guidance_27jul2010.pdf.