IP Law Daily, PATENT—Fed. Cir.: PTAB correctly invalidated IGT's gaming software infrastructure patent, (Jul 22, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Patent claims were obvious based on prior art; interference estoppel did not apply as the earlier interference challenge to the asserted patent ended on a procedural ground.

The U.S. Court of Appeals for the Federal Circuit affirmed the Patent Trial and Appeal Board’s (PTAB) decision in an inter partes review (IPR) brought by Zynga Inc., holding that multiple claims of IGT’s gaming software infrastructure patent were unpatentable as obvious in light of prior art. The court found that the Board’s construction of the claim term “monitoring” was supported by substantial evidence, and that the combination of the cited prior art references disclosed all limitations of the challenged claims. Further, the Federal Circuit rejected IGT’s argument that Zynga was barred from filing the petition under interference estoppel, explaining that the earlier 2010–2014 interference between the parties had ended solely on the ground of inadequate written description, without resolving the patentability of the claims (IGT v. Zynga Inc., No. 23-2262 (Fed. Cir. July 22, 2025)).

Background. The plaintiff/appellant, International Game Technology (IGT), is a leading developer of technology platforms and gaming solutions for land-based and online casino operations. The defendant/appellee, Zynga Inc., is a social game developer that offers online poker and casino-style mobile games. Although not direct competitors in physical casino operations, both entities develop digital systems for regulated gaming environments and are participants in overlapping technology sectors related to gaming software distribution and authorization.

The dispute centered around IGT’s expired U.S. Patent No. 7,168,089 (the ’089 patent), titled “Secured Virtual Network in a Gaming Environment.” The patent discloses a secured network configuration wherein gaming software may be authorized and transmitted from a central server to a plurality of gaming terminals under the supervision of a “software authorization agent.” The patent aims to reduce unauthorized software activity and enhance compliance with regulatory mandates by tracking and authorizing gaming software exchanges through logging and verification systems.

Zynga filed an IPR petition in 2021 challenging various claims of the ’089 patent on obviousness grounds. IGT objected based on interference estoppel, citing 37 C.F.R. § 41.127(a)(1), and contended that Zynga had previously litigated the patent's validity in an interference proceeding, which concluded without a priority award to Zynga. That interference had terminated in 2014 with dismissal on the threshold ground that Zynga’s application lacked sufficient written description; the Board had not reached the merits of patentability. In the IPR, the PTAB found estoppel did not apply and ultimately held that claims 28–29, 31–33, 47–50, 84–86, 90–92, and 99–100 were unpatentable for obviousness. The USPTO Director denied rehearing. IGT appealed.

Prior art. The Board's obviousness determination was based on two prior art references—U.S. Patent No. 6,592,432 to Goldberg and U.S. Patent No. 6,183,362 to Olden. Goldberg described a central server system for remotely distributing and authorizing software execution on client terminals, including gaming applications. Olden disclosed techniques for monitoring software usage and enforcing licensing restrictions through remote communication.

Threshold estoppel issue. The Federal Circuit held that it lacked jurisdiction to review IGT’s estoppel-based challenge under 35 U.S.C. § 314(d), which bars review of institution decisions. Citing Thryv, Inc. v. Click-To-Call Technologies, LP, 590 U.S. 45 (2020), the court reiterated that threshold matters closely tied to institution decisions, including estoppel application, are unreviewable. The court rejected IGT’s reliance on the narrow exceptions recognized in Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261 (2016), finding no agency misconduct or constitutional violation.

Applicability of interference estoppel. Even assuming reviewability, the court held that the PTO reasonably concluded estoppel under § 41.127(a)(1) did not apply because the earlier interference had not resolved the issue of patentability. The regulation applies only to issues that “were raised or could have been raised and were resolved.” Since the interference was dismissed on a threshold written description ground, Zynga’s obviousness challenge had not been resolved. The court found this conclusion consistent with Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), where estoppel was held inapplicable to grounds not addressed by the Board.

PTO’s waiver authority. The Federal Circuit also upheld the PTO’s exercise of discretion to waive estoppel under 37 C.F.R. § 42.5(b), which allows waiver of procedural rules “in the interest of justice.” The Director concluded that the waiver was appropriate even if estoppel were technically applicable. The court found this discretion reasonable and within the PTO's authority to manage its regulations, citing Apple Inc. v. Vidal, 63 F.4th 1 (Fed. Cir. 2023), which recognized the agency’s broad procedural leeway unless contradicted by statute.

Notice and procedural fairness. IGT next argued that the PTAB adopted a new theory of obviousness without proper notice, identifying multiple elements in Goldberg as constituting the claimed “software authorization agent.” The Federal Circuit rejected this contention, holding that Zynga’s petition and expert reply sufficiently disclosed this theory and that IGT had notice and opportunity to respond. The court noted that due process requires only meaningful notice and an opportunity to respond, which the PTAB had provided.

Obviousness over Goldberg and Olden. Substantial evidence supported the Board’s conclusion that the challenged claims were obvious over a combination of Goldberg and Olden. The Board credited expert testimony that a skilled artisan would have combined the two to achieve the claimed functionality of monitoring and authorizing software transmissions. The Federal Circuit found no clear error in this assessment.

Construction of “monitoring.” The court upheld the PTAB’s construction of “monitoring” to mean “tracking the occurrence of a transfer,” rejecting IGT’s argument that it should require inspection of the file content. The court held that the specification supported the broader construction and that the Board correctly interpreted the term in light of the claim language.

Dependent claims and other limitations. The Federal Circuit also affirmed the PTAB's treatment of dependent claims and claim limitations involving "software authorization," "central determination," and "secured virtual networks." The Board found that these limitations were met by Goldberg's accounting and driver modules and Olden's central control architecture. IGT did not separately appeal these findings, and the court declined to disturb the Board's analysis under the substantial evidence standard.

The court therefore affirmed the Board’s finding that claims 28–29, 31–33, 47–50, 84–86, 90–92, and 99–100 were unpatentable for obviousness and held that neither estoppel nor due process concerns barred the IPR from proceeding.

The Case is No. 23-2262.

Judge: Taranto, R.

Attorneys: Jennifer Kurcz (Baker & Hostetler LLP) for IGT. Elizabeth Moulton (Orrick, Herrington & Sutcliffe LLP) for Zynga Inc.

Companies: IGT; Zynga Inc.

Cases: Patent TechnologyInternet FedCirNews USPTO