Intellectual Property Office of New Zealand - Patents Decisions
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Last Updated: 16 October 2008
P12/2006
IN THE INTELLECTUAL
IN THE MATTER of the Patents Act 1953
AND
IN THE MATTER of an application for Letters Patent No 517105 in the
name of MAINLINE CORPORATE HOLDINGS LIMITED
Applicant
AND
IN THE MATTER of opposition to said application under section 21 by
MULTI-CURRENCY MANAGEMENT SERVICES LIMITED
Opponent
Hearing: 16 December 2005
K McHaffie assisted by M Adams for the Applicant
I Finch for the Opponent
Decision
BACKGROUND
Patent application 517105 was filed on 1 September 1999 claiming priority from an Irish patent application filed on 12 July 1999.
Acceptance of the application was published in Intellectual Property Office
of
New Zealand (IPONZ) Journal No 1488 of 27 June 2003.
On 24 October 2003 the opponent filed notice of opposition.
On 11 February 2004 the opponent filed a first amended notice of opposition and a statement of case.
On 17 February 2004 the opponent filed copies of the documents it relied on in this opposition, and the deadline for the applicant to file its counterstatement was set as 24 April 2004.
On 16 April 2004 the applicant filed its counterstatement.
On 27 September 2004 the opponent completed the filing of its evidence.
On 17 February 2005 the applicant filed evidence. The deadline for filing evidence in reply was set as 18 April 2005.
On 12 July 2005 the opponent completed filing its evidence. The final piece of evidence, which was filed on this date, was a declaration by Daniel Vilem Lavecky.
THE OPPONENT
The first extension of time request for filing a notice of opposition was
filed in the name of ‘Multi-Currency Conversions Limited’.
The
notice of opposition was subsequently filed, in the name ‘Multi-Currency
Management Services Limited’, the latter
name having been substituted for
the first name by way of correction of a clerical error under section 88. The
opponent gave as
grounds for the correction
This error is caused by the name of the (then) potential Opponent being mis-transposed by support staff from information received from our Australian associate. This error was not discovered before the Patents Form 16 was filed.
IPONZ accepted that error had been made, adding that the opponent’s explanation of the error was not very clear. The opponent has not provided evidence in support of an error having been made. However, for the purposes of this decision, I accept that an error was made and the opponent is unchanged. I note that it was the extension of time request which was filed in the incorrect name and not the notice of opposition itself. The Patents Form 16, requesting the extension of time to file notice of opposition, was filed on 26 September 2003 and the notice of opposition was filed on 24 October 2003, indicating to me that there was little delay in correcting the error.
It is accepted that a different opponent cannot be substituted by amendment after expiry of the opposition period even if that different opponent acquires an interest from the original opponent. I was assured by the opponent at the hearing that it is not the case that a different opponent had been substituted.
LOCUS STANDI
The onus of establishing interest is on the opponent.
In Wade’s Application No 164115 (Decisions of the Commissioner, P01/1081, 9 January 1981) reference was made to the approach of Scarman LJ in Globe Industries Corp’s Patent [1977] RPC 563 (CA). The Assistant Commissioner in Wade concluded that the opponent had to have a genuine commercial interest such that there was the existence, or the likelihood, of a real prejudice to that interest if the patent is granted. In that decision the Assistant Commissioner decided that the opponent had not established locus. The Assistant Commissioner, however, considered the grounds of opposition in the public interest. I rely on this last point later.
In Globe Industries, beginning at 575, Scarman LJ stated:
The case law to which I have referred shows that the interest must be a commercial interest and that it must be a genuine interest. It also shows that there must be the existence, or likelihood, of real prejudice.
In the same decision, at page 578, Goff LJ, affirmed:
Of course, the prospect of prejudice must be real, not speculative or fanciful, and it must be prejudice to a present commercial interest. So the objector must show, and the onus is upon him, ... that he has a real, definite and substantial commercial interest which may be prejudiced.
The opponent submitted that it met the first of the three grounds for establishing locus as set out by the Assistant Comptroller in Merron’s Application (1944) 61 RPC 91 at 92:
There are three clear grounds upon which an Opponent can establish locus; first, the possession of patents relating to the same matter as the application opposed; second a manufacturing interest; and third a trading interest.
I note that the opponent had made a patent application, which application has since lapsed. I will return to this patent application later.
In New Thing’s Application (1913) 31 RPC 45 at 46 Sir S O Buckmaster SG said:
I am not prepared to limit the interest which an Opponent must show in order to bring himself within the class of persons qualified to give Notice of Opposition under Section 11, to what is called a manufacturing interest. I think that is a mistake. A trading interest would also be sufficient, but the interest must be a real, definite and substantial interest, and must not arise from something that the Opponent proposes to do. So far as the present interest of the present Opponent is concerned it is nothing but the possession and use in the manner which I have mentioned of this particular screen. The rest of his interest arises from something that he intends to do in the future, and which he may or may not accomplish; it appears to me that that intention gives him no more right to oppose than a man saying that he intended in the future to make a patented article which would give him the right to be heard.
It will be sufficient if the opponent has a recognised interest at the date when the opposition is heard, provided that he was genuinely concerned with the invention at the time when the opposition was filed. This was referred to in Terrell on the Law of Patents, 12th Ed, paragraph 417; and also in Energy Consultants Limited (Decisions of the Commissioner, P14/1980, 15 August 1980) at 7:
Furthermore, these enquires necessarily were at a date later than that at which locus should be established, i.e. the date of lodging the notice of opposition.
The decision that the opponent in Energy Consultants did not have locus in effect disposed of the opposition, however the Assistant Commissioner made observations on the substantive grounds of opposition in deference to the applicant’s comprehensive submissions. I rely on this last point later.
In Bamford’s Application [1959] RPC 66 at 70 the Assistant-Comptroller held:
I cannot think that the Comptroller intended the remark I have quoted to be read so widely as to permit an opposition to be lodged or carried on by a person who had no interest at the time when notice must be given but could show one when the case comes to be decided ... If such a reading was intended, it seems to me to be over-ruled by the later decision in New Thing’s, supra, which says that a person qualified to oppose must have a real and substantial interest which must not arise from something he proposes to do ... Ruling 1912 (C) was referred to by Luxmoore J., as he then was, in Siemens-Schuckertwerke, 55 RPC 153. The judge did not specifically reject the Comptroller’s remark ... but the general tenor of his judgment clearly indicates his view that an opponent must have some genuine interest when he gives notice of opposition and cannot rely at the hearing stage upon some interest which he has established in the intervening period.
The Ruling 1912 (C), referred to above, was statement by the Comptroller-General that it was sufficient for the opponent to be able to show a bona fide and existing interest at the time when the opposition is heard:
With regard to the point that the interest was not present at the time the Opposition was entered, I think it is sufficient for the Opponent to be able to show a bonâ fide and existing interest at the time when the Opposition is heard. In any case, in the present instance the Opponent had applied for and obtained Patent rights abroad, and therefore had valid and existing rights under the Convention to make an Application here at the time when Opposition proceedings were begun.
This was commented upon in Siemens-Schuckertwerke’s Application 55 RPC 153, beginning at 155:
... it is plain that he was a person who had the right to apply for a patent under the provisions with regard to convention patents at the date when his opposition was put in and that itself would, in my judgment, be a sufficient interest to support an opposition. The claim for a patent was put in within the time limit for such application and before the opposition was heard. I do not wish to lay down any hard and fast rule with regard to the question whether there should be in fact an interest existing at the date when the opposition proceedings are started. It may well be that a person has in fact an invention in train and is about to make some application in respect of it to the Office and, in order to preserve its rights as an opponent, he may on a question of time or something of that sort, be compelled to put in his opposition; but in all cases where there is no existing application for the grant of a patent, it is the duty of the Office to inquire with care into the facts with regard to the alleged invention relied on by the Opponent.
An opponent has to have an interest at the date of filing the notice of opposition. However the existence of that interest can be established at a time prior to the opposition date.
In the circumstances of the present case, the notice of opposition was filed on 24 October 2003. The O’Sullivan declaration was filed as evidence of locus standi. This declaration was sworn on 7 December 2005. The declaration lists the countries in which the opponent operates. New Zealand is not listed as one of those countries. The opponent thus appears to have had no operation in New Zealand.
Mr O’Sullivan refers in his declaration to the opponent making three marketing trips to New Zealand in the past twelve months (presumably from the date of the declaration). The first trip was said in the declaration to be approximately twelve months ago, by my reckoning that would be about December 2004. The second trip was said to have been made in April 2005. The third trip was said to have been made during the past two months, by my reckoning this would be in October or November 2005. The exact dates of the trips are not provided. Mr O’Sullivan also mentions that the opponent is the owner of a New Zealand provisional patent application no. 534045, entitled ‘Direct currency conversion’, which was filed on 12 July 2004. This provisional patent application is the lapsed application which I referred to above.
By my calculations, then, the marketing trips referred to in the declaration were made approximately six weeks, six months and 12-13 months, respectively, after the notice of opposition was filed. The lapsed patent application was made approximately nine months after the notice was filed.
It is clear to me that the opponent has not established that, at the date of filing the notice of opposition, it was a person interested for the purposes of opposition. There is no evidence of a real, definite and substantial commercial interest in New Zealand at 24 October 2003.
It may be that the opponent had, at the time of filing the notice of opposition, intended to try to enter the New Zealand market. However, the opponent has not provided any evidence that it was trying to do this. A future intention to enter a market is not sufficient to establish locus standi.
The case law considered above dictates that I must find that the opponent does not have locus standi in circumstances such as those described in the present case.
It is my decision that the opponent has not established locus standi. In view of this the references to ‘opponent’ in this decision should be read as references to ‘potential opponent’.
In view of the evidence filed I believe I should still consider the grounds of opposition in the public interest following the Wade and Energy Consultants decisions above.
PRIORITY DATES
The opponent put at issue the priority date to which each of the claims is entitled. However, as each of the priority publications has a date earlier than the date of filing the complete specification the date is not an issue. The evidence of the parties assumes that the claims are entitled to the date of 12 July 1999 as their priority date.
ADMISSIBILITY OF LATE EVIDENCE
The declarations of Barry O’Sullivan and Daniel Vilem Lavecky were filed late in proceedings. I believe the O’Sullivan declaration to be important in deciding the question of locus. I admit the evidence of Mr O’Sullivan.
In the case of the declaration of Mr Lavecky, the applicant submitted at the hearing that it should be given the opportunity to file evidence in reply if I exercised my discretion and admitted the evidence of Mr Lavecky.
I have decided it is right to admit the declaration of Mr Lavecky.
The Lavecky declaration was filed as evidence in reply. However, I did not believe it was solely evidence in reply, but that it included further evidence. The opponent explained that efforts had been made to obtain this evidence as evidence in chief, and had explained why it had not been able to. I am not sure that the opponent’s explanation is sufficient to normally admit such late evidence. However, I believe the declaration of Mr Lavecky is important enough to warrant admitting. Here I follow the decision in Amadeus Global Travel Distribution SA v Sabre Inc (unreported, High Court Wellington, AP 126/02, Ronald Young J, 14 March 2003), at paragraph 28, where Young J stated:
In balancing these issues, I consider the justice of the case demands the admission of the evidence. The decision to be made is frankly too important to be made without all the facts. The procedural delay by the Appellant can and should be punished by the Courts by substantial costs. In this case though it should not be met by reducing the evidence available to the IPONZ hearing officer to the degree that the real merits of the application may not be heard.
I gave the applicant two weeks from receipt of the letter informing it of my decision to admit the declaration of Mr Lavecky to respond to the declaration, followed by one week from receipt of the applicant’s response for the opponent to reply to that response.
By way of a letter dated 16 January 2006 the applicant sought a short
extension to 8 February 2006 to file its response. I granted
this request.
The applicant filed a declaration by Alan Gordon Martin on 8 February
2006.
With a short extension period requested, which I grant, the opponent
filed its response, being second statutory declarations of Daniel
Vilem Lavecky
and Russell James Briant.
EVIDENCE
Filed in support of the opposition were statutory declarations of:
Filed in support of the application were statutory declarations of:
Filed in support of the opposition as evidence in reply were second statutory declarations of:
NATURE OF THE INVENTION
The title of the invention is:
Dynamic Currency Conversion for Card Payment Systems
An opening paragraph describes the field of invention:
The present invention relates to Card Payment Systems for use in a multi-currency environment. In particular the present invention provides systems and methods for identifying an appropriate currency for individual transactions conducted using a card payment system.
The background to the present invention is described in the specification as follows:
Description of the Prior Art
Several types of Card Payment Systems are available, examples of which include credit cards, charge cards and debit cards.
An example structure of a Payment Card System is illustrated in Figure 1 comprising a point of sale terminal 1, an authorisation host 2, a collection/management host 3, transaction collection system 4, a treasury management office 5, a clearing bank 6, a plurality of card schemes 7, and a plurality issuers 8,9. A point of sale terminal 1, according to the prior art is shown in Figure 2, comprising means for accepting payment card details 20. Examples of such means for accepting payment card details include keyboards, magnetic swipe systems, smart card technologies and point-to-point radio transceivers (W09912136). Alternatively, the terminal may be connected to a communications network, e. g. the Internet, and the means for accepting card details may comprise software which accepts card details forwarded by the cardholder in electronic form, e. g. data posted from a hyper text mark-up language (HTML) form.
A flowchart demonstrating a typical payment transaction as shown in Figure 3, commences with entry of a payment card's details 30, the terminal makes a connection 31 with the authorisation host using its communications hardware and software 22. Typically, this connection 10 is made over a public telephone network or wireless link, any other communications may be used e. g. the Internet. Information concerning the card details and if required the transaction are passed 32 to the authorisation host. The authorisation host checks 33 to confirm that the card details are valid and that the transaction is permitted. If the card details are valid and the transaction value is permitted, the authorisation host sends 34 an authorisation code to the point of sale terminal which then allows 35 the transaction to proceed. Typically a transaction slip is printed 21 for signature by the cardholder, whereas for an Internet transaction a conformational HTML page or e-mail may be forwarded to the cardholder. Optionally, some systems may provide an option 36 enabling a merchant to cancel 37 a transaction at this stage. If the authorisation host decides that the card details are invalid or that the transaction is not permitted then no authorisation code is given and the authorisation host informs 39 the terminal that the transaction is not allowed to proceed. The terminal typically outputs 40 an error message to this effect.
If approved and the transaction is completed, then details of the transaction are stored 38 in the terminal 1 in a transactions table 23.
As required, the terminal connects with the collection host as illustrated in Figure 4 over a communications link 11 and transmits details 43 from the transactions table 1 to the collection host 3. The terminal typically prints a report 44 for the terminal user detailing transactions transmitted. Once all of the transaction details have been communicated the terminal disconnects from the collection host 45.
The terminal is typically controlled by software 24 which is configurable to different situations by means of an alterable configuration file 25.
The transaction details contained in the transaction table are subsequently communicated from the collection host to a transaction collection host 4 which in turn passes these details onto a clearing bank 6. The clearing bank 6 then sorts the transaction details according to the card scheme used for a transaction. The transaction details are then forwarded to the appropriate card scheme 7, which sorts the transactions according to the card issuers, with transactions concerning a given issuer being passed onto that issuers computer system 8,9. The issuers in turn assign the details of transactions against a particular card to that card holders account.
An alternative system provides an intermediary called a central payment router which acts as an interface between one or more terminals and the collection and/or authorisation host. This alternative system is typically used in larger retail outlets where there are a large number of terminals. The use of a central payment router provides for greater efficiency, lower overall cost and permits the central collection of transaction details for a merchant, as details do not have to be accumulated manually from each individual terminal.
The exact method or system of conducting or processing transactions may vary considerably from card system to card system, bank to bank or country to country. For example, frequently the authorisation host and collection host are one and the same.
Examples of various apparatus, systems and methods for handling card payment transactions include US5678010, US5671285, US5661517, US5448047, US5416306, US5287268, US3723655, US4961142, US4962531, US05386458 and US5826245.
In general, transactions involving a card payment are conducted in the currency of the merchant. Accordingly, if a credit card is used for a purchase in the USA, the currency of the transaction will probably be US$. This restriction can be inconvenient for cardholders travelling abroad, as they are unsure of the exact value (in their own currency) of the transaction.
It would be advantageous if a cardholder could make payments in their home currency rather than the currency of the merchant with whom they are conducting the transaction, or view the transaction amount in their own currency for their information.
Furthermore, with the introduction of the EURO, the potential for conducting transactions in the multi-currency environment has increased. Each country participating in the European Monetary Union (EMU) will have in co-existence two currency units the EURO and the national currency for a transition period. As the transition period is quite long, it is inevitable that different issuers and merchants will convert their base currency from the national currency unit to the EURO at different times, with the inevitable result that merchant and consumers may be using different currencies. In addition, the growth of Internet commerce permits consumers to purchase from a greater variety of sources than was previously available. A large proportion of these on-line transactions will be conducted in currencies other than that of the cardholder.
Accordingly, it would be advantageous if a cardholder could view and/or make payments in their home currency rather than the currency of the merchant with whom they are conducting the transaction.
A variety of point of sale and other systems are available which permit multi- currency transactions in which the cardholder may conduct the transaction in the currency of their choice. For example, the Trintech Group (Dublin) provide a compact point of sale terminal and system which facilitates payment by the customer in the currency of their choice at the point of sale. A problem with these existing systems is that the merchant must enter the desired currency for the transaction into the system. In order to do this the merchant must determine the currency of the cardholder and check to see if this currency is permitted. This involves the merchant looking at the card and/or cardholder and attempting a determination of what country the cardholder is from. This determination requires action and some intelligence on the part of the merchant. In addition, with the advent of the Internet the point of sale is the computer, no human merchant may be involved and the payment card is not available for inspection. This also applies for transactions conducted from a distance by other means, e. g. fax or phone.
Accordingly, it would be an advantage if a method and system could be provided for determining the currency of a cardholder at the point of sale automatically, using only a payment card's details.
US5,842,185 discloses a system and method for automatically entering financial transactions such as credit card transactions into a financial account stored in a computer. A financial statement incorporating the transactions is provided in an electronic form understood by the computer, such as a computer data file, for updating the financial account. For a credit card account, the electronic statement includes one or more credit card transactions such as purchases. Before accepting the electronic statement, the process verifies that the electronic form of the statement has not been altered since its creation and therefore correctly reflects transactions in the original statement. In the process of entering the transactions, they are tracked by automatically assigning them to expense categories. First the process determines from the electronic statement if a payee for a transaction is of record in the computer and, if so, assigns the transaction to a category already associated with the payee. If not, the process next determines from the electronic statement a merchant category code such as a Standard Industry Code (SIC). The merchant category code is associated with a category recognised by the computer, and the transaction is assigned to the recognised category. If no recognised category exists, the process prompts the user for a category to which the transaction can be assigned.
WO 97/0441 describes a system and method for allowing funds to be transferred instantly to an account so that the funds are available to the beneficiary at the time they are sent, based on customer information which can be automatically accessed by the system, rather than needing to be manually entered. Further, the system automatically computes the appropriate exchange rate and any fees to be charged to the account and The system also analyzes the parameters of the transfer to assure that the transfer conforms with pertinent government regulations. The system also enables the user to quantify the amount to be transferred in the currency of the originating account or the currency of the receiving account, thereby maximizing the flexibility of the system. The system further is designed so that it can be understood and accessed by individuals having no special expertise in computers, wire transfers and the like.
WO 95/12169 describes a process which provides electronic access to pre-paid funds for cash or payment for goods and services, in which a card is issued to a customer with a value selectable by a customer. The card has a magnetic stripe with an encoded card number including a bank identification number (BIN) and an account number. The central card processor establishes a zero balance database including the card numbers, but with blank fields for the customer data and the value of the account. When a customer purchases a card, the sales agent transmits to the central database computer which fills in the blanks in the database, activating the account.
The main claims are claims 1 and 14:
obtaining the card number of the cards from the cardholder, characterised in that the method further comprises the steps of;
identifying an identifier code from said card number,
determining the operating currency for said identifier code, by
comparing said identifier code with entries in a table, wherein each entry in the table contains an issuer code or range of issuer codes and a corresponding currency code, and
settling the currency for association with the card transaction as the determined operating currency for the issuer code.
THE LAW
The burden of proof is on the opponent and the Commissioner should be satisfied beyond doubt that the Letters Patent applied for ought not to be sealed or the benefit of any doubt will be given to the applicant even though the doubt may be small. In Saxpack Foods v Watties Canneries (unreported, High Court Wellington Registry, M454/87, 11 July 1988) Ongley J stated:
I approach the proceedings upon the basis that the purpose of opposition proceedings is to clear the register of patents which are manifestly untenable. It is not to provide a method of disposing of truly contentious cases: per Buckley LJ, General Electric Co (Cox’s) Patents [1977] RPC 421, 437, where His Lordship stated the test to be applied in these terms:
Is it clear on the evidence before the Comptroller that, if the issue of obviousness (assuming that to be the ground relied on) were fought out in a full scale revocation action, the claims would be held bad for obviousness? If the answer is affirmative, then it is right that the patent should be killed in its infancy. If the answer is negative, the patentee should not be deprived of his patent without the protection of a full scale action.
That the benefit of any doubt is to be given to the applicant was also held in ex parte Swift [1962] RPC 37, 46:
[T]he function of the Comptroller-General and of the Tribunal under s.6 of the Act of 1949 is not to decide finally whether an alleged manner of new manufacture is actually patentable. Rather, their function is only to refuse to allow applications to proceed which on no reasonable view could be said to be within the ambit of the Act ... Thus if one goes back to s.2 of the Statute of 1623, it will be seen that from the very beginning it is for the High Court to determine actual patentability.
The high threshold that an opponent must reach in opposition proceedings is referred to in Sealed Air New Zealand Ltd v Machinery Developments Ltd (unreported, HC WN CIV-2003-485-2274, 25 August 2004, MacKenzie J) paragraph 10:
The opponent accepts that before the Commissioner the opponent has the onus of establishing the cited grounds of opposition ... The standard of proof to be applied is the ordinary civil standard, namely that any matters requiring to be proved must be established on the balance of probabilities. However, although the standard of proof is the civil standard, namely on the balance of probabilities, it is necessary to bear in mind the questions which the Assistant Commissioner at first instance, in this Court on appeal, must address in opposition proceedings. The opposition is a means of dealing with applications which clearly should not proceed. The question is, as it is put by Barker J in the passage from Beecham v Bristol-Myers (No.2) which I have cited, and by Ongley J in Saxpack Foods Limited v J Wattie Canneries Limited (M 454/85, High Court, Wellington Registry, 11 July 1988) whether the application is “manifestly untenable”. That procedure is not a method of disposing of truly contentious cases. For such cases, the procedure of a revocation action under s 41 is appropriate.
The applicant noted that this last decision was recently considered in Astra Aktiebolag’s Application (Decisions of the Commissioner, P28/2005, 25 October 2005) at 12-13.
On any conflict of fact and expert opinion, the applicant drew attention to General Electric Company’s Application [1964] RPC 413 (approved in Beecham Group Limited v Bristol Myers Company (No2) [1979] NZLR 629 at 634) where Lord Diplock said:
The right principle is that if on the face of the written evidence filed there appears to be a bona fide conflict of fact or credible expert opinion upon a question on the answer to which the existence or non-existence of the ground for refusal specified in s.14(1)(e) [equivalent to New Zealand section 21(1)(e)] depends, the Comptroller [Commissioner] should not exercise his jurisdiction to refuse the grant unless, after cross-examination of the witness if he thinks fit to order it, the conflict is clearly resolved in favour of the party opposing the grant.
PRIOR PUBLICATION – section 21(1)(b)
Section 21(1)(b) states:
That the invention, so far as claimed in any claim of the complete specification, has been published in New Zealand before the priority date of the claim —
(i) In any specification filed in pursuance of an application for a patent made in New Zealand and dated within 50 years next before the date of filing of the applicant’s complete specification:
(ii) In any other document (not being a document of any class described in subsection (1) of section 59 of this Act)
Advice from the opponent at the hearing was that this ground is not being pursued.
Documents 1 to 4, which are considered below under obviousness, were raised in the notice of opposition and statement of case as prior publishing the applicant’s claimed invention. After perusal of these documents, I find that they do not disclose the applicant’s invention claimed.
The ground of prior publication is not made out.
PRIOR USE - section 21(1)(d)
Section 21(1)(d) states:
That the invention, so far as claimed in any claim of the complete specification, was used in New Zealand before the priority date of that claim
The practice note, published in IPONZ Journal 1287 in July 1986, page 714, sets out what the opponent must do to prove this ground:
To succeed on this ground, an opponent must first establish that the alleged instance(s) of prior use was (were) not secret use(s) of the invention, as claimed. See the decision of the House of Lords in Bristol-Myers (Johnson’s) Application [1975] RPC 127, at 157, for a discussion on what constitutes public use, as opposed to secret use. The opponent must also establish, by evidence,
(a) what was used
(b) where it was used
(c) by whom it was used
(d) the date it was used
(e) where apparatus still extant may be inspected.
Advice at the hearing was that this ground is not being pursued.
The uses referred to in the notice of opposition and statement of case were not established as per the above practice note.
The ground of prior use is not made out.
OBVIOUSNESS - section 21(1)(e)
Section 21(1)(e) reads:
That the invention, so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step having regard to matter published as mentioned in paragraph (b) of this subsection, or having regard to what was used in New Zealand before the priority date of the applicant’s claim
In Beecham Group Ltd v Bristol Myers Company (No 2) [1980] 1 NZLR 192 at 232 the Court held that obviousness should be judged from the viewpoint of a ‘notional’ person possessing the following characteristics:
The usual test for obviousness is that set out by Oliver J in Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 at 73, and followed in the Court of Appeal in Ancare v Cyanamid [2000] 3 NZLR 299 at 309:
There are, we think, four steps, which require to be taken in answering the jury question. The first is to identify the inventive concept embodied in the patent in suit. Thereafter, the court has to assume the mantle of the normally skilled but unimaginative addressee in the art at the priority date and to impute to him what was, at that date, common general knowledge in the art in question. The third step is to identify what, if any, differences exist between the matter cited as being “known or used” and the alleged invention. Finally the court has to ask itself whether, viewed without any knowledge of the alleged invention, those differences constitute steps which would have been obvious to the skilled man or whether they require any degree of invention.
The steps can be summarised as:
In Ancare v Cyanamid, above, at 309, paragraph 43, Gault J held:
... the test [for obviousness] is well established. It postulates a person (or, where appropriate, a team), skilled in the field but not inventive, invested with the common general knowledge available in the field at the priority date, presented with the prior knowledge or prior use relied upon. Prior documents may be looked at together if that is what the skilled person or team would do. It asks whether to that person or team the alleged inventive step would be obvious and would be recognised, without bringing to bear any inventiveness, as something that could be done or is at least worth trying. That is a question of fact. If any embodiment within the scope of the claim is obvious the claim is invalid. These propositions are helpfully expanded upon in the recent English cases which are still applicable though under the 1977 Act; see the Windsurfing International case, Hallen Co v Brabantia (UK) Ltd [1991] RPC 195 at p 211, and Molnlycke AB v Procter & Gamble Ltd [1994] RPC 49 at p 112.
The applicant submitted that in Smale v North Sails Ltd [1991] 3 NZLR 19 (HC), at 42-44:
(i) the Windsurfing test was adopted;
(ii) the notional addressee was said to be well informed in the art in question and to possess all the relevant skills, but was incapable of even a scintilla of invention; and
(iii) the cases were said to be replete with warnings against being wise after the event as the result of ex post facto analysis.
The applicant submitted that in a recent decision of the English Court of Appeal in Technip France SA’s Patent [2004] RPC 46:
(i) the Court confirmed the approach in Windsurfing is often helpful and summarised the steps (at paragraph 111); and
(ii) the Court confirmed that the well known warnings against ex post facto analysis are as true today as they were when the warnings were given by Fletcher Moulton LJ in British Westinghouse Electric & Manufacturing Co Ltd v Braulik (1910) 27 RPC 209. An ex post facto analysis is unfair to the inventors and not countenanced by English patent law (at paragraph 112).
The standard in opposition proceedings is ‘clearly obvious’. As stated by Barker J in Beecham Group Ltd v Bristol Myers Company (No 2) at 230:
The word “clearly” in s 21(1)(e) is not found in s 41(1)(f) which provides, as a ground for revocation by the court of a patent in proceedings to that end:
That the invention, so far as it is claimed in any claim of the complete specification, is obvious and does not involve any inventive step having regard to what was known or used before the priority date of the claim in New Zealand.
The insertion of the word “clearly” in the opposition section indicates a higher onus on an opponent in opposition proceedings who alleges that there is no inventive step, the omission of the word in the revocation section indicates that the onus there is not quite so high.
The concept of the skilled addressee was discussed in The General Tire & Rubber Company Limited and Others v The Firestone Tyre and Rubber Company Limited and Others [1972] RPC 457 at 481 and 482:
... it is to a skilled addressee - a skilled man reasonable well versed in the art - that the specification is deemed to be addressed, and it is by the standards of the common general knowledge of such a man that one tests whether the invention was obvious or not.
The notional skilled addressee is the person with practical knowledge and experience of the kind of work in which the invention was intended to be used as in Catnic v Hill & Smith [1982] RPC 183 at 242, 243.
The applicant noted that the opponent had provided no indication as to who the skilled addressee is. The applicant said that the patent application is directed to card payment systems and to a data processing method. The applicant submitted, therefore, that the skilled addressee is a team consisting of a systems analyst who prepares design specifications of software systems to a particular business’s requirements, and a software programmer who implements software systems in accordance with those design specifications, both of whom have worked in the payment systems software industry.
Common general knowledge and the skilled addressee were discussed in General Tire at 481-482:
The common general knowledge imputed to such an addressee must, of course, be carefully distinguished from what in patent law is regarded as public knowledge. This distinction is well explained in Halsbury’s Laws of England, Vol. 29, para. 63. As regards patent specifications it is the somewhat artificial (see per Lord Reid in the Technograph case [1971] F.S.R. 188 at 193) concept of patent law that each and every specification, of the last 50 years, however unlikely to be looked at and in whatever language written, is part of the relevant public knowledge if it is resting anywhere in the shelves of the Patent Office. On the other hand, common general knowledge is a different concept derived from a commonsense approach to the practical question of what would in fact be known to an appropriately skilled addressee - the sort of man, good at his job, that could be found in real life.
Common general knowledge was considered recently by the New Zealand Courts in Ancare New Zealand Limited v Novartis and Others (19 June 1998, Morris J, High Court Auckland, CP 480/97 (upheld on appeal [2002] 3 NZLR 299)) at 37:
The judge of obviousness is a notional addressee. This person is a skilled technician in the art in question, knowledgeable in the relevant literature (including patent specifications and such material as would be discovered on making a diligent search), but unimaginative and with no inventive capacity; Technograph Printed Circuits Ltd v Mills & Rockley (Electronics) Ltd [1972] RPC 346, 355 per Lord Reid; Beecham Group Ltd v Bristol Myers Co (No.2) [1980] RPC 192. Where the subject matter covers more than one discipline, the notional addressee need not be an individual but may be a research team. In this case such a team would include a toxicologist, chemist and formulator. The Court must consider the whole field of research and the whole field of documents reasonably discoverable or generally known; Dow Chemical Co (Mildner’s) Patent [1975] RPC 167.
The inventive concept
The opponent submitted the invention described was a method and system for automatically selecting the ‘home’ currency of a card using only the card’s details. It submitted that there were three essential characteristics:
(i) extracting information from the card which was obtaining the card number and identifying an identifier code from that card number;
(ii) comparing the information with a table which matches the extracted information to a range of currency codes; and
(iii) using the currency code associated with that information for the transaction, or using the merchant’s currency.
The applicant’s view of the inventive concept was that it is normally what is set out in the main claim, as held in Minnesota Mining & Manufacturing Co v ATI Atlas Ltd [2001] FSR 514 at 530 (paragraph 33).
I accept that the inventive concept is that set out in claim 1. I would draw attention particularly to the aspect of the inventive concept where the home currency is automatically derived from an identifying number on the card, followed by the automatic presentation to the cardholder of the transaction cost in their home currency at the time of the transaction resulting from that automatic reading of the number.
The publications cited
1. European Patent EP 0251619
The document was said to have been published in New Zealand on or about 13 April 1988.
The document relates to a SMART card which can be used to authorise transactions in a foreign currency. The SMART card converts the transaction limit stored in the card to a selected currency, so that, when the transaction amount is entered in the selected currency, it can then be compared to the converted transaction limit to allow the authorisation process to proceed (or not proceed). The transaction itself is carried out in the currency of the merchant. The SMART card has entered onto it currency conversion rates as needed by the issuer. These rates will be operable for a fixed period of time. At the time the card is issued, the issuer records the cardholder’s name, account number, countries to be visited and travel dates.
In use, the cardholder manually selects the foreign currency in which the limit is to be converted, and the transaction amount in the foreign currency can be compared to the converted transaction limit for the purpose of approving the transaction. The document states that the currency conversion does not have to be exact since it is not being used to reconcile the transaction and transfer funds from the cardholder to the merchant, but it is merely being used to determine whether the cardholder should be authorised to complete the transaction. In the subject application, claim 1 states that the transaction is to take place in the foreign currency. As the applicant submitted, the SMART card acts as no more than a calculator multiplying a stored transaction limit by a stored approximate currency conversion rate.
The document does not disclose the present invention.
2. International Patent Application WO 97/04411
The document was said to have been published in New Zealand on or about 12 March 1997.
This document describes a system and method for transferring funds between accounts, in particular across international borders and in different currencies. Preferably an Automated Teller Machine (ATM), more preferably a particular type of ATM, is used, but home-banking telephone, personal computer, conventional telephone or the like can be used.
The document mentions that an ‘external transfers, standing orders and direct debits’ application handles several different functions and that it can also handle direct debits to the customers account, for example, through point of sales transactions. However, as pointed out by the applicant, this is a reference to the ‘external transfers, standing orders and direct debits application’ being able to handle direct debits that occur at point of sales transactions. It does not mean that the process described in the document is to be used at a point of sale terminal.
The process disclosed in the document does not describe the steps of identifying an identifier code from a card number and comparing that identifier code with entries in a table, with each entry containing an issuer code and corresponding currency code.
The process disclosed in the document enables the session to be conducted in a selected language based on the origin of the customer’s card. The opponent submitted that it was just a short step from this to determining currency from the card.
The opponent admitted that again, as with document 1 above, where the currency differs between the source and destination accounts the user is required to manually select the currency in which the transaction is to continue.
The applicant pointed to the statement of case which, at paragraph 14.7, states:
The ‘identity’ of the user is obtained automatically, for example, by reading the magnetic strip on a card, and can interpret data (a BIN number) which identifies the financial institution which issued the card.
The applicant pointed out, however, that the document does not disclose the use of Bank Identification Numbers (BINs), and pointed out that O’Brien 1 admits, at paragraph 49.7, that this use of a BIN is not disclosed in the document:
The system accesses profile information attached to the customer’s card (although not explicitly stated a person skilled in the art would understand that this is obtained by way of the BIN number);
The applicant pointed out that no evidence has been provided from the skilled addressee that such an addressee would understand that profile information would be accessed by way of the BIN. The applicant submitted that, even if it were to be found that this document discloses the use of BINs, a BIN of a card only identifies the issuing bank of the card. It does not directly identify the currency, as evidenced by Barry (at paragraph 48), Walker (at paragraph 6) and Duffy (at paragraph 22).
The document does not disclose the direct association between card number and card currency requiring no intervention by merchant or cardholder, and does not disclose a method or system carried out at a point of sale.
3. International Patent Application WO 95/12169
The document was said to have been published in New Zealand on or about 30 June 1995.
This document describes systems and processes for dispensing currency to a cardholder in response to an authorisation over an electronic data network. The invention provides an electronic cash access process which includes a combination of debit card and travellers cheque and is referred to as an Electronic Travellers Cheque (ETC). The card can be used at ATMs or other terminals to obtain cash, or it can be used to purchase goods or services. The card has a fixed value selected by the customer.
The ETC has an encoded card number including a BIN and an account number. A database is maintained on behalf of ETC issuers, and contains the card numbers. When a card is issued, customer data is transmitted to the database where it is entered against the card number. ETCs can be issued in various currencies and the currency of issue is stored in the database. The document states that the BIN of the issuing institution is stored in the database along with an indication of the currency used for issuance, and it states that the database will know the currency of the card from the BIN for that card. The document also states that a particular bank may have multiple BINs for multiple types of currencies in which the cards can be issued.
An intermediate network connects the ATM or point of sale terminal. When a customer uses the ETC at a remote terminal the currency of the terminal is transmitted to the intermediate network which will do the currency conversion and, if needed, debit the account balance. The ATM or point of sale terminal does not conduct any currency conversion. Also, the ETC processor database holding the account information does not, submitted the applicant, conduct any currency conversion, contrary to the statement in O’Brien 1 at paragraph 46.5.
The opponent stated that the document discloses the concept of using the BIN encoded in the magnetic strip of a card to cross-reference information stored on a remote database relating to the card, including the ‘home currency’ of the card.
The applicant stated that the method disclosed is primarily intended to operate at an ATM and any currency purchased from an ATM can only be in the currency which is stocked in the ATM.
The currency conversion referred to in the document is only for the purposes of authorising a transaction and debiting the account balance.
4. European Patent EP 0843292
The document was said to have been published in New Zealand on or about 26 May 1998.
The document relates to transaction processing and, more particularly, card transaction processing at points of sale. An object of the invention is to provide more comprehensive card transaction processing at a number of geographically remote locations in a controlled manner.
The process uses a plurality of point of sales apparatuses and a central host. At each point of sale the merchant has a means to select the appropriate currency in which the transaction is to be executed. The transaction amount is inputted in the local currency and the processor looks up the currency conversion table to convert to the transaction currency.
The document does not disclose the direct association between a card number and a preferred currency as claimed in the subject application.
The opponent stated that the only difference of any significance between the method/system described in this document and that described in the subject application is that the method/system of the subject application is further automated so that the terminal extracts an identifier from the credit card number and retrieves a stored currency associated with that identifier, and uses that stored currency for the remainder of the transaction. In other words, submitted the opponent, the two systems differ in that in the subject application the terminal extracts an identifier and determines the preferred currency, and the terminal selects that currency and uses it for the transaction.
5. Extract from March 1999 Edition of “Innsight” Monthly Magazine
The document was said to have been available to view via the Irish Hotelier’s Federation Website (www.ihf.ie) in March 1999. The opponent submitted that this satisfies the “Made available to the public” requirement of the section 2 definition. In support of this the opponent referred to Molecular Plant Breeding Nominees Ltd’s Application (Decisions of the Commissioner, P25/2005, 12 September 2005). In that decision the basis for admitting the Internet document included evidence presented in proceedings establishing that the document had been available on the Internet by a certain date. In the present case no such evidence has been received. I conclude that the document is not admissible.
In any event, although the extract refers to the launch of Fexco’s Multi-Currency Management Terminal allowing for the processing of multi-currency credit card transactions with amounts specified in the customer’s home currency, there are no details given as to how the system works or how the card’s currency is identified.
The differences between what was known and the alleged invention
The difference is the method and system as claimed. Moreover, it is in the aspect of the invention where the home currency is automatically derived from an identifying number on the card, followed by the automatic presentation to the cardholder of the transaction cost in their home currency at the time of the transaction resulting from that automatic reading of the identifying number.
Were the differences obvious to the skilled addressee?
The depositions:
Briant 1. Mr Briant would appear to be well positioned to advise me of the common general knowledge in New Zealand at the priority date and what would lead the skilled addressee to view the applicant’s claimed invention as known or obvious. Mr Briant remembered he had had a meeting with Mr O’Brien on 18 March 1999 and that they discussed Dynamic Currency Conversion (DCC), and its use in Europe, and cross-border multi-currency acquiring. Mr Briant makes reference to banks around the world that are owned by the National Bank of Australia (NAB) sharing information on a global basis and that regular conference calls were held between various United Kingdom (UK), Ireland, Australia and New Zealand institutions, and that Irish banks were actively using DCC well before 12 July 1999.
I understand DCC as used by the opponent to be an umbrella term, covering a number of differing processes and not necessarily the process claimed in the present application. Mr Briant does not disclose the specific details of the DCC processes which were discussed or referred to, to enable me to understand what those were and hence establish what was known in New Zealand at the relevant date.
Mr Briant refers to the claims of the subject application and states that the integers in the claims and the claims themselves were known or obvious. The statements are bald statements. There is no analysis of the claims against the cited documents viewed in light of any common general knowledge.
I note also that the extraction of the BIN is stated in Briant 1 (at paragraph 14.1) to be associated with a particular country and ultimately with a particular currency. However, in the present application, the association of the extracted identifier number with a currency is done at a particular time, ie at the time the number is extracted, as stated in claims 1 and 14. This extracted number is referred to a table in order to identify the currency of the card, followed by automatic calculation of the transaction amount without further input from the merchant or the cardholder. This aspect is important and is not discussed or challenged in Briant 1.
From Briant 1 I cannot see that the presently claimed DCC system was known in New Zealand at the relevant date. Mr Briant does not show any deductive process that could be attributed to the notional skilled addressee which would lead that addressee in an obvious way from the cited documents viewed in light of any common general knowledge to the invention claimed. Briant 1 does not establish that the invention claimed would have been obvious to the skilled addressee.
O’Brien 1. Mr O’Brien states that a small number of companies worldwide control credit card systems and this means that the systems are virtually standardised worldwide. Mr O’Brien states that in 1997-99 he was working in Dublin with an Irish company, Flexicom, who provided a multi-currency capable credit card processing system to banks. Mr O’Brien also states that a company, Fexco, developed in Ireland a multi-currency capable credit card processing system where the BIN of the card is read at the point of sale and the currency is calculated automatically from the BIN, the amount is shown in the visitor’s currency and the visitor can pay the merchant in that currency using that card. Mr O’Brien describes a credit card system used in Australia or New Zealand where a US visitor to Australia or New Zealand pays by credit card in Australian or New Zealand dollars. Mr O’Brien states that he talked to others about these systems, and other systems, freely.
O’Brien 1 refers to the introduction of DCC systems firstly in the Caribbean, then Ireland, and to the introduction of a multi-currency management service to Harrods in the UK. Mr O’Brien states that the Flexicom multi-currency system was promoted to the NAB, which owns the BNZ, on 18 March 1999. Declarant Mr Briant (above) was said to have joined in this promotion on 18 March 1999 by way of a conference call from New Zealand. Aspects of the Flexicom multi-currency system and its capabilities and how it could support front-end DCC processing were said to have been described at the meeting. Mr Briant was said to have been sent information after the meeting, although copies of this material have not been made available as part of any declaration. I also note that Mr Briant has not given any details of these proceedings sufficient to establish any prior knowledge of the applicant’s claimed invention in New Zealand. I note that it was the Flexicom system that was being promoted, not the Fexco system.
In the Harrods’ system, above, it would appear from the exhibits attached to O’Brien 1 that the system may identify that the card is a foreign card, and as a result the customer is asked if they wish to pay in another currency. If the customer wishes to pay in their home currency then the amount to be paid is converted to that currency.
O’Brien 1 considers the prior publications. Document 1, above, is described in O’Brien 1 as disclosing the applicant’s claimed invention. I have found above that it does not disclose the applicant’s claimed invention for several reasons, such as for the reason that the transaction limit stored in the card is converted to a selected currency, so that, when the transaction amount is entered in the selected currency, it can then be compared to the converted transaction limit to allow the authorisation process to proceed, and the transaction itself is carried out in the currency of the merchant.
O’Brien 1 considers document 2, above, as prior publishing the applicant’s claimed invention. However I have found that it doesn’t. For example, in document 2, where the currency differs between the source and destination accounts, the user is required to manually select the currency in which the transaction is to continue.
O’Brien 1 describes document 3, above, as disclosing the applicant’s claimed invention. However, I have found above that document 3 does not disclose the applicant’s claimed invention. For example, the currency conversion referred to in the document is only for the purposes of authorising a transaction and debiting the account balance. It is not to display the amount to the customer for payment in the home currency. In addition, the card is an ETC and as such is intended to be used at ATMs which would normally dispense to overseas visitors the currency of the country visited.
O’Brien 1 describes document 4 as disclosing the same invention as the applicant’s claimed invention, except to say that the latter’s is more automated. I have found that the document does not disclose the applicant’s claimed invention. For example, the two systems differ in that, in the subject application, the terminal extracts an identifier number and, from that, determines the preferred currency, and uses that currency for the transaction.
In O’Brien 1 Mr O’Brien refers to the claims of the present application and states that the invention as claimed in each claim is known or obvious.
O’Brien 2. The purpose of O’Brien 2 is to substitute exhibits 2 and 3 attached to O’Brien 1 with exhibits 9 and 10, which are said to be corrected versions of exhibits 2 and 3.
Barry. Mr Barry states that the present invention seeks to solve the problem of determining a preferred currency for a charge, debit or credit card transaction between merchant and cardholder at the time of the initiation of the transaction without any verbal or manual intervention. Point of sale terminals were previously known in which users could pay merchants in the currency of the merchant, but the terminal required active selection by the merchant of the currency for the transaction. Mr Barry states that the present invention provides automatic currency recognition at the point of sale (ACR@POS) as opposed to the prior art DCC. The determination of the preferred currency for association with the transaction between a merchant and a cardholder means that the association takes place automatically and at the time of the transaction at the point of sale.
Mr Barry states that Mr O’Brien has past and current employee relationships with the opponent company so he believes Mr O’Brien’s declaration is ‘tainted’; he implies that Mr O’Brien is not qualified to comment on the common general knowledge in New Zealand since he has never worked here; and he states that Mr O’Brien’s expertise appears to be in the sale of banking systems as opposed to the technical development of them, which last point he says is important to the present proceedings.
Mr Barry is critical of much of O’Brien 1 and points to what he regards as inconsistencies in the declaration. Mr Barry notes that Mr O’Brien worked with a company providing a multi-currency capable credit card processing system, not an automatic currency conversion system at point of sale (ACR@POS), and he states these to be two different technologies.
Mr Barry states that Mr O’Brien was not selling the Fexco DCC application in Australia, and, in addition, he was not selling the application in New Zealand either, since he had no presence in New Zealand. Mr Barry states that the detail in which the DCC service was talked about with NAB and Mr Briant has not been clarified, and Mr O’Brien’s dealings with New Zealand have not been particularised or supported by evidence.
Mr Barry explains that the Nabanco Caribbean system is a dual currency system where BINs were retained within a terminal to determine which transactions should be in US dollars and which in the local Jamaican currency. Further, there is no evidence that the document describing the Nabanco system was publicly available in New Zealand before the relevant date of the present claims. Mr O’Brien has also failed, I think, to establish that other documents referred to as disclosing the invention were publicly available in New Zealand before the relevant date, and, in some cases at least, that they were publicly available documents in their original countries. For example, the Harrods’ documents are said by Mr Barry to be commercial documents which would be confidential, not public, documents.
Mr Barry points to the use of the word ‘believes’ in O’Brien, where Mr O’Brien states that he ‘believes’ the invention was not novel at the time of the priority date, rather than unequivocally asserting the same. Mr Barry also questions whether Mr O’Brien knew the details of the Fexco system at the relevant date or has since learned the details.
Walker. Mr Walker states that he had no knowledge of the technology combinations disclosed in any of the multi-currency management systems, DCCs and multi-currency management system-DCCs described by the opponent in any of the documents attached as exhibits to the opponent’s declarations. He expresses doubt that any of those technical combinations have been implemented in a functional manner at point of sale for the purposes of DCC at the alleged dates.
Mr Walker also states that, at the priority date, credit card BIN tables were known and used for routing transaction authorisations and transaction settlements, but not for any other purpose. It was stated in Walker that, at the priority date, extensive computer systems were required for routing and processing the preceding authorisations and settlements, particularly since point of sale terminals prior to July 1999 did not present sufficient memory capacity to hold a sufficiently large range of Visa/MasterCard BIN tables for performing currency identification directly via such point of sale terminals at the point of sale at the time of the transaction.
Duffy. Mr Duffy states that in 1998 he became aware of the possibility of enabling tourists pay for goods and services in their own currency using their credit card. He was asked at the time by his employer (Fintrax) to investigate this possibility. At the time Fexco operated a service where the shop assistant would visibly determine that the card was not an Irish card, would then enter the card details on a computer and the screen would present the operator with a short list of currencies to choose from. This was satisfactory for Ireland where most of the visitors were from the US or UK. The need for automation was not high under such circumstances. The Fexco system was bulky compared to state of the art point of sale payment terminals of the time. Mr Duffy states that Fexco demonstrated their system to him and his company. During the demonstration Mr Duffy states that there was no mention of card identification.
The core business of the deponent’s company at the time was tax refunding to tourists, and through this he was aware of payment card numbers being similar. As part of tax refund data requirements, it was normal practice to record nationality and country of origin of the tourist, and many tourists chose to have their refund paid to their credit/payment card. The company was aware of the problem of misidentification as this would mean double currency conversion. Thus Mr Duffy says that he knew that a reduction in the size of equipment was needed, as was integration with the normal process of payment and the automatic determination of tourist/cardholder currency.
His company successfully collated all tourist information and card details with the objective of constructing a currency identification table. In addition, the company had available to it a table of popular card schemes which included start and end number ranges for cards issued by individual card association members. The table his company produced had over thirty thousand entries and had only a country code associated with a bank name. No currency code was available and the table had many anomalies with many ranges without country codes, and many with ambiguous country codes. The table was over one megabyte in size.
Mr Duffy says that he noticed that payment at point of sales devices were of low processing power and that they had limited memory capacity. Mr Duffy was therefore aware that the maximum size of any data used would need to fit within 250 kilobytes of memory availability. It was also determined that as few entries as possible was desirable as the time to search the table would be large, and delay every transaction. The card association table with over thirty thousand entries would not facilitate these needs.
Mr Duffy states that the method described in the application in suit was determined by his company as being the optimum method, and this method reduced the table requirements from over thirty thousand entries to eleven thousand entries, and required only leading digits. This card recognition table is referred to as an abbreviated Bank Reference Table in the present specification. The table source was a mixture of data from Fintrax’ own tourist database and that of the card associations. Mr Duffy says that it was evident during the development of the table that any six digit entry of the BIN used by Visa or MasterCard was not a reliable method of determining card currency, and neither was the use of six digits practical from a software point of sale operational perspective. Fintrax developed a PC prototype of the method and subsequently drafted a technical specification for a local payment at point of sale software provider to construct the application.
Mr Duffy states that he had no knowledge of the technology combinations disclosed in any of the multi-currency management systems, DCCs and multi-currency management system-DCCs described by the opponent in any of the documents attached as exhibits to the opponent’s declarations. He expressed doubt that any of those technical combinations may have been implemented in a functional manner at point of sale for the purposes of DCC at the alleged dates.
Lavecky 1. Mr Lavecky’s declaration was filed after the applicant had filed its evidence and thus has had the advantage of that evidence.
Mr Lavecky states that his company developed a prototype multi-currency capable credit card processing system for use by commercial banks. He was aware several other companies were developing similar systems, some specifically for use with DCC systems. He was aware of a system used in the Caribbean, the Caribbean Nabanco DCC system. Mr Lavecky describes the field of card currency transactions as being a global business and he states that he travels worldwide talking about products and keeping abreast of developments in this field. He was aware of the Fexco system and it was his understanding that it could automatically recognise the ‘home currency’ of the card. He states that the currency of the transaction would be the currency of the merchant.
Mr Lavecky states that his understanding of DCC systems prior to July 1999 was that they allow the transaction to be conducted in the currency of the card by detecting the card number (usually the BIN), associating the cardholder’s home currency with that card (usually by way of a look-up table of BINs and their currencies), and applying a currency conversion at the time of the transaction so that the cardholder sees the value of the transaction in the home currency of the card at the time of purchase (so the purchaser can choose whether to proceed in the home currency or the merchant’s currency).
Mr Lavecky understands that Mr O’Brien spoke with Mr Briant in March 1999. He, himself, spoke with Mr Briant in early 1999 about his company’s electronic multiple currency credit card processing systems which were able to display the price of a product or service in multiple currencies, and his company’s DCC systems. He states that none of his conversations were confidential because DCC systems were already well known around the world. He then states that his conversations with Mr Briant (I note that Briant 1 only mentions one conversation) were part of a roadshow to market his company’s services started in late 1998 to around May 1999. He states that he spoke to a large number of banks in local areas, including New Zealand. The reference to New Zealand appears in Lavecky 1 as ‘We spoke to a large number of banks in local areas (for example, New Zealand)’. During the time of the roadshow he states that his company’s DCC system was being developed. There is nothing in the declaration about the details of the system that were imparted to Mr Briant (or anyone else) that identifies the invention as claimed in the subject application, and Mr Briant does not refer to this talk, or any talk, with Mr Lavecky in Briant 1 (or in Briant 2).
Later in the deposition, Mr Lavecky states that he in fact had had a number of conversations with Mr Briant in early 1999, where he spoke about the DCC systems generally, their functionality, how they worked and how they could be implemented, their advantages and how his company could provide the BNZ with a wholesale service regarding multicurrency credit card transactions and processing including DCC. He then adds that, in addition to speaking about these systems and their advantages in the abstract sense (although it seems to me that he has already implied that they were talked about in great depth and detail), he also talked about the specific systems of his company, and those systems of his company that had been finalised, and also those systems of his company that were currently prototyped, and those systems of his company that were being developed. He states that the concept and general capabilities of DCC systems were well known amongst people in the industry at the time. Mr Briant has not described any of the foregoing in his deposition Briant 1 (or in Briant 2).
Mr Lavecky mentions more. However, none of what Mr Lavecky says, to my mind, establishes that any of what Mr Lavecky describes was known in New Zealand before July 1999. There is nothing in any of the declarations in support of the opposition that shows me that what Mr Lavecky describes was common general knowledge in New Zealand at the relevant date.
Mr Lavecky’s comments on obviousness of the claims amount to mere assertions that the claims would be obvious because all the features were known at the relevant date.
O’Brien 3. At paragraph 8 is the statement that Fexco’s DCC system, as it existed prior to the priority date, was capable of providing ‘DCC’ functionality, including the automatic identification of the currency of the card, at the point of sale. O’Brien 3 contains only a statement that the capability was there. This does not mean to me that the method and system as claimed in the present application were present or had been realised, only that there was the ‘capability’.
At paragraph 14 of O’Brien 3, the declaration refers to a Visa Europe document. This document has a date of December 2004 (ie well after the priority date of the present claims). The document states that DCC at point of sale is relatively new, but growing, and that Visa Operating Regulations for DCC have ensured consistency in the delivery of the service of giving the choice to an international cardholder of paying in the merchant’s currency or their home currency in Europe since 1998 and globally since 2002. It does not state how the currency is established at the merchant terminal, but states that the acquirer will need a multicurrency BIN or BINs and enquiries should initially be directed to Visa Europe. This document does not establish that, whatever the DCC system was, it was known in New Zealand before any priority date of the present claims.
In paragraph 23 of the declaration Mr O’Brien resiles from his statement in paragraph 21 of O’Brien 1 that the Fexco system has been widely used in Western Europe since the mid 1990’s and, presumably, from his position that the principles of operation have been common knowledge to those in the banking industry around the world since that time. He now states that the first implementations of which he had first hand knowledge did not occur until 1998.
O’Brien 3 ends with the statement that the deponent still ‘believes’, having regard to his knowledge of DCC systems prior to 12 July 1999, that the subject application describes a system that he was already aware of and had described to customers including those in New Zealand.
Martin. Mr Martin would, like Mr Briant, be well positioned to advise me of the situation in New Zealand at the priority date. As part of his career in retail banking technology, from September 2000 to June 2005 Mr Martin was Project/Product Development Manager for Electronic Transaction Services Limited (ETSL), a central transaction switch that today processes over 80% of all Electronic Funds Transfer at Point of Sale (EFTPOS) transactions undertaken in New Zealand. ETSL is owned by ASB, BNZ, Westpac and ANZ National Bank. It is worth pointing out for completeness that one other switch is said by Mr Martin to be operated in New Zealand, this being operated by the ANZ for its own purposes. Mr Martin also says that it would have been the case that ETSL processed over 80% of all EFTPOS transactions at July 1999.
A consequence of a centralised network like ETSL is said by Mr Martin to be that, in New Zealand, a bank card issuer or acquirer attached to the ETSL network would have to involve ETSL if it were to introduce a new service at point of sale, such as the DCC system of the present claims. (I note at this point that Mr Martin does not regard any system other than that claimed in the present application as being a DCC system, in contrast to the deponents in support of the opposition and as I have largely used this acronym in this decision.) This involvement would be needed because of the need to issue a revised version of the ETSL Terminal Specification for vendors of the DCC system to ensure that cardholders have a consistent experience when presented with the features of the DCC system at the point of sale, no matter what type of EFTPOS terminal on the ETSL network they use. Mr Martin states that the central transaction switch does not exist in any other countries in the Asia/Pacific region (including Australia) and is rare throughout the world.
Mr Martin states that he did not know at July 1999 of the system developed by Mr Lavecky’s company, Pure Commerce, or the Nabanco system, or the Fexco system. He did not know about them until he read Lavecky 1 in January 2006. He states that ETSL did not know of them at the time, either. He knew this latter point because he says he would have expected knowledge of them to surface within ETSL when he and his colleagues were making enquiries into DCC in 2003/2004. He states that he first became aware of the applicant’s DCC system while employed at ETSL when Fintrax (Mainline Corporate Holdings Limited, the applicant in the present case, is a wholly owned subsidiary within the Fintrax group of companies) approached ETSL in 2003 to share information on their automatic currency recognition for DCC at point of sale.
Mr Martin states that he understood that at 12 July 1999 the currency selection option sometimes offered to cardholders when making purchases on some web sites involved the cardholder manually selecting from a menu of available currencies the currency in which they wished to make payment. He states he does not call this process a DCC process. To the best of his knowledge, up to the approach by Fintrax in 2003, no changes were made to the ETSL Terminal Specification for any DCC system.
Mr Martin states that, from an ETSL perspective, the BIN is only used for clearing, settlement and authorisation with respect to card transactions. He states that the BIN is simply to identify which financial institution is responsible for the card payment transaction for the foregoing activities. He states that the use of the BIN to identify the currency of the card would not be reliable. For example, from his experiences in Saudi Arabia, a Saudi Arabian bank card would be identified as such by its BIN, but the identity of the currency as Saudi Arabian riyals, which one would expect of a card issued by a Saudi Arabian bank, would most likely be wrong as the majority of Saudi Arabian bank cards are issued in US dollars or British pounds. He states that at July 1999 he knew of no system in New Zealand that used a method of automatically identifying the currency of a credit card from its BIN. He was not aware at July 1999 of the features of operation of DCC at point of sale as it is claimed in the present application.
Briant 2. Mr Briant’s response to Martin is that Mr Martin, and ETSL, would not have known of DCC systems before the approach by Fintrax in 2003 because initiatives being considered by one of the parties to ETSL (ASB, BNZ, Westpac and ANZ National Bank being the parties), which initiatives were being considered to give a party a competitive advantage over its fellow ETSL parties, would be kept confidential from those other parties. Mr Briant gave some examples of such initiatives. In paragraph 8 of Briant 2 Mr Briant states that this was the case with DCC, and that the BNZ was actively investigating DCC before the priority date of the present claims. This would appear to be an admission that at least some of the work on DCC systems taking place at BNZ was confidential, ie was not public knowledge.
The other point I take from Briant 2 is that this document admits the matter of confidentiality in relation to work on DCC systems. This appears to me to be in contrast to much in the declarations in support of the opposition up to the time of Briant 2. Up to this declaration the opposition’s case appears to have had as a basis the fact that knowledge was shared between banks and globally, and that knowledge was shared, and discussions were held, without any requirement of confidentiality on the parties about such topics as DCC systems that had been developed, DCC systems that were being prototyped, and DCC systems that were being developed.
Lavecky 2. Mr Lavecky asserts that the claims of the present application relate merely to the basic building blocks of all DCC systems and not to the use of unique software and hardware to achieve a DCC system using these building blocks. It seems to me that the deponent is asserting that the claims are to a mere collocation of known steps. It seems to me that this is not the case. In DCC systems the BIN may be used to extract information which may or may not lead to someone guessing, or having to ask the cardholder, what the currency of the card may be. However, in the case of the presently claimed invention, a number (an identifier number) is automatically extracted from the card and this number is compared automatically to entries in a table to give a currency associated with the card (except where no operating currency can be determined for the identifier code as envisaged by claim 2 of the present claims). The transaction amount is then automatically calculated at the time in the currency of the card without any further input from the merchant or cardholder, and presented to the cardholder who proceeds with the transaction at the point of sale based on the information obtained in this way from the card.
Conclusion on obviousness
To my mind, the opponent has not shown that the method and system disclosed in claims 1 and 14 of the present application were known in New Zealand at the priority date of the claims or that it would have been obvious for the skilled addressee to derive them from what was known at the priority date by any obvious means and without any need for an inventive step. The opponent has shown systems, systems that have not been shown to be known in New Zealand at the priority date as far as I can see, where the cardholder is prompted to pay in the home currency of the card, but the opponent has not shown a system where the home currency is obtained automatically by way of an identifying number on a card, with the amount of the transaction in the currency of the card also being automatically calculated without any further input from the merchant or cardholder, and presented at the time of the transaction to the cardholder for payment in that currency.
At least there is a doubt, the benefit of which I must give to the applicant.
The ground is not made out.
NOT AN INVENTION - section 21(1)(f)
Section 21(1)(f) states:
That the subject of any claim of the complete specification is not an invention within the meaning of this Act
The definition of invention, Section 2(1), reads:
“Invention” means any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies and any new method or process of testing applicable to the improvement or control of manufacture; and includes an alleged invention
The opponent re-pleads the allegation of obviousness. The ground of obviousness has not been made out. Additionally, the subject matter of the claims relates to suitable subject matter for invention.
The ground is not made out.
NOT SUFFICIENTLY AND FAIRLY DESCRIBED - section 21(1)(g)
Section 21(1)(g) states:
That the complete specification does not sufficiently and fairly describe the invention or the method by which it is to be performed
The applicant referred to Noton New Zealand Limited v Alister Bevin Limited (1979) 1 NZIPR 236 regarding general principles of this section. At page 238 Davison CJ stated:
If reference is needed to authority on this matter, it can be found in Tetra Molectric Ltd’s Application [1977] RPC 290 at p 297, lines 32-40:
In my view, a dividing line can fairly be drawn thus: If you cannot achieve the promised result because of deficiencies in the information given in the specification, there is insufficiency. But if, following that information and having achieved mechanically that which the specification promises you will achieve by so following it, the end product will not of itself achieve that promise, then that is inutility. I do not pretend that that suggested dividing line is exhaustive, but it will in many cases - and perhaps in the majority of cases in which this question arises in opposition proceedings - point to the right approach in determining which side of the line a particular case falls.
But, in this case, inutility as opposed to insufficiency cannot be raised before the Commissioner. On examining the decision I find that the Assistant Commissioner did, however, indicate quite clearly that he had both requirements of sufficiency in mind when he was deciding the application. He said at p 5 of his decision:
An allegation of insufficiency is an allegation that the addressee of the complete specification will be unable to produce the subject of the principal or broadest claim by following the directions of the specification without further invention on the part of the addressee.
The first portion of that statement where he says, “will be unable to produce the subject of the principal or broadest claim” is a reference to the first leg, namely, the invention. The reference next to “following the directions of the specification without further invention on the part of the addressee” is reference to the method, the second leg of the matter.
The applicant submitted that the opponent has made a pleading of ambiguity, not insufficiency. For sufficiency the applicant also referred to Terrell on the Law of Patents, 12th Ed, paragraph 213, a portion of which I quote:
It has been said that the directions should be sufficient to enable “a workman of competent skill in his art” or a “competent engineer” to carry the invention into effect.
The applicant also referred to Schwarzkopf’s Application (1914) 31 RPC 437 at 439:
I certainly find it hard to understand how an invention, which relates to a process capable of perfectly simple and clear explanation, need have been presented in the confused and complicated form which characterises this Specification, but after all I have to see if there is an invention that is sufficiently and fairly described and capable of being disentangled and ascertained from the six pages of print in which it is embedded. If can discover this, I ought not to refuse the Patent simply because it is easy to see how much more clearly and how much more simply the invention might have been described.
It seems to me that the addressee of the complete specification will be able to produce the subject of the principal claims of the present application by following the directions of the specification without further invention on the part of the addressee.
The ground is not made out.
DECISION
The Opponent does not have locus standi. In the public interest I have found that the grounds of opposition have not been made out. The application is to proceed to grant.
COSTS
Pursuant to section 95(1) I award the applicant $4060-00 to be paid by the opponent to the applicant within 28 days of this decision.
Dated this 13th day of March 2006
____________________________
A Hazlewood
Assistant Commissioner of
Patents
A J Park for the Applicant
James & Wells for the Opponent
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URL: http://www.nzlii.org/nz/cases/NZIPOPAT/2006/12.html