United States Court of Appeals 

for the Federal Circuit ______________________ 

IN RE: RAY SMITH, AMANDA TEARS SMITH,

Appellants

______________________ 

2015-1664

______________________ 

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board, in No. 12/912,410.

______________________ 

Decided: March 10, 2016

______________________ 

MARK ALAN LITMAN, Mark A. Litman & Associates, 

P.A., Edina, MN, argued for appellants.

SCOTT WEIDENFELLER, Office of the Solicitor, United 

States Patent and Trademark Office, Alexandria, VA, 

argued for appellee Michelle K. Lee. Also represented by 

THOMAS W. KRAUSE, ROBERT MCBRIDE. 

______________________ 

Before MOORE, HUGHES, and STOLL, Circuit Judges.

STOLL, Circuit Judge. 

Ray and Amanda Tears Smith (collectively, “Applicants”) appeal the final decision of the Patent Trial and 

Appeal Board (“Board”) affirming the rejection of claims 

1–18 of U.S. Patent Application No. 12/912,410 (“the ’410 

patent application”) for claiming patent-ineligible subject 

matter under 35 U.S.C. § 101. Because the claims cover 
2 IN RE: SMITH

only the abstract idea of rules for playing a wagering 

game and use conventional steps of shuffling and dealing 

a standard deck of cards, we affirm. 

BACKGROUND

On October 26, 2010, Applicants filed the ’410 patent 

application, titled “Blackjack Variation.” According to the 

application, “[t]he present invention relates to a wagering 

game utilizing real or virtual standard playing cards.” 

Joint Appendix (“J.A.”) 258. Claim 1, which the Board 

analyzed as representative, recites: 

1. A method of conducting a wagering game

comprising:

[a]) a dealer providing at least one deck of . . . 

physical playing cards and shuffling the physical

playing cards to form a random set of physical 

playing cards;

[b]) the dealer accepting at least one first wager from each participating player on a player 

game hand against a banker’s/dealer’s hand;

[c]) the dealer dealing only two cards from the 

random set of physical playing cards to each designated player and two cards to the banker/dealer 

such that the designated player and the banker/dealer receive the same number of exactly two 

random physical playing cards; 

[d]) the dealer examining respective hands to 

determine in any hand has a Natural 0 count

from totaling count from cards, defined as the 

first two random physical playing cards in a hand 

being a pair of 5’s, 10’s, jacks, queens or kings;

[e]) the dealer resolving any player versus

dealer wagers between each individual player 

hand that has a Natural 0 count and between the 

dealer hand and all player hands where a Natural
IN RE: SMITH 3

0 is present in the dealer hand, while the dealer

exposes only a single card to the players;

[f]) as between each player and the dealer 

where neither hand has a Natural 0, the dealer 

allowing each player to elect to take a maximum

of one additional card or standing pat on the initial two card player hand, while still having seen 

only one dealer card;

[g]) the dealer/banker remaining pat within a 

first certain predetermined total counts and being 

required to take a single hit within a second predetermined total counts, where the first total

counts range does not overlap the second total 

counts range;

[h]) after all possible additional random physical playing cards have been dealt, the dealer comparing a value of each designated player’s hand to 

a final value of the banker’s/dealer’s hand wherein 

said value of the designated player’s hand and the 

banker’s/dealer’s hand is in a range of zero to nine 

points based on a pre-established scoring system 

wherein aces count as one point, tens and face 

cards count as zero points and all other cards 

count as their face value and wherein a two-digit 

hand total is deemed to have a value corresponding to the one’s digit of the two-digit total; 

[i]) the dealer resolving the wagers based on 

whether the designated player’s hand or the

banker’s/dealer’s hand is nearest to a value of 0.

J.A. 10–11. The examiner rejected claims 1–18 as directed to patent-ineligible subject matter under § 101, 

applying the machine-or-transformation test described in

Bilski v. Kappos, 561 U.S. 593 (2010). The examiner 

concluded that the claims represented “an attempt to 

claim a new set of rules for playing a card game,” which 
4 IN RE: SMITH

“qualifies as an abstract idea.” J.A. 102. On appeal, the 

Board affirmed the rejection, applying the two-step test 

outlined in Alice Corp. v. CLS Bank International, 134 

S. Ct. 2347 (2014), which had been decided in the interim. 

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.” J.A. 16. Applying 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. 

J.A. 17. 

Applicants appealed to this court, and we have jurisdiction pursuant to 28 U.S.C § 1295(a)(4)(A) and 

35 U.S.C. § 141(a). 

DISCUSSION

We review de novo whether a claim is drawn to patent-ineligible subject matter. In re Nuijten, 500 F.3d 

1346, 1352 (Fed. Cir. 2007). Section 101 defines patenteligible subject matter as “any new and useful process, 

machine, manufacture, or composition of matter, or any 

new and useful improvement thereof.” 35 U.S.C. § 101. 

The Supreme Court has “long held that this provision 

contains an important implicit exception. Laws of nature, 

natural phenomena, and abstract ideas are not patentable.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 

132 S. Ct. 1289, 1293 (2012) (internal quotation marks, 

brackets, and citations omitted). 

To determine whether an invention claims ineligible 

subject matter, we apply the now-familiar two-step test 

introduced in Mayo, id. at 1296–97, and further explained 

in Alice, 134 S. Ct. at 2355. First, we determine whether 

the claims at issue are directed to a patent-ineligible 

concept such as an abstract idea. Id. Second, we “examine the elements of the claim to determine whether it 

contains an ‘inventive concept’ sufficient to ‘transform’ the 
IN RE: SMITH 5

claimed abstract idea into a patent-eligible application.” 

Id. at 2357 (quoting Mayo, 132 S. Ct. at 1294, 1298). 

On the first step, we conclude that Applicants’ claims, 

directed to rules for conducting a wagering game, compare 

to other “fundamental economic practice[s]” found abstract by the Supreme Court. See id. As the Board reasoned here, “[a] wagering game is, effectively, a method of 

exchanging and resolving financial obligations based on 

probabilities created during the distribution of the cards.” 

J.A. 15. In Alice, the Supreme Court held that a method 

of exchanging financial obligations was drawn to an 

abstract idea. 134 S. Ct. at 2356–57. Likewise, in Bilski, 

the Court determined that a claim to a method of hedging 

risk was directed to an abstract idea. 561 U.S. at 611. 

Here, Applicants’ claimed “method of conducting a wagering game” is drawn to an abstract idea much like Alice’s

method of exchanging financial obligations and Bilski’s

method of hedging risk. 

Moreover, our own cases have denied patentability of 

similar concepts as being directed towards ineligible 

subject matter. See OIP Techs., Inc. v. Amazon.com, Inc., 

788 F.3d 1359, 1362 (Fed. Cir. 2015) (finding offer-based 

price optimization abstract), cert. denied, 136 S. Ct. 701

(2015); Planet Bingo, LLC v. VKGS LLC, 576 F. App’x 

1005, 1007–08 (Fed. Cir. 2014) (determining that methods 

of managing a game of bingo were abstract ideas). Thus, 

in light of these cases, we conclude that the rejected 

claims, describing a set of rules for a game, are drawn to 

an abstract idea. 

Our inquiry, however, does not end there. Abstract 

ideas, including a set of rules for a game, may be patenteligible if they contain an “‘inventive concept’ sufficient to 

‘transform’ the claimed abstract idea into a patent-eligible 

application.” Alice, 134 S. Ct. at 2357 (quoting Mayo, 132 

S. Ct. at 1294, 1298). But appending purely conventional 

steps to an abstract idea does not supply a sufficiently
6 IN RE: SMITH

inventive concept. Id. at 2357–58. The claims here 

require shuffling and dealing “physical playing cards,” 

which Applicants argue bring the claims within patenteligible territory. J.A. 10–11. We disagree. Just as the 

recitation of computer implementation fell short in Alice, 

shuffling and dealing a standard deck of cards are “purely 

conventional” activities. See Alice, 134 S. Ct. at 2358–59. 

We therefore hold that the rejected claims do not have an 

“inventive concept” sufficient to “transform” the claimed 

subject matter into a patent-eligible application of the 

abstract idea. 

That is not to say that all inventions in the gaming 

arts would be foreclosed from patent protection under 

§ 101. We could envisage, for example, claims directed to 

conducting a game using a new or original deck of cards

potentially surviving step two of Alice. The Government 

acknowledged as much during oral argument. See Oral

Argument at 14:59–15:31, available at

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

15-1664.mp3. 

Finally, we cannot address Applicants’ argument that 

the PTO’s 2014 Interim Guidance on Patent Subject 

Matter Eligibility (“Interim Eligibility Guidance”) exceeds 

the scope of § 101 and the Supreme Court’s Alice decision. 

Applicants’ challenge to the Guidelines is not properly 

before us in this appeal. See 35 U.S.C. § 141(a) (stating 

that an applicant “dissatisfied with the final decision” of 

the Board may appeal that decision to the Federal Circuit) (emphasis added). As the Interim Eligibility Guidance itself states, it “is not intended to create any right or 

benefit, substantive or procedural, enforceable by any 

party against the Office. Rejections will continue to be 

based upon the substantive law, and it is these rejections

that are appealable.” Interim Eligibility Guidance, 

Vol. 79 Fed. Reg. 74618, 74619 (Dec. 16, 2014) (emphasis 

added). And even if the Applicants had properly challenged the Guidance, we have previously determined that 
IN RE: SMITH 7

such Guidance is “not binding on this Court.” See In re 

Fisher, 421 F.3d 1365, 1372 (Fed. Cir. 2005). Thus we 

decline to consider Applicants’ argument regarding the 

Interim Eligibility Guidance.

We have considered Applicants’ remaining arguments 

and find them unpersuasive. Because the rejected claims 

are drawn to the abstract idea of rules for a wagering 

game and lack an “inventive concept” sufficient to “transform” the claimed subject matter into a patent-eligible 

application of that idea, we affirm.

AFFIRMED