CCL Secure Pty Ltd v De La Rue International Limited - [2024] APO 31

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

CCL Secure Pty Ltd v De La Rue International Limited [2024] APO 31

Patent Application: 2016261440

Title:Security documents and methods of manufacture thereof

Patent Applicant: De La Rue International Limited

Opponent:CCL Secure Pty Ltd

Delegate:Neil Miller

Decision Date: 30 July 2024

Hearing Date: 20 September 2023, via Videoconference

Catchwords: PATENTS - Section 59 – opposition to grant of a patent – grounds of novelty, inventive step, clarity, manner of manufacture, support – construction – late amendment of statement of grounds and particulars – security documents– polymer banknotes – window region – non-window region – full window portion– half window portion – arrangement of ink layers – complex optical effect – anticipation by demonstration – use of ancillary document to evidence demonstration – single source of information – combination of known features – threshold requirement s18(1) – collocation – visual effect – opposition unsuccessful on all grounds – costs awarded

Representation: Counsel for the applicant: Ms Frances St John
Patent attorney for the applicant: Nik Ramchand, Davies Collison Cave Pty Ltd
Counsel for the Opponent: Craig Smith SC
Patent attorney for the opponent: Ian Lindsay and Dan Bolderston, Allens Patent & Trade Mark Attorneys

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE

Patent Application: 2016261440

Title:Security documents and methods of manufacture thereof

Patent Applicant: De La Rue International Limited
Date of Decision: 30 July 2024
DECISION
The opposition is unsuccessful. Subject to appeal, I direct that the application proceed to grant.
I award costs according to Schedule 8 against CCL Secure Pty Ltd.
REASONS FOR DECISION

Background

1.Australian patent application 2016261440 (‘the application’) in the name of De La Rue International Limited (‘the applicant’) was filed on 6 May 2016 as PCT application PCT/GB2016/051290. The application claims priority from UK application no GB 1507966.8 with a priority date of 11 May 2015.

1.A request for examination was made on 2 April 2020. The application was accepted on 22 June 2021, with acceptance being advertised on 15 July 2021.

1.A Notice of Opposition was filed on 15 October 2021 by Allens Patent & Trade Mark Attorneys on behalf of CCL Secure Pty Ltd (‘the opponent’). A Statement of Grounds and Particulars (SGP) was filed on 14 January 2022. On 14 February 2022 the applicant sought the dismissal of grounds 3 to 6 and deletion of paragraph 2(b)(ii) set out in the SGP.

1.The request for dismissal was considered by a Delegate of the Commissioner. The Delegate advised in correspondence dated 23 February 2022 that he intended to dismiss ground 5 as set out in the SGP (failure to comply with s40(2)(b)) and that he intended to make a direction for further and better particulars in relation to paragraph 2(b)(ii) of the SGP following resolution of the dismissal request. A direction to this effect was then made on 24 March 2022.

1.On 30 March 2022 the opponent filed an amended SGP, addressing the request for further and better particulars as outlined by the Delegate. These amendments to the SGP were allowed on 21 April 2022. Several further amendment requests to the SGP were filed prior to the hearing. The SGP, as it presently stands, reflects the amendment request filed on 5 April 2023 and subsequently allowed on 20 April 2023. Unless otherwise specified, all references to the SGP from hereon are to the SGP as amended on 20 April 2023.

1.However, a further request to amend the SGP was filed on 1 September 2023. Given the proximity to the hearing, a Delegate advised the parties that whether this further SGP amendment would be allowed would be determined as part of hearing and deciding the substantive opposition, and that the parties should be prepared to argue their case on the SGP amendments in written submissions and at the hearing. Consequently, it falls to me to determine whether this further SGP amendment should be allowed. From here on, I will refer to this as the “further SGP amendment”.

1.The applicant, on 14 June 2022, sought to amend the specification. In view of the pending amendments the applicant, in correspondence dated 17 June 2022, requested a stay of the opposition proceedings. In addition to the stay the applicant also requested a new timetable for evidence to provide the parties appropriate time to file any evidence directed to the amended claims. Ultimately, the Delegate declined to stay the opposition in view of the amendments, which were allowed on 21 November 2022. The Delegate also advised the parties that evidentiary timeframes were specified in Regulation 5.8 and could not simply be changed by direction.

1.On 6 July 2022 the applicant wrote to the Commissioner regarding the requested stay and timeframe for evidence. The applicant advised that the parties were engaged in negotiations to resolve the opposition, and that both parties sought a stay of the opposition to facilitate these negotiations. On 12 July 2022 a Delegate of the Commissioner issued a direction staying the opposing proceeding until 21 September 2022, in view of the settlement negotiations. In view of the fact that Evidence in Support (‘EIS’) had been filed on 20 April 2022, the direction also stipulated that the Evidence in Answer (‘EIA’) was due on or before the expiry of the stay.

1.Ultimately, settlement negotiations did not resolve the opposition, with EIA being filed on 21 September 2022. Evidence in Reply (‘EIR’) was then filed on 24 November 2022.

1.In the opponent’s correspondence of 22 December 2022, they advised that the evidence in reply contained additional evidence under Reg 5.23. Although somewhat procedurally convoluted, eventually the Delegate invoked Reg 5.23 with respect to the material concerned via direction made on 23 February 2023. This direction provided the applicant with an opportunity to file a response to the material concerned, as required by Reg 5.23(2)(c). The applicant filed their response on 21 April 2023. The lodgement of the applicant’s response drew the formal evidentiary stages of the proceedings to a closure.

Onus and standard of proof

1.The present application was filed after 15 April 2013. As such, the present application is governed by the Act as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (“the Raising the Bar Act”). Amendments to Sections 7, 40 and 60 of the Act apply to the present case as a consequence of Schedule 1, items 55(1)(d) and 55(4)(a), and Schedule 6, item 133(7)(d) of the Raising the Bar Act.

1.The standard of proof that applies in the present case is the balance of probabilities. Under subsection 60(3A), if I am satisfied, on the balance of probabilities, that a ground of opposition to the grant of a patent exists, I may refuse the present application. Nevertheless, it remains the case that, 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.

The evidence

1.The opponent’s EIS consists of:

·Two declarations by Ms Amanda Jones,
oThe first declaration dated 1 March 2022 accompanied by Annexures ALJ-1 to ALJ-4 (‘Jones 1’);
oThe second declaration dated 14 April 2022 accompanied by Annexures ALJ-5 to ALJ-17 (‘Jones 2’),

oA declaration by Mr Daniel Bolderston dated 14 April 2022 accompanied by Annexures DSB-1 to DSB-16 (‘Bolderston’).

a.The applicant’s EIA consists of:

·Declaration of Gary Power dated 21 September 2022, accompanied by Annexures GP-1 to GP-9 (‘Power 1’).

a.The opponent’s EIR included:

·A declaration by Ms Amanda Jones dated 23 November 2022, accompanied by Annexures ALJ-18 and ALJ-20 (‘Jones 3’); and
·A declaration by Jacob Flynn dated 22 November 2022 accompanied by Annexures DSB-1C to DSB-17 (‘Flynn’)

a.Sections B to E of the Jones 3 declaration and exhibits DSB-18 (inclusive of .pdf, .mov, .mpeg, and .jpg files), DSB-19 (inclusive of .pdf, .mov, .mpeg, and .jpg files), DSB-20, and ALJ-19 were entered into evidence under Reg 5.23, as discussed more generally above.

a.The applicant’s reply to the materials submitted by the opponent under Reg 5.23 consisted of a declaration by Gary Power dated 21 April 2023 (‘Power 2’).

a.Amanda Jones states that she is the currently the Art Director / Security Designer / Bank Note Designer at 30-1 Design, an independent design business which she established in 2007, Jones 1 at [1]. Ms Jones has 20 years of experience in the industry first commencing employment in 1998 with Note Printing Australia (NPA) as an engraving artist. NPA is owned by the Reserve Bank of Australia and produces banknotes that are used in Australia and various other countries, as well as Australian passports. During her employment with NPA, Ms Jones became involved in concept design and, in particular, polymer banknote design per Jones 1 at [11]. Over the course of her 20 years working in the industry, Ms Jones has designed more than 63 banknotes which are currently in circulation worldwide, Jones 1 at [9].

a.Daniel Bolderston is a patent attorney at Allens Patent & Trade Mark Attorneys (Allens) which has carriage of the present opposition proceedings on behalf of the opponent. The purpose of Mr Bolderston’s declaration was place into evidence various images and video clips of banknotes from Mexio, China, Chile, Hong Kong, Brunei, Romania, Papua New Guinea and various other themed banknotes.

a.Jacob Flynn is a solicitor at Allens, Mr Flynn’s declaration had the purpose of placing into evidence various images and video clips banknotes from Papua New Guinea and Mauritius.

a.Gary Power states that he is the former Global Managing Director and Global Vice President of CCL Secure Pty Ltd, per Power 1 at [17]. Mr Power has considerable industry experience in the research and development of polymer substrates for polymer bank notes and other security features such as creating microstructures to produce optical effects, Power 1 at [14]-[16]. Mr Power’s expertise in the design relating to security documents is highlighted by the fact that he has been named as inventor or co-inventor on a large number of patent applications, Power 1 at [19].

The nature of the opposition

a.In the SGP the opponent listed the following grounds of opposition:

·s18(1)(a) – the invention is not a manner of manufacture;
·s18(1)(b)(i) – the invention as claimed lacks novelty;
·s18(1)(b)(ii) – the invention as claimed does not comprise an inventive step;
·s40(3) – the claims are not clear and succinct or supported by matter disclosed in the specification.

a.During the hearing the opponent sought to press all grounds as raised in the SGP. The opponent did however seek to focus argument regarding the grounds of novelty and inventive step on a particular selection of documents from those mentioned in the SGP. This narrowing of the case is seemingly what necessitated the further SGP amendment which is dealt with in detail below.

The further amendments to the SGP

a.The further amendments to the SGP were said by the opponent to include moving a number of documents from the novelty particulars to the inventive step particulars; adding D27 as a particular in relation to inventive step; and adding a combination of D15 and D27 as particulars in relation to both novelty and inventive step. At the commencement of the hearing, I invited both parties to discuss the issue of the further SGP amendments proposed by the opponent.

a.Counsel for the opponent began by noting that the further amendments to the SGP were simply clarifying amendments. The proposed amendments simply better particularise the primary case now being pressed by the opponent in relation to novelty with respect to the disclosure of D27 already in evidence before the Commissioner and the case advanced in relation to inventive step with respect to various plus one documents also in evidence before the Commissioner. Thus, the proposed amendments do not fundamentally alter the case being pressed by the opponent. Rather the amendments concern nothing more than mere tidying up of the SGP to accurately reflect the case pressed by the opponent in these proceedings.

a.Counsel for the applicant acknowledge that D27 was in evidence before the commissioner, but it was not used in the way now being put by the opponent in the proposed amendments. There is a significant difference between simply putting a document into evidence and giving notice that the material is being relied upon as prior art. The amendment to the SGP fundamentally alters the case to be answered and represents significantly more than a tidying up as suggested by the opponent. It was also noted by Counsel for the applicant that altering the case to be answered at such a late stage of the proceedings causes significant prejudice to the applicant. Most significantly the applicant’s expert witness Mr Power has not been afforded the opportunity to address D27 as it is now being put in the proposed amendments. There has been no evidence from Mr Power concerning D27 and certainly not in relation to the questions of whether D27 alone or read in combination with D15 anticipates the claims or renders the claimed invention obvious. With respect to the issue as to the timing of the amendment Counsel for the applicant also noted that the opponent offered no explanation as to the delay in seeking this further amendment given the fact that D27 was part of the EIS and that the SGP had been amended on multiple occasions following the submission of the EIS.

a.The opponent in their reply noted that Ms Jones in her evidence refers to the Latitude note depicted in D15, whilst then referencing the slides of D27 (see for example Jones 1 at [18], Jones 2 at [86]-[88], Jones 3 at [49] and exhibit ALJ-3 of Jones 1). That is D27 has always been presented as an aid to explanation as to the structure of the Latitude note that was physically demonstrated. If D27 was not being utilised in support of the opponent’s case for lack of novelty, then what did the applicant think was the point of the evinced provided by Ms Jones with respect to D15 and D27. The case presented by the opponent in respect to novelty is anticipation through the doing of an act, namely the showing of the physical Latitude note as depicted in D15. This position is unchanged as a result of the proposed amendments. Consequently, there is no adverse impact on the applicant because of the amendment.

a.The applicant then sought to make two brief points in rejoinder, to which I agreed. Firstly, it is far too onerous a task for the applicant to have to review the evidence and determine what case is to be answered or to hypothesise what documents may later be relied by the opponent to make its case. The applicant is entitled to rely on the SGP as filed to understand the case to be answered and respond accordingly. Secondly Mr Power’s discussion concerning D27 is in response to what Ms Jones has articulated in respect of the document. Mr Power’s evidence does not go to novelty or inventive step, and this, it was argued, is where the prejudice arises for the applicant.

a.At this point in the hearing, I advised the parties that further deliberation concerning the amendments was required. In view of this I advised the parties that it was my intent to proceed with the hearing noting the sensitivities around D27, and should the need arise, I would invite both parties to make further submission regarding D27 in the interests of procedural fairness. Both parties agreed to proceed on this basis.

Consideration of the request to amend the SGP

a.The relevant factors to be taken into consideration in deciding whether to allow an amendment to the SGP were discussed by Deputy Commissioner Spann in CSL Limited v Isconova AB et al [2016] APO 82 (“CSL Limited”) at [9] and [12]. Relevantly these are:

·the prospect of undue prejudice to a party – for example, the applicant may be unduly prejudiced by unnecessary delays in seeking amendment, or by the introduction of further particulars that change the case the applicant has to answer (per Diamond Scientific Company v CSL Limited [1992] APO 55);

·whether the ground proposed to be added is sufficiently particularised and the nature and importance of the requested amendment; (per K-Tec, Inc v Healthy Foods, LLC [2016] ATMO 4 (“K-Tec”) at [23] considering similar provisions in the Trade Marks Act)

·the timing of the amendment request and the reasonableness of the explanation of the delay (K-Tec at [23]); and

·the public interest (K-Tec at [23]) noting that a correct determination of the opposition is one based on the issues properly raised in in the framework of the proceedings (CSL at [17]).

a.At the hearing I expressed concern as to the timing of the further amendments. The fact that amendments which potentially alter the case to be answered were only sought days before final submission were due and less than 2 weeks before the substantive hearing, severely limits any opportunity of response by the applicant. It is difficult to see how an amendment to the SGP that potentially alters the case to be answered at such a late stage in the oppositions process could be viewed as anything other than prejudicial to the applicant.

a.It is not unusual for an opponent to seek to amend the SGP as matters may further crystallise through the evidentiary phases and the drafting of the substantive submissions, all of which occur after the initial drafting of the SGP. However, where the need arises to amend the SGP the expectation is that such amendments should made at the earliest reasonable opportunity. Otherwise, this negates the purpose of the SGP which is to give early notice of the opponent’s case. The opponent in their submissions have made it clear that D27 has always formed part of its evidence and it has always been central to their case for lack of novelty and inventive step. This then begs the question as to why did they not seek to make this amendment to the SGP sooner, particularly given the fact that they had amended the SGP on several occasions throughout the opposition process. At time of making each of these amendments to the SGP they were in possession of D27 and cognisant of its relevance to their case for novelty and inventive step, so why then the delay making this further amendment to the SGP. Other than stating the amendment is a simple tidying up, the opponent offers no explanation as to the delay in seeking to particularise D27 in the manner now sought despite its import to their case. The lack of explanation concerning the delay weighs against allowing the amendment.

a.The public interest lies in the resolution of opposition proceeding before the commissioner in an orderly and efficient manner. The filing of substantive amendments to the SGP at such a late stage of the oppositions process, which change, rather than narrow, the case to be answered, is not in keeping with this principle. Rather the late filing of such amendments could have resulted in the delay of the substantive hearing further protracting the matter. Further protraction of the proceedings is not in the public interest and is also prejudicial to the applicant. This also weighs against allowing the amendment.

a.Taking into consideration the above factors the proposed amendments in my view are significantly more than a mere tidying up. Allowing such amendments that potentially alter the case to be answered at a late stage in these proceedings would amount to an abuse of process. Consequently, I refuse the amendments to the SGP dated 1 September 2023.

The specification

a.The specification concerns security documents having optically variable security devices thereon, and methods for their manufacture. Security devices are used for example on documents of value such as banknotes, cheques, passports, identity cards, certificates of authenticity etc.

a.The specification on page 1, lines 14 to 30 provides various examples of security devices typically utilised in the art. Such devices include pattern-based approaches such as the use of microtext, fine line patterns, latent images, venetian blind devices, lenticular devices, moiré interference and magnification devices. Other known security devices include holograms, watermarks, embossings, perforations and the use of iridescent (e.g. colour-shifting) or luminescent/fluorescent inks and semi-transparent or transparent iridescent pigments.

a.The specification then acknowledges that the use of iridescent inks and semi-transparent or transparent iridescent pigments on polymer banknotes is discussed in WO 2006/133512 (the ‘512 reference). This document discloses colour-shifting ink compositions applied in a window region of a polymer banknote. More specifically, the ‘512 reference discloses the use of a first colour shifting ink composition and a second colour shifting ink composition applied in a window region of a polymer banknote. Both the ink compositions include different colour pigments and interference pigments but both exhibit substantially the same colour when the interference pigments are viewable at a first viewing angle. At other viewing angles the compositions exhibit different colours.

a.The specification goes on to note that various arrangements of security devices all serve the same purpose, namely they make it difficult to copy security documents using conventional reproduction techniques, such as photocopying. However, as reproduction techniques and technologies evolve there is a need to develop new security devices with more complex visual effects in order to stay ahead of would-be counterfeiters.

a.The basic construction of a such security documents in accordance with embodiments of the invention is shown in Figure 1(a) reproduced below. Figure 1(a) depicts a polymer banknote having a transparent substrate 5. Typically, the substrate 5 is composed of Biaxially Oriented Polypropylene (BOPP). The substrate 5 may be monolithic or multi-layered and may include other transparent layers such as a primer layer.

a.In the example shown in Figure 1(a), opacifying layers 6a and 6b are disposed on both sides of the substrate 5, with a window region 2 being formed by creating gaps within the opacifying layers. The window region in this instance is a full window region as both opacifying layers 6a and 6b have been completely removed from both sides of the substrate within window region 2. The areas on the substrate where the opacifying layers are retained is referred to as the non-window region 3. The opacifying layer(s) 6a, 6b in this case may be white or off-white in appearance, for example they may be white with a grey tint due to the presence of anti-static conductive particles.

a.To form an optically variable security device 10, a negative (non-printed) image is provided at the centre of the security device as indicated by region C in Figure 1(a); in this example the negative image is of the digit “10”. A conventional (visibly) coloured, semi-transparent non-iridescent ink 11 is applied to regions B of the substrate. The composition of the non-iridescent ink 11 is different from the composition, and preferably a different colour to (e.g. not white), of the opacifying layers 6a, 6b. A semi-transparent, iridescent ink 12 is then applied over the non-iridescent ink 11 in regions B and C such that it completely covers the non-iridescent ink 11 and the negative image of the digit "10". The iridescent ink 12 appears blue at normal incidence when viewed in reflection against a dark background and then appears substantially colourless when viewed at an angle away from normal incidence in reflection against a dark background.

a.As can be seen from figure 1(a) the deposition of the inks means that in some parts of the device both inks 11, 12 are present (i.e. in regions marked B). In other parts of the device, only one of the inks, for example as shown in figure 1(a) only iridescent ink 12 is present in region C). It is also apparent from figure 1(a) that the iridescent ink 12 layer has the same outer boundary/profile as the non-iridescent ink 11 layer. The specification does, however, acknowledge that the iridescent ink 12 could extend beyond the non-iridescent ink 11 or vice versa.

a.The colour palette exhibited by the iridescent ink 12 layer of figure 1(a) is then discussed at page 13 lines 29-32. Notably, when viewed in reflection against a dark background the iridescent ink 12 appears blue at normal incidence and appears substantially colourless when viewed at an angle away from normal incidence. The iridescent ink 12 also appears yellow in transmitted light. The non-iridescent ink 11 in this instance is a red ink.

a.The various optical effects exhibited by the arrangement of the ink layers 11 and 12 and the three different regions A, B and C of the banknote of figure 1(a) are shown in figures 1(b)-1(d) reproduced below. Figure 1(b) depicts the appearance of the window region 2 when the banknote is viewed in reflection against a dark background at normal incidence. Figure 1(c) depicts the window region in reflection against a dark background off axis (i.e. at an angle away from normal incidence). The image shown in figure 1(d) is of the window region in transmitted light i.e. banknote being viewed on axis against a backlight.

a.As can be seen from figure 1(b) region A, being the region underlying the black background, is unmodified and uniformly black, in contrast to region B where the ink layers 11 and 12 overlap such that the appearance of region B is dominated by the iridescent ink layers whereby region B appears blue. In Figure 1(c) the iridescent ink layer 12 appears colourless. Consequently, the digit 10 is visible in region C where only ink layer 12 is present. In region B ink layer 11 dominates the colour palette causing region B to appear red in colour. In transmitted light, region A as shown in figure 1(d), appears transparent while region B is provided with an orange hue due to the interaction of the ink layers. More specifically layer 11 appears red while the iridescent ink layer 12 appears yellow in transmitted light, the resultant blend of the two layers providing the orange hue to region B. In region C the digit 10 is again visible but with a yellow tint provided by the iridescent layer 12.

a.The specification, at page 14 lines 4 -19, then discusses further modifications that could be made to the bank note of figure 1(a), notably the indicia could be formed by defining appropriate gaps in the iridescent layer 12. The effect of which is that the indicia would be apparent in on-axis reflected light and hidden in off axis reflected light. The addition of a dark background layer such as a black ink is also discussed. In such cases the additional ink could be provided in parts of the device under the two ink layers or on the opposite side of the substrate. The effect of the black layer is similar to the dark background as discussed above in relation to figures 1(b) and 1(c) i.e. it causes the iridescent ink layer 12 to dominate the colour palette in reflected light even when the document as a whole is not placed against a dark background. The inclusion of dark ink regions enables the creation of more complex designs and so further increases the security level of the document. The specification then proceeds to discuss suitable ink compositions for the ink layers 11 and 12 (specification at page 14 line 21 to page 16 line 5).

a.Further variations of a banknote according to the embodiments of the invention are then discussed in relation to Figures 2(a)-(d) to 6. The key difference between these various embodiments of the banknote resides in that different layer arrangements are provided in various regions of the banknote. The embodiment depicted in Figures 3(a)-(d) is of note as, as shown in Figure 3(a) (reproduced below), the security document again consists of a substrate 5, ink layers 11 and 12 and opacifying layers 6a and 6b. However, in contrast to the embodiment of figure 1 an opacifying portion 6c is provided inside the window region 2.

a.In this case the opacifying layer 6c effectively creates a half window portion 2a within the window portion 2. As shown, non-iridescent ink layer 11 is disposed across one half the window region 2, with a portion of the layer 11 being disposed across the substrate in regions F, B, F and a portion being disposed over opacifying layer 6c in region G. The iridescent ink layer 12 being disposed on the remaining half the widow portion across regions C, B’, C and opacifying layer 6c in region E. A portion of non-iridescent ink 11 is disposed on top ink layer 12 in region B’ and similarly a portion of iridescent ink 12 is disposed on ink layer 11 in the region B, as can be seen from figure 3(a). These overlapping portions of inks 11 and 12 form two-star shaped regions labelled as B and B′.

a.As in the case of banknote of Figure 1, the various regions of the security device of Figure 3 exhibit different colour shifts within the various regions F, B, G, E, B′ and C in reflected or transmitted light. This is shown in figures 3(b)-3(d), reproduced below.

a.The various visual effects as shown in figures 3(b)-3(d) are summarised as follow:

Security document viewed in reflection at normal incidence (figure 3(b)):
·Regions F and G where only ink layer 11 is present appear red and the boundary with the opacifying portion 6c is substantially indiscernible.
·Star-shaped region B visible inside region F appears blue.
·Opacifying portion 6c in region E appears yellow.
·Region C appears blue.
·Star-shaped region B' is visible and appears purple.

Security document viewed in reflection at off axis (figure 3(c)):
·Regions F and G appear red.
·Star-shaped region B is not readily visible as it also takes on a red hue.
·Region E takes on the colour of opacifying layer 6c, typically white
·Region C appears dark grey due to the scattering nature of the colourless iridescent pigment.
·Star-shaped region B' visible and appears red.
Security document viewed in transmitted light (figure 3(d)):
·regions F and G both appear with a red tint, although region F is transparent whilst region G is opaque.
·regions E and C both appear with a yellow tint although region C is transparent whilst region E is opaque.
·Both star-shaped regions B and B' appear orange.

The opposed claims

a.The claims under consideration are those as proposed to be amended on 4 August 2022 and which were subsequently allowed on 21 November 2022. The claims as amended number 18 in total, with claims 1, 2, 14 and 15 being the independent claims. Claim 1 as currently presented is reproduced below:

1. A security document having an at least semi-transparent or translucent window region of lower optical density than an adjacent non-window region of the security document, the window region being defined by at least one opacifying layer of the security document which is present in the non-window region and not in the window region of the document, and an optically variable security device disposed at least partially in the window region, comprising a first ink layer and a second ink layer which at least partially overlap one another in the window region, wherein the first ink layer comprises a non-iridescent, semi-transparent ink composition with a visible colour which does not vary with viewing angle, the first ink layer having a different composition from the at least one opacifying layer of the security document, and the second ink layer comprises an iridescent, semi-transparent ink composition, the appearance of which varies according to the viewing angle, the second ink layer comprising an iridescent pigment which exhibits a change from a visible colour at some viewing angles to substantially colourless at other viewing angles; and wherein:
the optically variable security device is located partially in the window region and partially in the non-window region, the first and second ink layers in the non-window region, the first and second ink layers in the non-window region (a) being located on the same side of a transparent substrate forming the security document as one another and (b) at least the second ink layer being located on the outer surface of the at least one opacifying layer; and
the window region includes a full window portion comprising a region of the transparent substrate without an opacifying layer on either surface, and a half window portion comprising a region of the transparent substrate with an opacifying layer on only one of its surfaces, and respective regions of the optically variable security device are located in the full window portion and in the half window portion.

a.Claim 2 is also directed to a security document and recites similar limitations to that of claim 1. Claim 2 differs from claim 1 in that it specifies that the second ink layer comprises a mica-based interference pigment. Claims 14 and 15 are directed to methods for the production of the security document corresponding to claims 1 and 2.

a.The dependent claims 3-13 and 17 recite additional limitations concerning the arrangement of the layers, the substrate, the colour differences exhibited by the layers, optical density of the layers etc. Claims 16 and 18 are directed to the order in which the first and second ink layers are applied.

Person Skilled in the Art

a.The specification is to be construed through the eyes of the person skilled in the art, being a notionally non-inventive skilled worker aware of the common general knowledge in the relevant field. In KD Kanopy Australasia Pty Ltd v Insta Image Pty Ltd [2007] FCA 481; 71 IPR 615 Kiefel J identified ([16]) the person skilled in the art (“PSA”) as:

“...a person acquainted with the surrounding circumstances of the state of the art and manufacture at the relevant time...They are likely to have a practical interest in the subject matter of the invention...and may often work in the art with which the invention is connected.”

a.In Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980; 9 IPR 225, Finkelstein J stated at [70]:

“He is the person to whom the patent is addressed and who must construe it. He is the person whose knowledge will determine whether a patent is novel. He is the person who will judge whether a patent is obvious.”

a.In AstraZeneca AB v Apotex Pty Ltd [2015] HCA 30 “AstraZeneca” at [23], the High Court additionally noted that:

“The notional person is not an avatar for expert witnesses whose testimony is accepted by the court. It is a pale shadow of a real person – a tool of analysis which guides the court in determining, by reference to expert and other evidence, whether an invention as claimed does not involve an inventive step.”

a.The opponent, in their written submissions at paragraph [21], notes that the subject matter of the application is primarily directed to banknote design considerations. Consequently, the PSA would require an understanding of how banknotes are actually constructed, including how opacifying and ink layers are applied and ordered.

a.The applicant, in their written submissions at paragraph [13], agrees with the opponent’s assessment but also adds that the hypothetical PSA would require expertise in developing the polymer substrate, coatings, inks and microstructures used in making banknotes, rather than being simply a banknote designer. The invention in the applicant’s view is not design-related, rather, it provides a new optical effect that increases security. The applicant submitted that Mr Power is a closer proxy for that hypothetical skilled person than Ms Jones. More specifically, the applicant argued that Mr Power has greater technical expertise in the physical construction of such security documents whereas Ms Jones’ expertise lay in the design of various aesthetics of such documents e.g. artwork.

a.When I look to the specification there is little doubt that the invention concerns the construction of improved security documents with enhanced optical effects. The specification, outside the mention of the use of various indicia, does not seemingly concern aesthetic aspects of the security document, rather the focus being on the physical arrangement of ink layers etc to produce various optical effects. It is therefore apparent the relevant PSA would require an understanding of the construction of such documents, including an understanding of how polymer substrates, coatings, inks and microstructures are used in the making of such documents, along with an understanding of various opacifying and ink layers that are applied and ordered to produce the requisite optical effects.

a.Given the above it is apparent that Mr Power possesses skills which align with the notional PSA as I have outlined above. Ms Jones’ expertise does seem to lie more in the design aesthetics of such security documents, however this is not to say Ms Jones does not have experience in the construction of security documents of the type envisioned in the present application. On a review of Ms Jones resumé, I note that she has expertise in securities printing, foil application and design and Spark ink application and design. Both Mr Power and Ms Jones have been involved in the design and printing of security documents of the type concerned with the instant application and, therefore, both can reasonably put forward opinions on what may happen in such processes. However, it is noted that Mr Power has a greater depth of technical knowledge concerning the physical composition of ink layers and the effect exhibited by such inks when combined in various layers. Thus to, the extent that it becomes necessary, I would prefer Mr Power’s evidence concerning the properties of the ink layers and the interaction therebetween.

Clarity and construction

a.In both written and oral submissions, the opponent argued that the manner in which a number of features are defined within the claims gives rise to three distinct clarity issues. Consequently claim 1 as well as the other independent claims fail to define the scope of the monopoly sought with sufficient clarity. Thus, the claims do not meet the requirements of s40(3).

a.A claim will lack clarity if a person skilled in the relevant art cannot ascertain whether what he proposes to do falls within the claim's ambit per Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51 at [932]. A claim does not lack clarity merely because it is difficult to construe. The determination of whether or not a claim lacks clarity is to be based upon a proper construction of the claim. A claim will only lack clarity if the perceived ambiguity cannot be resolved by the application of well-known principles of construction Tramanco Pty Ltd v BPW Transpec Pty Ltd [2014] FCAFC 23 at [173].

a.The rules of construction for an Australian patent specification are well summarized in Decor Corp v Dart Industries [1988] FCA 399; 13 IPR 385, the correct application of these rules 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.”

a.I would also note what was said in Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214 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.”

The first Clarity issue meaning of “semi-transparent” or “translucent”

a.One of the cornerstones of construction is that, absent some special meaning they would be ascribed by the PSA, the words of the claim should be accorded their plain ordinary meaning. The Macquarie Dictionary Online, 2024, Macquarie Dictionary Publishers, an imprint of Pan Macmillan Australia Pty Ltd, defines the terms translucent and semi-transparent as follows:

·translucent: transmitting light diffusely or imperfectly, as frosted glass.
·semi-transparent: imperfectly transparent.

I note that semi-transparent is defined by reference to transparent which is the property of transmitting rays of light through a substance so that bodies situated beyond or behind can be distinctly seen (as per Macquarie Dictionary Online, 2024). Thus, something that is semi-transparent allows for the imperfect transmission of light. Consequently, one can view the terms semi-transparent and translucent as being synonyms.

The second clarity issue being the delineation of window region, half window portion, non-window region.

a.I have no issue with the definition of half window portion. The claim clearly articulates that it is an area within the window region which has an opacifying layer on one of its sides. Nor is this at odds with the definition of the window region which is not precluded from including an opacifying layer. The question to be addressed is whether this is at odds with the definition of the non-window region. The opponent’s argument seemingly suggests that the passage “the window region being defined by at least one opacifying layer of the security document which is present in the non-window region and not in the window region of the document” precludes the window region and non-window region from containing the same opacifying layer/material.

a.The applicant’s counter to this is that the claim clearly requires that the window region needs to have “lower optical density” than the non-window region. It therefore follows, the applicant argued, that the half window portion needs to have lower optical density that comprises less opacification than the non-window region. Thus, the non-window portion has higher optical density than the half-window portion, which is created by having at least one opacifying layer that is not present in the full or half-window regions. Consequently, the claim in the applicant’s view clearly requires three different levels of opacity the full window, which is transparent, the half-window which has opacification on one side only, and the non-window region, which has at least one opacifying layer that must have higher optical density than the half-window and therefore must have multiple opacifying layers (per applicant’s written submission at [18]-[19]).

a.On a plain reading of the passage defining the delineation between the window and non-window regions, it is stated that there is at least one opacifying layer in the non-window region that is not in the window region, this requirement being in addition to the need for the window region to be of lower optical density than the non-window region. What I take from this, is that the non-window region is required to include an opacifying layer that is not present in the window region. Logically it follows that if the window region contains an opacifying layer then non-window region must, by definition, contain an opacifying layer that is not in the window region. This is the very situation that is currently presented in the claim. That is, the half window portion includes an opacifying layer, viz the window region includes an opacifying layer, thus by definition the non-window region must then include an opacifying layer that is not in the window region i.e. the non-window contains an opacifying layer that differs from an opacifying layer of the half window portion.

a.In light of the forgoing, I am led to the construction that the security document includes a window region which is a region which permits the imperfect transmission of light, the window region including a half window portion having an opacifying layer. The document also including a non-window region adjacent the window region. The non-window region containing an opacifying layer that differs from an opacifying layer in the window region and by logical extension the half window portion as it is disposed within the window region. The window and non-window regions being further distinguished in that the window portion is of lower optical density than the adjacent non-window portion.

Third clarity issue regarding the meaning of “on the outer surface of the at least one opacifying layer”

a.The opponent is of the view that “at least the second ink layer being located on the outer surface of the at least one opacifying layer” is ambiguous, as it could be read as requiring the second ink layer to be positioned on the outer surface of one of the opacifying layers or on the outer surface of all the opacifying layers. The applicant’s response to this is that the reference to outer surface is the outer surface of all the opacifying layers, moreover this is the manner in which both experts understood the identified phrase.

a.When I consider the identified phrase, it does appear to be used in a collective sense such that it is referring to the outer surface of all the opacifying layers. This view is also supported by the specification. More specifically the specification contains a number of references to the second ink layer (i.e. the iridescent ink layer) being disposed on the outer surface of the opacifying layers or outermost surface of the security document as follows:

· “…portions of the device located outside the window should still be visible in the finished document, including the iridescent effect. …in the non-window region the optically variable security device is located on the outer surface of the security document such that from one side of the security document the first and second ink layers can be viewed unobstructed by the non-window region of the document” at page 4 lines 12-18

· “…the second ink layer outermost so that its iridescent effect can be viewed without obstruction.” At page 7 lines 31-32

·“ In this way the iridescent ink layer forms the outermost layer of the security device, thereby enabling unobstructed viewing of the iridescent effect.” at page 9 lines 24-26

· “the iridescent and non-iridescent inks should be located on the same side of the substrate as one another, and at least the iridescent ink 12 should preferably be located on the outer surface of the opacifying layer(s)”. at page 12 lines

Thus, it is clear from the specification that when the non-iridescent ink and iridescent ink are disposed on the same side that the optical effects exhibited by the second ink layer is viewable in both the window and non-window regions.

a.What is apparent from the specification is that for the effects of the iridescent ink to be present in the non-window region of the security document then it needs to be deposited such that it is unobstructed from view. Thus, in this instance the alternative construction offered by the opponent results in an absurdity, positioning the iridescent ink between opacifying layers would obscure the ink from view, thereby negating any optical effect imparted by the second ink in the non-window region. That is, the positioning of the iridescent ink in such a manner negates the very purpose for its use in the non-window region as set out in the specification. Consequently, the construction offered by the applicant that the second ink layer is disposed on the outer surface of all the opacifying layers is the preferred construction and one that is in keeping with common sense when consideration is given to the specification as a whole.

Conclusion on Clarity

a.Taking into account the construction of the identified phrases set out above it is apparent that claim 1 is directed to a security document having a specific arrangement of first and second ink layers across various regions of the security document. The ink layers are composed of different ink compositions, one being a non-iridescent, semi-transparent ink composition with a visible colour which does not vary with viewing angle. Given the arrangement of the layers across the various regions of the document, particular optical effects e.g. colour changes etc are exhibited by the security document at certain viewing angles when under illumination.

a.As previously noted, a claim will lack clarity where it contains an ambiguity or uncertainty that cannot be resolved in accordance with the general principles of construction. In the present circumstances, I have been able to ascribe an appropriate construction of the various terms identified by the opponent as being potentially problematic such that the claim is afforded a workable standard. I am satisfied that the claims as currently presented do not lack clarity.

Novelty

a.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; (1977) 137 CLR 228 at page 235:

“The basic test for anticipation or want of novelty is the same as that for infringement and generally one can ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement”.

a.It follows that if a citation discloses all the integers of the claim, the claim will lack novelty. If the citation does not disclose all the integers of the claim, the claim will still lack novelty provided the citation discloses all the essential integers of the claim. However, if one or more of the essential integers are not disclosed in the citation, the claim is novel (see Nicaro Holdings v Martin Engineering [1990] FCA 40; 16 IPR 545 and Catnic Components Ltd v Hill and Smith (1982) RPC 183).

a.It is noted that General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited [1972] RPC 457 at 486 (“General Tire & Rubber Co”) stated that:

“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 as likely to be carried out in a way which would not do so, the patentee’s claim will not have been anticipated, although it may fail on the ground of obviousness.”,

and that, in order to meet the test for anticipation, the prior art:

“…must contain clear and unmistakeable directions to do what the patentee claims to have invented…A signpost, however clear, upon the road to the patentee’s invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.”

a.In oral submissions, the case advanced for lack of novelty by the opponent focused primarily on the disclosure of D15, the understanding of which was supplemented by reference to D27. As I have noted above, there was some contention as to the opponent’s reliance on D27. Being cognisant of the issued posed by D27 and that it was in the interests of both parties that the hearing continue, I reserved the right to request further submissions concerning D27 should the need arise. On consideration of the written submissions, the evidence presented by the experts and the material presented during oral submissions, I am satisfied, for reasons that will become apparent, that issues concerning D27 have been adequately dealt with and further submissions concerning D27 are not required in order to determine this matter.

a.More specifically, the opponent’s case for anticipation is based on the demonstration of the Latitude note in conjunction with the slides of D27 at a workshop conducted by Ms Jones at the 2012 International Bank Note Designers Association (IBDA) Conference, held in Stockholm, Sweden. Essentially, the opponent’s case for lack of novelty is one predicated on information that was made publicly available through the doing of an act namely the demonstration of the physical note depicted in D15.

a.The requirements for a prior use or act to be novelty destroying were summarised in Damorgold Pty Ltd v JAI Products Pty Ltd [2015] FCAFC 31 at [12] as follows:

·The act must have made the claimed invention publicly available. This means that it is accessible to at least one member of the public in circumstances where that person would be free in law and equity to make use of it as that person saw fit (Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC at [124] (Insta Image)).

·The act must have resulted in disclosure of ‘each and every one’ of the essential integers of the claim (Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 527-528 and 531-532; Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848 at [93] ) such that a person of ordinary skill in the art would at once perceive, understand and be able practically to apply the invention without making further experiments or gaining further information before the invention can be made useful (Hill v Evans (1862) 4 De GF & J 288 at 300-302; 45 ER 1195 at 1199-1200; reproduced in 1A IPR 1 at 6-7).

·The issue is whether what the skilled addressee observes on inspection is sufficient to enable him or her to comprehend the complete invention (Insta Image at [151]).

·If there is a missing integer on examination, there may be anticipation if the evidence establishes that the skilled worker would understand that integer to be present as a matter of course and without the application of inventive ingenuity. However, it may not be sufficient simply to show that the missing integer was part of common general knowledge (AstraZeneca AB v Apotex Pty Ltd (2014) 312 ALR 1 at [311] and [345]-[352]; Zetco at [93]).
·The onus lies on the party seeking to establish an enabling disclosure (Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90 at [147]).
·It is not possible to combine the single act with a document (Zetco at [93]).

a.In the present case there was some contention as to whether D15 and D27 were disclosed freely to the public. I note that the applicant, in both written and oral submissions, did not press the issue whether the material of D15 and D27 was presented on a non-confidential basis. The applicant did maintain that given the inadequacies in the evidence the opponent has not established that the information in D15, or D15 in combination with D27, was disclosed at the IBDA conference. The opponent, at [49]-[48] of their written submissions, points to the evidence of Ms Jones concerning the demonstration of the materials as establishing disclosure of D15 and D27 at the IBDA conference was on a non-confidential basis.

a.Given the inherent difficulties in establishing the fact that a particular act took place, I find it puzzling that scant information has been put forward in relation the IBDA conference at which the disclosure was said to have taken place. For example, the opponent’s expert simply states that that conference took place in Stockholm in 2012, and no specific dates are provided. One would normally expect that the provision of such detail would be a relatively simple matter and easy to corroborate through contemporaneous materials associated with the conference such as the conference agenda etc. Then there is the fact that Ms Jones states that the workshops were held by Lachlan McDonald of PolyTeQ Services, which raises the question as to whether it would not have been prudent to present evidence from Mr McDonald attesting to the fact that the workshops took place and that the material of D15 and D27 was disclosed during the workshop. I appreciate that this may well be the ideal situation and that the provision of such evidence is subject to the availability of the experts or witnesses.

a.While there are some idiosyncrasies in the evidence regarding the IBDA conference they do not undermine the credibility of the evidence provided by Ms Jones. I am satisfied that the material as exemplified in D15 and D27 was presented to one or more individuals without an express or implied duty of confidence before the priority date of the instant application. The question that remains is whether the material of D15 and D27 is sufficient to anticipate the claimed invention.

Consideration of D15 and D27

a.The material relating to D15 entered into evidence are photographs of the front and rear sides and a video of the Latitude bank note as demonstrated at the workshops presented during the IBDA conference. The discussion of D15 as provided by Ms Jones in her evidence is by reference to the ancillary being a set of PowerPoint slides exhibited as Annexure ALJ-3 to Jones one and later referred to in Jones 2 at [86]-[88], Jones 3 at [49] (now referenced by the opponent as D27). Even if Ms Jones were to provide discussion as to the composition of the note of D15 unassisted by such ancillary materials, I am cognisant of the fact that such evidence would be somewhat coloured by the fact that she is the designer of the note of D15.

a.Mr Power’s initial thoughts on the note depicted in D15 are set out at [104] of Power 1. Mr Power notes that D15 includes a full window which is defined at the edges by stepped back white and blue opacification layers forming both half window and non-window regions. Mr Power also opines that the note of D15 also includes various shapes that have been formed using the G-Switch ink. I am cognisant of the fact the Mr Power has a familiarity with the products of the opponent given his longstanding association with same. This familiarity places Mr Power in a position where he may well be able to read in more to the disclosure of D15 than the hypothetical PSA. Consequently, I view Mr Powers statements as to the use of the G-switch ink with some trepidation.

a.On viewing the exhibits relating to D15 it is apparent that the note depicted incudes one or more window regions which are bounded by a non-window region. The note also exhibits various security elements, including various colour elements, these having a blue or white hue, and these being disposed within or surrounding the window regions. Looking at D15 no substantive information is conveyed in relation to its actual composition. I understand that the PSA may well be cognisant of the fact that such a note is composed of a number of layers including materials such as suitable polymers and/or various inks etc. However, material of D15 in and of itself imparts no specific information as to the arrangement or composition of the layers used to construct such a note. Presented with the note shown in D15 the PSA could only speculate as to its physical makeup. Consequently, the note itself is devoid of the necessary clear and unmistakable directions required to strip the claimed invention of novelty. Thus, the mere disclosure of the note by way of its presentation alone cannot be said to anticipate the claim.

a.The fact the Latitude note of itself does not constitute an enabling disclosure is a fact I suspect the opponent was readily aware of, thus owing to the need to supplement the apparent disclosure of D15 with the material in D27. As noted above per the decision in Zetco, it is not permissible to combine the apparent disclosure of the act with a document. It could be said that this is what is being attempted on the part of the opponent by supplementing D15 with the material of D27. The opponent’s position to me seems clear, namely that D27 was presented in conjunction with the display of the physical Latitude note depicted in D15 which constitutes a single act, this being the workshop conducted by Ms Jones. I do not see further debate on whether it is permissible or is not to consider D15 in combination with D27 to be fruitful, as I am of the view that D27 does not cure the deficiencies of D15 such that the combined disclosure of the two rises to the necessary level to anticipate the claimed invention.

a.The opponent focuses on the disclosure of the Figure from slide 10 (reproduced below) of D27 which was presented by Ms Jones at the workshop given during the IBDA conference. This figure is said to depict the layer structure of the Latitude note depicted in D15 in detail. Ms Jones, at [49] of Jones 3, explains that the layer structure of the Latitude note includes two opacifying layers, shown to the left of the transparent substrate layer, this being the third layer from the left. On the opposite of the substrate there is a white opacifying layer followed by a blue coloured layer. A layer of G-switch ink is then laid down on the blue layer, followed by another white opacifying layer. Ms Jones also states, at [50] of Jones 3, that she talked through the layer structure as shown in this Figure during the demonstration.

a.When I consider the Figure, I can see that the depicted Latitude note is composed of several layers including what I would hazard to guess are a number of opacifying layers depicted in white and a transparent substrate. I can also discern the blue layer which may well constitute a first ink layer and a layer disposed over the blue layer, which may or may not be a second ink layer. The figure alone imparts little information as to the composition of the various layers and their precise functions - all that the figure shows is that Latitude note is composed of multiple layers. Without the aid of statements at [49] of Jones 3 it is difficult to discern the nature of the various layers and whether these may well constitute the first and second ink layers.

a.One issue I have with the statements of Ms Jones is that they are uncorroborated. While I have no doubt that the statements of Ms Jones at [49] speak to her recollection of events, there is nothing offered in evidence to verify what was exactly disclosed by Ms Jones during the course of the presentation, other than her recollection of a demonstration that occurred more than 10 years ago. It is not uncommon for notes to be made in relation to the slides of such presentations, and a copy of such information would have lent further support to the argument being advanced by the opponent for lack of novelty.

a.In addition to this there also appears to be conflicting statements in the evidence of Ms Jones concerning the structure of the Latitude note. As pointed out by the applicant, Ms Jones, at [87] of Jones 2, states that the G-Switch layer is printed on the front of the banknote with the back side having a blue opacification layer as well as two white opacification layers; this runs contra to the statements at [49] of Jones 3 as discussed above.

a.The applicant submits, given these discrepancies, that I should accept the evidence at Jones 2 [87] over the evidence at Jones 3 [49]. This is as the comments in Jones 3 in the applicant’s view are in relation to D27, which depicts a different bank note to that which is the subject of D15. The applicant then pointed to the evidence of Mr Power at [37]-[38] of Power 2. Here Mr Power notes what appears to be some aberrations between the note exhibited as D15 and the note structure of D27, including differences in the hourglass motif of D15 and D27, the provision of holograms in D27 and the fact that the slides are silent as to the use of G-switch ink. Thus, in Mr Power’s view, the structure presented in D27 does not accurately reflect the structure of the note depicted in D15.

a.When I look to Jones 2 at [87], I note Ms Jones references the presentation exhibited in ALJ-3, this being D27. While I can see there are some discrepancies in the evidence of Ms Jones as it pertains to consideration of D15, they are not such that I can wholly dismiss the evidence of Ms Jones. Moreover, these inconsistencies further highlight the difficulties presented in determining the exact makeup of the note shown in D15 based on a limited visual inspection. In any event, what I can take away from the discussion concerning the combination of D15 and D27 is that the Latitude note is composed of multiple layers including a number of opacifying layers and what can be regarded as a first ink layer i.e. the blue layer and a second ink layer i.e. the black layer which is said the G-switch ink layer. A note of this ilk also includes a number of window regions bounded by a non-window region.

a.The opponent submits that when D15 and D27 are considered together it is apparent that the note of D15 anticipates the claimed invention. The applicant notes that the claim requires the second ink layer to be located on the outer surface of all the opacifying layers. Such a feature is not present in D27, nor is it readily apparent from the physical note of D15 that the second ink layer is disposed on the outer surface of the opacifying layer. This is supported by the evidence of Mr Power, who says that G-Switch ink is “applied directly to the clear film of the banknote substrate” (Power 1 at [104] and [199](a)).

a.The opponent’s position is that the provision of the G-Switch layer overlapping the blue and white opacifying layer satisfies the requirement of the second ink layer to be on the outer surface of at least one of the opacifying layers. This position is based on the opponent’s view that the feature of the “second ink layer being located on the outer surface of the at least one opacifying layer” is not limited to the second ink layer being the outer surface of the all the opacifying layers. As I have discussed above, I do not come to the same construction as that of the opponent. In my view, the phrase second ink layer being located on the outer surface of the at least one opacifying layer means that the second ink layer is on the outer surface of all of the opacifying layers (i.e. on the outer surface of the document) in the non-window region. On review of D27 it is clear that the second ink layer is positioned between the opacifying layer and is not disposed on the outer surface of all of the opacifying layers. D27 therefore in my view fails to disclose all the essential integers of the claim.

a.In light of the above discussion, neither D15 nor D27 anticipate the claimed invention. The presentation of the Latitude note depicted in D15 cannot be said to provide the necessary disclosure to allow the PSA to comprehend the complete invention, nor would such a person, based on visual inspection of D15, at once perceive, understand and be able practically to apply the invention without making further experiments or gaining further information before the invention can be made useful. D27 fails to disclose all the essential features of the claimed invention thus supplementing D15 with the material of D27 also fails to anticipate the claimed invention.

a.I am satisfied that claim 1 is novel over the disclosures of D15 and D27, whether considered separately or as a combination. Claims 2, 14 and 15 recite similar limitations to that of claim 1 and are therefore also considered to be novel over D15 and/or D27. It also follows that claims 3-13 and 16-18 are novel over D15 and/or D27 as these claims recite additional limitations to those of claim 1, 2, 14 and 15.

Inventive step

a.The statutory basis for inventive step for this opposition is set out at s7(2) and s7(3) of the Act as it stood after commencement of the Raising the Bar Act, and is reproduced below:

(2) For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed (whether in or out of the patent area) before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3).
(3) The information for the purposes of subsection (2) is:
(a) any single piece of prior art information; or

(b) a combination of any 2 or more pieces of prior art information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have combined.

a.The question of obviousness has been extensively considered by the courts. In particular Aickin J stated in Wellcome Foundation Ltd. v VR Laboratories (Aust) Pty. Ltd. [1981] HCA 12 at [45]; [1981] HCA 12; (1981) 148 CLR 262 at 286 (“Wellcome Foundation”):

“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.”

a.In Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59; 212 CLR 411 at [53], the High Court accepted the approach taken in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd [1970] RPC 157 at [187] where Graham J posed the reformulated Cripps 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 combination] in the expectation that it might well produce a [useful or better result]?” (emphasis in the original)

a.Moreover, the relevant authorities have also made it clear that the question of obviousness is a question of fact that is to be determined by evidence.

a.During oral submissions, the opponent advanced arguments in relation to inventive step to the effect that fundamentally there is no invention disclosed in the specification, nor is there any invention in what has been claimed. What is claimed, the opponent argued, is nothing more than a collection of components without any relevant interaction between them, such that the components do not combine to create some new optical effect. The only variable effect is a property of the optical variable ink (OVI) itself. The opponent again stated that the invention does not solve a specific problem. The problem identified or raised in the application is the same as that for every single bank note patent application i.e. just having something difficult to copy. There is no technical advance or new technical effect that results from the combination of these known integers. The opponent’s position is best summarised at [74], and [81]-[84] of their written submissions.

a.The applicant’s position is that the invention addresses the need to provide more complex visual effects that prevent or otherwise make it more difficult to counterfeit or forge the security document. The solution posed by the instant application is a particular combination of layer types arranged in a particular order which results in optical effects that are different to those of the prior art. The fact that the instant invention exhibits such effects that differ from the previous devices means that the note is more secure. Moreover, applicant argued, the solution posed by the instant invention is a technical one. Namely, the invention as claimed requires an optically variable device that exhibits multiple different effects in different areas including the full, half and non-window regions due to the manner in which the ink layers are illuminated, thereby causing variations in the level of light reflected etc. The applicant also noted that while the resultant effect of the invention is a visual one, this does not mean that the effect in not a technical effect. In the present art the technical effect of increased security was said to be intrinsically linked to the appearance of the device (per applicant’s written submissions at [53]-[58]).

Assessment of inventive step

a.The proposition advanced by the opponent that there is no invention described or claimed seemingly invokes the threshold requirements of s18(1). The opponent also seems to argue that the invention as claimed in no more than mere collection of integers (i.e. a collocation) rather than a proper combination. When I consider the position advanced by the opponent, I am a little perplexed, in that the argument put forward is seemingly more aligned with that which would normally be advanced under the ground manner of manufacture. The applicant’s rebuttal arguments concerning technical effect also include remnants that seem more at home under manner of manufacture considerations, perhaps due to the nature of the opponent’s submissions. I appreciate that there is a historical link between manner of manufacture and the notion of inventiveness, however these grounds are now distinctly separate heads as specified by s18 of the Act and should not be conflated.

a.The provisions of s7(2) Act are clear; the question to be assessed is whether the invention is obvious to the person of skill in the art given the CGK, taken either alone or in combination with the prior art base as specified per s7(3) of the Act. The process for determining the inventive step was outlined in Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd (2008) 78 IPR 20; [2008] FCAFC 139 (“Insta Image”) at [80]:

It follows from the provisions of the Act outlined above that in determining the issue of obviousness, it is necessary:
(1) to identify the invention “so far as claimed in any claim”;
(2) to identify the “person skilled in the relevant art”;
(3) to identify the common general knowledge as it existed in Australia before the priority date;
(4) to inquire under s 7(2) whether the invention referred to in (1) above would have been obvious to the person referred to in (2) above in light of the knowledge referred to in (3) above; and
(5) to inquire whether that invention would have been obvious to that person in the light of that knowledge when that knowledge is considered together with either kinds of information mentioned in s 7(3) (additional prior art information).

a. I have already engaged with the considerations of steps (1) and (2) of Insta Image. Per my discussion at [59] and [80]. I will now address the remaining considerations.

The common general knowledge in the art (CGK)

a.The opponent at [78] of their written submissions set out that the following elements formed part of the CGK:

(a) full windows, and a half-window;
(b) optically variable/iridescent inks (OVIs) ;
(c) non-iridescent standard inks, including coloured inks;
(d) opacifying layers used on polymer substrates;
(e) the use of OVDs and inked designs in windows and half-windows; and
(f) the use of OVDs and inked designs that run into (are partially within) windows
and half-windows.

a.I also note that in the evidence of Mr Power, at [24] of Power 1, the following elements are also stated as being common security features utilised in such security documents:

(a) holograms;
(b) diffractive structures, including those applied in the early polymer banknotes to the
middle of a polymer substrate and viewed through a clear window in the substrate.
(c) foils, including foils with holographic features;
(d) relief structures (some of which can create floating images);
(e) moire effects (from tightly spaced lines);
(f) micro mirrors;
(g) optically variable inks;
(h) patterns and detailed designs, including small text and micro-text only visible with
magnifying devices; and
(i) effects from lenses.

a.In both written and oral submissions, the applicant did not seek to repudiate that the elements as outlined at [78] of the opponent’s written submissions formed part of the CGK in the art as at the priority date. Likewise, the opponent did not dispute that the features as identified by Mr Power were part of the CGK in the art. Thus, there does not seem to be any dispute between the parties that the above identified elements were common general knowledge in the art.

a.I note that the specification states that number of visible security devices such as microtext, fine line patterns, latent images, venetian blind devices, lenticular devices, moiré interference devices and moiré magnification devices, holograms, watermarks, embossings, perforations and the use of iridescent (e.g. colour-shifting) or luminescent / fluorescent inks were known. This disclosure aligns with the statements of Mr Power concerning the state of the common general knowledge. Additionally, when I look to the examples of the banknotes exhibited as DSB-3 through DSB-16 they all include the elements Ms Jones states to be CGK.

a.Based on the information contained in the specification and the evidence before me I am satisfied that the elements outlined in [114] and [115] above formed part of the CGK in the art.

The problem being addressed.

a.Before considering the question of inventive step further it is necessary for me to address the submissions advanced by the opponent concerning the problem addressed by the instant application. The opponent advances that as the invention in question is not directed to solving a particular problem it cannot said to be inventive. In support of this the opponent cited the decision of the full Federal Court in Konami Australia Pty Ltd v Aristocrat Technologies Australia Pty Ltd [2016] FCAFC 103 (“Konami”) per Perram J at [102]:

“The 847 Patent involved a number of features in combination in a poker machine game. The combination of features was not said to solve any particular problem. I can discern in the combinations no problem solved or frontier crossed. There was, in that circumstance, nothing remotely inventive about the 847 Patent and the trial judge was correct so to conclude.”

a.Looking at the cited passage I do not see his Honour as advancing a general premise that a patent application must solve an articulated problem to be deemed to involve an inventive step. Rather, his Honour is affirming the decision of the trial judge as outlined at [92] of Konami:

“…his Honour was entirely unpersuaded that there was anything inventive about this admittedly novel combination. At [250] he said:
In my opinion, none of claims 1, 19 and 56 involve a scintilla of inventiveness. There was no difficulty overcome or barrier crossed by these alleged inventions. Each of the combinations defined in these claims is obvious and could be arrived at by a person skilled in the relevant art (however unimaginative he or she might be) armed only with the common general knowledge as it stood at the priority date.”

a.Viewed in context his Honour is simply acknowledging that the various combinations claimed in the 874 patent were obvious and that there would be no difficulty posed (i.e. no problem presented) to the skilled person to arrive at the claimed invention without the exercise of inventive faculty armed only with the CGK.

a.In addition to the above, I am also conscious of the fact that there is no requirement at law for the patent to address or otherwise solve a problem (as distinct from providing a specific, substantial and credible use as required by s7A). There is certainly nothing within the Act that mandates this, nor am I aware of any case law that stipulates one as such. What the decided cases show in this area of law is that there are numerous approaches to the determination of obviousness. The problem solution approach is but one tool that may assist the decision maker in determining questions of obviousness.

a.Finally, the position advanced in the opponent’s written submissions, that the specification fails to solve a problem, is at odds with the statements made during oral submissions that there is a problem identified by the specification, but it is a common one that effects the industry. The fact that the specification is directed to solving a known or common problem is not determinative of whether the invention so far as claimed lacks an inventive step. As was expressed in Biogen Inc v Medeva plc [1997] RPC 1; (1996) 36 IPR 438; 38 BMLR 149 at 34 (RPC); 442 (IPR) per Lord Hoffmann:

“Whenever anything inventive is done for the first time it is the result of addition of a new idea to the existing stock of knowledge. Sometimes, it is the idea of using established techniques to do something which no one had previously thought of doing. In that case, the inventive idea will be doing the new thing. Sometimes, it is finding a way of doing something which people had wanted to do but could not think how. The inventive idea would be the way of achieving the goal. In yet other cases, many people may have a general idea of how they might achieve a goal but not know how to solve a particular problem which stands in their way. If someone devises a way of solving the problem, his inventive step will be that solution, but not the goal itself or the general method of achieving it.”

Thus, an inventive step may lie in the solution posited by an individual to a known or common problem afflicting the art. Or in the proverbial sense, there may be many ways to skin a cat such that the result is the same despite the solution proposed, but this does not mean that such a solution is any less inventive to that of another. I am also cognisant of the fact that the existence of alternative solutions to such a common problem does not preclude a finding of a lack of inventive step.

a.In the present case, the debate as to whether the invention solves a particular problem does not advance the opponent’s case for lack of inventive step. The question to be answered is whether the invention so far as claimed is obvious to one of skill in the art given the given the CGK, whether taken alone or in combination with either kind of information mentioned in s7(3). This is a question of fact that is to be determined on the evidence.

Consideration of inventive step in light of the CGK alone

a.The opponent advances that the none of the claims involve an inventive step in view of the CGK alone. The claims, the opponent argued, are no more than a combination of known features wherein the resultant combination does not produce any new technical effect. In support of this the opponent relies on the evidence of Ms Jones, at Jones 1 paras [43]-[47] and [54]-68].

a.When I look to the passages as identified in Jones 1, they speak to the fact that elements (a) to (f), as identified in [114] above, were part of the CGK and had been employed in various polymeric notes as exemplified in the Brunei 10,000 dollar banknote, the Brunei 1,000 Ringgit note, the Malaysia 5 Ringgit note and the Hong Kong 10 Dollar note. In addition to this, paragraphs [43]-[47] speak to issues of registration and stepping back. Namely, there can be imperfect registration of the layers in the manufacture of such notes, and this can cause parts of the images to be obscured due to over opacification, or for the shapes of the window regions to be distorted. Ms Jones explains that the registration issue was and is typically addressed by the technique known as stepping back, where each upper layer is stepped back a small amount, around 0.5mm, to provide some leeway between the layers.

a.The opponent also noted the reasons behind combining optically variable ink (OVI) and standard inks are that finer details can be created with standard inks, including ink from the opacifying layer itself (opponents written submissions at [79] and Jones 1 at [53]-[54]). Ms Jones provides additional commentary regarding approaches to banknote design including layer structure and ink selection at paras [63]-[67]. Here, Ms Jones states that the bank note designer would have selected the inks, including any OVIs to be used in a design for a new note. Ms Jones states that as a designer she would have been free to choose the types of inks used in the design in order to meet the design brief and provided it was in budget. It is also acknowledged by Ms Jones that, during the initial design phase, the note design would be reviewed by people in R&D and production, who would then make comments regarding the design and request that certain features be changed, such as one feature or ink to be replaced by another. Ms Jones also states that a designer would have regard to where in the layer structure an ink was to be placed and on what side of the substrate a particular ink was to be laid down. In developing the note, it would be common to consider the production process and manufacturability; given manufacturing constraints it was not uncommon for a layer structure to be altered. For example, a designer may need to swap an ink from the front of the note to the back of the note and vice versa.

a.When I consider the evidence of Ms Jones there is nothing that directly addresses the question as to why it would be obvious to lay down the second ink layer on the outer surface of the of the opacifying layers given the state of the CGK. What I get from the evidence of Ms Jones is that the designer was free to choose how the layers were arranged in the note, and that the ordering of the layers could be subject to change given manufacturing constraints. Moreover, when I look to Ms Jones’ evidence concerning the Chilean 2000 Pesos bank note, the Papua New Guinea 2, 5, 10 and 20 Kina bank notes, the Hong Kong 10 Dollar bank note and the Brunei 1000 Dollar bank note, at paragraphs [21], [22], [26] and [27] of Jones 2, is that in each of these exemplar notes opacification is applied over the G-switch ink in the non-window region. That is to say there appears to be a prevailing school of thought in the art that G-switch ink should not be utilised as the top layer in non-window regions.

a. The commentary of Ms Jones, per paragraph [72]-[79] of Jones 3, regarding the 100 Kina note, is also of some interest. Here, Ms Jones states that in the window region the G-switch layer is laid down after the first opacifying layer is printed. I note that discussion concerning the ordering of the layers at [72]-[79] of Jones 3 focuses on the window region of the 100 Kina note; nothing is advanced concerning the non-window region. It is not until paragraph [102] of Jones 3 that the layer structure of the non-window region is discussed, notably that surrounding the windows (i.e. the non-window region) are five opacifying layers, two on one side and three on the opposite side, the topcoat on the front side is a green opacifying layer and the topcoat on the back side is a yellow opacifying layer. That is, in the non-window region the G-switch layer is obscured by an opacifying layer.

a.In oral submissions Counsel for the opponent referred to the 100 Kina bank note as discussed in Jones 3. More specifically, Counsel for the opponent noted that in the half window, and to the extent that there is a difference the non-window, that an opacifying layer is laid down over the OVI which renders the optical variable effects of the ink inert but there is nonetheless an optical effect exhibited, this being the fact that the OVI layer imparts a particular colour effect, this being the green tint to the points of the stars in the half window region. Again, the opponent’s argument is predicated on there being no discernible difference between the window or non-window regions given the words of the claim. As I have previously discussed, I do not find this to be the case. On consideration of the 100 Kina note it is apparent that the second ink is laid down as a topcoat within the half window portion, but I have no evidence to suggest that it is the topcoat in the non-window region.

a.When I look to the exhibited banknotes that utilise such an iridescent ink of the type claimed i.e. G-switch ink it appears the ink is run under outer opacifying layer in the non- window region. Thus, what emerges from the evidence before me is that it was common for the iridescent inks of the type claimed to be run under the opacifying layer in the non-window region. The rational for this is best set out in Jones 2 at paragraphs [62]-[64], here Ms Jones explains that by running the OVI of the type claimed under the opacifying layer in the non-widow region additional effects could be achieved without the need for two different inks. In these instances, the security feature retains the colour-shifting properties of the OVI inside the window region while presenting a solid colour in the non-window region, this gives the appearance that two distinct inks have been used to generate the feature. This makes it very difficult to counterfeit the feature due to issue with registration, more specially the single ink printing exhibits perfect registration, such perfect registration is difficult to duplicate utilising two separate inks.

a.Nothing in the evidence establishes instances where an iridescent ink of the type claimed was laid down as the topcoat in the non-window region (i.e. second ink layer position on the outer surface). Rather it seems the accepted practice was to run the ink under the topcoat in the non-window region to give the appearance that two distinct inks were used in the manufacture of the security device which has added security benefits. Given this, it cannot be said that the selection of the iridescent ink of the type claimed as a topcoat in the non-window region is neither a standard nor routine design choice.

a.Thus, what emerges from the evidence is that the G-switch ink is not typically applied as a topcoat in non-window regions. Considering the totality of the evidence it appears that the general understanding in the art was that G-switch ink was not generally exposed on the outer surface of the note in the non-window region. This also seems to accord with the evidence of Mr Power, at [35] of Power 1 and at [8](c) of Power 2, where Mr Power explains that when G-switch is laid down over opacifying layers it no longer exhibits the same colour switching properties. The statements of Mr Power seemingly suggest that that the PSA would avoid using the G-switch ink as a topcoat in a non-window region given the that the switching properties G-switch ink are diminished by the underlying opacifying layer.

a.The evidence as presented does not lead me to a general conclusion that it was common practice to utilise optically variable ink (OVI) as a topcoat in the non-window region. When I look to the 50 pesos note entered into evidence as D12 it can be seen that the butterfly motif which is printed in Spark ink (i.e. an OVI ink) is printed across the window, half window and non-window regions. It should be noted that the Spark ink is not an OVI ink that contains an iridescent pigment. Thus, all that the 50 pesos note shows is that it was possible to print an OVI ink of a certain type across the three regions. This is but one example and it does not establish to the necessary level that it was CGK to lay down an OVI, let alone one of the type claimed, as a topcoat in the non-window region. Thus, given the evidence, it has not been established, on balance, that the laying down of OVIs of the type claimed as a topcoat in the non-window region was in fact CGK in the art as at the priority date.

a.As has been highlighted in the relevant authorities, where the invention as claimed is to a combination, it is the combination that must be shown to be obvious rather than each of the individual features thereof. A combination may exhibit an inventive step even though each of its features was common place, as per the decisions in Minnesota Mining and Manufacturing Co. v Beiersdorf (Australia) Limited (1980) 144 CLR 253 at page 293, Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) [2002] HCA 59 at [6] and Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 at [69]).

a.In view of the above it cannot be said that the invention so far as claimed would be obvious to one of skill in the art; while there may be elements of the claimed combination that can be considered to be CGK, there is nothing in the CGK that points toward the particular combination of features within the claim. I am therefore satisfied that claim 1 as presented involves an inventive step over the CGK in the art. Claims 2, 14 and 15 are considered to involve an inventive step over the CGK as they recite similar limitations to those of claim 1. It also follows that claims 3-13 and 16-18 involve an inventive step by virtue of their dependency on claims 1, 2, 14 and or 15.

Consideration of inventive step in light of D15, D27 and the CGK

a.The argument advanced by the opponent concerning lack of inventive step under s7(3) is that any difference between the Latitude, note as exemplified in D15 and D27, and the claimed invention concerns nothing more than matters of routine design choice that would be obvious to one of skill in the art. Furthermore, the opponent argued that the differences are either trivial or mere parameters, and thus cannot give rise to an inventive step (opponents written submissions at [85] and [86]).

a.As I have discussed above with respect to the issue of novelty, the layer structure of the Latitude note is an unknown when one simply considers D15 alone. That is not surprising as this is what is intended with the construction of such security documents, namely a would-be forger should not be able to discern the layer structure of the particular note as this is what gives the note its security. It is only with the aid of D27 that it is possible to gain an understanding of the construction of D15. As I have previously discussed, D27 fails to disclose that the second ink layer is provided on the outer surface of the opacifying layers in the non-window region. Furthermore, there is nothing in the teaching of the combination of D15 and D27 that points towards the provision of the iridescent ink layer of the type as claimed on the outer surface of the opacifying layers in the non-window region. This deficiency is not cured by the CGK as I have discussed above there is nothing in the evidence before me that established that depositing an iridescent ink layer of the type as claimed on the outer surface of the opacifying layers was CGK.

a.As noted above, the opponent contends that the invention concerns nothing more than mere design choices. As I have previously observed, the layers of the security document can be laid down in a myriad of possible combinations, and this is evident from the material submitted in this matter. Moreover, as I have discussed above at [131]-[133] the laying down of an iridescent ink of the type claimed as a topcoat in the non-window region is neither standard nor a routine design choice.

a.In light of the above discussion, I am satisfied that the invention as defined in claim 1 involves an inventive step over any combination of D15 and/or D27 with the CGK in the art. Claims 2, 14 and 15 recite similar limitations to those of claim 1 and are therefore also considered to involve an inventive step over D15 and/or D27 when combined with the CGK. As I have found the independent claims involve an inventive step, it also follows that the remaining dependent claims 3-13 and 16-18 involve an inventive step over D15 and/or D27 when combined with the CGK.

Consideration of D12 “the Mexican 50 Pesos note”

a.In written submissions, the opponent provided discussion concerning D12 (opponent’s submission at [87]-[93]). The opponent advances that the 50 pesos banknote is an illustration of a combination of known features including full window, half-window, optically variable ink and coloured semi-transparent ink that are used in combination to achieve a layered security feature (opponent’s written submissions at [96]). Importantly, I note that there is no disagreement between the experts that the 50 pesos note does not include an iridescent ink having an iridescent pigment that exhibits a change from a visible colour at some viewing angles to being substantially colourless at other viewing angles (per Jones 3 at [95] and Power 1 at [186](a)). It also does not appear to be in dispute that the layer structure of the 50 pesos note differs from that of the invention as claimed with respect to the deposition of the first and second ink layers. More specifically, the experts agree that the first and second ink layers of in the non-window region of the 50 pesos are not located on the same side of a transparent substrate forming the security document. Rather the coloured semi-transparent ink layer being the orange gravure ink layer is printed on the backside of the 50 pesos note while the OVI ink being the Spark ink is printed on the front side of then not (Jones at [44] and [93], Power 1 at [97](b), [97](c) and [186](b))

a.The opponent, in both written and oral submissions, sought to address the apparent differences between the construction of the 50 pesos note and that of the invention as now claimed. The proposition advanced by the opponent is that the differences are trivial, and that it would be obvious to one of skill in the art that the Spark ink could be readily substituted for another OVI, such as G-switch ink. Furthermore, it would be a relatively simple matter for a designer of such notes to simply move the coloured semi-transparent ink layer from the back side of the note to the front side i.e. it is nothing more than a matter of simple design choice. In support of this the opponent pointed to the evidence of Ms Jones at [44] of Jones 3.

a.In response, the applicant reinforced the fact that the Spark ink is not an iridescent ink having an iridescent pigment that exhibits a change from a visible colour at some viewing angles to being substantially colourless at other viewing angles. The Spark ink is one that has vastly different properties to that of the OVI required in the claim. Moreover, as has been explained by Mr Power, the colour switching properties of OVIs of the nature as claimed are adversely affected by the underlying opacifying layer. Given the difference in properties and the detrimental effects on the switching effect, the PSA would not be led as a matter of course to make the recited substitution asserted by the opponent. Regarding the suggestion that it would be a simple matter for the PSA to simply rearrange the layers, the applicant advanced that this is an oversimplification of the issue. As pointed out by Mr Power, at [36] of Power 2, the repositioning of one or more layers is not a simple matter; there are technical constraints that would need to be addressed. Additionally, the repositioning of the layer would also impact on the effects exhibited by the other security features within the note, such that they would not work as intended. Thus, movement of the layer as suggested by Ms Jones would necessitate a complete redesign of the note. Consequently, Mr Power opined that it would not be obvious to one of skill in the art to simply move the layer from one side to the other given these issues.

a.Counsel for the opponent rebutted this, noting that the applicant was applying the modified Cripps test which is not necessarily applicable in the present situation. The assessment to be applied is not whether the 50 pesos note could be modified to produce something within the claim. Rather, the assessment is more concerned with what concepts the PSA would take from the 50 pesos note in the development of new security features. Armed with this knowledge it would be a relatively simple task for the PSA to arrive at the claimed invention through routine step alone.

a.The appropriate starting point for the determination of obviousness is the citation. As is succinctly put in s7 the Act:

“…an invention is to be taken to involve an inventive step when compared with the prior art base [i.e the citation] unless the invention would have been obvious to a person skilled in the relevant art”

a.This general premise that the appropriate starting point in the assessment of obviousness being the prior art was affirmed in AstraZeneca at [192]- [230]. Thus, the assessment here is given the teaching of D12 and the CGK is whether what is claimed obvious. As was correctly stated by the opponent, the assessment is not a question of whether the PSA could modify the reference in question to produce something falling within the claim.

a.I do not see the argument concerning the re-arranging of layers as advancing the opponent’s case. Simply switching one layer from the front side to the back side does not remedy the fact that the evidence does not establish that it would be obvious to lay down a topcoat of an iridescent ink of the type as claimed in the non-window region. As the authorities have made clear, in the case of a claim to a combination it is the combination as a whole that must be shown to be obvious. The opponent has not established on the evidence before me that the combination as claimed would be obvious to one of skill in the art. I am satisfied that the invention as claimed involves an inventive step over the disclosure of D12 when combined with the CGK in the art.

Manner of manufacture

a.The opponent’s case on manner of manufacture is somewhat of a tapestry which intertwines distinctly different concepts that have been enumerated in the assessment of other grounds of opposition. The primary proposition that is advanced by the opponent is that the invention as claimed is no more than a collocation of known integers and thus not patentable. Interwoven with the collocation argument was an assertion that the invention is purely visual in character and thus not directed to the useful arts. Finally, when I consider the arguments advanced by the opponent over the course of these proceedings there is an underlying thread that the threshold requirements of s18(1) have not been met.

Are the threshold requirement of s18(1) met?

a.The concept that the wording of s18(1) of the Act imposed a threshold requirement was considered in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd 32 IPR 449 (“Mirabella”). Here the majority of the High Court held that:

"... the effect of those opening words of s 18(1) is that the primary or threshold requirement of a "patentable invention" is that it be an "invention". Read in the context of s 18(1) as a whole and the definition of "invention" in the Dictionary in Schedule 1, that clearly means "an alleged invention" … if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further.”

a.During oral submissions there was a distinct focus on the part of the opponent that the specification does not actually explain what the invention is, what it is that has been solved, or what is new about the alleged invention (also iterated at [15] of the opponent’s written submissions). The opponent also noted that the specification admits that various optical variable devices (OVDs) and optical variable inks, including iridescent inks, are known as per the specification at page 1 (per opponent’s written submissions at [12]-[14]). During oral argument the opponent noted that Commissioner has dealt with a number of oppositions concerning patent applications in this field, and in those cases a broad range of OVDs are used to produce quite clever and interesting visual effects that vary, that are hard to reproduce and that have an ability to be seen either by the naked eye or via particular viewing mechanisms to determine the authenticity of the document. The present application is not directed to any of those things; all that the specification presents is a combination of known elements that are not combined to result in any new technical effect.

a.The opponent noted that the specification as originally filed contemplated a particular visual effect, namely the reveal of particular images at certain viewing angles based on the colour shift in the iridescent ink, which is readily apparent from Figures 1-4. These effects were reflected in claim 1 as originally presented, however claim 1 in its original form did not make it through prosecution as it was clearly something that was not new, and hence the applicant was required to amend the claims to find something that was novel, but the claims as a result do not define an invention per se. Rather the claims as now presented recite no more than a collection of well-known integers.

a.During oral argument, Counsel for the opponent submitted that the fact that the claims are not defining an invention per se is apparent from the evidence of Mr Power, at Power 1 at [154]-[156]. In these paragraphs Mr Power was asked to explain the advance and benefits provided by the alleged invention defined in the amended claims. The opponent noted that Mr Power opined that the combination of features was new and unique, however he does not in fact identify anything of substance that he is able to discern from the application as being an advance as such.

a.As I have noted above, throughout the opponent’s oral submissions there was a focus on the fact that neither the relevant improvement nor relevant visual effect achieved is outlined in the instant application. Counsel for the opponent noted that anything with a different appearance would inherently give rise to a different visual effect, with nothing more than this being presented in the instant application. What the application is presenting is nothing more than a visual arrangement of known features. These features do not relate to each other in any technical sense. They only relate to each other in terms of providing a broad visual effect (per opponent’s written submissions at [106]).

a.The applicant’s response is that the invention as claimed relates to a technical way to achieve a visually observable effect, in order to make it harder for the document to be counterfeited. The claims recite technical integers whose relationship to, and interaction with, each other is carefully prescribed, and it is that interaction that creates the visual effect that makes the security document so difficult to copy. The claims require an optically variable device that exhibits multiple different effects in different areas, and those effects are required to extend over each of a full, half, and non-window region. The device will give a different appearance in each of those regions due to the variation in whether light is reflected and to what degree, and hence how the two ink layers are illuminated. The combination of these different effects alongside one another gives rise to a more complex visual effect (applicant’s submissions at [58]). It is the prescribed physical overlap of features that gives rise to the differing optical effects in each of the full, half, and non-window regions, thereby making the document more secure.

a.In assessing whether the subject matter of an application meets the threshold requirements of s18 or falls with the bounds of other traditionally excluded subject matter, the central question remains the same “is what is disclosed and claimed in the specification suitable subject matter for letters patent?”. As was highlighted in D'Arcy v Myriad Genetics Inc (2015) HCA 35, Research Affiliates LLC v Commissioner of Patents (2014) FCAFC 150, Commissioner of Patents v RPL Central Pty Ltd (2015) FCAFC 177, Encompass Corporation Pty Ltd v InfoTrack Pty Ltd (2019) FCAFC 161, Commissioner of Patents v Rokt Pty Ltd (2020) FCAFC 86 and Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd (2021) FCAFC 202; the question of whether the application is directed to subject matter is to be assessed as a matter of substance. When I consider the specification, it is apparent that what is described is a physical arrangement of various opacifying and ink layers across various regions of the security document namely the full window region, half window portion and non-window region. The layers interact with each other to induce particular optical effects under different lighting conditions and viewing angles. The substance of the invention, in my view, lies in the prescribed ordering of layers to induce an optical effect for given lighting conditions and viewing angles in each of the full window region, half window portion and non-window region. I note that the specification acknowledges the fact that the elements forming the layers are known in the art, but there is nothing in the specification that presupposes the particular physical combination as claimed.

a.The opponent has repeatedly advanced that the specification does not disclose what is the alleged complex optical effect produced, which in the opponent’s view, points to the fact there is nothing inherently new in the recited combination. It is appreciated that there is no explicit recitation of the resultant optical effect within the specification. I do not, however, see this as surprising - it is clear that the resulting optical effects are dependent on the arrangement of the layers and the properties of the selected inks. What is apparent from the specification is that there is a particular arrangement of layers in the non-window region, a different arrangement of layers in the half window portion and a further arrangement of layers in the full window region. Thus, given the composition of the layers in each area, a different optical effect will be respectively induced in the non-window region, half window portion and full window region. It is the juxtaposition of the optical effects in each of the three regions that gives rise to the visual effect of the invention.

a.In view of the above it cannot be said that the invention is simply a visual arrangement of known features. The substance of the invention lies in the prescribed ordering of opacifying and ink layers across distinct regions of a security document, which gives rise to a juxtaposition of the distinct optical effects the combination of which produces a new visual effect that makes the document more secure. I am therefore of the view that the threshold requirements of s18(1) are met.

Is the invention no more than a collocation or purely visual effect?

a.The opponent has advanced that what is claimed is nothing more than a mere collocation of known visual features that do not relate to each other in a technical sense. Moreover, it was said, they only relate to each other in terms of providing a broad visual effect in the same way that a claim might be to a combination of features to be included in a painting. Such a visual effect belongs to the fine arts as opposed to the useful art (opponent’s written submissions at [106]).

a.It is clear on the face of the specification that the appearance of a layer is affected by both the choice of underlying and overlying layers. Thus, the overall appearance of a particular region of the document is a function of the ordering of the layers and the physical properties of the layer. The order in which the layers are combined in particular regions effects how the region transmits, reflects or absorbs incident light which imparts a particular visual appearance to the region under differing lighting conditions. In the invention as claimed there is a prescribed ordering of opacifying and ink layers across distinct regions of a security document, the composition of these layers in the non-window region, half window portion and full window region induces a different optical effect. It is the juxtaposition of these multiple visual effects that makes the document more secure.

a.In light of the above I am satisfied that the invention so far as claimed is to a proper combination of integers that interact to produce a physically observable effect such as change in colour etc. in each of the three specific regions of the document, the resulting combination of these effects rendering the document more secure.

a.As noted, the opponent advances that the invention is purely of a visual character and thus not patentable. However, as is clear from the above discussion, the invention produces physically observable optical effects that are induced by a particular arrangement in the physical composition of the security document. It is the particular ordering of layers having specific physical properties that causes changes in the appearance of the security document when viewed at particular angles and under particular lighting conditions leading an improvement in the document’s security. The various visual effects employed in the instant invention are not purely of an aesthetic or artistic nature, rather the various visual effects provide a practical utility in the way in which they are combined to increase the security of the document via the precise arrangement and structure of the document.

a.In light of the above I am satisfied that the claims are directed to a patentable combination of features having a practical utility. Accordingly, the claims as currently presented are directed to a manner of manufacture within the meaning of s18(1) of the Act.

S40(3) Support

a.Subsection 40(3), as amended by the Raising the Bar Act, requires that the claims must be supported by matter disclosed in the specification. In CSR Building Products Limited v United States Gypsum Company [2015] APO 72 (CSR) the delegate at [115] summarised the approach to determining whether the requirements of support are satisfied as follows:

(i) construe the claims to determine the scope of the invention as claimed,
(ii) construe the description to determine the technical contribution to the art, and
(iii) decide whether the claims are supported by the technical contribution to the art.

a.In Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477 (“Merck”) Burley J at [546] affirmed that the approach adopted by the delegate in CSR was in essence correct but then stated that the following should caveats should be added:

“… the requirement that the technical contribution to the art must be ascertained. Where it is a product, it is that which must be supported in the sense that the technical contribution to the art disclosed by the specification must justify the breath of the monopoly claimed.”

a.Claims will exceed the technical contribution to the art when they claim products that the specification does not enable (Merck at [553]) or cover ways of achieving the desired result which owe nothing to the application, or any principle disclosed therein per the decision in Jusand Nominees Pty Ltd v Rattlejack Innovations Pty Ltd [2022] FCA 540 (“Jusand”) at [483]. It is worth noting here that the decision in Jusand with respect to the law on support was undisturbed by the decision of the Full Federal court in Jusand Nominees Pty Ltd v Rattlejack Innovations Pty Ltd [2023] FCAFC 178.

a.In their written submissions, at [117], the opponent argued that none of the claims is to a combination of features that is disclosed in the application. These combinations are then enumerated by the opponent at [118] of their written submissions. The opponent, at [119] of their written submissions, advances that the specification does not provide any general teaching that the features of one embodiment can, or should, be combined in other embodiments. The opponent then referenced the discussion relating to Figure 3, at page 17 lines 20-24 of the specification, where it is made clear that the half window portion is inside the full window, and that this may be combined other embodiments. The claims are, however, not limited to the arrangement of the half window and full window per Figure 3, they also include within their scope any type of half-window. Thus, the scope of the claims is therefore broader than the matter disclosed in the specification.

a.During oral argument the opponent sought to further clarify their position concerning the issue of support; the first point they made was that they are not advancing the issue of sufficiency. In present circumstances the specification never sets out the specific combination as claimed. Thus, the only way to get to something that falls within the claims is to pick and choose between integers from different claims, that is an intermediate generalisation needs to be created from the various disclosures and then these need to be put together to arrive at something within the scope of the claims. Moreover, even if there is something in the particular combination in terms of patentability, then the particular combination is not set out in the specification nor is its relevant technical contribution to the art. Consequently, the claims lack support.

a.The applicant in their response noted the tension between the argument advanced by the opponent in respect of inventive step and support. Notably, the submissions advanced on inventive step are to the effect that the skilled person is capable of arranging the various layers and regions as they please without any technical difficulty, while the submissions on support are to the effect that the PSA would not know how to do that even after reading the application. By contrast, the applicant’s position has been consistent, that is the skilled person could arrange the various layers and regions in the way prescribed in the claims of the patent, but they would not think to do so as it would require complete redesign of the banknotes presented as prior art (applicant’s submission at [98]).

a.Additionally, the opponent’s case on support is based on the idea that the combination of integers claimed in the claims is not disclosed in the application. However, the application provides a general teaching that features of one embodiment can, or should, be combined in other embodiments, as per page 17, lines 21 to 24. The opponent attempts to confine that teaching by saying it is limited to providing a half window portion inside a full window portion, whereas the claims include any type of half window. Claim 1, however, makes it clear that a half-window portion is formed by putting an opacifying layer on only one surface of the transparent substrate (applicant’s submissions at [100]).

a.The opponent’s position seemingly stems from their contention that there is no distinction between the half window and non-window region, this construction, as discussed earlier, seemingly negates the plain wording of the claim. On a plain reading of the claim, it states that the window region includes a full window portion comprising a region of the transparent substrate without an opacifying layer on either surface, and a half window portion comprising a region of the transparent substrate with an opacifying layer on only one of its surfaces. That is the half window portion as recited in the claim is within the window region. Moreover, the claim clearly specifies as to how the half portion window is formed within the window region. The claims in my view provide for a security device having a construction that generally aligns with the embodiment discussed in relation to Figure 3.

a.As I have noted above the invention concerns (i.e. the technical the contribution) the provision of various optical effects across distinct regions of a security document, being the non-window region, the half window portion and the full window portion, which gives rise to a juxtaposition of the distinct optical effects the combination of which produces a new visual effect that makes the document more secure. The claims as currently presented define and do not exceed this technical contribution. Consequently, the claims do not lack support.

Conclusion

a.The opponent has not discharged their onus. The opposition is unsuccessful. Subject to appeal, I direct that the application proceeds to grant.

Costs

a.It is usual in matters before the Commissioner that costs should follow the event, and I see no reason to depart from this approach. The opponent has been unsuccessful in this matter, and, therefore, I will award costs according to Schedule 8 against the opponent.

Neil Miller

Delegate of the Commissioner of Patents