Beat the Q Pty Ltd v Ian Charles Ogilvy - [2015] APO 47

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Beat the Q Pty Ltd v Ian Charles Ogilvy [2015] APO 47

Patent Application: 2011253607

Title:A transaction processing method, apparatus and system

Patent Applicant:                   Ian Charles Ogilvy
Opponent:  Beat the Q Pty Ltd
Delegate:  Greg Powell
Decision Date:  7 August 2015
Hearing Date:  26 May 2015, in Canberra

Catchwords: PATENTS - section 59 – opposition to the grant of a patent –whether the claimed invention is novel – lack of novelty not established – whether the claimed invention involves an inventive step – lack of inventive step not established on evidence filed – whether the claims are clear and fairly based – claims clear and fairly based – whether claims define a manner of manufacture – claims define a manner of manufacture – opposition unsuccessful – costs awarded against the opponent.

Representation: Patent applicant: Tim Staley, Patent attorney of Griffith Hack, Sydney
Opponent:Lorne Wood-Roe, Patent attorney of Adams Pluck, Hornsby

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2011253607

Title:A transaction processing method, apparatus and system

Patent Applicant: Ian Charles Ogilvy
Date of Decision: 7 August 2015
DECISION
The opposition is unsuccessful. I direct that the application proceed to grant, subject to any appeal of this decision.
Costs are awarded according to Schedule 8 of the Patents Regulations against Beat the Q Pty Ltd.
REASONS FOR DECISION
Background

Application 2011253607 in the name of Ian Charles Ogilvy (“ICG”) was filed on 23 November 2011 as a divisional application of parent application 2005256142 and accepted on 3 December 2012. The parent application had lapsed due to failure to gain acceptance following examination. Beat the Q Pty Ltd (“BTQ”) filed a Notice of Opposition on 10 April 2013. The evidence in support of the opposition was completed on 22 October 2013, the evidence in answer was complete by 22 January 2014 and, despite indicating that evidence in reply was going to be filed, BTQ filed no evidence in reply.
The hearing was held on 26 May 2015. ICG’s representative appeared in person along with Ian Ogilvy as an observer. BTQ’s representative appeared by phone.
The Opposition
While more grounds appear in the Statement of Grounds and Particulars, at the hearing BTQ opposed the grant of a patent on the basis of:
(i)non-compliance with sections 40(2) and (3)
(ii)lack of novelty
(iii)lack of inventive step
(iv)lack of manner of manufacture.
Evidence in support consists of two declarations as follows:
(i)Dr Ka Ching Chan with Annexures A–E; and
(ii)Stefan Mozar with Annexures A–F.
Evidence in answer consists of a single declaration by Dr Seppo Keronen with Annexures A–E.
I will refer to the relevant parts of the evidence where appropriate.
The Specification
The present invention relates to a transaction processing system for facilitating payments in various circumstances. The specification notes that payments often occur in an electronic manner in which a credit or charge card is used and, following appropriate authorisation such as the payer’s signature on an invoice, the amount owing for the purchase is transferred electronically from the payer’s bank to the merchant. The specification notes that there are substantial security risks due to the card being out of the owner’s possession for a short period of time until the invoice is signed, or the fact that the information on the card can be easily copied and used fraudulently. The specification notes:
“There is a general need for a payment system that offers improved security and convenience”.
The specification also notes that the usual payment process occurs between the merchant and a transaction processing system. The payer has little to do with the transaction processing other than to provide their account details which, as noted above, can be copied. The specification then states:
“No one has suggested an alternative system to the conventional merchant device/transaction processing system arrangement.”
To overcome these shortcomings the specification proposes a number of alternatives which, in a general sense, increase the payer’s participation in the payment process. In all alternatives the payer uses what is broadly described as “a payer electronic device” to proceed with the payment process. Without the payer electronic device the transaction cannot be authorised. This adds an extra layer of security and, in some embodiments, obviates the merchant’s involvement in the payment process altogether. The payer electronic device that is exemplified in the specification is a mobile phone. However, the description notes at page 31 that it could be “any other computing device (preferably portable), such as a PDA”, and could also be “a dedicated device specifically built as a payer electronic device”. For simplicity, in this decision I will simply refer to either a “payer electronic device” or a mobile phone.
In one embodiment, having swiped their credit card, or entered their credit card details on an internet site, the payer receives a message on their mobile phone from the transaction processing system asking them to confirm that the payment should proceed. In another embodiment, the mobile phone and the merchant’s card terminal communicate with each other so that the necessary information from the merchant (such as merchant ID and payment amount) is sent to the mobile phone which then communicates with the transaction processing system. That is, the payer’s mobile phone takes on the role that is usually played by the merchant’s credit card terminal in normal purchasing arrangements. In this way, the payer does not need to give the merchant their credit card details, which avoids the possibility of unscrupulous merchants retaining credit card details for fraudulent use. In another embodiment the bill presented by the merchant to the payer carries, for example, a bar code which, when scanned by the payer’s mobile phone, results in the necessary information allowing payment of the bill (i.e. merchant ID, payment amount, etc) being gathered by the mobile phone so that the appropriate message can be packaged and sent by the phone to the transaction processing system to authorise payment to the merchant. In yet another embodiment, the bar code may be placed on the menu, for example, of a merchant and scanning the bar code causes the menu to be uploaded to, and displayed by, the mobile phone. The payer then selects various options from the menu and the selections are transmitted to the merchant. At the same time, the necessary information allowing payment of the bill are packaged and sent to the transaction processing system to authorise payment to the merchant.
The specification ends with 56 claims. Claims 1 and 33 are method and apparatus claims as follows:
1.A method of making a payment, comprising the steps of:
providing information associated with a payer, the information being provided in a manner so that a payee can access the information,
receiving information about the payment by a payer electronic device associated with the payer and
giving instructions for making the payment using the electronic device associated with the payer;
wherein the information about the payment includes product information in the form of at least one product identifier of at least one product available from the payee, and the method includes the step of the payer electronic device selecting at least one product identifier, and wherein the payer electronic device is a computing device and the product identifier is in computer recognisable form, the payer electronic device being arranged to recognise and process the product identifier;
wherein the information about the payment further includes payment information including a payment amount for the at least one selected product and a payment identity of the payee;
wherein the payer electronic device is arranged to enable recognition of the payment information and to formulate messages including the payment information and transmit those messages to a transaction processing system;
wherein the step of giving instructions for making the payment includes the step of the payer electronic device providing the payment amount, payment identity of the payee and the selected product identifier to the transaction processing system; the transaction processing system being arranged to access an account of the payer and make payment to the payee for the payment amount, and
the transaction processing system transmitting the product identifier to the payee, wherein the payee receives information about the at least one product paid for by the payer electronic device to enable provision of the product to the payer.
33.An apparatus for facilitating a payment transaction from a payer to a payee, comprising
a payer electronic device associated with the payer, the payer electronic device including a payment information receiving means for receiving information about the payment, and payment instructing means for giving instructions for making the payment;
wherein the information about the payment includes product information in the form of at least one product identifier of a product available from the payee, and the payer electronic device is arranged to enable selection of at least one product identifier, and wherein the payer electronic device is a computing device and the product identifier is in computer recognisable form, the payer electronic device being arranged to recognise and process the product identifier; wherein the information about the payment further includes payment information including a payment amount for the at least one selected product;
wherein the payment instructing means is arranged to provide the payment amount, payment identity of the payee and the selected product identifier to a transaction processing system, the transaction processing system being arranged to access an account of the payer and make payment to the payee for the payment amount, the transaction processing system comprising a transmitting means that transmits the product identifier to the payee, wherein the payee receives information about the product ordered and paid for by the payer electronic device to enable provision of the product to the payer and wherein the payer electronic device is arranged to enable recognition of the information about the payment and to formulate messages including the information about the payment and transmit those messages to the transaction processing system .
The claims also include two claims to computer implementation of the method as follows:
55A computer program providing instructions for controlling a computing device to implement a method in accordance with any one of Claims 1 to 32.
56A computer readable medium providing a computer program in accordance with Claim 55.
DECISION
Onus of proof
The examination request for this patent application was filed on 5 April 2012. As a consequence, substantive amendments of the Patents Act brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act2012 do not apply to the present application. This includes the amendment to subsection 60 (3A) that allows the Commissioner to refuse a patent application if satisfied on the balance of probabilities that a ground of opposition exists.
Consequently the former standard for opposition proceedings applies and the opponent must establish that it is clear or practically certain that the patent is invalid (F Hoffman La Roche AG v New England Biolabs Inc [2000] FCA 283 at [29], [67]; [2000] FCA 283; 50 IPR 305 at 311, 319; Commissioner of Patents v Sherman [2008] FCAFC 182 at [18], [22]; [2008] FCAFC 182; 79 IPR 426; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).
Construction
ICG submitted that there were three key features in the claims that distinguished the invention from the prior art. ICG submitted that the construction of these features was important. The three features are:
(i)a payer electronic device associated with a payer;
(ii)wherein the payer electronic device is a computing device and the product identifier is in computer recognisable form, the payer electronic device being arranged to recognise and process the product identifier; and
(iii)wherein the payer electronic device is arranged to enable recognition of the payment information and to formulate messages including the payment information and transmit those messages to a transaction processing system.
Sheppard J summarised the rules of construction for a patent specification in Décor Corp v Dart Industries 13 IPR 385 at 400. This summary has been referred to in numerous subsequent judgements, and was endorsed by the Full Federal Court in Pfizer Overseas Pharmaceuticals v Eli Lilly [2005] FCAFC 224.
It is a recognised tenet of Australian patent law that each claim must be read as part of the entire specification (Electrical and Musical Industries Ltd v Lissen Ltd 56 RPC 23 at 39), and thus the meaning of the words used in a claim may be affected by what is said in the body of the specification (Rosedale Associated Manufacturers Ltd v Carlton Tyre Saving Co Ltd [1960] RPC 59 at 69). While noting that it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim, by adding to those words glosses drawn from other parts of the specification (Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 and Decor Corporation Pty Ltd v Dart Industries Inc (supra)), it is legitimate to refer to the rest of the specification to explain the background to the claims, to ascertain the meaning of technical terms and resolve ambiguities in the construction of the claims (see Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 476).
More recently, the approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 81 IPR 228 at [118] – [120]:
“the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear … while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole … it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification … terms in the claim which are unclear may be defined or clarified by reference to the body of the specification”
I also note what Middleton J said in Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214, 100 IPR 451 at [139]:
“It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense. The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent. From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date.”
“a payer electronic device associated with a payer”
ICG submitted that this phrase would be interpreted to mean a personal, consumer electronic device operated by a payer who would be an individual customer. BTQ submitted that there was no reason to consider the payer to be an individual consumer and no reason to limit the payer electronic device to be a personal computing device. BTQ submitted that ICG had limited these words according to the description. BTQ submitted that the electronic device could be a desktop computer or the like.
In so far as the scopes of “payer electronic device” and “payer” go, I both agree and disagree with both parties. To my mind, the “payer” does not have to be an individual consumer in the sense of a single person. While ICG’s submissions point to the fact that, throughout the specification, references are always to a payer device which is associated with a person, it does not automatically follow that the claims are so limited. The payer could be a company. However, in the context in which the term appears, it is clear that there is only one payer seeking goods and/or services from a merchant. Whether the payment comes out of a natural person’s account or out of a company account, there is only a single source of funds. In the same way, the “payer electronic device” does not have to be portable in the way of a mobile phone. It could be, as submitted by BTQ, a desktop computer. I emphasise, however, that the merchant could not be considered to be a “payer” in the context in which that term is used in the present specification. They are two distinct entities with different pieces of information associated with each one (e.g. payer account, merchant ID).
What is more important, and what neither party addressed to any great extent in their submissions, is what is meant by “associated”? For example, in the normal point-of-sale (“POS”) that occurs daily in shops all over the world, a payer interacts with a POS machine owned by the merchant from whom the payer wishes to purchase goods or services. At the point in time when the payer interacts with that machine, could it be said to be “associated” with the payer? If so, then the payer electronic device could not be said to a personal device. However, in the present case, I am satisfied that the term “associated” in the context of the specification as a whole, imparts some sort of notion of possession between the payer and the payer electronic device. Passages noted by ICG which support this are:
Page 3 lines 8-10 – “method involves using such a ubiquitous electronic device associated with the payer to give instructions for making the payment”.
Page 3 lines 11-12 – “every payer may therefore have an electronic device associated with them which they can use to provide instructions for making payment”.
Page 32 lines 10-14 – “The improved payment system of this invention takes advantage of the fact that the majority of consumers in many markets are bringing their own computing device (usually a mobile telephone) to the point of sales. Low cost modifications to that device can enable a new system of payment that not only addresses the security problems with the current system, but also brings many additional new features”.
Page 32 lines 19-25 – “The system of embodiments of the invention utilises a modified consumer electronic computer in the form of a mobile phone or pocket computer that has been upgraded to operate in any location that has wireless coverage. The system replaces all transactions including obtaining verification from the consumer (payer) using this upgraded device. In this manner, all transactions are verified by the consumer. Real time transactions such as point of sale, over the phone purchases or Internet purchases can be verified at the time”.
While BTQ submitted that there was nothing in the claims to suggest that the payer device is owned or exclusively operated by the payer, in my opinion the specification as a whole clearly shows that this is the case. I note that the instruction by Bennett J in H Lundbeck A/S (supra) that “the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear” does not limit the context to being in the context of the claims only. It is the specification as a whole which forms the context for interpretation of the claims. It follows that clearly the device belongs (in some sense) to the payer.
“wherein the payer electronic device is a computing device and the product identifier is in computer recognisable form, the payer electronic device being arranged to recognise and process the product identifier”
ICG submitted that this feature means that the payer electronic device is configured to recognise and process product identifiers. They took the position that the product identifier was a particular term of art that applied to the particular product identifier that was part of the POS message sent to the transaction processing system. They submitted that it was not simply selecting items displayed on a page of a shopping website. It was what was generated as the identifier when that selection had been made.

BTQ submitted that, in the context of the claim, this feature meant that the payer electronic device recognised and processed the identifier to enable formulation of the message to the transaction processing system. However, they seemed to maintain that the product identifier related to entries in a database that described the product and to the data that was sent to the transaction processing machine.
There are numerous examples in the specification that support ICG’s interpretation. It is clear for those embodiments where the payer has made some sort of selection from, for example, a food menu, that the product information that the payer’s electronic device recognises and processes for transmittal to the transaction processing system is not “hamburger” (which could be the entry in the database that describes what is being ordered), but the product identifier code(s) associated with that hamburger that can be sent to, and is recognised by, the transaction processing system. In my opinion, the payer’s device could be seen to be a “personal POS device”.
“wherein the payer electronic device is arranged to enable recognition of the payment information and to formulate messages including the payment information and transmit those messages to a transaction processing system”
ICG submitted that this feature meant that the payer electronic device could recognise and process payment information. I note that, in the next part of the claim following this phrase, the claim further states:
“wherein the step of giving instructions for making the payment includes the step of the payer electronic device providing the payment amount, payment identity of the payee and the selected product identifier to the transaction processing system”.
This phrase can be read in conjunction with the words above that the payer electronic device has to “formulate messages” and “transmit those messages to a transaction processing system”. What is sent to the transaction processing system is “payment information” which has been recognised by the payer electronic device and which includes (and was, therefore, recognised by the device) the payment amount, payment identity of the payee and the selected product identifier. To my mind, this reinforces the position that the payer electronic device acts like a personal POS device.
Novelty
It is a requirement of subsection 18(1) of the Patents Act 1990 (the Act) that the invention, so far as claimed in any claim, is novel. Subsection 7(1) states that an invention is taken to be novel unless it is not novel in the light of the prior art. A citation is part of the prior art base for the purposes of novelty if it was published before the priority date of the claim. BTQ submitted that claims 1‑3, 6–8, 11–19, 25, 29–31, 33–35, 37–47, 52, 53, 55 and 56 lacked novelty in light of WO 2002/102133. BTQ referred to this document as D2 and I will continue to do so in this decision. As D2 was published on 27 December 2002, well before the earliest claimed priority date of 25 June 2004, it forms part of the prior art base for the present application.
It is well established that the general test for lack of novelty is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19 at [20], 137 CLR 228 at 235:
“The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement”.
This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (see Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 517). In order to meet this requirement, the prior art must “contain clear and unmistakeable directions to do what the patentee claims to have invented” (The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited [1972] RPC 457 at 486).
Unfortunately for the opponent, and notwithstanding that BTQ’s declarants made statements that all features of claims 1 and 33 at least are disclosed in D2, given my interpretation above of the three terms highlighted by ICG, the claims are novel in light of D2.
D2 discloses a financial transaction processing system and method for goods and/or services supplied by a merchant. It is quite clear from this document that information associated with a payer is accessible by the merchant. Furthermore, information about the payment is also receivable; such information including product identifiers, merchant ID and payment amount. Additionally, D2 discloses giving instructions for payment to be made by transmitting the information to a transaction processing system so that authorisation can be transmitted to the merchant to enable provision of the goods and/or services to the payer.
However, D2 does not disclose a payer electronic device associated with the payer as I have construed that feature to be. In all embodiments in D2, there is a device associated with the merchant that receives the necessary information and transmits it to the transaction processing system.
For example, figures 3 and 7 of D2 show what could be called in-store and online embodiments respectively. Those figures are as follows:
Figure 3
Figure 7
As is clear from figure 3, it is the merchant that has the POS machine rather than the payer. With respect to figure 7, D2 notes that:
“… system 700 in Fig. 7 further comprises an online consumer terminal 710 that communicates with transaction processing system 26 over communications link 715. Online merchant 12' replaces merchant store 12, online merchant computer 734 replaces POS device 34, and communication link 28' replaces communications 28 shown in Fig. 3.” (my emphasis)
So, while figure 7 discloses what can be considered to be an electronic device associated with the payer (terminal 710), that device does not collate the necessary information and transmit it to the transaction processing system. D2 clearly states at page 17 line 25–page 18 line 2:
“… the online merchant computer creates an authorization request comprised of the customer ID, a merchant ID and transaction data, and then transmits that data to transaction processing system 26.”
BTQ also pointed to another embodiment in D2 described as a “self-service kiosk”. In this embodiment (set out in figure 9 – which I have not shown), D2 states:
“A terminal located at the kiosk is similar to online consumer computer 710 [shown in figure 7] except that a product database similar to that found in online merchant computer 734 [shown in figure 7] is stored in the mass storage device. In operation, the customer in merchant store 12 approaches a kiosk in the store, indicates a food, merchandise or service selection, and provides a customer/transmitter ID using input device 920, customer transceiver 50 or a combination of the two. In doing so, the customer has placed an order for the desired article of food, merchandise or service and simultaneously initiated payment processing. Once the transaction is authorized, a receipt is printed on printer 990 and the purchase is delivered to the customer, either at the kiosk or at another predetermined location. This embodiment provides a combination self-service, automatic payment processing system, with order preparation being the only delay”
It is clear here that there is no payer electronic device associated with the payer as I have interpreted that feature. While it is unclear whether the kiosk undertakes the POS function, or communicates with another device which undertakes the POS function, the kiosk would appear to be located in the merchant’s store. I note that this would seem to follow in the passage I have quoted above where it describes the payer approaching the kiosk “in the store”. The above passage is strongly suggestive that the infrastructure required for the POS functionality is provided by the store. While I note that the passage above mentions the use of a “customer transceiver” which could be said to be an electronic device associated with a payer, like the terminal (710) of figure 7, there is no disclosure of it operating in the way defined in the claims.
The claims do not lack novelty in light of WO 2002/102133 (D2).
Inventive Step
Subsection 7(2) of the Act states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art. A document is prior art for this purpose if "a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant" (s 7(3)).
The test for whether an invention is obvious is whether it would have been a matter of routine to proceed to the claimed invention. In Wellcome Foundation Ltd v V.R. Laboratories (Aust.) Pty Ltd [1981] HCA 12 at [45], 148 CLR 262 at 286 Aickin J stated:
“The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not.”
The High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd (‘Alphapharm’) [2002] HCA 59 at [51]–[53]; 212 CLR 411 at [51]-[53] approved this approach, in addition to that taken in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd [1970] RPC 157 at 187 in which Graham J had posed the question:
“Would the notional research group at the relevant date in all the circumstances directly be led as a matter of course to try [the claimed invention] in the expectation that it might well produce a useful [desired result]?”
Where the invention lies in a combination of features, the question is whether the combination, not each individual feature, is obvious when compared to the prior art base (Alphapharm [2002] HCA 59 at [41]; 212 CLR 411 at [41]; Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd (Minnesota Mining) [1980] HCA 9 at [116]; (1980) 144 CLR 253 at 293).
The usual approach to determining inventive step is the problem-solution approach. Once the problem has been formulated and the common general knowledge and the prior art base have been determined, the question of whether the claimed solution is obvious must be addressed.
BTQ submitted that the invention claimed in claims 1–56 did not involve an inventive step in light of any one of the following documents when combined with common general knowledge:
(i)D2 (as discussed for novelty)
(ii)US 2002/0138496 (referred to as D11)
(iii)US 2004/0148226 (referred to as D12)
(iv)US 2001/0049636 (referred to as D13)
(v)WO 2001/027837 (referred to as D14).
They did not submit that the claims lacked an inventive step in light of common general knowledge alone.
The first thing I note is that US 2004/0148226 (D12) was published on 29 July 2004 which is approximately one month after the earliest claimed priority date of 25 June 2004. Prima facie, it does not form part of the prior art base for the determination of lack of inventive step. BTQ did not submit that the present application was not entitled to its earliest priority date. As such, I am not required to consider this document. However, even assuming that the present application was not entitled to its earliest priority date, the outcome does not change. Simply for convenience, I will not exclude D12.
The second thing I note is that no expert for either side has made any statement that would lead me to believe that patent documents are regularly consulted by persons skilled in this art. As such, it is open to me to find none of these documents would have been “ascertained, understood, and regarded as relevant”. However, whether the documents were ascertained or not, the outcome remains the same. Therefore, I will not exclude them from consideration.
The problem
In determining the problem or ‘starting point’ for considering inventive step, I note the words of the majority of the Full Court in AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99 at [203] as follows:
“If the problem addressed by a patent specification is itself common general knowledge, or if knowledge of the problem is s 7(3) information, then such knowledge or information will be attributed to the hypothetical person skilled in the art for the purpose of assessing obviousness. But if the problem cannot be attributed to the hypothetical person skilled in the art in either of these ways then it is not permissible to attribute a knowledge of the problem on the basis of the inventor’s “starting point” such as might be gleaned from a reading of the complete specification as a whole.”
As indicated in paragraph 4 above, the specification notes that there is a general need for a secure and convenient payment system, and that there has been no suggestion to have an alternative system to the usual system arranged around the merchant’s system. BTQ submitted that the problem seemed to be that it was not possible to carry out a financial transaction without having to provide a credit card number to a merchant as part of the transaction, which was a security risk. ICG provided no submissions with respect to the problem. There is also no evidence from any of the experts specifically stating what problems were known in the art. This is not surprising given that AstraZeneca (supra) was decided after their evidence had been prepared.
It is clear to me from the evidence that security is a major concern when it comes to purchase of goods and services using credit cards and electronic communication channels. This is not surprising. It is also clear that it is desirable that any purchase system should not be so complex or user-unfriendly so as to discourage its use. Given that, it appears that the problem to be addressed is to avoid an inconvenient payment system with a high security risk.
The person skilled in the art
In general, the skilled person or addressee is the person who works in the art or science with which the invention is connected. He or she is a person, or team, likely to have a practical interest in the subject matter of the invention. While the skilled person may be assumed to be well versed in the relevant art, such a person must be taken to be non-inventive (Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980 at [71]-[72]; 49 IPR 225 at [71]-[72] referring to Catnic Components Ltd v Hill &Smith Ltd [1982] RPC 183 at 242 and General Tire [1972] RPC 457 at 485; Minnesota Mining [1980] HCA 9 at [115]; 144 CLR 253 at 293).
BTQ submitted that the person skilled in the art (“PSA”) would be a person who has a background in computing and experience in the field of financial processing systems and who had “an understanding of the protocols and flow of messages between the merchant and transaction processing system hardware in order to complete a financial transaction”. ICG provided no submissions on this point. To my mind, BTQ’s submission captures the essence of the PSA for this invention.
Neither party disagreed that the other party’s expert was not a PSA and, therefore, not entitled to provide evidence in this opposition. As such, I am prepared to have regard to all evidence supplied.
The common general knowledge in the art
A definition of common general knowledge was provided by Aitken J in Minnesota Mining [1980] HCA 9 at [115]; 144 CLR 253 at 292:
“The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge.”
Information cannot be treated as part of the common general knowledge in the absence of evidence of its general acceptance and assimilation by persons skilled in the relevant art (Alphapharm [2002] HCA 59 at [31]; 212 CLR 411 at [31]).
Both ICG and BTQ accepted that it was common general knowledge to operate and process POS systems. BTQ submitted, and it was not disputed by ICG, that it was common general knowledge that any transaction message sent to a transaction processing system contained payment information for a selected product, as well as a merchant identifier. BTQ also submitted, and, again, it was not disputed by ICG, that a remote transaction processing system that “(a) was operable to receive transaction messages containing payment information for a selected product and (b) authorise payment before sending an acknowledgement to the payee” was common general knowledge.
Lack of inventive step?
Accepting my construction of the three features highlighted by ICG, BTQ’s opposition under the ground of inventive step must fail.
BTQ’s submissions in toto for each of documents D2 and D11–D14 were as follows (emphasis in the original):
80As previously stated, D2 describes various configurations for a payer electronic device which can be programmed to recognise and process payment information so as to enable a transaction message to be formulated and sent to a transaction processing system for authorisation. The transaction processing system securely stores the relevant account information for the payer and the payee is never granted access to this information (i.e. such that the security risks associated with conventional POS based systems are mitigated).
81.In one of the embodiments described in D2 an online payer computer is operable to scan the relevant product/payment information from a barcode to enable the transaction message to be generated (see Figures 7 & 9 and corresponding detailed description). In another embodiment a payer can access a self-service kiosk implementing a terminal that takes much the same form as the online payer computer but which is loaded with a database containing the relevant selectable product and payment related information (see pg. 18 line 15 bridging to pg. 19 line 2).
82.With regards D11 there is disclosed a payer electronic device (which may take the form of a personal computer, laptop, cellular phone, etc.) which is arranged to communicate with a catalogue server for receiving product and payment information. The information is received as object attributes that can be presented on the display. The payer electronic device is operable to recognise and process the object attributes to enable a transaction message to be formulated. The transaction message is subsequently transmitted to a transaction server (see paragraphs 37, 42 to 44). As for D2, the system of D11 obviates the need to provide credit card details and the like to a merchant.
83.With regards D12 there is disclosed a “shopping aid” which can be utilised by a payer to “receive and optionally respond to product information transmitted electronically”. The product information can be “transmitted locally from a computer system associated with a merchant or from the Internet to a portable device of the consumer such as a mobile phone, personal digital assistant (PDA), mobile or handheld computer or any other suitable device that combines some or all of the features of those devices”. See paragraph 14. Selection of the product information can be carried out by way of a menu shown on the display of the consumer device, or by “scanning in” product information using a barcode or other optical, magnetic or RFID scanner installed on the consumer device. See paragraphs 41 and 42. The device can transmit a transaction message to a remote server for purchase authorisation. See paragraph 49.
84.With regards D13 there is disclosed a “consumer wireless shopping device, such as a phone or PDA, that communicates with a server for completing purchase transaction” (see abstract). The wireless devices have “memory for storing programs relating to the sale and purchasing functionality note herein”. Each of the wireless shopping devices has the capability to “determine an identification code of a product to be purchase [sic]”. This can be achieved through scanning a barcode providing the relevant information. See paragraphs 65, 66 and 133. In this manner the consumer can use the device to identify and determine the price for goods desired. They can use the device to purchase the goods “without having to go through the conventional checkout process”. See paragraph 75.
85.With regards D14 there is disclosed a payer electronic device that can access a “universal shopping database” to browse product information and make a payment for a selected product. The payer electronic device may be provided with a menu driven interface which allows the user to “view detail information for each item in the lists, including the vendor, description, price and date” and “execute purchases and receive confirmation of the transaction order number and email from retailer”. The payer electronic device may take the form of a PDA. The specification states that an application can be downloaded and installed on the PDA to implement the universal online shopping functionality. See page 22 lines 3 to 32.”

Acknowledging that D2 and D11–D14 disclose a payment system in which product identifiers, payer ID, merchant ID and payment amounts are aggregated and sent to a transaction processing system, the missing feature is a payer electronic device associated with the payer which recognises, selects and processes a product identifier, a payment amount, a payer identity and a payee identity (i.e. a merchant ID) and can then formulate messages containing this information and transmit them to a transaction processing system.
BTQ submitted that:
“In view of the instances of common general knowledge previously detailed and having regard to what has been published in documents D1 to D22, it is submitted that it would have been obvious to a person skilled in the art at or before the priority date of every claim of the opposed application to implement a system and method including an electronic device which is implemented by the payer for recognising and processing product and payment information for a selected product (i.e. to “work with payment information” in the same manner as a conventional POS system) so as to formulate a transaction message in a convenient and secure manner”.
However, there is no evidence to support this. None of BTQ’s experts state that it was common general knowledge in the art to implement a payer electronic device as it is defined in this application. Indeed, no expert commented on D11–D14 and provided an opinion on what they would have done in implementing the described system in light of the problem that BTQ says existed. It would appear that moving control over to the payer was something that was avoided. While D2 and D11–D14 describe systems which may avoid the payer having to hand over their credit card details to the merchant, it appears to me that the details are disclosed eventually but not from a payer electronic device as defined. For example, it may come from a database that stores payer details that passes them on to the merchant’s POS device or the transaction processing system. This is not the same thing as is defined and, as I have already said, there is no evidence that such an arrangement was common general knowledge in the art.
While it may appear in this day and age, with various applications for “smart phones” and/or personal computers, that such a method as is defined in the claims is in common use today, it must be remembered that the assessment of inventive step must be limited to what was known as at the priority date. The question is what was common general knowledge in 2004? The difference between then and now can be significant.
On the evidence before me I cannot find that the claims lack an inventive step.
Full description and best method of performance
The test for sufficiency of description is set out in the High Court decision in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 at [25]:
“… will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions of prolonged study of matters presenting initial difficulty?”
The specification, in addition to fully describing the invention, must include the best method of performing the invention. In American Cyanamid Company v Ethicon Limited [1979] RPC 215 at page 269, it was stated:
“The Act is intending to protect the public against a patentee who deliberately keeps to himself something novel and not previously published which he knows of or has found out gives the best results, with a view to getting the benefit of a monopoly without giving to the public the corresponding consideration of knowledge of the best method of performing the invention.”
Consequently, even if a manner of performing an invention is self-evident, applicants are nevertheless required to set out the best method of performing the invention known to them. The best method requirement is assessed on the basis of the applicant’s knowledge at the time of filing the complete specification (Rescare Ltd. v Anaesthetic Supplies Pty. Ltd., 25 IPR 119). If the applicant identifies a better method at a time subsequent to filing, there is no obligation to amend the specification to include that method. In addition, if the specification does not include the best method, it can be amended to include the best method (as known to the applicant at the time of filing), at least until the time of grant (Pfizer Overseas Pharmaceuticals v Eli Lilly [2005] FCAFC 224).
While not discussed in any detail at the hearing, under this ground BTQ submitted:
“The specification is silent on how the payer electronic device (i.e. as distinct from the payer) is operable to select product identifiers as defined by each and every method claim of the opposed application. The invention is thus not fully described. Furthermore, the specification does not describe the best method of performing the invention known to the applicant.”
I cannot see the problems that BTQ can see. It seems clear to me from the specification that it is well known that product identifiers are associated with different goods and services offered by a merchant. As such, having the necessary software to formulate messages to be sent to the transaction processing system would, in and of itself, confer the necessary ability to carry out this action. It is accepted by all parties that POS systems and how they operated (i.e. the software/firmware) were well known. Consequently, it would appear well within the grasp of the PSA, having conceived of the idea of a payer electronic device, to implement the necessary functions. Moreover, I note that there is no evidence from any expert in this opposition which suggests that they would have some difficulty in implementing the system.
With respect to best method, it is noted that there is no evidence that ICG did not present the best method. There is nothing to demonstrate that what was known by ICG at the time of filing the complete specification was beyond that which was actually filed.
Therefore I find that the specification is fully descriptive and discloses the best method of performance.
Clarity
BTQ submitted that claims 1 and 37 lacked clarity. Claim 1 was said to lack fair basis because of the same reasons as for clarity.
Claim 1 was said to lack clarity and fair basis because:
“… claim 1 defines that the payer electronic device is arranged to select at least one product identifier. Prima facie it is not clear whether the selection by the electronic device is in response to a user of the payer electronic device instructing the selection, whether the payer electronic device is simply enabling selection by the payer, or whether the selection by the payer electronic device is based on some other instruction (i.e. independent of a payer instruction). Thus, claim 1 is not clear and not fairly based.”
I can see no merit in any of this. It seems clear to me from the claim that it is the payer electronic device that selects the product identifier when information about the payment is required. This is clear and is described. The questions asked by BTQ as to (i) whether this is done in response to a user, (ii) whether this is enabled, or (iii) whether it is done for some other reason, are totally irrelevant. Such questions seek to try and create a problem where none exists. I also note that no expert had any problems understanding the claim.
Claim 1 is clear and fairly based.
BTQ submitted that claim 37 lacked clarity because (emphasis in original):
“Claim 37 defines the payer electronic device is “arranged to upload the product information from a database where the product information is available”. However, claim 33, from which claim 37 depends, requires that the payer electronic device is arranged to receive (i.e. download) the product information.”
Given that the payer electronic device is to upload product information from a database, this is clearly defining that the payer electronic device is receiving that data. In other words, claims 33 and 37 are saying the same thing. BTQ is again seeking to create a problem where none exists.
Claim 37 is clear.
Manner of Manufacture
BTQ submitted that claims 1–56 did not define a manner of manufacture. BTQ submitted that, from the specification as a whole, the invention related to a scheme for facilitating payments using a payer electronic device and, since the payer electronic device was a computer operating in the normal or expected way, the invention did not result in an improvement of the operation of, or effect of the use of, the computer. BTQ submitted that the claims were not patentable as per Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150.
From reading the specification as a whole, it is clear that the invention does not lie in a scheme. The invention lies in a method and apparatus which uses a payer electronic device which does not operate in the same way as other electronic devices that may be associated with payers in general. This is a new device and is integral to the claimed invention. As such, the method is not the mere implementation of a scheme.
I conclude that the claims are for a manner of manufacture.
CONCLUSION
The opposition is unsuccessful. The claims are clear, fairly based, novel, inventive and define a manner of manufacture.
Subject to appeal, I direct that the application proceed to grant.
COSTS
The parties submitted that costs should follow the event. I see no reason to depart from that result. The opposition has been successful so costs should be awarded against BTQ.
Greg Powell
Delegate of the Commissioner of Patents