British Telecommunications Public Limited Company v Telstra Corporation Limited

[2001] APO 14

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 682935 in the name of BRITISH TELECOMMUNICATIONS PUBLIC LIMITED COMPANY

Title:          Charging for Usage of a Telecommunications Network

Action: Opposition under sec. 59 of the Patents Act 1990 by TELSTRA CORPORATION LIMITED

Decision:          Issued            .

Abstract

The opposition was unsuccessful on all the grounds of opposition, which were non-compliance with section 40, lack of novelty, lack of inventive step and not being a manner of manufacture.

The only evidence in this matter was evidence in support from the opponent.  The opponent primarily relied on two documents to establish its ground of novelty.  The first, a document by the opponent, was found to have insufficient evidence of its public availability before the priority date.  The second document was a Telstra telephone bill which the opponent contended, unsuccessfully, disclosed all the features of the claims in suit.

All the features of the broadest claims were found, in themselves, to be common general knowledge.  The evidence supporting this, while not independent, was not contradicted and was credible.  However the combination of features in the claims seemed inherently capable of involving an inventive step and the evidence did not suffice to establish otherwise, and therefore the claims were considered to involve an inventive step.

Costs were awarded against the opponent.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 682935 by British Telecommunications Public Limited Company and an opposition thereto by Telstra Corporation Limited under section 59 of the Patents Act 1990.

BACKGROUND

Application 682935 was filed on 2 March 1995 under the provisions of the Patent Cooperation Treaty as PCT/GB95/00451, claiming priority from a United Kingdom application 94301477.9 filed on 2 March 1994.  That application was published under the PCT as WO 95/24094, and in Australia was allocated the application number 18200/95.  The application entered the national phase of processing on 26 August 1996, having undergone international preliminary examination under the PCT.  The application was advertised accepted on 23 October 1997 and given the six-figure number 682935.

A notice of opposition to application 682935 was served on the applicant on 23 January 1998 by Telstra Corporation Limited (Telstra).  The only evidence filed in relation to this matter is evidence in support, and service of this was completed on 23 February 1999.

The statement of grounds and particulars has been amended twice.  In it the grounds of opposition are expressed somewhat obtusely, but are in effect that the specification does not comply with the following provisions of the Patents Act 1990: paragraph 18(1)(a) (non-patentable invention), subparagraph 18(1)(b)(i) (novelty), subparagraph 18(1)(b)(ii) (inventive step) and section 40.

The matter was heard on 28 November 2000 in Canberra.  The applicant was represented by Mr Peter Heathcote, patent attorney of the firm Baldwin Shelston Waters, Sydney, and the opponent was represented by Mr Adrian Ryan of counsel assisted by Mr David Webber, patent attorney of the firm Davies Collison Cave, Melbourne.

THE SPECIFICATION

The invention relates to a telecommunications billing system, for use, for example, in the public switched telephone network (PSTN) with which all would be familiar.  The specification states:

"In determining charges for a switched call, components which can affect the charge are (a) the geographical location of the customer being called, (b) the duration of the call and (c) the way in which the call is established.  In particular, calls which are established by the direct dialling method are usually charged at a lower rate than charged calls connected by a manual operator.

Under a conventional billing environment, it is a relatively straightforward procedure to develop systems and apparatus for converting these parameters into actual billable amounts.  Thus, after all of the necessary information has been collected from local exchanges, where it is stored as calls are being made, it is possible to supply this information to a procedure, whereupon charges are generated automatically and bills despatched in a highly automated and efficient manner."

What the present specification proposes is a more sophisticated billing system.  In the words of the specification:

"It can be appreciated that it would be desirable to provide a more sophisticated system for the charging of usage within a telecommunications network, if only to take account of fiscal and technological constraints with minimal effort.  However, having made progress towards overcoming many of the problems associated with changes of this type occurring, it would also be desirable to take full advantage of such a system to be able to implement new marketing tools quickly and efficiently, probably ahead of competitors, while at the same time minimising the risk of errors being introduced into the system."

The marketing tool having a particular attraction so far as this invention is concerned is discounting.  The specification continues:

"A marketing tool which has particular advantage is that of providing discounts for particular types of call.  As new marketing opportunities arise, it is advantageous to facilitate the incorporation of new discounting schemes, for example so as to encourage increased use of the network during off-peak periods.  Furthermore, in addition to providing such services, it is also necessary to provide mechanisms by which customers may be selectively given access to these new services.  Thus, with the inclusion of sophisticated discounting schemes, environments would exist in which, for a given collection of call usage data, the actual amount billed to a customer will depend upon whether the customer is signed up for a particular type of service."

There then follows the customary consistory statements couched in the same terms as independent claims of the specification, plus an outlining of various preferred aspects of the invention, after which the specification proceeds to describe the best method of performing the invention.  This is done by reference to a number of schematic and graphical representations of the equipment and processes used to implement the invention, commencing with a schematic representation of customer terminal equipment connected to interconnected local exchanges and a central charging station.  The specification then describes the charging station in more detail, albeit still in schematic form.  Central to the charging station is a processor, and the remainder of the description part of the specification is a detailing of the operations performed by this processor.

The specification concludes with seventeen claims, of which three (Claims 1, 11 and 14) are independent (disregarding omnibus claims).  Claims 1, 11 and 14 read as follows:

“1.  A method of producing charging details for charging customers for use of telecommunications services, in which details of call items for a customer are compiled, characterised by:
defining a plurality of call types;
identifying each of said call items as belonging to one of said call types;
calculating a notional charge for each said call item;
accumulating said notional charges for each said call type in call type accumulators;
defining call categories, wherein at least one of said call categories has a discount rate associated therewith; and
mapping accumulated call type values stored in said call type accumulators into category accumulators according to customer specific data."

"11.  A method of processing call item data so as to generate charging data for use in billing customers for usage of telecommunications services, the method comprising the steps of:
i) sorting said call item data according to call type;
ii) calculating a first charge for each said call item in accordance with its call type;
iii) accumulating said first charges for each said call type, in call type accumulators;
iv) storing customer related data, identifying one or more selected call categories relevant to respective customers;
v) further sorting said first charges, according to said one or more call categories; and
vi) calculating a second charge for the first charges to which a selected call category applies."

"14.  Apparatus for charging customers for use of a telecommunications network, comprising:
means for storing an item of data for each call made by said customer; characterised by:
table storage means for storing data relating to charging options;
processing means for processing said item data in combination with option data; and
accounts printing means for printing account data generated by said processing means;
said processing means including means for:
defining a plurality of call types;
identifying each said item as belonging to one of said call types;
calculating a notional charge for each said call item data;
accumulating said notional charges for each said call type in call type accumulators;
defining call categories, wherein at least one of said call categories has a discount rate associated therewith; and
mapping accumulated call type values from said call type accumulators to category accumulators in accordance with customer specific data."

THE EVIDENCE

The evidence in support consists of these statutory declarations:

·     A declaration by David Brian Webber (patent attorney for the opponent), comprised principally of copies of a number of patent documents and non-patent literature annexed as exhibits to the declaration.

·     A declaration by Andrew James Steer, an employee of the opponent company.  Mr Steer was involved in the development by Telstra of a billing and invoicing system called FLEXCAB. The opponent contends that this document is an anticipation of the present invention, and it is the main focus of the opponent's case.  A major portion of Mr Steer's evidence comprises an explanation of the FLEXCAB system and a comparative analysis of FLEXCAB and the present invention.  The remainder of Mr Steer's declaration is mainly devoted to summarising the disclosures of some other prior art documents in the evidence and pointing out instances where he perceives the claims to lack clarity.

·     A declaration by Dale James Raaen, who was an employee of a company which was acting as a consultant to Telstra at the time when FLEXCAB was being developed, and was involved in implementing the system.  Included in the Raaen declaration are comments that the specification describes standard practice in the art, which was performed and known by most telecommunications carriers before the priority date of the present claims, and that the present specification is "bereft of detail" as to how the discount capability of the present invention would be implemented.

Further details of the evidence, where relevant, will be given later in the decision.

SUBMISSIONS

In his submissions at the hearing, Mr Ryan contended that it was the unchallenged and undisputed evidence of Mr Steer and Mr Raaen that each aspect of the claimed invention is simply a matter which was common general knowledge before the priority date of the claims.  He supported this by pointing out specific passages in the evidence of Mr Steer and Mr Raaen and drawing favourable inferences by the omission of the applicant to file evidence in rebuttal of the evidence of Mr Steer and Mr Raaen.  He went on to state that, even putting these considerations aside, the correctness of the assertions of Mr Steer and Mr Raaen is manifest when one performs the exercise suggested by Mr Raaen of looking at the telephone bills produced by Telstra Corporation Limited before the priority date, and he proceeded to analyse two such bills in the evidence.  He also contended that the Telstra system which is apparent from the bills is also described in detail in the FLEXCAB documentation, noting in particular the concepts of "eligible charges" and "contributory charges" contained in that document.  Contributory charges are charges that contribute to a discount, while eligible charges are the charges to which the discounts might apply.  For example, all STD calls might contribute to a discount on an eligible charge comprised of STD calls between 7.00pm and midnight or to a discount on an eligible charge comprised of all local calls.

Mr Ryan went on to submit that the present invention was not a manner of manufacture when account was taken of the admissions of prior art in the specification. He asserted that all the inventor has done is to modify the "relatively straightforward procedure" (as it is referred to in the specification) which is admitted in the specification to be common general knowledge so as to accommodate discount calls, and that such an invention does not satisfy threshold level of inventiveness required by the Patents Act.

Finally, in relation to section 40, Mr Ryan submitted that the specification does not describe the invention fully, or alternatively the claims lack fair basis, because there is no proper description as to what constitutes the said call type accumulators and category accumulators. He also noted clarity issues raised by Mr Steer in his evidence.

Mr Heathcote commenced his submissions by drawing attention to where the onus of proof lay in this matter, then submitted:

"None of the prior art adduced by the opponent could be said with reasonable certainty to be part of the common stock of knowledge of those in the art, particularly on the evidence of two experts [Steer and Raaen] associated with the opponent.  The declarants are clearly more than a normal skilled worker in the art and their assertions as to what was common general knowledge are unsupported by any independent evidence from parties not associated with Telstra."

In regard to novelty, Mr Heathcote contended that the evidence from the opponent did not suffice to establish that the FLEXCAB document had been publicly available, but in any case none of the prior art in the evidence anticipated the present invention.

I will set forth the submissions made by the parties in more detail, where material, later in my decision.

DECISION

Evidentiary issues

In proceedings such as these before the Commissioner the onus rests with the opponent to clearly establish its case in reaching a conclusion on any issue and the standard of proof required is the civil standard of proof on the balance of probabilities (see, for example, Dunlop Holding's Ltd.'s Application [1979] RPC 523). As a tribunal, I am entitled to act on any material which is "logically probative" (T. A. Miller Ltd. v The Minister for Housing and Local Government and Another (1968) 1 WLR 992). Mr Heathcote, however, cited the "instruction" given by the High Court in Commissioner of Patents v Microcell (1959) 102 CLR 232 that

"the Commissioner ought not to refuse acceptance of an application unless it appears practically certain that letters patent granted on the specification would be held invalid"

as being relevant to the present case.  The matter before the Court in the Microcell case was an ex parte refusal of acceptance proceeding rather than an inter partes opposition to grant proceeding as at present, but in F. Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 Emmett J of the Federal Court found that in opposition proceedings, as well, the Court (and by implication the Commissioner of Patents in its role as a tribunal) should be "clearly satisfied that the patent, if granted, would not be valid". Thus I would go along with Mr Heathcote to this extent: at least where questions of fact such as obviousness and existence of invention are involved "the grant should not be refused unless it has been clearly shown that the grounds of opposition have been clearly made out" (Montecatini v Eastman Kodak (1971) 45 ALJR 593). However whether or not a clear case exists must be assessed in an environment or framework where the primary facts are to be determined on the basis of the balance of probability.

Regarding the evidence of the opponent's experts, Steer and Raaen, Mr Heathcote submitted that

"both the declarants have an excess of peculiar knowledge in relation to the FLEXCAB system……..and thus would be in a position to have an excess of detailed knowledge of this system over and above that of the normal man skilled in the art."

I think this is true, so far as it goes, and I do not think it can be reasonably claimed by the opponent, and nor is it, that every minute detail of the FLEXCAB system is common general knowledge.  However, what the opponent actually maintains, as I understand it, is that the steps and features defined in the present claims and present in the FLEXCAB system were well known to those skilled in the art as well as other members of the public by medium (in the course of its development and implementation) of the FLEXCAB system.  Whether in fact the evidence is adequate to establish this is a question which I will address presently.

Mr Heathcote also made the general points that Steer and Raaen are "clearly more than" the person skilled in the art and that they are not independent of the opponent.  The latter point is undoubtedly correct (Mr Steer is an employee of Telstra and Mr Raaen appears to be an employee of a consulting company, Andersen Consulting, which acted as a consultant to Telstra), and that needs to be taken into account when weighing their evidence.  The first point - that they are more than the person skilled in the art - is not, in my view, well founded.  The art in question is the designing of billing systems for telecommunications services, and the backgrounds of  Steer and Raaen appear to fall squarely within that field.  That field would appear to demand persons of high level skills and qualifications (see, for example, American Cyanamid Company v Ethicon Limited (1979) RPC 215 at 245), as Steer and Raaen appear to be.

Mr Ryan, on the other hand, contended that the evidence of Steer and Raaen should be accepted since the applicant has not sought to dispute or contradict any of this evidence.  He stated:

"the Commissioner by his delegate may draw the strongest inferences against the applicant on every applicable feature of the case from its failure to adduce evidence: L J Fisher & Co Ltd v Fab Tile Industries Pty Ltd (1978) 1A IPR 565, 568 and the Commissioner is entitled to infer from the failure of the alleged inventor to give evidence that his evidence would not have been helpful to the applicant: Jones v Dunkel (1959) 101 CLR 298 at 308, 312 and 320-1 and see also Henley Arch v Cklarendon Homes 41 IPR 443, 451.

Jones v Dunkel, Fisher v Fab Tile and Henley Arch v Clarendon Homes all concerned the failure of a key figure in these cases to give evidence, from which the court in each case felt it appropriate to draw adverse inferences.  I, likewise, think some adverse inference may be drawn from the failure of the applicant in the present matter to provide evidence in support of its case.  However, I think that that is offset somewhat by the non-independent nature of the evidence from the opponent, although due weight must be given to the fact that it is in the form of a statutory declaration.  I am aware that there are a number of patent cases (Glenwood Systems v Gooden (1993) AIPC 90-985, Dunlop Holdings Ltd's Application (1979) RPC 523, Endurequip v Robyn Ann Roelofs 28 IPR 131, (1993) AIPC 91-037, and Ferocem v Hightech Auto Tools an unreported Patent Office decision of 10 January 1994 concerning patent application 621027) where uncorroborated but, relevantly, uncontradicted evidence of prior use has been accepted, but in each case this evidence was independent evidence.  Therefore while I think some significance should be placed upon the failure in the present case of the applicant to provide evidence, I do not think it quite apt that I "draw the strongest inferences against the applicant", as suggested by Mr Ryan.

Section 40

As already mentioned, Mr Raaen criticised the specification as "being bereft of detail".  Mr Steer had the more specific criticism that, although he thought the description to be reasonably clear,

"one significant deficiency is that the specification does not describe how the call type accumulators, and category accumulators are performed.  It is not clear what these accumulators constitute as no specific hardware or software is recited as providing the accumulators."

A specification will be sufficient when:

"the patentee makes the nature of his invention, and how to perform it, clear and intelligible to persons having a reasonably competent knowledge of what was known before on the subject to which the patent relates, and having reasonably competent skill in the practical mode of doing what was then known."

(Universal Oil Products v Monsanto, (1973) 46 ALJR 658)

It is not necessary for a complete specification in describing the best method of performing the invention to provide details that the addressee of the specification (the person skilled in the art) can supply from their own background knowledge (a principle  which may not have been fully comprehended by  Raaen and Steer).  As was stated in No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 at 243

[I]n other words, [it is essential] that the patentee should disclose his invention sufficiently to enable those who are skilled in the relevant art to utilise the invention after the patentee's monopoly has come to an end.  Such disclosure is, indeed, the consideration that the patentee gives for the grant to him of a monopoly during the period that the patent would run. ….

It is not necessary that he should describe in his specification the manner in which the invention is to be performed, with that wealth of detail with which the specification of the manufacturer of something is usually put before the workman who is engaged to manufacture it."

The provision of specific hardware and/or software as data accumulators and to carry out the basic data manipulation that the present invention requires would seem to me to be well within the capabilities of the skilled workman in the field, and the specification would thus not appear to lack sufficiency in this respect.  I note that the present specification in this aspect appears, in my experience, to be no less detailed than is normal for patent specifications concerned with similar subject matter.  As well Mr Steer appears to undermine himself in this regard by immediately going on to state that

"The call items which are described are the equivalent of the [call charge records] for FLEXCAB.  The call type accumulators could be locations set aside in memory to accumulate costs for different call types, using a determinant that designates a field in the call items."

This suggests to me that Mr Steer himself (as a person skilled in the art) does have a sufficient level of understanding as to what the accumulators constitute to readily enable appropriate software and hardware to be implemented for this purpose.

In the statement of grounds and particulars, 19 instances of lack of clarity are particularised.  In his statutory declaration, Mr Steer has repeated verbatim 17 of them.  I do not consider it necessary to discuss these in any detail, beyond saying that while the jargon and form of wording used in the claims (although is quite typical of patent claims) may not facilitate their comprehension, to the addressee of the claims they would, in my view, nonetheless be clear.

The claims are more readily understandable once it is realised that:

·     The method steps defined in Claims 1 and 11 pertain to the billing of an individual customer of the telecommunications service referred to in the claim.

·     To define a call category with an associated discount rate means to establish a category of call to which a discount rate applies, an example of which would be that all calls between 7.00pm and midnight are to be at half-price.

·     To map accumulated call type values into category accumulators according to customer specific data in effect means to apply a discount (such as that which was exemplified in the previous dot-point) to the accumulated cost of any category of call for which the customer data in the processing system indicates the customer is entitled to the discount.

As well as the 17 clarity matters Mr Steer has reiterated from the statement of grounds and particulars, at a separate place in his declaration Mr Steer makes reference to another circumstance where he considers there is a lack of clarity.  He states:

"Claim 11 recites a similar standard discount process, but refers to calculating 'a second charge' which in my opinion is ambiguous as it could refer to a second rate, an additional charge or a discounted charge. The claims are unclear in this regard……"

I agree with Mr Steer that the reference to calculating a second charge could refer to any one of those alternatives he has mentioned.  However, I do not think it is the case that the claim is ambiguous, but rather simply that it is broad by virtue of not being limited to just discounting.

Mr Steer also asserts that Claim 11 is lacking in fair basis, but I think that is due to a construction he is placing on the specification which takes discounting to be an essential feature of the invention.  In my view there is support within the specification for the broad form of the invention defined by Claim 11.

Accordingly I find that the specification complies with section 40 of the Patents Act.

Novelty

The basic test for anticipation and lack of novelty is the "reverse infringement" test - see General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited [1972] RPC 457 and Meyers Taylor Pty. Ltd. v Vicarr Industries Ltd. (1977) 137 CLR 228 at 235. In applying this test I must ascertain whether each and every one of the essential features of the claimed invention is provided by the prior disclosure (Rodi and Wienenberger AG v Henry Showell Ltd. [1969] RPC 367, Flour Oxidising Co. Ltd. v Carr & Co. Ltd. (1908) 25 RPC 428).

I do not think there is any doubt that every feature of claim 1 is essential.  A feature is essential if the applicant for the patent has made it an essential feature by the terms of the claim, properly construed (Catnic Components v Hill and Smith Ltd [1982] RPC 183), and this seems to me to be the case here.  Neither party put a contrary view.

It is a fundamental requirement for lack of novelty to be established that the prior art giving rise to the lack of novelty must, according to subsection 7(1) be "publicly available".  At the hearing the opponent relied on two forms of prior art to establish its ground of lack of novelty.  These are the FLEXCAB document and two telephone bills (issued by the opponent, then operating under the name Telecom Australia).  The telephone bills appear genuine, and the applicant did not contend otherwise.  Regarding the FLEXCAB document, however, Mr Heathcote submitted that no evidence had been adduced by the opponent which clearly establishes that this documentation was disclosed to members of the public, as distinct from Telstra and Andersen personnel.  In doing so he cited the decision by a delegate of the Commissioner in Telefonaktiebolaget LM Ericsson v Redrock Communication Pty Ltd 48 IPR 192, (2000) AIPC 623 in which the delegate held that any doubt as to public availability should be resolved in the favour of the patent applicant. He also cited the statement in Stanway Oyster Cylinders Pty Ltd v Marks (1996) AIPC 91-255 as follows:

"The concept of information being 'publicly available' involves, in addition to its being accessible to the public, that a person to whom the information is disclosed in that person's capacity as a member of the public is free, in law and equity, to make use of the information."

Both Mr Steer and Mr Raaen state in their evidence that the FLEXCAB document was published in early 1992 and was freely available before the earliest priority date of the present claims to a large number of Telstra and Andersen Consulting personnel and to others interested and skilled in the art, such as customers.  From the way Steer's and Raaen's evidence is expressed it appears that when they say the document was "published" they are referring to when it was created.
There is no other evidence of publication except for the assertions of  Steer and Raaen and the three versions of the actual FLEXCAB document which are in the evidence.  There is, of course, no significance to the fact that the opponent has not provided any evidence disproving publication, as the normal expectation would be that for practical reasons it would be beyond an opponent to produce such evidence.  It is thus a question whether the evidence as it stands is sufficiently persuasive to say that it clearly establishes that publication has occurred.  There is not really anything about the FLEXCAB documents themselves which suggests that they had been made publicly available.  The FLEXCAB document in evidence comes in three forms: a version entitled "Applications", another entitled "FLEXCAB Release 1.0 System Blueprint" and (paper) copies of transparencies for an overhead projector.  The content of the "system blueprint" version is self-evident from its title, and as such does not appear intended for public consumption.  The overheads are apparently derived from the "applications" document, but are so condensed as to provide insufficient detail to be an anticipation of the present claims.  The "applications" document is one which, apart from providing information on the system, is clearly designed to "sell" it.  Its somewhat effusive and repetitive style (which drew comment from Mr Ryan) suggests to some extent that it could have been intended for Telstra's external customers, but overall it seems more likely to have been intended for internal consumption by other areas within Telstra.  Moreover, the document contains some obvious errors (again commented upon by Mr Ryan) in one of the examples of pricing (at pages 49 and 59), and again this suggests to me that it could be an internal document.

Both the "blueprint" and the "applications" documents have at the top of their cover page the words "Unclassified" and below that "Telecom Proprietary".  No evidence was given as to the significance of those words, and they seem to me to be open to a wide range of interpretations.

All three versions of the document are photocopies.  The blueprint and overheads appear to be copies of pages taken from a "ring-binder" file, and it is notable that the cover page of the "applications" document seems to have been photocopied onto different paper than the remainder of the document.  There is no evidence given as to the history of the originals of the particular documents in evidence since they came into being in 1992 (according to  Steer and Raaen), such as where they have reposed.  There is no evidence of the existence of an accession date in any library.  And finally the opponent has not been able to provide evidence from any persons to whom any of the documents were made available without fetter, which, even taking into account the passage of time, seems somewhat curious given the widespread dissemination these documents are claimed by the opponent to have had.

Weighing all these factors, I am inclined to side with the applicant that insufficient evidence has been provided by the opponent to clearly establish that publication of the three FLEXCAB documents in the evidence has taken place.  It follows that the opponent's ground of lack of novelty is not established in relation to these documents.

In the evidence of  Steer and Raaen some general assertions are made that the FLEXCAB system was known to customers and clients of Telstra and persons skilled in the art and that the FLEXCAB system was in operation before the priority date of the present claims.  I accept this evidence to the extent that I consider it establishes that there were certain members of the public who were acquainted with the existence (as distinct from the details) of the FLEXCAB system and who were under no obligation of confidentiality in relation to that information.  Mr Steer goes further than this, however, describing details of the FLEXCAB system then stating:

"The features of FLEXCAB described in the preceding paragraphs were well known to those skilled in the art in Australia before the priority date, which included personnel of Telstra and Andersen consulting."

Mr Raaen however, makes no equivalent claim.  The closest he comes is to state:

"During development and implementation of FLEXCAB, before the priority date, the steps or features recited in the claims were, in addition to being well known to those skilled in the art, discussed or communicated to other members of the public in Australia, and in particular to Telstra clients during client briefings." (emphasis added)

It is not altogether clear from these passages whether Steer and Raaen are alleging that prior use has occurred, or prior oral disclosure.  If it is prior use that is being alleged (in this case it is prior use of the FLEXCAB system), it is generally considered that uncorroborated evidence is not adequate to establish that prior use has taken place.  For example, in Windsurfing International Inc v Petit; Windsurfing International Inc v Borsimex Pty Ltd (1984) AIPC 90-135, it is stated:

"It is essential that an allegation of prior public use should be strictly proved.  Evidence which is uncorroborated is undoubtedly suspect and should be scrutinised with particular care.  The Court must be satisfied that the proof is sufficient in the circumstances having regard to the gravity of the allegation."

Notwithstanding this, there have been least two Patent Office decisions in which uncorroborated evidence of an independent witness has been sufficient to establish the facts alleged in relation to prior use: Glenwood Systems v Gooden (supra) and Endurequip v Robyn Ann Roelofs (supra).

In the present case, however, the evidence of Mr Steer is, as I have already observed, neither independent nor, on the issue of the prior use of the FLEXCAB system, corroborated.  I therefore find that the evidence does not establish that any prior use of the FLEXCAB system has occurred.

If it is prior oral disclosure that is being alleged, in Humpherson v Syer 4 RPC 407 Bowen LJ, in appearing to criticise the judge in the lower court for his finding of fact in relation to the evidence on communication of the invention, stated:

"But the learned Judge below was asked to consider that there was a prior publication in respect of what was done between Widmer and his employer.  We are dependent for the materials from which we draw the inferences as to what passed between Syer and Widmer very much on the evidence of those two gentlemen, and I cannot help feeling that with regard to the evidence one is not bound to accept their memory as an absolute correct and full statement of all that took place, and that, it being for the Defendent in this case to make out that there was a prior publication to Widmer, the onus resting on him, the Court might well, upon the materials which are before it, hesitate before it came to the conclusion that the Defendant has sustained that onus."

In that case, one of witnesses, Widmer, was ostensibly independent, whereas in the present case neither Steer nor Raeen fall into that category, and there is no evidence from any recipient of the information which has been allegedly disclosed.  Accordingly the evidence falls well short of what is necessary for the opponent to establish its case in this aspect.

I turn now to the Telstra (or Telecom Australia as it was known then) telephone bills that the opponent has cited as anticipating the present claims.  These bills are dated 11 January 1993 and 6 April 1993.  For present purposes their disclosures are effectively identical.  Aside from the usual items listed on the first page of the bills such as "metered calls", "STD", "Mobile Network", information calls, etc, each bill has an item identified as "Flexi-Plan balance" with an amount in dollars registered against it.

On the second sheet of these bills an area is devoted to providing further details of the "Flexi-Plan" item.  It is headed "Flexi-Plan Details".  The particular Flexi-Plan that this customer has signed up for is called "Family and Friends".  Five telephone numbers are listed (the same for each bill) and an amount is stated against each telephone number.  A total of the amounts is given, then an amount which is a percentage of the total amount (10%) of that number is stated.  That percentage amount is thereafter subtracted from an amount referred to as the "Plan Fee", giving the "Flexi-Plan balance" which appears on the first page of the bill.  It is also of relevance that there is another area of the second sheet of these telephone bills which is headed "STD calls", and which is clearly a listing of all the STD calls made from the telephone which is the subject of the bill, including calls made to the five numbers listed in the Flexi-Plan Details.  An amount is listed against all STD calls - including those involved in the Flexi-Plan.  A total amount for all STD calls is given, and this also appears on the first page of the bill.

Comparing now these telephone bills with what is defined by Claim 1 it can be seen that the metered calls, STD calls, Mobile Network calls, information calls, etc. listed on the front page of the bill constitute, in terms of Claim 1, "call types".  The calls listed on subsequent pages under these types, such as is the case with those headed "STD calls", constitute "call items" having "a notional charge for each said call item" and these notional charges are clearly disclosed as being accumulated according to call type.  The Flexi-Plan feature would, as submitted by Mr Ryan, constitute a defined call category having a discount rate associated with it, as required by Claim 1.  The only remaining feature of  the claim is that of:

mapping accumulated call type values stored in said call type accumulators into category accumulators according to customer specific data.

Once again this seems to be what has occurred in the case of the two bills, putting aside where the call data which is mapped is obtained from.  Some calls of the STD type are mapped into the call category "Family and Friends".

The applicant's defence against this prior art is to contend that the bills give insufficient information to amount to a citation, in that it is not possible to deduce from the bills by what process or by what system the information contained in them was derived.  Mr Ryan, on the other hand, cited Mr Raaen's evidence in submitting that the features of the method claimed in Claim 1 can be automatically deduced from the bills.

Claim 1 includes, as to be expected considering it is directed to a method, some processing steps.  These are expressed in such general terms as "defining", identifying, "accumulating", "calculating" and "mapping", and it is clear from the specification that these expressions refer to basic processes of electronic data storage and manipulation.  The bills in question, in typical fashion, comprise numbers representing amounts of money having explanations written next to them and then tallied up to give an overall amount for the bill.  However, as ought to be apparent from my earlier outline of the content of the bills, the "bottom line" of the present bills is arrived at by a process which is somewhat more complex than mere addition.  This process bears a close resemblance to that which lies at the basis of the invention which is defined by the present claims.  Moreover, I think there is no doubt that to the person skilled in the art the bills would be seen clearly as having been generated by means of some form of electronic computer .  The question to be answered is whether the person skilled in the art would see these bills as disclosing that in compiling them the steps of "defining", identifying, "accumulating", "calculating" and "mapping" as defined in Claim 1 be performed.

I think the answer to that question in the case of the steps involving "defining", identifying, "accumulating" and "calculating" has to be yes, although perhaps the skilled reader would not see the process in exactly those terms (which are cast very broadly, as might be expected in a patent claim).  The various components of the bills clearly require that the computational means which is behind the bills perform these functions.  However, this would not seem to be so in the case of the final step of the claim, that is, the mapping step.  The bill gives no indication that the information in the Family and Friends category accumulator is a result of mapping call type values stored in the STD call type accumulator.  It could be obtained by this route, but it seems to me to be at least as likely to have been obtained by direct input of the relevant call charges, and other possibilities may exist.  As was stated in General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Limited (supra) at page 486

"If ... the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee's claim, but would be at least be as likely to be carried out in a way that would not do so, the patentee's claim will not be anticipated."

Because of this I am led to conclude that Claim 1 and Claims 2 to 10 are not anticipated by the two Telstra telephone bills cited by the opponent in this matter.

In Claim 11 the "mapping" feature from which Claim 1 derives its novelty is substituted by the features:

"v)   further sorting said first charges, according to said one or more call categories; and

vi)  calculating a second charge for the first charges to which a selected call category applies."

Claim 11 will be novel on the same basis as Claim 1 if, upon a proper construction, the step of "further sorting" is taken as occurring in relation to charges which are present in call type accumulators according to paragraph iii) of Claim 11, which reads

"iii) accumulating said first charges for each said call type, in call type accumulators".

The presence of the word "further" in paragraph v) probably gives sufficient basis for adopting that construction.  However, the issue is put beyond doubt by the wording of Claim 12, which states:

"12.  A method according to claim 11, wherein step v) comprises identifying all the call type accumulators to which each call category applies and transferring the accumulated first charges in each identified call type accumulator to a data store or data structure allocated to a respective call category."

The matter defined in this claim is clearly predicated upon the first charges referred to in paragraph v) of Claim 11 being located in the call type accumulators referred to in paragraph iii) of that claim.  Thus the further sorting into call categories defined in paragraph v) must take place in relation to first charges stored in call type accumulators, which is not something which can be read into the Telstra telephone bills.  I therefore conclude that Claims 11 to 13 are novel over the Telstra telephone bills.

Claim 14 is an apparatus claim and includes as integers various means corresponding to the method steps of Claim 1.  As such it and its appended claims are novel over the Telstra bills by virtue of Claim 1 being novel.  Omnibus Claims 16 and 17 are likewise novel over this prior art.

Of the other documents in the evidence the most significant appears (on the basis of the fact that it was the only one touched on by Mr Ryan at the hearing) to be extracts from a publication Telecommunications Pricing, Theory and Practice by Bridger M. Mitchell and Ingo Vogelsung, University Press, Cambridge ISBN 0521 41667.  Mr Ryan only cited this document for its disclosure of the "Family and Friends" pricing feature.  Mr Steer, however, states in his evidence that:

"Page 202 describes how calls to and between certain locations have their charges accumulated, for example on a virtual private network (VPN), and then these charges are mapped to different discount categories, depending on the level of the first accumulated charges.  The first accumulated charges are mapped to the discount category for accumulation and application of the appropriate discount.  This was also achieved with AT&T Tariffs 12 and 15 as described on pages 211-212."

The expression "Virtual Private Network" is not used at page 202, and only appears at page 207.  The expression "mapped" appears not to be used at all, and whether something falling within the scope of this is what is described at page 202 or elsewhere is not readily apparent.  This document appears to be primarily about pricing regimes, rather than systems for implementing such regimes, and I do not consider it anticipates the invention defined by the present claims.

Mr Steer also refers to five other documents in the evidence, but only as inventive step citations.  I have considered these and all the remaining documents in the evidence vis à vis novelty, and in my view none of these documents anticipates the present Claims.  While most of these documents have some element of discounting (taking that expression to encompass any pricing differential), none appears to use the specific technique for achieving that outcome which is defined by Claims 1, 11 and 14.

Accordingly I find that claims 1 to 17 are novel in light of the prior art in the evidence in this matter.

Inventive Step

According to subsections 7(2) and 7(3) of the Patents Act, a claimed invention will lack an inventive step if it is obvious in the light of:

(a)   common general knowledge; or

(b)   common general knowledge considered together with information in a single document or through doing a single act, provided that the document or act could reasonably be expected to have been ascertained, understood and regarded as relevant to work in the relevant art in the patent area by the person skilled in the art.

A finding of lack of inventive step thus requires, as a precursor, that the state of the common general knowledge in the art in Australia be established.

A widely accepted definition of common general knowledge is that provided by Aickin J in Minnesota Mining and Manufacturing Company and Another v Beiersdorf (Australia) Limited 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."

The state of the common general knowledge is a question of fact which must, in general, be determined on the basis of evidence from persons whose background enables them to testify authoritatively as to the common general knowledge in the particular art.  Indirect evidence such as widespread publication or admissions made in patent specifications may also serve to indicate that something is common general knowledge.

The evidence put forward by the opponent to establish the common general knowledge in the art is contained in the statutory declarations by Steer and Raaen.  Mr Steer's evidence on common general knowledge is essentially limited to the statement that:

"[the features of the] basic method considered inventive by the applicant …… were well known to those skilled in the art before the priority date and were being executed in the billing systems of a number of telecommunications carriers before the priority date".

Mr Raaen, in his evidence, makes a couple of similar assertions, for example:

"Given the state of the common general knowledge in Australia at the priority date, the claims are not, in my opinion, specific enough to recite anything unique.  They simply recite basic steps and features of telephony billing which were already well known to those skilled in the art."

He also states:

"On reading the specification my impression was that it simply describes standard practice in the relevant art, which was performed and known by most telecommunications carriers prior to the priority date.  Many carriers around the world possessed documents before the priority date which described, in various forms, the features described in the specification.  These documents include Telecommunications Billing Software Packages available from GTEDS.  The known features are basic call item identification by assigning a call type, product billing identifier (PBI) or service code to a call item, calculating and accumulating notional or nominal charges for the call items based on call type, defining discount categories, and mapping the accumulated charges to the categories based on customer specific data to apply the discounts.  These features were well known and being used by many carriers prior to the priority date, and in particular were well known to those skilled in the art in Australia before the priority date.  These basic features can be automatically deduced from the telephone bills that were produced at the time, such as those produced by Telstra prior to the priority date."

I have two misgivings about this evidence.  The first arises from the use of the word "impression", which strikes me as introducing an element of equivocation into the evidence.  The second is that I perceive some suggestion in the evidence that circumstances outside of Australia have influenced Mr Raaen's perception of the common general knowledge in Australia.  Having said that, I recognize that it is possible, or in fact even likely, that persons skilled in the art in Australia would be aware of systems being developed and used by overseas carriers (although there is no explicit evidence on this, and the fact that Telstra has apparently had recourse to a consultant from overseas in developing its FLEXCAB system perhaps belies this to some extent).

Despite these misgivings as well misgivings regarding the independence of Steer and Raaen, I accept the evidence from the opponent that each of the features of the invention defined in Claims 1, 11 and 14 was common general knowledge in the art at the priority date of the present claims.  However, it does not follow automatically from that that the invention as defined is lacking an inventive step.  It will only lack an inventive step if it is the case that it would have been obvious to a non-inventive skilled worker in the field (that is, the person skilled in the art) to select the particular combination of integers making up the claim: Minnesota Mining & Manufacturing and 3M Australia v Beiersdorf (Australia), (supra) and Mölnlycke AB v Procter & Gamble Ltd (1994) RPC 49. In the latter case the Vice Chancellor in UK Court of Appeal stated:

"The Act requires the court to make a finding of fact as to what was, at the priority date, included in the state of the art and then to find again as a fact whether, having regard to that state of the art, the alleged inventive step would be obvious to a person skilled in the art.  In applying the statutory criterion and making these findings the court will almost invariably require the assistance of expert evidence.  The primary evidence will be that of properly qualified expert witnesses who will say whether or not in their opinions the relevant step would have been obvious to a skilled man having regard to the state of the art."

In his declaration, Mr Raaen states on a number of occasions that the steps and features of the presently claimed method are well known to those skilled in the art.  By this I take it he is saying that the individual steps and features are well known.  Nowhere does he state that it would be obvious to combine these steps and features into a single method or apparatus.  It is also notable that Mr Raaen considers, as stated in the passage from his declaration which I have quoted earlier, that:

"These basic features can be automatically deduced from the telephone bills that were produced at the time, such as those produced by Telstra prior to the priority date"

whereas, as I have indicated, in my view the contrary is the case.

Mr Steer, in his declaration, makes the general statement that

"……I cannot consider any of the claims to recite any novel or inventive subject matter over that which was well known to those skilled in the art in Australia before the priority date."

He also states in relation to the FLEXCAB documents:

"The documents each comprise information which a skilled person could, before the priority date, be reasonably expected to have ascertained, understood and regarded as relevant to work in the art in Australia and, in my opinion, the invention would have been obvious to a person skilled in the art in the light of the common general knowledge as it existed in Australia before the priority date, whether that knowledge is considered separately or together with either of the documents."

Later in his declaration he uses exactly the same wording in relation to five other documents present in the evidence in this matter.

I have previously concluded that the evidence put forward by the opponent does not establish that the FLEXCAB documents were publicly available at the relevant time, so the allegation of lack of inventive step in relation to these documents must fail.

As regards common general knowledge considered separately or together with the five other documents, my first observation is that the generality in which the allegation is put makes it less than convincing, and I further observe that the choice of words does not inspire confidence that Mr Steer fully understands what it is he is alleging.  Furthermore, I must take into account the possibility that the evidence of both Mr Steer and Mr Raaen  has been coloured by ex post facto analysis, which, as Aickin J in Minnesota Mining and Manufacturing v Beiersdorf (supra) pointed out, "has been vigorously criticized in many courts".

It is also notable, I think, that in a period not very much before the priority date of the present application the opponent itself had apparently been devoting considerable resources to the development of a system (FLEXCAB) along similar lines to that which is the subject of the present invention.  This suggests that the art was not as well advanced as the evidence of Steer and Raaen would suggest, or at least not in Australia.  The tone of the FLEXCAB "applications" document provides further corroboration of this.

On my reading of Claims 1, 11 and 14, there is not much to them.  However, as Aickin J said in Meyers Taylor Pty. Ltd. v Vicarr Industries Ltd.(supra):

"It is trite law that a 'scintilla of inventiveness' is sufficient and 'no smallness or simplicity will prevent a patent being good'".

Applying this principle it seems to me that the feature of accumulating notional charges for various call types and mapping them into category accumulators having a discount rate associated therewith must, when associated with the other integers of Claims 1 and 14, be viewed as having the potential for constituting an inventive step.  The same applies with paragraphs v) and vi) of Claim 11 when associated with the other integers of that claim.  Then when one turns to the evidence in this matter it does not appear to me, for the reasons I have explained, to be particularly persuasive of the contrary view.  As a consequence I conclude that, on balance, the evidence does not suffice to establish that Claims 1, 11 and 14 do not involve an inventive step,

Therefore, I find that, on the evidence, the invention defined by Claims 1 to 17 involves an inventive step.

Manner of Manufacture

On manner of manufacture Mr Ryan cited Bristol Myers v F H Faulding (1999) 46 IPR 553 as authority for principle that where a patent application which has been lodged in Australia refers to matters which are known, the Commissioner would ordinarily proceed upon the basis that the knowledge thus described is common general knowledge. He then proceeded to advance an argument based on such admissions of common general knowledge in the present specification that the present invention does not satisfy the threshold of inventiveness required by the Act. He stated:

"As will be apparent from claim 1, all the applicant has done is to modify the 'relatively straightforward procedure' [of the admitted prior art] so as to accommodate discount calls.  The applicant has done no more than tell us that we should deal with discount calls in the billing method by first calculating the total charge for such calls without regard to the discount, and then we should apply the discount."

However, I do not see the admitted prior art of the specification as travelling beyond what I have already accepted as being the common general knowledge for the purposes of considering whether the claimed invention involves an inventive step.  The outcome of that consideration was that the claimed invention involves an inventive step.  Thus I see no basis for a finding that the claimed invention fails to satisfy a threshold level of inventiveness.

Accordingly I find that the invention is a manner of manufacture as required by paragraph 18(1)(a) of the Patents Act 1990.

CONCLUSION

The opposition fails on all the grounds which were relied on.

Unless the Commissioner is served with a notice of appeal within 28 days of the date of this decision, I direct that the application proceed to sealing.

COSTS

In proceedings such as these it is usually the case that costs follow the event.  I see no reason to vary that approach on this occasion.  I therefore award costs against Telstra Corporation Limited.

E. J. Knock
Delegate of the Commissioner of Patents

Patent attorneys for the applicant   :  Baldwin Shelston Waters, Sydney

Patent attorneys for the opponent   :   Davies Collison Cave, Melbourne