Patent Helping Gamblers Dodge ATM Cash Limits Invalidated

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By Peter Leung

March 28 — A patent for setting up ATMs so users can get cash even after exceeding their daily withdrawal limit is invalid, the U.S. District Court for the District of Nevada ruled March 25.

The court found that U.S. Patent No. 6,081,792 is directed to an abstract idea and lacks an inventive concept. So, it is not patentable under the Supreme Court's ruling in Alice and Section 101 of the Patent Act.

Global Cash Access Inc. had sued NRT for patent infringement. According to the complaint, both companies deal in ATM machines that facilitate easy access to cash in casinos and similar establishments throughout Nevada.

NRT moved to dismiss the suit on grounds that the patent covered unpatentable subject matter and because the patent cannot be infringed by a single party.

An Abstract Idea

The court agreed that the invention is not patentable subject matter.

Applying the two-step test described in Alice, the court first found that the described invention was an abstract concept.

The patent describes a way to convert an ATM withdrawal request into a point-of-sale transaction when the first transaction is denied because the account has hit its daily withdrawal limit. The method is possible because ATM withdrawals and point-of-sale transactions typically have separate daily limits.

The court found this was an abstract idea of “obtaining money from a bank account through a second transaction after a first transaction fails.”

In particular, it explained that using separate transactions to get cash has existed for a long time. The patented method merely describes a way to have both transactions take place on a single machine, rather than requiring the user to go to a bank. As such, the patent covers nothing more than a “well-known, routine, conventional” activity.

The court rejected Global Cash's claim that the patent covers an improvement to ATMs rather than a type of financial transaction. The patent claims relate to the transactions, and the ATM in the invention does not play a transformative role that saves the invention, it said.

What's On First

The court did not address NRT's second argument that no single party can infringe the patent, because it found that the invention covered unpatentable subject matter. That approach appears to be consistent with the belief that subject matter eligibility should be the first issue addressed .

Some judges support this approach, but others argue that subject matter eligibility should be the final step of the analysis.

Judge Miranda M. Du issued the ruling. Pillsbury Winthrop Shaw Pittman LLP represented Global Cash, while Polsinelli LLP represented NRT.

To contact the reporter on this story: Peter Leung in Washington at pleung@bna.com

To contact the editor responsible for this story: Mike Wilczek in Washington at mwilczek@bna.com

For More Information

Text is available at: http://src.bna.com/dE4.