Addressing subject matter eligibility issues (§ 101), the US Court of Appeals for the Federal Circuit affirmed the district court’s judgment that a patent directed to “shuffling and dealing a standard deck of cards” is not eligible for patent protection, and declined to address whether the US Patent and Trademark Office’s (PTO’s) patent-eligibility guidelines for examiners improperly exceeded the scope of the Supreme Court of the United States’ ruling in Alice Corp. v. CLS Bank Int’lIn re Ray Smith, Amanda Tears Smith, Case No. 15-1664 (Fed. Cir., Mar. 10, 2016) (Stoll, J).

Applicants Ray and Amanda Tears Smith appealed the final decision of the Patent Trial and Appeal Board (PTAB or Board) affirming the rejection of their application for claiming patent-ineligible subject matter under § 101. Applying the machine-or-transformation test described in Bilski, the examiner concluded that the claims represented “an attempt to claim a new set of rules for playing a card game,” which “qualifies as an abstract idea.” On appeal, the Board affirmed the rejection under the two-step test outlined in Alice. Applying step one, the Board determined that “independent claim 1 is directed to a set of rules for conducting a wagering game which . . . constitutes a patent-ineligible abstract idea.” For the second step, the Board concluded that “shuffling and dealing cards are conventional in the gambling art,” and as such, “do not add enough to the claims” to render them patent eligible. Applicants appealed to the Federal Circuit.

The Federal Circuit concluded that the Board correctly rejected the applicants’ application, agreeing that card game rules are an abstract idea and therefore not patent eligible under Alice. Specifically, because the applicants’ game involved shuffling and dealing a standard deck of cards, it did not involve an inventive concept that could be patented. Moreover, according to the Federal Circuit, “just as the recitation of computer implementation fell short in Alice, shuffling and dealing a standard deck of cards are ‘purely conventional’ activities” that are not eligible for patent protection. The Federal Circuit noted that not all games are foreclosed from patent protection, stating that “we could envisage, for example, claims directed to conducting a game using a new or original deck of cards potentially surviving” the Alice test. 

The applicants also challenged the PTO’s 2014 Interim Guidance on Patent Subject Matter Eligibility (which explains how to apply Alice during the examination of a patent application), arguing that the guidelines “improperly extend the bounds of those four decisions without any substantive legal precedence or authority” and “improperly applied extreme and faulty analogies to apply Alice.” The Federal Circuit declined to consider this argument, explaining that the guidelines are not intended to create any right that was enforceable against the PTO. In any case, the PTO’s rejection of patent applications is based on substantive law, and only those rejections, not the guidelines, can be appealed.