'Inventive concept'? An ATM patent suit tests the abstract idea standard

'Inventive concept'? An ATM patent suit tests the abstract idea standard

by Ralph Jocke Walker & Jocke Co. LPA

Global Cash Access and its related company USA Payments own U.S. Patent No. 6,081,792. This patent is directed to ATM systems that are operated in casinos where customers frequently want to withdraw more cash from their account than is permitted by their bank's daily cash withdrawal limit.

The patent covers a system in which, if a customer's requested cash withdrawal transaction is denied because it places them over their daily withdrawal limit, the ATM offers the customer the opportunity to obtain the cash through a POS debit transaction.

Because POS debit transactions have a higher daily limit than cash withdrawals, the amount of the customer's transaction can usually be accepted if the customer requests the transaction through this alternative route.

The transaction is processed and the customer is directed to the casino's cashier window or other location away from the ATM to pick up their cash. The transaction receipt from the ATM or other identifying information is used by the customer to obtain the cash at the casino's cashier window.

Global Cash had filed infringement cases in the past against the Tropicana Casino and U.S. Bank, both of which apparently settled with Global Cash. Other providers developed ways to "design around" the patent, using different approaches that are outside the scope of the patent's claims.

In May 2015 Global Cash sued NRT Technologies for infringing the patent. NRT is a provider of kiosks and other transaction terminals used in the gaming industry. As explained in the footnote on page 12 of the court decision, NRT requested that the U.S. Patent Office review the validity of this patent.

However, in January 2016 the Patent Office declined to review the patent because NRT had failed to make a showing that it was more likely than not that the patent was invalid.

NRT also filed a motion with the U.S. District court in Nevada where Global Cash had filed the patent infringement suit, seeking to have the patent declared invalid. NRT argued that the patent was invalid for being directed to an unpatentable "abstract idea."

NRT also argued that the patent was not infringed, which the court did not decide because it held the patent invalid.

The court relied on comments made within the patent itself that the claims of the patent relate to processes that were well known prior to the patent being filed.

These processes included having a daily cash withdrawal limit for ATM cash transactions. The court also pointed out that it was known to require a person to obtain cash from a bank teller or through another type of transaction from their bank account, after they had reached the daily cash withdrawal limit from ATMs.

Finding that the patent covered automating previously known practices, the court held that the Global Cash patent was similar to other patents that were held invalid due to merely covering "abstract ideas."

Moreover, the court found no technological improvements related to the functioning of the ATM or other technological advancements in the patent that would warrant sustaining the validity of the patent.

The court held the patent invalid and dismissed the patent infringement claim of Global Cash against NRT. The court left pending other claims between the parties which relate to allegations of unfair competition, deceptive trade practices and other similar claims. Those issues will continue to be fought in the lawsuit.

Of course, like any decision of a Federal District court regarding patents, it is subject to appeal. However, other patent owners who have appealed court holdings invalidating patents based on the patent covering "abstract ideas" have met with little success.

Therefore, this is likely the end of the Global Cash patent, which will make things easier for companies that provide ATM systems in casinos.

photo istock

Topics: Regulatory Issues

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