Court Opinion

ID: 9403570
Source: CourtListenerOpinion
Date Created: 2023-06-21 15:02:56.755788+00
Date Added: 2024-06-11T17:20:08.054965
License: Public Domain

Case: 22-1650   Document: 43     Page: 1   Filed: 06/07/2023

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

           BLACKHAWK NETWORK, INC.,
                   Appellant

                            v.

         INTERACTIVE COMMUNICATIONS
             INTERNATIONAL, INC.,
                     Appellee
              ______________________

                       2022-1650
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. PGR2020-
 00084.
                  ______________________

                  Decided: June 7, 2023
                 ______________________

     ORION ARMON, Cooley LLP, Denver, CO, argued for ap-
 pellant. Also represented by SAMUEL WHITT, Washington,
 DC.

     PATRICK D. MCPHERSON, Duane Morris LLP, Washing-
 ton, DC, argued for appellee. Also represented by DONALD
 JOSEPH ENGLISH, PATRICK C. MULDOON.
                  ______________________
Case: 22-1650     Document: 43     Page: 2    Filed: 06/07/2023

 2                            BLACKHAWK NETWORK, INC. v.
           INTERACTIVE COMMUNICATIONS INTERNATIONAL, INC.

     Before LOURIE, HUGHES, and STARK, Circuit Judges.
 LOURIE, Circuit Judge.
     Blackhawk Network, Inc. (“Blackhawk”) appeals from
 a final written decision by the United States Patent and
 Trademark Office Patent Trial and Appeal Board (“the
 Board”) in a post-grant review (“PGR”) holding that claims
 1–6 of U.S. Patent 10,769,894 (the “’894 patent”) are un-
 patentable as obvious. See Interactive Commc’ns Int’l, Inc.
 v. Blackhawk Network, Inc., Case No. PGR2020-00084, Pa-
 per No. 47, J.A. 1–70 (P.T.A.B. Mar. 15, 2022) (“Decision”).
 We affirm.
                        BACKGROUND
     The ’894 patent is assigned to Blackhawk and is di-
 rected to systems for facilitating the sale and activation of
 draw-based lottery tickets, which allow purchasers to wa-
 ger bets regarding a future event such as a random selec-
 tion of a set of numbers. The tickets disclosed in the ’894
 patent are pre-printed and may be activated by scanning a
 bar code on each ticket and transmitting a payment confir-
 mation to a central authority administering the lottery us-
 ing traditional point-of-sale (“POS”) terminals, such as
 cash registers in grocery store checkout lanes. Once acti-
 vated, the tickets entitle holders to claim prizes for winning
 wagers. Independent claim 1 recites providing “payment
 confirmation for the pre-printed lottery ticket” to a lottery
 administration system as part of the activation process.
 ’894 patent at col. 10 ll. 41–42. Independent claim 6 con-
 tains a similar “payment confirmation” limitation but does
 not specify providing this confirmation to a lottery admin-
 istration system. Id. at col. 11 ll. 5–6.
     Interactive Communications International, Inc. (“In-
 Comm”) filed a petition for PGR on all claims of the ’894
 patent. Specifically, InComm alleged that claims 1–6 of the
 ’894 patent would have been obvious at the time of inven-
 tion over U.S. Patent 7,627,497 (“Szrek”).
Case: 22-1650     Document: 43     Page: 3    Filed: 06/07/2023

 BLACKHAWK NETWORK, INC. v.                                  3
 INTERACTIVE COMMUNICATIONS INTERNATIONAL, INC.

     Szrek describes an approach to activating lottery tick-
 ets involving a store’s back office, a POS terminal, and a
 lottery administration system. Szrek’s system relies on a
 printed receipt from the retailer’s POS terminal to record
 and verify that customers have paid for lottery tickets. Un-
 like the system claimed in the ’894 patent, Szrek does not
 require payment confirmation as part of ticket activation.
 However, in Szrek, both payment and activation are pre-
 requisites for a ticket’s eligibility to win prizes.
     The Board found that Szrek’s description of the inter-
 operational characteristics of a store’s back office, a POS
 terminal, and a lottery administration system would have
 suggested to a skilled artisan that a store’s back office
 would provide payment confirmation for the pre-printed
 lottery ticket to the lottery administration system. Deci-
 sion at 43–44. According to the Board, in Szrek’s system,
 after a store clerk scans a pre-printed lottery ticket at a
 cash register, the register communicates a request to the
 store’s back office. Id. The store’s back office then com-
 municates an activation request to the lottery administra-
 tion system. Id. The Board then found that Szrek disclosed
 that upon receiving the activation request, the lottery ad-
 ministration system determines whether the ticket is eligi-
 ble to win a prize. Id. The Board continued that, under
 Szrek, the lottery administration system then communi-
 cates to the store’s back office indicating that the ticket is
 a winner, and that winner payment is authorized. Id.
      Because the lottery administration system alone can
 determine whether a ticket is eligible to win a prize, the
 Board found that it logically follows that Szrek’s lottery ad-
 ministration system possesses the information necessary
 to establish payment and activation for the ticket. Id. at
 44. Applying its findings, the Board held that claims 1–6
 of the ’894 patent would have been obvious over Szrek. Id.
 at 45–46.
Case: 22-1650    Document: 43      Page: 4    Filed: 06/07/2023

 4                            BLACKHAWK NETWORK, INC. v.
           INTERACTIVE COMMUNICATIONS INTERNATIONAL, INC.

    Blackhawk appealed the Board’s decision to this court.
 We have jurisdiction under 28 U.S.C. §§ 1295(a)(4)(A).
                         DISCUSSION
     We review the Board’s legal determinations de novo, In
 re Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004), and the
 Board’s factual findings underlying those determinations
 for substantial evidence, In re Gartside, 203 F.3d 1305,
 1316 (Fed. Cir. 2000). Obviousness is a question of law that
 “lends itself to several basic factual inquiries,” including
 the scope and content of the prior art, the level of ordinary
 skill in the art, and differences between the prior art and
 the claimed invention. Graham v. John Deere Co., 383 U.S.
 1, 17–18 (1966).
     Blackhawk argues that the Board’s findings were not
 supported by substantial evidence. Specifically, it argues
 that Szrek’s requirement that a customer possesses both
 the lottery ticket and receipt is fundamentally different
 from the ’894 patent’s claimed methods that do not require
 a customer to possess a receipt. InComm responds that the
 Board properly found that Szrek’s disclosure sufficiently
 established to a skilled artisan that a store’s back office
 would include an instruction to provide a payment confir-
 mation for the pre-printed lottery ticket to the lottery ad-
 ministration system.
     We agree with InComm that the Board’s findings were
 supported by substantial evidence and that Szrek would
 have rendered claims 1–6 of the ’894 patent obvious. The
 Board found that Szrek taught that both payment and ac-
 tivation must occur for a pre-printed lottery ticket to win a
 prize. It continued to find that because Szrek taught that
 from scanning a ticket, the lottery administration system
 could alone determine whether the ticket was eligible to
 win a prize, it logically followed that the lottery admin-
 istration system “possessed the information necessary to
 establish payment and activation for the ticket . . . when it
 received the activation request.” Decision at 44. The Board
Case: 22-1650    Document: 43      Page: 5    Filed: 06/07/2023

 BLACKHAWK NETWORK, INC. v.                                 5
 INTERACTIVE COMMUNICATIONS INTERNATIONAL, INC.

 then concluded that because the lottery administration
 system could determine a winning ticket and provide au-
 thorization of a winning payment, the store’s back office in
 Szrek must have “provided payment confirmation for the
 ticket to the [lottery administration] system before that de-
 termination.” Id.
     The Board properly construed Szrek’s disclosure of the
 inter-operational characteristics of a store’s back office,
 POS terminal, and lottery administration system. Fur-
 thermore, the Board properly analyzed how a skilled arti-
 san would have interpreted Szrek’s teachings. The Board’s
 findings are supported by substantial evidence and would
 have rendered the “payment confirmation” limitation in
 claims 1–6 of the ’894 patent obvious. We therefore affirm
 the Board’s holding that claims 1–6 of the ’894 patent
 would have been obvious to a skilled artisan at the time of
 the invention in view of Szrek.
                        CONCLUSION
     We have considered Blackhawk’s remaining argu-
 ments but find them unpersuasive. For the foregoing rea-
 sons, the decision of the Board is affirmed.
                        AFFIRMED