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NOTE: This disposition is nonprecedential.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
