# United States **Court of Appeals** 
**for the Federal Circuit**

______________________

ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY

LIMITED AND ARISTOCRAT TECHNOLOGIES, INC., Plaintiffs

- Appellants,

v.

INTERNATIONAL GAME TECHNOLOGY AND IGT, Defendants

- Appellees

.

______________________

2010

- 1426

______________________

Appeal from the United States District Court for the

Northern District of California in N o. 06

- CV

- 3717, Senior Judge Ronald M. Whyte

.

______________________

Decided: March 13, 2013

_______________ _______

M EREDITH M ARTIN A DDY

, Brinks Hofer Gilson & Lione, of Chicago, Illinois, argued for plaintiffs

appellants. With her on the brief were D OMINIC P.

Z ANFARDINO

, R OBERT G. P LUTA and J EREMY S. S NODGRASS

. Of counsel on the brief were B LAIR M. J ACOBS and

B UREDEN J. W ARREN

, McDermott Will & Emery LLP, of Washington, DC; and T ERRENCE P. M C M AHO N and

A NTHONY D E A LCUAZ

, of Menlo Park, California

.ARISTOCRAT TECH v. INTL GAME TECH 2

D EANNE E. M AYNARD , Morrison & Foerster, LLP, of Washington, DC, argued for defendants

- appellees. With

her on the brief were A LEXANDER J. H ADJIS

, B RIAN R.

M ATSUI

, M ARC A. H EARRON and A DAM A. E LTOUKHY . Of

counsel on the brief was J EFFREY S. L OVE , Klarquist Sparkman, LLP, of Portland, Oregon.

______________________

Before O’M ALLEY

, B RYSON * , and L INN **

, Circuit Judges

.
O’M ALLEY

, Circuit Judge

. Aristocrat Technologies Australia PTY Limited and Aristocrat Technologies, Inc. (collectively, “Aristocrat”) and International Game Technology and IGT (collectively, “IGT”) compete in the casino gaming machine industry. In 2006, Aristocrat brought the cur rent action against IGT in the Northern District of California alleging that IGT directly and indirectly infringes two of Aristocrat's
patents

— U.S. Patent No. 7,056,215 (“the ’215 patent”)

and U.S. P atent No. 7,108,603 (“the ’603 patent”). The

asserted patents generally relate to gaming machines, such as slot machines, and claim methods for awarding a progressive prize through a bonus game that may appear

in addition to the main game. Aristocrat accuses IGT gaming devices that feature various bonus game s in which a player may win progressive prizes. Following remand from a previous appeal, IGT moved for summary judgment of noninfringement

. On May 13, 2010, the district court granted IGT’s m otion for summary judgment of noninfringement as to all

assert ed claims of both patents explaining that IGT's

* Circuit Judge Bry son assumed senior status on January 7, 2013.

** Circuit Judge Linn assumed senior status on November 1, 2012.ARISTOCRAT TECH v. IN TL GAME TECH 3

accused products require two separate actors: (1) the casino via the gaming machine and (2) the player. Under

our decision in Muniauction , the district court found that the lack of a single entity performing all of the steps of the asserted claims precludes direct infringement as a

matter of law. See Muniauction, Inc. v. Thomson Corp.

, 532 F.3d 1318, 1330 (Fed. Cir. 2008). While Aristocrat’s appeal of the district court’s claim construction and su mmary judg ment ruling was pending, we issued our en banc

decision in Akamai Technologies, Inc. v. Limelight Ne tworks, Inc. , 692 F.3d 1301 (Fed. Cir. 2012). We affirm the district court’s claim constructions and its ruling on direct infringement and, in light of our decision in Akamai , we vacate and remand the portion of the district court’s ruling on indirect infringement.

B ACKGROUND

A. Patents In Suit

The ’215 patent, entitled “Slot Machine Game and System With Improved Jackpot Feature,” issued on June 6, 2006. A s described in the specification, the claimed invention related to a system of linked gaming machines through which an allegedly improved jackpot mechanism is provided to a player. Incremental jackpots, i.e., the payout of an additional prize from a slot machine based on predetermined conditions in combination with rando mly selected criteria, are well known in the prior art. According to the ’215 patent, however, these prior art systems lack flexibility in both operator control and the ability to tailor t he awarding of prizes to player prefe rences. As an improvement on these existing systems, the ’215 patent describes a system wherein an additional prize is awarded to a player through a secondary feature game appearing after the main game is completed.

T hrough the use of this secondary game to award a pr ogressive jackpot, the ’215 patent provides a system by which progressive jackpots can be linked across gamingARISTOCRAT TECH v. INTL GAME TECH 4

platforms (e.g., slot machines, cards, keno, bingo or p achinko), are awarded based on credits wagered, and can be adjusted without changing the main game. Claim 1 of

the ’215 p atent is exemplary for our purposes:

In a network of gaming machines, each of said gaming machines having a user interface activa table by a player to affect game display, ea ch of said gaming machines being capable of accepting different wager amounts made by the player, a method of randomly awarding one progressive prize from a plurality of progressive prizes using a second game to select said one progressive prize, a display of said second game being triggered upon an occurrence of a random trigger condition ha ving a probability of occurrence related to the amount of the wager, comprising:

making a wager at a particular gaming machine in the network of gaming m achines;

initia ting a first main game at said pa rticular gaming machine;

causing a second game trigger condition to occur as a result of said first main game being initiated, said second game trigger condition occurring randomly and having a probability of occurrence dep endent on the amount of the wager made at said pa rticular gaming machine, said step of cau sing the second game trigger condition including:

(1) selecting a random number from a predetermined range of numbers;

(2) allotting a plurality of numbers from the p redetermined range ofARISTOCRAT TECH v. IN TL GAME TECH 5

numbers in proportion to the amount of the wager made at said particular gaming machine, said step of allotting including allotting

one number for each unit of cu rrency of the amount wagered; and

(3) indicating the occurrence of the

s econd game trigger condition if

one of the allotted numbers

matches the selected random number;

triggering a second game to appear at said particular gaming machine in response to said occurrence of said second game tri gger condition, said second game appe aring after completion of said first main game;

randomly selecting said one progressive prize from said plurality of progressive prizes that has been won;

displaying said second game to the player at said particular gaming machine in r esponse to said trigg ering;

activating said user interface at said pa rticular gaming machine by said player during said displaying of said second game to affect the display of said second game;

identifying to the player said one progre ssive prize from said plurality of progre ssive prizes that has been won; and

awarding said one progressive prize from said plurality of progressive prizes that

has been won.

’215 patent col. 8 l. 45

– col. 9 l. 25. Figure 2 of the ’215 patent shows the algorithm by which the system awards aARISTOCRAT TECH v. INTL GAME TECH 6

progressive prize to a player.

Through this algorithm, random numbers are generatedARISTOCRAT TECH v. IN TL GAME TECH 7

from a predetermined range based on the preferences of the operator. The system then selects a random number from that range and allocates a contribution to the pr ogress ive prize based on the number of credits wagered by the player. The player’s numbers are then selected, again based on the number of credits wagered, and compared to the random number generated in step 21. If the random number matches one of the player’s numbers, the system initiates the feature game through which the value of the progressive jackpot to be paid to the player is determined. If the feature game is not triggered

— i.e., there is not a match between one of the player’s numbers and the

random n umber

— a new random number is selected and the system waits for the main game to be initiated again.

The ’603 patent, also entitled “Slot Machine Game and System With Improved Jackpot Feature,” issued on September 19, 2006 and is a continuation of the ’215 patent. The claims of the ’603 patent are substantially similar for the purposes of this appeal to the claims of the ’215 patent except that they lack the step of “activating said user interface at said particular gaming machine by said player during said displaying of said second game to affect the display of said second game.” The removal of this step means the progressive jackpot awarded to the player is selected randomly rather than based on input from the player.

B. Procedural History

On June 12, 20 06, Aristocrat filed suit against IGT for infringement of the ’215 patent in the United States
District Court for the Northern District of California. Aristocrat amended its complaint to assert infringement of the ’603 patent upon the issuance of that pat ent. After the parties completed claim construction briefing, IGT moved for summary judgment of invalidity based on a theory that the ’215 patent was abandoned and that Aristocrat failed to properly revive the application. InARISTOCRAT TECH v. INTL GAME TECH 8

addition, according to IGT, the improperly revived ’215 patent application anticipated the ’603 patent under 35 U.S.C. § 102(b). The district court granted IGT's motion on June 13, 2007 and entered final judgment in favor of

IGT. Aristocrat Techs. Austl. Pty, Ltd. v. Int’l Game Tec h.

, No. 06

- CV

- 3717, 2007 U.S. Dist. LEXIS 97582 (N.D. Cal. Sept. 4, 2007). Aristocrat timely appealed and, on Se ptember 22, 2008, we reversed the judgment of the district court finding “that improper revival may not be asserted

as a defense in an action i nvolving the validity or i nfringement of a patent.” Aristocrat Techs. Austl. Pty Ltd.
v. Int’l Game Tech. , 543 F.3d 657, 663 (Fed. Cir. 2008). Accordingly, we remanded the case to the district court.

On February 19, 2009, IGT filed a Motion for Su mmary J udgment of Noninfringement (IGT’s “Motion”) arguing, based on a joint infringement defense, that IGT performs some, but not all, of the claimed steps in the asserted patents. The district court held a claim co nstruction hearing on March 18, 2009, based on the brie fing filed prior to the first appeal. On May 14, 2009, the

district court entered its claim construction order and ordered supplemental briefing on terms

— including “ma king a wager” and “awarding”

— at issue in this appeal. The parties addressed th e supplemental terms in the remaining briefing on IGT’s Motion.

On May 13, 2010, the district court granted summary judgment in favor of IGT. The district court analyzed Aristocrat’s infringement contentions under the fram ework we set forth in Muniauction , whereby direct i nfringement requires a single party to perform every step of a claimed method and, where more than one party performs the steps of the claimed method, there can be no infringement absent direction or control over the entire process by the accused party. Aristocrat Techs. Austl. Pty,
Ltd. v. Int’l Game Tech. , 714 F. Supp. 2d 991, 995 (N.D. Cal. 2010). Finding it “undisputed that the ‘activating user interface’ step is performed by the player, not by theARISTOCRAT TECH v. IN TL GAME TECH 9

gaming machine,” and thus the ’215 patent requires that “at least one step must be performed by the player, and at least one step must be performed by the gaming m achine,” the district court turned to the question of whether IGT exercised direction or control over the player’s pe rformance o f the “activating a user interface” step. Id.

The district court first rejected Aristocrat’s theory that IGT’s provision of free credits to a player is sufficient direction or control such that a player’s actions are a ttributable to IGT. Next, the cour t addressed Aristocrat’s contention that IGT infringes the claimed methods through its testing of the accused machines by IGT e mployees. While the “testing” theory of infringement solved Aristocrat’s divided infringement problem with respect to
the “activ ating a user interface” limitation, the district court found that IGT failed to practice the step of “awar ding said one progressive prize from said plurality of progressive prizes that has been won” while testing the

machines. As a matter of claim constru ction, the district court held that the “awarding” step “requires more than displaying the amount of the prize won.” Id. at 997. Thus, because “[i]t is undisputed that during the testing of gaming machines legal entitlement to a prize is never

conferred upon IGT employees,” the district court found that the “awarding” step is not performed during testing.

Id.

With respect to the ’603 patent

— which lacks the “a ctivating a user interface” limitation

— the district court analyzed whether the “making a wager” step also requires some action by a player. Considering both the intrinsic evidence, in the form of the shared specification of the ’215 and ’603 patents and the prosecution history of the ’215 patent, and the extrinsic evidence, introduced through exper t testimony submitted by Aristocrat, the district court rejected Aristocrat’s contention that “ma king a wager” means processing a bet. Rather, the court agreed with IGT and construed the term “to mean betting,ARISTOCRAT TECH v. INTL GAME TECH 10

which is an act performed by the player.” Id

. at 1000. The court also noted that, until IGT brought its Motion, Aristocrat interpreted “making a wager” as a step pe rformed by the player as opposed to the operator of the gaming machine. Id. Having previously considered and rejected Aristocrat’s co ntention that IGT directs or co ntrols the players by providing free credits and that IGT performs the “awarding” step while testing the machines, the district court granted summary judgment of noni nfringement in favor of IGT on both the ’215 and ’603
paten ts.

On June 15, 2010, the district court granted Arist ocrat's motion for entry of final judgment of noninfring ement. Aristocrat timely appealed and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

D ISCUSSION

On appeal, Aristocrat contests the dist rict court’s co nstruction of “making a wager” and “awarding said one progressive prize.” Aristocrat also argues that material issues of fact exist as to whether IGT performs the “ma king a wager” and “awarding” steps under the district

court’s construction s. IGT contends, in turn, that the district court correctly construed these terms and that summary judgment of noninfringement is separately supportable because, in the accused devices, the bonus game appears before, rather than after, the conclusion of

t he main game, and thus do es not satisfy the limitation that the “second game appears after completion of said first main game.”

A. Claim Construction

We review claim construction de novo. Cybor Corp. v. FAS Techs., Inc. , 138 F.3d 1448, 1456 (Fed. Cir. 19 98) (en banc). To interpret the claims, we look first to the intri nsic evidence in the record, including the claim language, the written description, and the prosecution history.ARISTOCRAT TECH v. IN TL GAME TECH 11

Vitronics Corp. v. Conceptronic, Inc. , 90 F.3d 1576, 1582 (Fed. Cir. 1996). Although it is less significant than intrinsic evidence, a court can consider extrinsic evidence in the record, which “consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and lea rned treatises.” Phillips v. AWH Corp. , 415 F.3d 1303, 1317 (Fed. Cir. 2005) (en banc) ( internal quotation marks omi tted) (citation omitted)

. A claim’s preamble may limit the claim when the claim drafter uses the preamble to define the subject matter of t he claim. Allen Eng’g Corp. v.

Bartell Indus. , 299 F.3d 1336, 1346 (Fed. Cir. 2002).

1. “awarding said one progressive prize”

In granting summary judgment for IGT, the district court found no evidence that the patentee intended the term “awarding said one progressive prize” to mean something other than its ordinary meaning. Thus, the court construed the “awarding prize” limitation as confe rring rights to a prize as opposed to simply displaying for viewing the amount of the prize won. Specifically, the district court found that the claims of the ’215 patent include both the steps of identifying the prize to a player and awarding said prize to the player; if the awarding step could be met by displaying the prize amount, the identifying step would be rend ered superfluous. Because “[i]t is undisputed that during the testing of gaming machines, legal entitlement to a prize is never conferred upon IGT employees,” the district court determined that the “awarding step” was not performed by IGT during the

testi ng of the machines and summary judgment in favor of IGT was appropriate. Aristocrat , 714 F. Supp. 2d at

997.

Aristocrat argues on appeal that, contrary to the di strict court’s construction, the “awarding” step does not “require a transfer of legal entitle ment to the prize” and that “awarding” means “presenting” or “display[ing]” toARISTOCRAT TECH v. INTL GAME TECH 12

“the player the monetary amount determined to be due.” Appellant’s Br. at 31

- 32 . Aristocrat first argues that “the intrinsic evidence shows that the ‘awarding’ step occurs

whe n the gaming machine presents” or “display[s] to the player” a “monetary amount due.” Id. at 32. For exa mple, because the preamble of each of the claims begins with: “In a network of gaming machines . . . ,” Aristocrat asserts that the specification con firms its understanding that the system itself, without involvement of the game operator or the player, performs the awarding step. Aristocrat also points to the statement that:

[p]referably, the prize awarded in a jackpot game by the system of the prese nt invention, is a mon etary amount the value of which is incremented with each game play ed on each gaming machine or console in the system. Alternatively, the i ncrementation can take place on a per token bet

basis.

’215 patent col. 4 ll. 45

- 50. And according to Aristocrat, that Figure 2 depicts a “prize awarding algorithm” that may be programmed into the gaming machine in an
embodiment of the claimed method is further evidence that the system performs the awarding step without involvement of the play er. Finally, Aristocrat argues that defining “awarding” in terms of conferring a “legal ent itlement” produces an absurd result, wherein “claim scope could differ from jurisdiction to jurisdiction, depending on what constitutes ‘legal entitlement.’” Appel lant’s Br. at 36. The awarding step, therefore, could never be met “by a gaming machine in Utah or Hawaii because under their laws no person is legally entitled to an award by a slot

machine.” Id. at 37. Yet, in other states where gambling

i s legal, Ari stocrat argues, “that same person playing the same machine with the same outcome may be legally

entitled to an award.” Id.

IGT counters that Aristocrat’s construction is “at oddsARISTOCRAT TECH v. IN TL GAME TECH 13

with the ordinary meaning of ‘awarding’” in that it fails to correspond to the dictionary definitions cited by Arist ocrat. Appellee’s Br. at 33. IGT also contends that Arist ocrat’s construction is inconsistent with the claim language surrounding the term at issue. Specifically, as did the district court, IGT points to the addi tional steps of “di splaying” and “identifying” the prize as confirmation that awarding means conferring an entitlement, rather than “presenting” the amount due. Thus “awarding” must have a different meaning from those other terms and

Aristocrat’s construc tion “would render the ‘identifying’ step superfluous.” Id. at 3 5 (citing Merck & Co. v. Teva Pharms. USA, Inc. , 395 F.3d 1364, 1372 (Fed. Cir. 2005) (“A claim construction that gives meaning to all the terms of the claim is preferred over one that does not do so.”)). And, the “construction that Aristocrat would give to ‘awarding

, ’ i.e., displaying to the player the amount to be awarded, is precisely the same action that is performed in the immediately preceding step[] [of] ‘identifying to the player sai d one progressive prize . . . that has been won.’” Appellee’s Br. at 35.

IGT also argues that the specification uses “award” and “pay” interchangeably. First, IGT points to the specification’s descriptions of prior art schemes for indu cing play at slot m achines:

Many schemes have been devised in the past to induce players to play slot machines including schemes such as specifying periods during which jackpot prizes are increased or bonus jackpots paid . Other schemes involve awarding an add itional prize to a first player to achieve a pred etermined combination on a poker machine.

’215 patent col. 1 ll. 13

- 18 (emphasis added);

[ O ] ne . . . prior art arrangement . . . pays the jac kpot prize when the count reaches some predete rmined and randomly selected n umber. In a moreARISTOCRAT TECH v. INTL GAME TECH 14

recent prior art arrangement, . . . the prize is

awarded to a machine when the game number it is allocated matches a preselected random nu mber.

’215 patent col. 1 ll. 26

- 35 (emphasis added). IGT also refutes Aristocrat’s reliance on Figu re 2 and argues that “Figure 2 and a discussion of it in the specification make clear that paying the award is part of the awarding pr ocess.” Appellee’s Br. at 37. IGT notes that the last step on the flowchart depicted in Figure 2 is to “wait for input

t o indicate prize paid and machine unlocked.” ’215 patent Fig. 2. In addition, IGT cites the specification’s discussion of Figure 2, which explains that:

In the preferred embodiment, a prize is always awarded to the jackpot feature game, t he feature

game being used to determine the size of the prize to be awarded (see step 27) . T he winning machine

is then locked up (see step 28) and the controller awaits an indication that the prize has been paid before allowing the machine to be unlocked (see step 29). In some embodiments, the machine will not be locked up in steps 28 and 19, but instead the prize will simply be paid

. . . . ’215 patent col. 6 ll. 38

- 45

. We agree with IGT and the district court that the awarding step must be construed as conferring ri ghts from the operator of the game to the player. While Ari stocrat does cite evidence suggesting that the “awarding” step is performed by a component within “a network of gaming machines,” that evidence fails to show that awarding means “presenting to the player the monetary

amount determined to be due.” Aristocrat’s reliance on the statement in the summary of the invention that “[p]referably, the prize awarded in a jackpot game by the system of the present invention, is a monetary amount

the value of whi ch is incremented with each game playedARISTOCRAT TECH v. IN TL GAME TECH 15

on each gaming machine or console in the system” is misplaced because that sentence merely describes the character of the prize to be awarded; it does not define what constitutes the awarding step. ’215 patent col. 4 ll.

44

- 48.

Aristocrat’s proposed construction of the “awarding” step is also inconsistent with the surrounding claim language. As noted by the district court and IGT, this claim language shows that “the ‘awarding prize’ step cannot be met simply by di splaying [or ‘presenting’] the amount of the prize won” because “this would render the ‘identifying prize’ step superfluous.” Aristocrat , 714 F. Supp. 2d at 99 6 . Aristocrat attempts to differentiate between these two steps by arguing that the “identifyin g” step involves “indicat[ing] which one of the four named progressive prizes is won” without displaying the amount of the prize, while the “awarding” step displays the amount of the prize. Appellant’s Br. at 34

- 35. This distinction lacks support in the intrinsic record and is inconsistent with the ordinary meaning of the terms “identifying” and “awarding.” Both steps use identical language to refer to the object of the claimed action: “said one progressive prize from said plurality of progressive prize s that has been won.” Yet, Aristocrat would have this language mean different things depending on the step in which it is used. In the “identifying” step, Arist ocrat would have this language mean the “type” of progre ssive prize won, “e.g., grand, major, minor or mini.” Id. at 34. With respect to the “awarding” step, Aristocrat would have the identical language mean the “amount” of the progressive prize won. The only difference in the la nguage of the two steps, however, is that one begins with “identify ing to the player,” while the other begins with “awarding.” Aristocrat does not explain how this distin ction supports two distinct meanings of “said one progre ssive prize from said plurality of progressive prizes that

has been won.”ARISTOCRAT TECH v. INTL GAME TECH 16

Nor does the specifica tion support such a distinction.

The ’215 patent describes an embodiment in which the “feature jackpot screen and signs display which jackpot has been won,” but this description does not assign a different meaning to the “said one progressive prize” language depending on the step in which it appears. Se e ’215 patent col. 8 ll. 10

- 1 1 . Rather, this embodiment
demonstrates that Aristocrat’s construction of the “awar ding” step would render the identifying step superfluous. Specifically, the above

- cited description uses “display” to

describe the action whic h Aristocrat claims is performed during the “identifying” step, i.e., indicating what type of prize was won. And, “display” is the same verb Aristocrat uses to describe the action performed during the “awar ding” step. Compare ’215 patent col. 8 ll. 10

- 11 (“[T ] he feature jackpot screens and signs display which jackpot has been won.”) (emphasis added), with Appellant’s Br. at 35 (“The ‘awarding’ step occurs when the ‘monetary

amount’ . . . is displayed to the player in a jackpot game . . . .”) (emphasis add ed) . If one were to substitute “display” for both “identifying” and “awarding” in the claims, the only distinction between the steps would be the “to the player” language in the identifying step. The absence of “to the player” in the “awarding” step, how ever, cannot justify Aristocrat’s proposed dichotomy wherein one step involves displaying the monetary amount of the prize while the other displays the type of prize won. The di strict court’s

— and our

— construction does not suffer from the same infirmity. Under the correct construction, “said one progressive prize from said plurality of progressive prizes that has been won” would have the same meaning in both steps, and the “identifying” step is not superfl uous.

We also reject Aristocrat’s contention that t he district

court’s construction would result in inconsistent trea tment of the patent in different jurisdictions. Gambling may be tolerated to a greater or lesser extent in differentARISTOCRAT TECH v. IN TL GAME TECH 17

states but we do not construe the awarding step

— or view

the district cou rt’s determination

— so narrowly as to be dependent on a particular state’s gambling regulations. The critical aspect of the construction of the “awarding” step is the transfer of the right to a prize from the casino operator to the player

— a transfer that n ot even Arist ocrat alleges occurs during IGT’s testing of their equi pment. That a particular state’s law may complicate a player’s ability to enforce collection of their prize does not affect the operation of the system claimed in the asserted
patents or our construction of the “awarding” step.

Finally, while we see no reason to resort to consider ation of extrinsic evidence, given the clarity of the claim term itself and the support within the specification, we note that our construction is fully consisten t with the dictionary definitions put forward by both parties. Arist ocrat argues that, in relying on the dictionary definition, the district court imported an extraneous limitation into the claims. But, contrary to this contention, the district

court sim ply used the provided definitions to inform its understanding of the “ordinary and customary” meaning

of the word “award.” See Phillips , 415 F.3d at 132 2

- 23 (“Dictionaries or comparable sources are often useful to assist in understanding the commonly unde rstood mea ning of words and have been used both by our court and the Supreme Court in claim interpretation.”); see also id. (“[J]udges are free to consult dictionaries . . . at any time in order to better understand the underlying technology and may also r ely on dictionary definitions when constr uing claim terms, so long as the dictionary definition does not contradict any definition found in or ascertained by a reading of the patent documents. ”) (internal quotation

marks omitted) (citation omitted)

.

2. “ making a wager”

The claims of the asserted patents describe a network of gaming machines, “each of said gaming machines beingARISTOCRAT TECH v. INTL GAME TECH 18

capable of accepting different wager amounts made by a player.” ’603 patent col. 8 ll. 8

- 10; see also ’215 patent col.

8 ll. 4 7

- 4 9, col. 9 ll. 2 8

- 30. As interpreted by the district court, this claim language “indicates that gaming m achines accept wagers, while players make wagers.” Ari stocrat , 714 F. Supp. 2d 991, 994 (N.D. Cal. 2010) (emphasis in original). Thus, the district co urt construed “‘making a wager’ to mean betting, which is an act pe rformed by the player.” Id. at 1000. Aristocrat contends that the district court improperly added the limitation that the act is performed by the player and that “making a wager” is merel y carrying out a bet. Under Aristocrat’s proposed construction, all of the steps would have been performed by a single actor during normal play.

Aristocrat argues on appeal that the district court failed to recognize that when the claims require that a

s tep be performed by the player

— namely the “activating step” of the ’215 patent

— the claim explicitly states “by the player” and that claim 4 of the ’215 patent

— the method of claim 2 wherein the step of making a wager includes betting a plurality of credits

— confirms that the gaming machine itself carries out a bet. Aristocrat’s contentions are inconsistent with the specification, ho wever. For example, when describing the algorithm used by the gaming machine, the Abstract makes clear that credits are bet by the player:

Prior to each game, the gaming machine (10) s elects a random number from a range of numbers and during each game, the machine allocates the first n numbers in the range, where n is the nu mber of credits bet by the player in that game.

’215 pat ent at [57] . In addition, when describing prior art machines, the specification speaks in terms of the player as the actor doing the betting:

With some prior art combination based trigger a rrangements there is a serious disadvantage inARISTOCRAT TECH v. IN TL GAME TECH 19

that the player betting a single token per line, is just as likely to achieve a jackpot as the player playing multiple tokens per line. This has the e ffect of encouraging players playing for the bonus jackpot to bet in single tokens, rather than betting multiple tokens p er game.

Id. col. 1 ll. 42

- 48 (emphasis added). The specification also appears to use “playing” and “betting” synonymously, referring, in both cases, to actions of the player:

Typically, it would be expected that the game r eturn (RTP) is independent of th e number of coins bet per line. With conventional progressive jac kpot games though, increasing the credits bet per line creates a relative disadvantage as far as RTP is concerned. Lets [sic] say the start

- up amount for a feature jackpot is $10000. A pla yer who is playing 1 credit per line has a chance for $10000

for each credit played , whereas a player playing 5

credits per line only has a chance for $2000 for

each credit played . This creates a scale of dimi nishing returns. The smart player who gambles for the feature jackpot only, will always cover all playlines, but will only bet 1 credit per line b ecause the prize paid for the feature jackpot is the same irrespective of the bet.

Id. col. 2 ll. 3

- 16 (emphasis added). The above passages show that: (1) “betting” is an action performed by the player; and (2) contrary to Aristocrat’s contention, the term “credits bet” refers to credits that were bet by the player.

Nor does the prosecution history support Arist ocrat’s position that the machine itself makes the bet. As originally drafted, the “making a wager” step made clear that “betting” is performed by the player and that the machine “allows” such betting: “ allowing the player to bet a plurality of credits for a single play at a gaming m a-ARISTOCRAT TECH v. INTL GAME TECH 20

chine in the ba nk of gaming machines.” J.A. 575 (emph asis added). Through an amendment, Aristocrat modified the above language as follows, resulting in the language that issued as the “making a wager” step: “ allowing the player to bet a plurality of credits for a sing le play making

a wager at a particular gaming machine in the bank

network of gaming machines.” J.A. 629 (emphasis and strikethrough in original) . By removing the reference to the actor that “allows” the betting, Aristocrat, at best, introduced ambiguity into the claim. The amendment did not clearly limit the claim to activity by the machine as opposed to the player.

Aristocrat further argues that the district court e rroneously treated “wager”

— as it appears in the phrase “making a wager”

— and “wager amoun t”

— as it appears in the preamble of claim 2 of the ’215 patent

— as synon ymous. According to Aristocrat, this error led the court to conclude that, because the preamble states that “wager amounts” are made by a player, “wagers” must also be made by a player . In doing so, Aristocrat contends, “the district court improperly rendered meaningless the term ‘amount’ in the preamble, and read the limitation ‘by a player’ into the phrase ‘making a wager.’” Appellant’s Br. at 45. In Aristocrat’s view, the player i dentifies a “wager amount” while the gambling machine “carrie[s] out” a “‘wager’ (or bet).” Id.

Aristocrat’s arguments lack merit. As the district court found, the use of “amounts” is necessary in the preamble passage but not in the “making a wager” step

. An asserted purpose of the patented invention was to overcome a disadvantage in the prior art in which a player had no incentive to bet more than a single credit per game because the odds of winning the bonus were the same regardless of the number of cr edits bet. The paten tee overcame this disadvantage by tying the odds of wi nning the bonus to the number of “credits bet,” i.e., the wager amount, made by the player. Thus, for the inve n-ARISTOCRAT TECH v. IN TL GAME TECH 21

tion to work, the gaming machine must be “capable of accepting differ ent wager amounts made by the player,” as the preamble recites; if a gaming machine could accept only one wager amount, e.g., a single credit, the machine could not perform the asserted purpose of the invention, i.e., varying the probability of the appeara nce of the feature game based on the number of credits bet. ’603 patent col. 8 ll. 9

- 10, ’215 patent col. 8 l. 48. Similarly, the “causing a second game trigger condition” step discusses the “amount of the wager” because, as in the preamble,

the inclusio n of “amount” was necessary to explain the relationship between the value of the wager and the probability of the feature game appearing. ’215 patent

col. 8 ll. 59

- 64; col. 8 ll. 22

- 25 (“causing a second game trigger condition to occur . . . said second g ame trigger condition occurring randomly and having a probability of occurrence dependent on the amount of the wager made at said gaming machine . . .”) (emphasis added).

In the “making a wager” step it is unnecessary to
refer to “amounts” because the st ep does not discuss tying the odds of the feature game’s appearance to the amount of the wager. Thus, contrary to Aristocrat’s contention, the district court did not treat “wager” as synonymous with “wager amounts.” Rather, it recognized that “wager

amou nt” referred to the amount (or value) of the wager

— i.e., the number of credits bet

— whereas, standing alone, “wager” simply referred to a bet. The preamble makes clear that the player chooses “different wager amounts” and, absent contrary evidence, it is r easonable to conclude that the same actor that chooses “wager amounts” also makes “wagers.”

Aristocrat also claims that the district court “i mproperly disregarded” its expert’s declaration as conclus ory. We agree with the district court’s characterizati on of Mr. Crevelt’s declaration and see nothing improper in discounting conclusory statements as “not useful.” See Phillips , 415 F.3d at 1318 (“ [ E ] xtrinsic evidence in theARISTOCRAT TECH v. INTL GAME TECH 22

form of expert testimony can be useful to a court for,”

inter alia , the purpose of “establish[ing] that a particular term in the patent or the prior art has a particular mea ning in the pertinent field. However, conclusory, unsu pported assertions by experts as to the definition of a claim term are not useful to a court.”) (citations omit ted)

. While Crevelt’s declaration explains, at length, how a gambling machine’s software “carr[ies ] out or implement[s] a bet by executing computer code,” it fails to explain whether the patent’s use of “making a wager” refers to: (1) the steps performed by the gaming machine when it implements a bet; or (2) to the antecedent acts performed by the play er when she places a bet. See J.A. 442

- 43. Instead, Crevelt’s declaration “assumes that ‘making wager’ means pr ocessing a bet” and then explains how the machine pe rforms the processing. The district court explained the circularity of Crevelt’s reasoning as follows:

Crevelt explains that microprocessors have been used to control gaming machines since the early 1980s, and whenever a bet is placed, microproce ssors must carry out a sequence of programming steps, in particular, the step of transferring cre dit s from the credit meter to the bet meter. Crevelt

Decl. ¶¶ 6, 11. Since microprocessor involvement is required to process a bet, Crevelt concludes that “making a wager” necessarily refers to the proc edure by which microprocessors transfer credits

from th e credit meter to the bet meter. See id. at ¶ 6 ( “ IGT's proposed construction, in effect, would divest the gaming machine of any function relate d to processing a wager amount.” ). This reasoning, however, begs the question since it assumes that “making a wager” means processing a bet. If

“ making a wager ” refers to processing a bet, one may infer that “making a wager” describes this microprocesso r step. On the other hand, if “ma king a wager” refers to the act of betting, then itARISTOCRAT TECH v. IN TL GAME TECH 23

would describe an act by th e player rather than the microprocessor.

Aristocrat , 714 F. Supp. 2d at 999 (footnote omitted)

. Aristocrat urges us to find that Phillips requires only that an expert explain “how” a person of ordinary skill in the art would understand the term, but that an expert need not explain “why” a person of ordinary skill in the art would understand a term in a particular manner. This argument igno res Phillips ’s teaching that “conclus ory, unsupported assertions by experts as to the definition

of a claim term are not useful to a court.” 415 F.3d at 1318 (emphasis added). By failing to explain why a person of ordinary skill in the art would understa nd “making a wager” to describe the steps performed by the microprocessor in processing the bet, Crevelt failed to support his assertion that “making a wager,” as unde rstood by a person of ordinary skill in art , “means transfer

of credits fr o m the credit m eter to the bet meter by the game software.” J.A. 443. We find that the district court properly applied Phillips when it discounted Crevelt’s

declaration. 1

1 In its reply brief, Aristocrat attempts to bolster

Crevelt’s declaration by citing, for the first time, a Pen nsylvania gambling regulation that describes a gaming machine configured to wager credits:

A slot machine approved for use in a licensed facility must be configured to wager credits available for play in the following order: (1) Noncashable credits. (2) Cashable credits.

58 Pa. Code § 461a.7(x) (2010). This extrinsic ev idence of industry

- specific usage was not part of the record before the District Court, and Aristocrat cannot raise it

for the first time on appeal

— let alone in reply. See, e.g.,ARISTOCRAT TECH v. INTL GAME TECH 24

For the reasons stated above, we agree with the di strict court that the term “making a wager” shou ld be construed to mean “betting, which is an act performed by the player.”

B. Direct Infringement

Having construed the disputed claims, we turn to the district court’s grant of summary judgment of noni nfringement

. This court “reviews the district court’ s grant or denial of summary judgment under the law of the regional circuit.” Bd. of Trs. of Leland Stanford Junior Univ. v. Roche Molecular Sys. , 583 F.3d 832, 839 (Fed. Cir. 2009), aff'd , 131 S. Ct. 2188, 180 L. Ed. 2d 1 (2011) (internal quotation marks omitted) (citation omitted) . The Ninth Circuit reviews de novo a district court’s grant or denial of summary judgment. Humane Soc'y of the US v.

Locke , 626 F.3d 1040, 1047 (9th Cir. 2010).

To establish liability for direct infringement of a

claimed metho d or process under 35 U.S.C. § 271(a), a patentee must prove that each and every step of the method or process was performed. BMC Res., Inc. v. Paymentech, L.P. , 498 F.3d 1373, 1378 (Fed. Cir. 2007);

Muniauction , 532 F.3d 1318. In the recent en banc dec ision of this court in Akamai , we addressed the requir ements for infringement under 35 U.S.C. § 271(b) but found that “we have no occasion at this time to revisit any of those principles regarding the law of divided infring ement as it applies to liability f or direct infringement under 35 U.S.C. § 271(a).” Akamai , 692 F.3d at 1307. Thus, “for a party to be liable for direct patent infring ement under 35 U.S.C. § 271(a), that party must commit all the acts necessary to infringe the patent, either pe rsonally o r vicariously.” Id. (citing Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc. , 424 F.3d 1293, 1311

Conoco, Inc. v. Energy & Envtl. Int'l, L.C. , 460 F.3d 1349,

1358

- 59 (Fed. Cir. 2006).ARISTOCRAT TECH v. IN TL GAME TECH 2 5

(Fed. Cir. 2005); Fromson v. Advance Offset Plate, Inc.

, 720 F.2d 1565, 1568 (Fed. Cir. 1983)).

For method claims

— such as those at issue here

— a pat ent holder must establish that an accused infringer perform s “all the steps of the claimed method, either personally or through another acting under his direction or control. Direct infringement has not been extended to cases in which multiple independent parties perform the steps of the method claim.” Id. at 1307. We have stated previously that “the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the

acts committed by another party that are required to complete performance of a claimed method.” Muniau ction , 532 F.3d at 1330.

Under the claim constructions discussed above, no single actor performs all of the steps of the claimed met hods. With respect to th e ’215 patent, Aristocrat admits that a player, rather than the casino or game operator, performs the step of “activating said user interface at said particular gaming machine by said player during said displaying of said second game to affect the display of said second game.” See, e.g.

, Appellant’s Br. at 43, 46

- 7. Similarly, as recited in all the asserted claims, a player, rather than the game operator, “makes a wager.” Thus, to be liable for direct infringement, IGT must exercise

direction or control over a player playing the game.

The district court correctly determined that no mat erial issue of fact existed as to IGT’s lack of direction or control over the player. In opposition to IGT’s motion for summary judgment, Aristocrat argued that IGT control s or directs the behavior of players by providing free credits to players to induce them to gamble at IGT's machines. As the district court found, “[w]hile providing players with free credits might encourage some people to gamble at IGT's machines, players are not obligated to use their freeARISTOCRAT TECH v. INTL GAME TECH 26

credits, nor are players acting on behalf of IGT when they
use their free credits on IGT's machines.” Unable to “discern any legal theory under which IGT is vicariously liable for players’ actions as a general matter,” the district court appropriately found no direct infringement. On appeal, Aristocrat contends that “[t]he player’s entire gaming experience is dictated by IGT’s programming of the gaming machine” and that IGT causes the player to make a wager and activat e a user interface. Thus, accor ding to Aristocrat, the player’s actions are the “natural, ordinary, and reasonable consequences” of IGT's conduct. 2

Our case law does not recognize the test that Arist ocrat proposes and we decline to so extend it here. As we stated in Akamai , “this court has rejected claims of liabi lity for direct infringement of method claims in cases in which several parties have collectively committed the acts necessary to constitute direct infringement, but no single party has committed all of the required acts.” Akamai

, 692 F.3d at 1307 (citing BMC , 498 F.3d at 1381 ( “ Direct infringement is a strict

- liability offense, but it is limited to those who practice each and every element of the

claimed invention. ” ); Muniauction , 532 F.3d at 13 29 (same)). One party’s direction or control over another in a

2 Aristocrat argues for the first time in reply that the

direction and control test is satisfied under the now vacated panel decis ion in Akamai because “the casino is contractually obligated to the player to properly run the game once a wager is made.” Appellant’s Reply Br . at 22 ( citing Akamai , 629 F.3d at 1319 (“[J]oint infringement occurs when a party is contractually obligated t o the accused infringer to perform a method step.”) We find this argument to be untimely raised, see Carbino v. West

, 168 F.3d 32 (Fed. Cir. 1999), as well as unavailing. Even if we assume a contractual obligation on the part of the casino to pay the pla yer, that would not make the player’s
actions those of the casino.ARISTOCRAT TECH v. IN TL GAME TECH 27

principal

- agent relationship or like contractual relatio nship operates as an exception to this general rule, but absent that agency relationship or joint enterprise, we
have declined to find o ne party vicariously liable for

another’s actions. See Akamai , 692 F.3d at 1307; Cross

Med. Prods. , 424 F.3d at 1311 (no liability for direct infringement if the party that is directly infringing is not acting as an agent of, or at the direction of, the a ccused infringer). IGT has no such relationship with the player. Neither is the agent of the other, nor can we discern a theory under which one would be vicariously liable for the

other’s actions.

Finally, Aristocrat argues that a reasonable jury could

f

ind that IGT directly infringes during the testing of its machines because, “even under the district court’s co nstruction requiring ‘legal entitlement,’ the ‘awarding’ step

is satisfied when the credits increment on the credit meter indicating that the pla yer is entitled to the amount

due.” Appellant’s Reply B r. at 10. Aristocrat cites

Crevelt’s declaration for the proposition that IGT’s m achines are programmed to “automatically i ncrement the credit meter to include the progressive prize .” Id. at 9

. Cre velt’s testimony, however, does not speak to whether an IGT employee actually would be entitled to claim any prize that the machine displays. There is no evidence in the record that testers are given the right to use any

credits added to the credit meter or claim any prizes won
in the course of such use. Because Aristocrat failed to establish a genuine fact dispute regarding the employee’s entitlement to a prize, the district court properly granted summary judgment in IGT’s favor on the issue of i nfringem ent during testing.

For these reasons, we affirm the district court’s grant of summary judgment of noninfringement with respect to liability under 35 U.S.C. § 271(a).ARISTOCRAT TECH v. INTL GAME TECH 28

C. Indirect Infringement

Neither the parties, nor the district court in its su mmary judgment order, expend significant time on the question of indirect or induced infringement. The district court premised its grant of summary judgment of noni nfringement on its finding of no direct infringement under

our decision in Muniauction . Bas ed on our en banc dec ision in Akamai , we must vacate and remand the portion of the order relating to indirect infringement on that

basis. As we stated in Akamai , “[r]equiring proof that

there has been direct infringement as a predicate for induced infring ement is not the same as requiring proof that a single party would be liable as a direct infringer.”

Akamai , 692 F.3d at 1308

- 09 (emphasis in original)

. Thus, “[a] party who knowingly induces others to engage in acts that collectively practice the steps of the patented

method

— and those others perform those acts

— has had precisely the same impact on the patentee as a party who induces the same infringement by a single direct infrin ger; there is no reason, either in the text of the statute or in the policy u nderlying it, to treat the two inducers differently.” Id. at 1309.

Like the plaintiffs in the cases underlying our en banc

decision in Akamai , Aristocrat deserves the opportunity to press its indirect infringement theory with the benefit of

our clarificat ion regarding inducement. While we express no opinion on the ultimate merits of Aristocrat’s indirect infringement position, the adduced evidence could support a judgment in its favor on a theory of induced infring ement. Therefore we vacate and remand th e district court’s grant of summary judgment as it relates to ind irect infringement.

D. Alternative Grounds for Noninfringement

IGT argues that we may affirm the district court’s grant of summary judgment of noninfringement, and

avoid remand of this case on indirect infringement, on theARISTOCRAT TECH v. IN TL GAME TECH 29

basis that the bonus game in the accused machines a ppears during the main game as opposed to after it. The ’215 and ’603 patent claims include a limitation requiring the “triggering [of] a second game to appear at said pa rticular gaming machine in response to said occurrence of said second game trigger condition, said second game appearing after completion of said first main game.” ’215 patent col. 9 ll. 10

- 13; ’603 patent col. 8 ll. 36

- 39. The district court, after a mot ion for reconsideration, co nstrued the term “completion” to mean “after a determin ation of a winning or losing result on the first main game pursuant to the rules of the first main game.” J.A. 2644. 3 IGT contends that, in the accused machines, the appea rance of the Fort Knox bonus game pauses the main game and that the results of the main game are not displayed to the player until after the conclusion of the bonus game. Citing gaming industry regulations, IGT asserts that a game is not “complete” until t he credits that have been wagered and won are transferred to a player’s credit

meter.

Aristocrat, citing Trading Technologies International, lnc. v. eSpeed, lnc. , 595 F.3d 1340, 1359 (Fed. Cir. 2010), first responds that we review a denial of a summary j udgment motion for an abuse of discretion and that, under that standard, we should affirm the district court’s judgment. Aristocrat also contends that it presented substantial expert testimony relating to the source code responsible for triggering the bon us game and that the trigger only occurs upon the completion of the main game. As stated above, we review a district court’s grant or denial of summary judgment under the law of the regio nal circuit, Board of Trustees of Leland Stanford Junior University

, 583 F.3d at 839, and the Ninth Circuit reviews both grants and denials of summary judgment de novo.

3 Neither party contests the district court’s constru ction of “completion” on appeal.ARISTOCRAT TECH v. INTL GAME TECH 30

See, e.g.

, Humane Soc’y , 626 F.3d at 1047. We see no reason to depart from that general rule here.

Regardless, we agree with Aristocrat that the distri ct court correctly found disputed issues of material fact with respect to the limitation at issue. Nothing in the district court’s construction of the term “completion” references the display of results to the player and we decline to

construe the distric t court’s construction

— especially where IGT does not directly appeal that construction

— to
include that limitation. Nor does our review of the record below or here on appeal reveal a substantive challenge to Aristocrat’s expert testimony regarding the timi ng and operation of the accused machines. We therefore agree

with the district court that a material issue of fact exists as to when the main game completes.

C ONCLUSION

For the reasons stated above, we affirm the district

court’s constructions of “making a wager” and the “awar ding step,” affirm the district court’s grant of summary judgment with respect to direct infringement, and vacate and remand the district court’s judgment with respect to indirect infringement.

AFFIRMED IN PART, VACATED AND REMANDED

IN PART