CCL Secure Pty Ltd v De La Rue International Limited

[2020] APO 56

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

CCL Secure Pty Ltd v De La Rue International Limited [2020] APO 56

Patent Application:             2014266991

Title:Security documents and methods of manufacture

Patent Applicant:                De La Rue International Limited

Opponent:CCL Secure Pty Ltd

Delegate:Xavier Gisz

Decision Date:  21 December 2020

Hearing Date:  26 May 2020, via Video Conference, with further submissions filed on 23 September 2020 and 30 September 2020

Catchwords:  PATENTS - opposition to the grant of the patent under s 59 – opposed on the basis of inventive step and clarity – information considered under Regulation 5.23 – claims 1-6 and 8 lack an inventive step – costs awarded – variation of costs made

Representation:                   Counsel for the applicant: Frances St John

Counsel for the opponent: Craig Smith

Patent attorney for the opponent: Ian Lindsay and Cici Cui

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:             2014266991

Title:Security documents and methods of manufacture

Patent Applicant:                De La Rue International Limited

Date of Decision:                21 December 2020

DECISION

The opposition is successful. Claims 1-6 and 8 lack an inventive step in light of AU 2010294467.

The Applicant is given 2 months from the date of this decision to propose suitable amendments to overcome this finding of lack of inventive step.

Costs are awarded (according to Schedule 8) against the Applicant up to the day the parties were informed that the amendments had been allowed (23 September 2019). Costs are awarded against the Opponent (according to Schedule 8) from the day after the parties were informed the amendments had been allowed (24 September 2019).

The costs are varied such that 50% of the costs incurred by the Applicant as a result of the Opponent’s failure to comply with a direction (of $6,500) are awarded against the Opponent, CCL Secure Pty Ltd. (i.e. $3,250).

REASONS FOR DECISION

Background

1. The matter relates to patent application 2014266991 (the Application) in the name of De La Rue International Limited (the Applicant). The Application is a national phase of international application PCT/GB2014/051487 published as WO2014/184560. The Application claims a priority date of 17 May 2013.

2. The Application was advertised as accepted on 5 July 2018. A notice of opposition to grant was filed on 5 October 2018 by CCL Secure Pty Ltd (the Opponent).

3. The statement of grounds and particulars (the SGP) was filed on 4 January 2019. The evidence in support was completed on 5 April 2019. The evidence in answer was completed on 4 July 2019. The evidence in reply was completed on 5 September 2019.

4. On 30 May 2019 the Applicant filed amendments to the specification. The amendments were allowed on 23 September 2019.

5. On 15 October 2019 the Applicant asserted that the evidence in reply was not properly in reply. On 28 October 2019 the Delegate found that paragraphs 28, 29 and 30 of the second declaration by Odisea Batistatos dated 5 September 2019 are not properly in reply and proposed a direction that those parts of the declaration would not form part of the evidence. On 11 November 2019 the Opponent responded to the proposed direction arguing that those paragraphs were properly in reply. On 21 November 2019 the Delegate agreed with the Opponents arguments and decided to not make the proposed direction.

6. The hearing of the opposition was by video conference on 26 May 2020.

   APPLICABLE LAW

7. The present opposition is governed by the Patents Act 1990 (the Act) as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (the Raising the Bar Act) as the opposed application was filed after 15 April 2013. As a consequence the Commissioner may, under section 60(3A), refuse a patent application if satisfied on the balance of probabilities that a ground of opposition exists.

   Evidence

   Evidence in support

8. The evidence in support completed on 4 April 2019 comprises the following declarations:

   ·Odisea Batistatos (first Batistatos declaration) with Exhibits OB-1 to OB-14

   ·Chun Cui with Exhibits CCC-1 to CCC-6

   ·Bruce Hardwick (first Hardwick declaration) with Exhibits BAH-1 to BAH-27

   Evidence in answer

9. The evidence in answer completed on 4 July 2019 comprises a declaration of Daniel John Reid with Annexures DJR-1 to DJR-4.

   Evidence in reply

10. The evidence in reply completed on 5 July 2019 comprises a declaration of Odisea Batistatos (second Batistatos declaration) with Exhibits OB-15 to OB-20.

    Regulation 5.23 information

11. On 21 May 2020 I advised the parties that I was aware of a potentially relevant document (Australian patent AU 2010294467) that was not in the evidence. I was aware of this document because it was the subject of an opposition I had previously decided. I proposed that the document could be considered under the provisions of Regulation 5.23. The parties expressed a preference for not making detailed submissions about this document at the hearing.

12. Following the hearing, on 29 May 2020 I proposed a direction setting out the timetable for the parties to provide evidence relating to AU 2010294467 pursuant to Regulation 5.23(2)(c).

13. Taking into account feedback from the parties, I made the following direction on 9 June 2020 (with a slight modification to the timings in the proposed direction):

    The Opponent is given six (6) weeks from the date of this letter to provide evidence on the relevance of AU 2010294467 to the novelty and inventive step of the claimed invention.

    The Applicant is given six (6) weeks from the date the Opponent’s evidence is filed (or alternatively the date the Opponent indicates they will not be providing evidence) to file evidence on the relevance of AU 2010294467 to the novelty and inventive step of the claimed invention.

    The Opponent has one (1) week from the date the Applicant’s evidence is filed (or alternatively the date the Applicant indicates they will not be providing evidence) to file further submissions.

    The Applicant has one (1) week from the date the Opponent’s submissions are filed to file further submissions.

14. The Opponent filed evidence on 21 July 2020 comprising a declaration by Bruce Hardwick (the supplementary Hardwick declaration) with accompanying exhibits BAH-28 and 29.

15. The Applicant filed evidence on 1 September 2020 comprising a declaration by Daniel Reid (the supplementary Reid declaration) with accompanying exhibit DJR-5.

16. On 9 September 2020 the Opponent filed another declaration by Bruce Hardwick. On 15 September 2020 the Applicant wrote to the Commissioner noting that the Opponent had filed evidence rather than submissions. On 18 September 2020 I wrote to the parties stating that the declaration would not be relied upon under Regulation 5.23 since it was unlikely to be determinative of the opposition and would also not be treated as submissions. I allowed the Opponent five days to file submissions and the Applicant seven days (after the Opponent’s submissions were filed) to file their submissions.

17. The Opponent filed their submissions on 23 September 2020. The Applicant filed their submissions on 30 September 2020.

    Grounds of Opposition

18. The Opponent opposes the grant of the application on the grounds of lack of inventive step and lack of clarity.

    The invention

19. The invention is a method of manufacturing a security document with two or more windows containing optically variable effects. The windows are made in a single step process called a “common cast cure” process.

20. More specifically, the invention is a method of manufacturing a security document by opacifying areas of a substrate, wherein the non-opacified areas form two or more windows, wherein each window has an optically variable effect generating relief structure of differing appearance, and wherein the relief structures are formed using a common cast-cure process.

21. The description states in the background section at page 1 lines 11 to 29:

    “Optically variable effect generating relief structures such as holograms and diffraction gratings have been used widely over the last few years to impart security to documents of value such as banknotes, credit cards, passports and the like. Conventionally, the structure is provided on a transfer foil and then hot stamped from the transfer foil onto the final document substrate. More recently, foils in the form of transparent strips have been applied to opaque substrates provided with one or more apertures therethrough and aligned with the strip so that regions of a security device disposed on the strip are revealed within transparent windows of the document.

    Where the document substrate is itself polymeric, alternative methods for producing a security device on a security document can be employed, including the use of “cast-cure” resins. For instance, a hologram device may be formed in a “window” region of the document (defined by the absence of an opacifying layer) by applying a curable material to the polymer substrate and embossing the material with a desired relief structure. Simultaneously or subsequently, the material is cured, e.g. by exposure to UV radiation, in order to fix the relief structure. A metallic ink is then applied to the relief to provide a reflective layer, in order to render the optically variable effect visible.”

22. The heart of the present invention resides in the formation of two or more windows in a single step. One advantage of forming the two windows in a single step is improved alignment and registration of the windows. This allows for configurations which would be difficult forming the windows in separate step. This is discussed at page 8 lines 1 to 8:

    “Most preferably, the respective relief structures are registered to one another such that their relative positions do not significantly change between one document and another of the same series. This can be achieved using a common cast-cure process to form the relief structures, as described further below, but is very difficult to imitate successfully using other means such as foils. This is particularly the case where the windows are arranged in a configuration which cannot be formed using a single foil strip element since achieving register between two or more individual foils (as would then be necessary) is extremely difficult.”

23. One embodiment of the resulting product is shown in Figures 1(a) and 1(b):

24. The corresponding description states at page 19 lines 30 to 32:

    “The opacifying layer 5 delimits and separates the two window regions 8a, 8b from one another such that they are laterally spaced. In this case, as seen best in the plan view, the opacifying layer 5 completely surrounds each window region.”

25. The corresponding description states at page 20 lines 10 to 19:

    “Within each of the window regions 8a and 8b, a security device 10a and 10b is disposed on the upper surface of the substrate 2. In this example, each security device 10a and 10b comprises a layer of material 11a, 11b applied to the surface of substrate 2 and into which a relief structure 12a, 12b has been formed. The relief structures may each define a diffractive device such as a hologram, diffraction grating or kinogram and may be formed using any suitable origination technique such as classical two-step rainbow holography or electron beam lithography. The diffraction structures are rendered visible by providing a reflection enhancing layer 13a, 13b which conforms to the relief, such as a metal layer, metallic ink or a high refractive index material such as zinc sulphide.”

    Claims

26. The specification (including the amendments allowed on 23 September 2019) ends with eight claims; one independent claim and seven dependent claims. The independent claim 1 is as follows:

27. Claim 1:

    A method of manufacturing a security document, comprising:

    providing a polymer substrate, and then, in any order:

    (a) applying at least one opacifying layer to the first and/or second surface of the substrate, whereby a plurality of laterally-spaced window regions are defined by corresponding gaps in the at least one opacifying layer, at least one of the opacifying layers being present between the laterally-spaced window regions; and

    (b) providing a security device in each window region by at least forming an optically variable effect generating relief structure on the first or second surface of the substrate, each of the respective security devices exhibiting an optically variable effect of different appearance from one another;

    wherein in step (b) each optically variable effect generating relief structure is formed using a cast-cure process comprising:

    (b1) applying a layer of curable material to the first or second surface of the substrate within each window region;

    (b2) forming the respective relief structures in the surface of the curable material; and

    (b3) curing the curable material such that the respective relief structures are fixed;

    where steps (b2) and (b3) may be performed simultaneously or sequentially;

    and wherein a plurality of the optically variable effect generating relief structures are formed in respective window regions on the same surface of the substrate using a common cast-cure process.

28. Claim 1 can be divided (as per the Applicant’s submissions) into the following integers:

    (I)(part 1) A method of manufacturing a security document,

    (I)(part 2) comprising providing a polymer substrate, and then, in any order:

    (II) (a) applying at least one opacifying layer to the first and/or second surface of the substrate,

    (III) whereby a plurality of laterally-spaced window regions are defined by corresponding gaps in the at least one opacifying layer,

    (IV) at least one of the opacifying layers being present between the laterally-spaced window regions; and

    (V) (b) providing a security device in each window region by

    (VI) at least forming an optically variable effect generating relief structure on the first or second surface of the substrate,

    (VII) each of the respective security devices exhibiting an optically variable effect of different appearance from one another;

    (VIII) wherein in step (b) each optically variable effect generating relief structure is formed using a cast-cure process comprising:

    (IX) (b1) applying a layer of curable material to the first or second surface of the substrate within each window region;

    (X) (b2) forming the respective relief structures in the surface of the curable material; and

    (XI) (b3) curing the curable material such that the respective relief structures are fixed;

    (XII) where steps (b2) and (b3) may be performed simultaneously or sequentially;

    (XIII) and wherein a plurality of the optically variable effect generating relief structures are formed in respective window regions on the same surface of the substrate using a common cast-cure process.

    Clarity legal principles

29. The Court in Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51 (MLA) at [932] set out the principles in determining clarity:

    "A valid claim is required to define with sufficient certainty the scope of the monopoly being claimed (s 40(3)). Given that a patent is a public instrument, the claim must be defined in such a way that it is not reasonably capable of being misunderstood so that others know the "exact boundaries of the area within which they will be trespassers": Electric & Musical Industries Ld v Lissen Ld (1939) 56 RPC 23 at 39 per Lord Russell of Killowen. 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."

30. Clarity is a matter of claim construction. His Honour stated in MLA at [936] cited his Honour Justice Hely in Flexible Streel Lacing Co v Beltrco at [131]:

    "Thus, I conclude that the product claim is obscure; it is fairly and equally open to diverse meanings, namely that the sipes run at right angles across the strip, on the one hand, or that the sipes run along the length of the strip on the other. Another possibility is that the claim embraces both. Sometimes, ambiguity or insufficiency in description can be resolved by a skilled addressee through the application of commonsense and common knowledge: cf Innovative Agriculture Products Pty Ltd v Cranshaw (1996) 35 IPR 643 at 666. I do not think that this is such a case."

31. It is a recognised tenet of Australian patent law that each claim must be read as part of the entire specification (Electrical and Musical Industries Ltd v Lissen Ltd 56 RPC 23 at 39), and thus the meaning of the words used in a claim may be affected by what is said in the body of the specification (Rosedale Associated Manufacturers Ltd v Carlton Tyre Saving Co Ltd [1960] RPC 59 at 69). While noting that it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim, by adding to those words glosses drawn from other parts of the specification (Welch Perrin & Co Pty Ltd v Worrel [1961] HCA 91; (1961) 106 CLR 588 and Decor Corporation Pty Ltd v Dart Industries Inc (supra)), it is legitimate to refer to the rest of the specification to explain the background to the claims, to ascertain the meaning of technical terms and resolve ambiguitiesin the construction of the claims (see Interlego AG v Toltoys Pty Ltd [1973] HCA 1; (1973) 130 CLR 461 at 476).

    Clarity - consideration

    Common cast-cure process

32. The Opponent states in their submissions at paragraph 87:

    “As Dr Hardwick and Mr Batistatos explain, while they understand a ‘cast-cure’ process to be describing the known soft embossing process, the term ‘common cast-cure’ process is not a term of art. Indeed, Dr Hardwick thought that the word ‘common’ potentially just meant that it is the commonly used cast-cure process, as did Mr Batistatos.”

33. The Applicant states in their submissions at paragraph 69:

    “There is no lack of clarity in the claims. The first definition of “common” in the Macquarie Dictionary is “belonging equally to, or shared alike by, two or more or all in question” (see definition attached and marked “A”). That is how a reader would understand “common” in claim 1. It is how Mr Reid understood it. He said that “common” is clear: it means one and the same. In context, it means only one cylinder is being used to form the relief structures (at [45]).”

34. The Opponent states at paragraph 98 of their submissions:

    “In turning to the claims, the uncertainty that is manifested by the third paragraph on page 15 is reinforced by claim 6, which purports to limit the scope of claim 1 by requiring that the relief structures be formed in a single forming step, such as a single embossing step.”

35. Claim 6 states:

    “6. A method according to any of claims 1 to 5, wherein in step (b2) of the common cast-cure process, the respective relief structures on the same surface of the substrate within at least two window regions are formed in a single forming step, preferably a single embossing step.”

36. The Applicant states:

    “When claim 1 refers to a “common cast-cure process”, it means that the cast-cure process is a single process common to all of the relief structures to be put onto the banknote. That encompasses simultaneous embossing (ie, the relief structures are at the same circumferential position on the roller) and non-simultaneous embossing (ie, the relief structures are at different positions on the same roller). Claim 6 is dependent on claim 1. It is limited to simultaneous embossing.

    That construction is supported by the evidence of Mr Reid (at [45], [48]).”

37. As there is some ambiguity in the meaning of the term “common cast-cure” it is appropriate to resolve this ambiguity by reference to the description.

38. The description states at page 13 lines 24 to 26 (with my emphasis in underline):

    “This can be achieved for example by forming the relief structures in one common cast-cure process so that the various relief structures are formed in the same embossing (or other forming) step.”

39. The description states at page 15 lines 22 to 31:

    “Also preferably, in step (b2) of the common cast-cure process, the respective relief structures on the same surface of the substrate within at least two window regions are formed in a single forming step, preferably a single embossing step. The formation may not be simultaneous since embossing reliefs used to form the devices may be spaced about the circumference of an embossing roller, for example, in which case one device will be embossed before the next. However the two reliefs will inherently be registered to one another. High registration could alternatively be achieved by performing multiple in-line cast cure and embossing steps, but not to the same degree. Nonetheless this latter approach has the benefit of allowing different resins (e.g. resins of different colour) to be applied.”

1. By referring to the description, the meaning of “common cast-cure” becomes clear. The cast-cure process of forming two or more relief structures is ‘common’ if it uses the same step or process. For example, a single roller can form relief structures in a single or common step.

2. The Applicant asserts that claim 6 is limited to simultaneous embossing, however I disagree with this assertion. The claim only defines that the structures are formed in a single step. I consider that claim 6 to be of substantially the same scope as claim 1 in light of this interpretation. In this case there is no need to apply the ‘presumption against redundancy’ to find a different meaning, since the meaning is clear on its face.

3. I am satisfied that the claims are clear.

   Claim construction legal principles

4. The relevant principles of construction are usefully summarised by Bennett J in Sachtler GMBH & Co KG v RE Miller Pty Ltd (with Corrigendum dated 27 July 2005) [2005] FCA 788 (15 June 2005):

   “Evidence can be given by experts on the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings given by such persons to words which might otherwise bear their ordinary meaning … Where the patent contains technical material, the Court must, by evidence, be put in a position of a person of the kind to whom the patent is addressed, a person acquainted with the surrounding circumstances of the state and the art and at the relevant time … However, if the evidence does not establish that such a technical meaning exists, words used in a patent specification should be given their ordinary meaning …

   …[T]he evidence of the skilled reader is not determinative of the construction of the document. It is evidence of how a skilled reader would have read the document at the relevant time. It is then for the Court to construe the document, giving such weight to the evidence as it sees fit.

   The construction of the specification is for the Court, not for the expert witness …”

5. The principles of construction of specifications are well established. The Full Court in Kinabalu Investments Pty Ltd v Barron and Rawson Pty Ltd [2008] FCAFC 178 laid out the principles succinctly:

   "When determining the nature and extent of the monopoly claimed, the specification must be read as a whole. But as a whole it is made up of several parts which have different functions. The claims mark out the legal limits of the monopoly granted. The specification describes how to carry out the process claimed and the best method known to the patentee of doing that. Although the claims are construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim, by adding to those words glosses drawn from other parts of the specification. If a claim is clear and unambiguous, it is not to be varied, qualified or made obscure by statements found in other parts of the document. It is legitimate, however, to refer to the rest of the specification to explain the background of the claims, to ascertain the meaning of technical terms and resolve ambiguities in the construction of the claims. See Flexible Steel Lacing Co v Beltreco Ltd [2000] FCA 890; (2000) 49 IPR 331 at [73]- [75] (Hely J).

   Other more specific principles of construction collected in Flexible Steel at [81] are:

   • a specification should be given a purposive construction rather than a purely literal one;

   • the hypothetical addressee of the specification is the non-inventive person skilled in the art before the priority date;

   • the words used in a specification are to be given the meaning the hypothetical addressee would attach to them, both in the light of the addressee’s own general knowledge and in the light of what is disclosed in the body of the specification;

   • as a general rule, the terms of the specification should be accorded their ordinary English meaning;

   • evidence can be given by experts on the meaning those skilled in the art would give to technical or scientific terms and phrases, and on unusual or special meanings given by such persons to words which might otherwise bear their ordinary meaning;

   • however, the construction of the specification is for the court, not for the expert. In so far as a view expressed by an expert depends upon a reading of the patent, it cannot carry the day unless the court reads the patent in the same way."

   Construction of claim 1

6. Having dealt with the term “common cast cure” above, the only term that needs special consideration is the term ‘window’.

   Window

7. Claim 1 has the feature of a plurality of window regions. Claim 8 defines that at least one of the window regions is a half window region. The term ‘window’ includes both a ‘full window’ and ‘half window’ within its scope. The meaning of a ‘full window’ and ‘half window’ is considered below.

   Full window

8. A full window is a region that is visible from both sides of a security document. This is achieved by positioning a visible layer on a transparent substrate. An example of a full window is shown in Figure 1(b):

   Half window

9. An example of a half window is shown in figure 1(e):

10. The corresponding description states at page 22 line 30 to page 23 line 4:

    “Figure 1e shows another alternative construction in which the components on the upper surface of substrate 2 have substantially the same arrangement as discussed with respect to Figures 1b and 1c. However, in this example the second opacifying layer 6 on the underside of substrate 2 extends across the full area of the security document, including window regions 8a and 8b. Thus, window regions 8a and 8b are "half windows" which, whilst not transparent, will be of lower opacity than their surroundings due to the gaps 7a and 7b. Since the security devices 10a and 10b will no longer be visible from the underside of the security document, in this case both devices 10a and 10b must be configured so that their respective optically variable effects can be viewed from the upper side of the document.”

11. Another embodiment with a half-window is shown in figure 13(a) and 13(b):

12. The corresponding description states at page 39 line 25 to page 40 line 12:

    “A further embodiment of a security document 170 is shown in Figure 13a in plan view and Figure 13b in cross-section along the line E to E'. The security document is provided with two window regions 178a and 178b with corresponding security devices provided therein. In this example, both of the window regions 178a and 178b are half windows as shown best in Figure 13b. The two security devices are visible only from opposite sides of the security document. Thus, window region 178a is defined by a gap in first opacifying layer 175 applied to the upper surface of the substrate 172 and the security device disposed in the window on the same surface of the substrate 172 is visible only from the point of view from observer (i) on the same side of the substrate (as shown in Figure 13a). The security device 178b is provided on the opposite side of the substrate and hence is not visible in the plan view 13a (its location is denoted using broken lines). However, from the point of view of observer 2 on the opposite side of the substrate, the second security device 178b is visible.

    Embodiments such as this are generally less preferred since the two optically variable effects cannot be viewed simultaneously by a person handling the document. However, in transmission the half windows may be visible from both sides, allowing the relative positions of the two windows to be compared. This effect may be usefully exploited by designing the shape and position of the two or more windows to have a meaningful relationship when viewed in transmitted light. For example, they may combine to form an item of information. In one example, a first window could take the shape of a currency symbol such as "£" and a second could take the shape of a number, e.g. "5", such that in transmitted light, the combination of denomination and currency of the document is visible: "£5".”

13. Mr Hardwick states in his first declaration at paragraph 147:

    “Page 2 of the document [WO 2010/042999 which was exhibit BAH-23 of Mr Hardwick’s declaration] provides a detailed description of how windows or half-windows are formed. Specifically, if opacifying layers are omitted in a region on both surfaces of a substrate, a full window is formed, if opacifying layers are omitted only on one surface but not the other, a half-window is formed.”

14. It is notable that this meaning of half-window is consistent with other prior art documents. For example paragraph 147 of WO 2010/042999 (which is the Applicant’s own prior art) provides the following explanation of a half window at page 2:

    “A partly transparent or translucent area, hereinafter referred to as a "half window", may be formed in a polymeric security document which has opacifying layers on both sides by omitting the opacifying layers on one side only of the security document in the window area so that the "half-window" is not fully transparent, but allows some light to pass through without allowing objects to be viewed clearly through the half-window.”

15. I have thus construed that a ‘half-window’ comprises a transparent substrate with a visible layer (typically an optical variable device) on one side and an opacifying layer on the other side. A half window is only visible from one side of the security document.

    Inventive step legal principles

16. It is a requirement of subsection 18(1) of the Act that the invention, so far as claimed in any claim, involves an inventive step. Subsection 7(2) states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art:

    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).

17. Subsection (3) prescribes the information that may be considered as:

    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.

18. Prior art information is information that is part of the prior art base, and the prior art base is information in a document that is publicly available and information made publicly available through doing an act. Once the common general knowledge and prior art information have been identified, the question is whether the claimed invention would have been obvious. Various verbal tests have been set out to explain this question. In Wellcome Foundation Ltd v V.R. Laboratories (Aust.) Pty Ltd (1981) 148 CLR 262 Aickin J stated:

    "The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not."

    Inventive step - consideration

19. The Opponent argues that the claimed invention lacks an inventive step in light of: a) common general knowledge alone, and b) in light of D8 (WO2008/031170) together with common general knowledge.

20. I will also consider whether the claims are inventive in light of AU 2010294467 which I raised under regulation 5.23, and the evidence and submissions filed by both parties in relation to AU 2010294467.

    The person skilled in the art

21. Mr Reid, Mr Batistatos and Dr Hardwick each have extensive experience in the field of security documents. They each provide expert evidence regarding the invention and common general knowledge at the priority date. I am satisfied that all three have provided relevant evidence. I will assess the evidence according to its relevance to particular aspects of the analysis.

    The problem

22. The description provides in the ‘background to the invention’:

    “There is a constant need to increase the security level of such security documents in order to deter counterfeiters.

    It is desired to address or ameliorate one or more disadvantages or limitations associated with the prior art, or to at least provide a useful alternative.”

23. The description states at page 4 lines 21 to 31:

    “Known security documents having polymeric substrates, such as those mentioned above, have been provided with single window-located security devices. By providing each security document with a plurality of spaced window regions, each containing a different security device, the difficulty of counterfeiting the document is significantly increased thereby enhancing the security of the document. Previous polymeric security documents have been designed to emulate conventional paper-based document designs in which the provision of two different security devices each based on an optically variable effect generating relief structure is disadvantageous since this would require the application of two different foils, thereby significantly complicating the manufacturing process and slowing production time.”

24. I consider that this excerpt provides a good explanation of the “disadvantages or limitations associated with the prior art”. Thus, I consider the problem to be overcome is the difficulty in providing multiple security devices on a security document.

    Inventive step in light of common general knowledge alone

25. The Opponent’s main argument was that the claimed invention lacks an inventive step in light of the common general knowledge.

26. The Opponent states in their submissions:

    “If more than one window on the polymer banknote is to have a relief-structure OVD, then achieving that is straight-forward:
    (a) the printing press lays down the resin in each of the areas corresponding to each of the windows; and
    (b) the embossing roller incorporates templates that are each positioned so as to press into each of the corresponding windows.

    This was the approach taken by CCL itself before the priority date.”

27. Mr Batistatos states at paragraphs 52, 53 and 55:

    “This promotional banknote has three regions displaying holograms in three separate window areas. There are three different images formed, being a compass, a turtle, and the shape of South America. Some parts of these images are holographic (See OB-4). For example inside the map of South America, there is a number '50'. Inside the turtle image, there is a holographic gene structure. The compass image also includes a portion that is holographic. By holographic it is meant that the colours of these images change at different viewing angles. Some of the holographic images appear deeper than others. This is because they are in different image planes. I provide below a photograph of the banknote circling where the holograms are located. The reason that there are multiple holograms on this note was because we wanted to demonstrate to our customers that Latitude is not subject to design restrictions, instead, they can be placed almost anywhere on a banknote substrate, and not limited by size or shape. Comparing to hot stamped foils, Latitude is a cheaper security feature to manufacture. It would be acceptable to include multiple Latitude devices in a banknote, however, it would be too expensive and unfeasible to include multiple foils in a banknote.

    The holographic structures on this promotional banknote were made by printing a layer of clear UV curable polymer onto the clear BOPP film. The UV curable polymer is applied as discrete patches over the clear BOPP film, in a single printing step, in predetermined window regions. After the UV patches are applied, a single embossing cylinder then embosses relief structures in the UV curable material while it is still soft. The UV material is then cured by one or more UV lights to retain the relief structures.

    There are a few advantages to using a single embossing step. This means we only needed one embossing cylinder for creating banknote designs that have multiple patches of embossed relief structures. This process is more efficient than having a number of different embossing cylinders. Secondly, as the relative positions of the relief structures are determined by the repeating embossing patterns carried on the shim (or the embossing cylinder), registration between the relief structures can be more accurately controlled.”

28. Mr Reid states at paragraph 133:

    “In paragraphs 51 to 55, Batistatos comments on the production of the Charles Darwin banknote. As I stated above, OB-4 is not a banknote, rather it's a promotional sample concept note. With the exception of those involved in the production, as far as I'm aware it was done without the knowledge of others in the industry. As I stated above, it was and remains common practice in the industry to deliberately keep confidential how a particular product is produced.”

29. I agree the process of manufacturing the Charles Darwin promotional sample does not appear to have been publicly available information, and there is no evidence to support such a contention. Indeed, the Opponent does not appear to be arguing that the Charles Darwin promotional sample is itself prior art or that its manufacture was an act making this information publicly available. Instead the Opponent is suggesting that, because CCL was (allegedly) using the common cast process to create a security document with multiple windows several years before the priority date, then it follows that the technique was common general knowledge. I do not accept this argument. The existence of private knowledge does not imply that the knowledge is also common general knowledge.

30. Mr Batistatos states at paragraphs 61 and 62:

    “The Charles Darwin banknote was produced by CCL so that it could promote the Latitude feature to the document security industry. CCL promoted this banknote using the flyer which is annexed hereto and marked Annexure OB-6.

    The Charles Darwin banknote was first presented in November 2010 by our marketing department at the Halo Pack Conference in Kuala Lumpur, Malaysia that ran from 14 to 16 November 2010. This conference focuses on the developments in holograms and is attended by those in the document security industry, such as those working with banknotes and passports. Our marketing department presented a slide show on the Latitude printed hologram, and samples of the Charles Darwin banknote were shown. A copy of the presentation slides are in Annexure OB-7. I personally attended this conference and watched the presentation. The product achieved a lot of interest, as the audience asked many questions about it.”

31. The presentation slides (in exhibit OB-7) about the Latitude technology include a slide titled “Infused Technology Benefits” that listed the following benefits:

    ·Integrated substrate/print security features

    ·Not adhered, applied, laminated or embedded

    ·Consistent banknote feature profile

32. This suggests that the Latitude technology integrated the security features directly onto the banknote without the need for manufacturing a film which is then adhered to a substrate. However, this does not provide an enabling disclosure of the common cast-cure process defined in claim 1.

33. The Opponent states in their submissions at paragraphs 61 to 65:

    “D.3. Incorporating two relief-structure OVDs into a security document using a single embossing roller is the simplest possible method, and is obvious

    The soft polymer layer (resin) into which the relief structure is impressed is laid down in the same manner as other inks, using a printing press such as a gravure press.

    The relief structure is impressed into the resin by an embossing roller that passes over the polymer substrate and has a shim (or template) of the relief structure that is positioned so that the template presses into the soft polymer. A hardening step follows which uses either UV light or heat to harden the soft polymer.

    If more than one window on the polymer banknote is to have a relief-structure OVD, then achieving that is straight-forward:

    (a)the printing press lays down the resin in each of the areas corresponding to each of the windows; and

    (b)the embossing roller incorporates templates that are each positioned so as to press into each of the corresponding windows.

    This was the approach taken by CCL itself before the priority date.

    There would be no reason to use separate embossing rollers – that would involve added expense, for no reason, and would unnecessarily create an additional issue of registration to be addressed (that is, keeping each OVD in registration with the other).”

1. The Opponent’s argument can be summarised as follows: forming a single window in a single step process is well known, thus it would have been obvious (at the priority date) to form two windows in a single step process. However, the Opponent’s argument overlooks a critical step in the process: forming two windows also requires forming the opaque window border in registration with the windows as defined in claim 1.

2. I am not satisfied that a person skilled in the art would, as a matter of routine, modify the common general knowledge of forming a single window in a single step process into forming two windows (including an opaque window border). I consider that claim 1 is inventive in light of common general knowledge alone.

   D8 - WO2008/031170

3. Mr Hardwick states in his first declaration at paragraphs 130 and 131:

   “WO2008/031170 discloses most of the features of claim 1 of the Opposed Application.

   -Page 14, lines 23-27 and Figure 1 sets out that a security document 10 comprises a substrate of transparent plastic materials and has an upper side and a lower side. The transparent substrate is formed from a transparent polymeric material such as a laminated structure of two or more layers of bi-axially oriented polypropylene. This discloses Feature (a) of claim 1.

   -Page 14, lines 30-34 describes that opacifying layers are omitted in a region of the substrate 11 to form a window area, in which a security device 17 is provided. Terms such as windows, half-windows, and opacifying layers are provided on pages 2-3, which also included description as to how windows or half-windows are generally formed. This at least partially discloses Features (b) and (c).

   -Page 15, lines 1-4 describes that an embossable ink composition is applied to the substrate within the window area, and is embossed with a relief structure to form the security device 17. This discloses Feature (d).

   -Page 15, lines 32-34, and page 16, lines 1-4 provides that the security device provided in the window includes one or more of a variety of relief structures to form different security features, including diffractive structures such as diffraction gratings, holograms, DOEs, lens structures, and optically variable non-diffractive relief structures. This discloses Feature (e).

   -The Abstract, page 15, lines 5-6, page 16, lines 18-20 disclose that the security device is formed from radiation curable ink. Feature (f) is disclosed.

   -Because the first and the second security elements are formed from a single printed UV curable material, and embossed in a single embossing step, they are inherently registered with each other and will have the same position with respect to one another on each security document. Feature (g) is also at least partially disclosed.

   WO2008/031170 discloses a method of providing two different optically variable generating effect relief structures in a single window. The document does not provide an example which shows laterally spaced window regions. However, as I have mentioned above, prior to May 2013, it is already well known and used extensively by the security industry to provide laterally spaced windows and provide a security feature in each window. Claim 1 of the Opposed Application is not inventive in the light of WO2008/031170 and common general knowledge.”

4. Mr Reid states in his declaration at paragraphs 73 and 74:

   “[WO 2008/031170] is a security device integrated into the window or half-window area of a security document. It is "formed from an embossed radiation curable ink, the security device including one or more of a diffractive structure, a lens structure or other security element having an embossed relief structure." (See page 5 lines 4 to 8.)

   [WO 2008/031170] does not have many of the elements of claim 1 of the Opposed Application. For example, there is no disclosure of two or more windows. There is therefore also no disclosure of a security device (let alone differently appearing security devices) in each window of the multiple windows. Throughout [WO 2008/031170] there is only mention of a single security device in a window. On page 18 and in claim 8, there is reference to a "composite security device" which can contain two different security elements (see, for example, page 18 lines 1 to 2). However, there is only a single security device in a single window. There is also no disclosure of using a common cast-cure process as required by claim 1 of the Opposed Application.”

5. There is agreement between the parties that D8 discloses a security document with a single window formed in a single step process.

6. For essentially the same reasons I provided in relation to the common general knowledge alone, I am not satisfied that a person skilled in the art would modify the invention of D8 to use the same process to make two windows each having a security device instead of one window with a security device.

   D8 - WO2008/031170 – Figure 5

7. During the hearing I noted that it appeared the closest embodiment to the present invention is disclosed in figure 5 of D8, shown below:

8. The corresponding description states at page 19 line 23 to page 10 line 14:

   “Referring to Figure 5 there is shown a further modified security document 50 which is similar to the document 30 of Figure 3 with corresponding reference numerals applied to corresponding parts. The security document 50 differs from that of Figure 3 in that the composite security device 57 is provided on the same side of the transparent substrate 11 as the half-window 56, with a further security element 58 provided on the opposite side 13 of the transparent substrate 11 which is completely covered by the opacifying layers 15 and 35 in the half-window area.

   The further security element 58 is preferably in the form of an element which interacts with at least one of the first and second security devices 51 and 52 of the composite security device 57. In one embodiment the first security element 51 may comprise a reflective diffractive structure, such as a DOE [diffractive optical element] or hologram, and the second security element 52 may comprise a lens structure with the further security element 58 comprising a security feature which can be verified, inspected or enhanced by the lens structure 52. For example, the further security element 58 may comprise an area of micro printing, with the second security element comprising a Fresnel lens or a magnifying lens for magnifying a viewing the micro printing. Alternatively, the second security element 52 may comprise a lenticular array, such as an array of microlenses 53 with the second security element comprising an array of micro-images 59 in register with the micro lenses such that the micro-images 59 can be viewed through the lenticular array 52. The micro-images 59 may be formed by a variety of different methods. The micro images 59 could be printed onto the surface 13 of the transparent substrate; or they could be markings formed a laser, eg by laser blackening, laser colouration or ablation.”

9. I will now assess whether each feature of the claim is disclosed in the embodiment of D8 shown in Figure 5.

   Integer (I)(part 1) - A method of manufacturing a security document

10. D8 is a security document.

    Integer (I)(part 2) - providing a polymer substrate

11. D8 discloses a substrate at item 11.

    Integer (II) - applying at least one opacifying layer to the substrate

12. D8 discloses a security device 51 such as a reflective diffractive structure (page 20 line 1). A reflective diffractive structure is inherently opaque, thus security device 51 is considered an opacifying layer applied to the substrate.

    Integers (III) and (IV) - whereby a plurality of laterally-spaced window regions are defined by corresponding gaps in the at least one opacifying layer

13. D8 discloses a single window region and not a plurality of window regions.

    Integers (V) and (VI) and (VII) - providing a security device in each window region exhibiting an optically variable effect of different appearance from one another

14. D8 does not disclose each window region to exhibit a different optically variable effect.

    Integers (VIII), (IX), (X), (XI), (XII), and (XIII) - each optically variable effect generating relief structure is formed using a common cast-cure process

15. D8 states at page 24 lines 15 to 26:

    “The method described above in which embossed relief structure security devices are formed by printing a transparent radiation curable ink onto a sheet, embossing the ink while still soft and simultaneously curing the ink with radiation, allows multiple security features to be formed in a sheet of banknotes or other security documents in which the security features are more accurately in register with the window or half-window areas of the individual documents of the sheet compared to other methods of applying embossed security devices such as diffraction gratings or holograms by transferring the security devices from a transfer sheet onto the security documents. This, in the present invention, is due at least in part to the registration of the security device being generated as an integral step of the printing process, and not being subject to issues of sheet fed registration in which tolerances are commonly greater than 1 mm.”

16. I consider this to be a disclosure of forming the embossing relief structures with a common cast-cure process.

    D8 - summary of features

17. The embodiment of D8 shown in figure 5 discloses all of the features of claim 1 except for the features of: a) forming two window regions, and b) each window having a different appearance. Instead, figure 5 of D8 discloses a single window with an opaque area in the middle. A plausible inventive step argument is that a person skilled would extend the region 51 the entire length of the region 56 such that it divides the region into two windows.

    Would a person skilled in the art make region 51 as a contiguous region extending so as to divide region 56 into two windows?

18. Hypothetically, the region 51 could be made into a contiguous region extending from one side of the region 56 to the other side so as to divide region 56 into two windows. The region 51 would need to be made wide enough so as to make it apparent that the region was acting as a divider, rather than being a mere stripe. Once split into two windows, a person skilled in the art would then need to make the additional modification of making the appearance of each of the windows different.

19. There is no evidence that a person skilled in the art would be expected to extend region 51 such that it divided the region 56 into two windows. There is also no evidence that a person skilled in the art would, as a matter of routine, further modify D8 such that the two window regions were of different appearance.

20. Although these two modifications could be seen as minor variations, this is not determinative to the question of inventiveness. Instead, the question to answer is whether a person skilled in the art would have made those modifications. In this case, I consider that the realisation that the opaque region could be used as a border to split a single window into two is more than a matter of routine. Indeed, none of the experts recognised that this would be a possible variation, either before or after the experts were made aware of the claimed invention.

21. I consider that claim 1 does not lack an inventive step in light of D8.

    AU 2010294467

22. As mentioned above, I raised AU 2010294467 under regulation 5.23. This document prima facie discloses a similar invention.

    Evidence on AU 2010294467

23. Dr Hardwick states in his Reg 5.23 declaration at paragraphs 26 to 32:

    “Step (a) of claim 1 is in relation to creating a plurality of laterally spaced window regions by opacifying layers. AU'991 states that opacifying layers could be formed in a number of ways such as laminating an opacifying sheet or film (e.g. paper or polymer) to the underlying substrate, or with an opacifying coating, such as a binder containing a dispersion of coloured, e.g. white particles which is printed or otherwise applied to the substrate.

    Page 39, lines 17 to 21 of AU'467 discloses that regions 35-38 are surrounded by optically static information items such as single coloured regions or multicoloured, non-optically variable motifs. This discloses Step (a) of claim 1, as it discloses providing a coloured coating surrounding the optically variable regions 35 to 38. Also see page 31, lines 1 to 15 where it discloses opaque layers or coloured layers are provided outside the region 32, wherein the region 32 is part of a transparent banknote substrate which consists of plastic.

    I also wish to mention that providing a single or a plurality of windows on a security document is common to the security document industry long before 2013. I have provided a long list of examples of issued banknotes which include one or more windows at para 34 to 42 of my first declaration. All of the windows used on these issued banknotes are created by the same method, which is applying one or more opacifying layers to the front and back surfaces of a substrate and omitting the opacifying layers in the designated window regions.

    Step (b) requires providing a security device in each window region by at least forming an optically variable effect generating relief structure, and each of the security devices exhibiting different appearances. This is disclosed in AU'467 at page 37 lines 18 to 24 in relation to Fig 7-8, and page 38, lines 10 to 14 in relation to Fig 9. The microlenses in these figures are optically variable effect generating relief structures.

    Claim 1 also requires each optically variable effect generating relief structure to be formed by a cast-cure process comprising steps b1 to b3. This is disclosed in AU'467 at a number of places, for example, lines 35-39 of page 23 to lines 1 to 5 of page 24, lines 32 to 37 of page 30.

    The last part of claim 1 requires the plurality of optically variable effect generating relief structures to be formed using a common cast-cure process. As I mentioned in my first declaration, a cast-cure process, which involves printing a curable resin material, embossing relief structures into the curable resin material, and then curing the curable resin, is a commonly known process by the security industry and is the same as the "soft embossing" technique I described above. Further, the configuration shown in Fig 7 of AU'467 has to be formed using a single printing-embossing-curing process, because the microlenses extend in a continuous layer. The configuration shown in Fig 8 of AU'467 is also formed using a single printing-embossing-curing process because nobody would be motivated to perform separate embossing steps when it is sufficient to create the microlens surface relief structure in a single embossing step.

    I consider each and every feature of claim 1 to be disclosed in AU'467.”

24. Mr Reid states in his Reg 5.23 declaration at paragraphs 21 to 25:

    “Element (I) refers to ‘providing a polymer substrate’. As I indicated in my First Declaration (see, for example, subparagraph 50(b)), in its context of ‘a method of manufacturing a security document’, I understand the ‘polymer substrate’ to mean the substrate of the security document itself. This is important for subsequent claim elements of the Opposed Application, which refer to steps performed on surfaces of this substrate. The ‘467 Patent discloses providing security documents with polymer substrates acting as the carrier layer 10. In the embodiments of figures 3 to 5, the carrier layer 10 (see page 31, lines 1 and 2) also acts as the spacer between the lenses and the image layer, whereas in the embodiments of figures 1, 2 and 6 to 9, the multilayer body is applied as a patch or strip onto the carrier substrate.

    Elements (II), (III) and (IV) refer to making multiple windows in the polymer substrate. Elements (II), (III) and (IV) concern applying an opacifying layer to, for example, the banknote substrate, but not in some areas which form the windows. In the ‘467 Patent, the carrier substrate can be made out of polymer or paper. (On page 7 lines 10 to 12 it states ‘The carrier substrate thus constitutes, for example, a banknote’s carrier substrate which consists of paper, plastic, …’) The forming of a window specifically by an opacifying layer applied to the surface of the carrier layer 10 is only disclosed in the context of the embodiment of figure 3 (see page 31 lines 11 to 15). Therefore, element (II) is disclosed, but only in the context of the embodiment of figure 3. Regarding elements (III) and (IV), whilst some of the embodiments of the ‘467 multilayer device can be applied to a carrier substrate which has a window (namely, the figure 3 device and the figure 6 device), there is no disclosure anywhere in the ‘467 Patent of a carrier substrate which has multiple windows. Accordingly, elements (III) and (IV) are not disclosed.

    With respect to element (V), a security device in a window is disclosed in the ‘467 Patent, but not ‘in each window’ because in the ‘467 Patent, there is only ever a single security device in a single window of a security document. There is no disclosure of multiple windows with respective devices in each window as is claimed in the Opposed Application.

    Element (VI) requires ‘forming an optically variable effect generating relief structure on the first or second surface of the substrate’ and element (VII) requires that each of the security devices exhibit an optically variable effect of different appearance. As I’ve stated previously, the focus of the ‘467 Patent is very much on applying a device to the document substrate, and not on forming a device on the surface of the document substrate. (Although, as I stated above, a possible interpretation with respect to figures 3 to 5 is that the relief structures are formed on the substrate.) Also, with respect to elements (VI) and (VII), the ‘467 Patent discloses only a single security device. Whilst that single security device in figures 7, 8 and 9 will have different areas or zones which exhibit different optically variable effects, these are always part of the same device. If it is to be used in a window, the device is to only be used in one window. It does not
    disclose multiple security devices in multiple windows with each security device exhibiting different optically variable effects. In addition, the figure 7, 8 and 9 devices (which are the only devices which have different zones which exhibit different optically variable effects) are undoubtedly formed off the document. Accordingly, elements (VI) and (VII) are also not present in the ‘467 Patent.

    Elements (VIII) to (XII) refer to forming relief structures in each of the multiple windows by cast curing the relief structures in layers of curable material directly on the document substrate and, in particular, onto the same document substrate that received the opacifying layers defining the plurality of windows. These elements are not disclosed in the ‘467 Patent. In the ‘467 Patent, there is only ever one security device (not multiple devices like in the Opposed Application). In the ‘467 Patent, each of the (single) devices in figure 7, figure 8 and figure 9 can exhibit different optically variable effects in different areas.  However:

    a. as stated above, these devices are made separately to the carrier substrate and then applied to it. Accordingly, if they were produced by cast-curing, this cast-curing was done off the document substrate. This is different to what is disclosed in the Opposed Application which requires cast-curing directly onto the document substrate and, in particular, onto the same document substrate that received the opacifying layers defining the multiple windows. As I said in paragraph 108 of my First Declaration, soft embossing off the substrate is very different to (and much less complicated than) soft embossing directly onto a carrier substrate because with the former there are no registration issues and the embossing only occurs on one side of the foil. The registration issues that I referred to arise because a window needs to be created, a lacquer needs to be put down in the precise region of the window, and the embossing needs to occur within the regions of the lacquer. Achieving the registration of the window, the lacquer in the window and the embossing in the window is a difficult process.

    b. the zones of the differing appearing optically variable effects in the ‘467 Patent are ‘adjacent to one another alongside one another.’ This is clearly to create a continuous optically variable appearance. Accordingly, there is no disclosure of the optically variable effect generating relief structures being separated by opaque areas, let alone a disclosure of optically variable effect generating relief structures separated by opaque areas and in different laterally spaced window regions.”

1. The Applicant’s submissions summarise Mr Reid’s evidence in relation to ‘467:

   “The 467 application is missing three of the key elements of the Application. First, it does not disclose multiple windows created by applying an opacifying layer, with a security device in each window. Secondly, it does not clearly disclose cast-curing directly onto the banknote substrate. Thirdly, the 467 application does not disclose the common cast-cure process that is the inventive heart of the Application.

   Integers (II), (III) and (IV) (using Mr Reid’s numbering at Reid 2 [20]) refer to making multiple windows in the polymer substrate. They concern applying an opacifying layer to, for example, the banknote substrate, but not in some areas which form the windows.

   Integer (II), applying at least one opacifying layer to the first and/or second surface of the substrate, is only disclosed in the 467 application in the embodiment of Figure 3 (see page 31 lines 11 to 15) (Reid 2 [22]). This integer is not disclosed in the other embodiments.

   Further, there is no disclosure anywhere in the 467 application of a carrier substrate which has multiple windows, and so integers (III) and (IV), which refer to multiple windows, are not disclosed in any embodiment (Reid 2 [22]).

   For example, Figure 4 does not disclose windows. The 467 application does say that the carrier substrate 10 in Figure 4 is transparent – but that does not mean there are windows in the sense of the Application. Figure 4 shows only the decorative layer being applied to the carrier substrate with an adhesive. It does not show any windows at all.

   Figures 7 and 8 also do not have a window in the carrier substrate. This is evident because the devices in Figures 7 and 8 rely on reflected light (Reid 2 [7], [34]; and see page 35 lines 19 to 25 of the 467 application).

   Turning specifically to Figure 8, the two regions 34 are separated by another region 33, which is described as an “optically active surface structure”. Such a structure is not necessarily opaque. Mr Reid says such structures can also be transparent (Reid 2 [36]).”

   Integer (I)(part 1) - A method of manufacturing a security document

2. ‘467 discloses forming an optically variable effect generating relief structure on the surface of the substrate on a film layer. The film layer is then adhered to a substrate. I note the claims are directed to “a method of manufacturing a security document, comprising…” The word ‘comprising’ is construed to mean that the list of features is an inclusive list. That is, it does not exclude the possibility of more steps.

3. This is emphasised by the following from the description at page 18 lines 12 to 17:

   “The substrate may comprise a single layer or could be multi-layered, e.g. comprising a core support layer and one or more outer layers whose properties are selected for functions such as embossing or scuff protection. The multiple layers could comprise different polymer compositions and/or non-polymeric layers such as paper. Thus, the invention is also applicable to hybrid polymer/paper composite documents.”

4. ‘467 has more steps in the manufacture of the security document in addition to the steps defined in the present claims. In particular, a film layer is first formed (including a substrate) which is then adhered to another substrate. However, since the claim is inclusive, the extra step in the method of ‘467 does not diminish its relevance.

5. Thus ‘467 discloses a method of manufacturing a security document. Integer (I)(part 1) is disclosed in ‘467.

   Integer (I)(part 2) - providing a polymer substrate

6. As noted above, the device of ‘467 has an additional step in the method of manufacturing a security document when compared with the claimed invention. More particularly, there are two elements that can be considered substrates – decorative layer 12 and carrier substrate 10.

7. Mr Reid has interpreted the carrier substrate 10 of ‘467 to be the substrate in the claims, whereas Mr Hardwick has interpreted the decorative layer 12 to be the substrate in the claims. The reason that they have come to different interpretations appears to be because Mr Reid has taken a literal approach in the understanding of ‘467 in light of the claims (by matching the word ‘substrate’ in the claimed invention to the word ‘substrate’ in the disclosure of ‘467), whereas Mr Hardwick has taken a ‘purposive’ approach.

8. I consider Mr Hardwick’s approach in the interpretation of ‘467 and the claims to be more satisfying than Mr Reid’s approach (particularly in light of the explanation of a ‘substrate’ at page 18 lines 12 to 17 of the description already discussed above). Thus for the analysis I will be taking the decorative layer 12 of ‘467 to be a substrate.

9. The structure of the decorative layer 12 is disclosed in ‘467 at page 29 lines 29 to 38:

   “The decorative layer 12 is embodied like the decorative layer 12 according to figure la to figure 1f, wherein figure 2 shows an embodiment of the decorative layer 12 in which the decorative layer consists of a transparent replication lacquer layer 122 and a whole-area metal layer 121, wherein, in the regions forming the image regions of the microimages 22, a diffractive relief structure 123 is impressed into the surface of the replication lacquer layer 122 and such a relief structure is not impressed into the background regions…”

10. I consider a lacquer to be a polymer. Integer (I)(part 2) is disclosed in ‘467.

    Integer (II) - applying at least one opacifying layer to the substrate

11. Figure 8 of ‘467 is shown below:

12. Page 35 line 34 to page 36 line 5 states (with my emphasis in bold):

    “The decorative layer 12 has zones 34 and 33 in the region 31. In the zones 33, the decorative layer 12 is configured in the manner described above with respect to figure 1 or figure 2. In the zones 33, the decorative layer 12 has a replication lacquer layer having an optically active surface structure 24, which is provided for generating a further optically variable information item, which differs from the first optically variable information item generated in the zones 34.”

13. Mr Hardwick states at paragraph 11:

    “In addition to the micro-optic devices which are both provided in zones 34, Fig 7-8 both include an optically active surface structure 24 between adjacent zones 34. I have discussed the optically active surface structure in para 6 above and what it could consist of. The optically active surface structure 24 would exhibit an opaque appearance if it is covered by a metallic reflection layer such that the diffractive effect is to be viewed in reflection mode. Some diffractive structures are inherently opaque, such as moth-eye structures which substantially reduce the amount of light reflected from the structures.”

14. Mr Reid states at paragraph 36:

    “In paragraph 11, Hardwick refers to the optically active surface structure 24 being opaque. I have not seen any disclosure of this in the ‘467 Patent. Optically active structures can also be transparent.”

15. I consider that the optically active surface structures 24 in ‘467 are opaque. The description of ‘467 states at page 38 line 31 to page 39 line 7:

    “In addition, an advantageous combination of zones 34 having optically variable information items with adjacent zones 33 having an optically variable information item contrasting therewith is possible, for example as individual motifs within an overall motif, in order that the zones 33 can serve as a contrasting optical reference to the optically variable information item in the zones 34. By way of example, there can be movement effects in the regions 35 to 38 and a surrounding region 39 without a movement effect or a movement effect in the region 38 with a region 37 surrounding or adjoining the latter without a movement effect, for example with a hologram and/or with optically variable pigments or else in each case contrary movement effects in the regions 35 to 38.”

16. Zones 33 in this example are holograms or optically variable pigment, both of which have a sufficient level of opacity to be considered opaque. A hologram is a diffractive structure that is applied to the surface of a substrate as a relief structure that is impressed into the substrate and then metallised. An optically variable pigment could be applied onto the surface of the substrate, or alternatively could be embedded with the lacquer of the substrate. The application of a hologram or variable pigment onto the substrate (but not the embedding variable pigment within the lacquer of the substrate) is considered to be application of an opacifying layer to the substrate.

17. Integer (II) – applying at least one opacifying layer to the substrate – is disclosed in ‘467.

    Integers (III) and (IV) - whereby a plurality of laterally-spaced window regions are defined by corresponding gaps in the at least one opacifying layer

18. Figure 9 of ‘467 is shown below:

19. Page 38 lines 31 to page 39 line 21 states:

    “In addition, an advantageous combination of zones 34 having optically variable information items with adjacent zones 33 having an optically variable information item contrasting therewith is possible, for example as individual motifs within an overall motif, in order that the zones 33 can serve as a contrasting optical reference to the optically variable information item in the zones 34. By way of example, there can be movement effects in the regions 35 to 38 and a surrounding region 39 without a movement effect or a movement effect in the region 38 with a region 37 surrounding or adjoining the latter without a movement effect, for example with a hologram and/or with optically variable pigments or else in each case contrary movement effects in the regions 35 to 38.

    Contrasting optically variable information items can also be generated, for example, by virtue of the fact that, in one or a plurality of regions 35 to 38, a microstructure grid is provided above a microimage grid or above other optically variable motifs and, in other regions 35 to 38 directly or indirectly adjacent thereto, the microstructure grid is either extinguished, for example by means of a lacquer layer having a similar refractive index, or is not provided.

    It is likewise possible to provide in the regions 35 to 38 optically variable information items adjacent with optically static information items, for example single-colored regions or multicolored, non-optically variable motifs, adjacent to one another.”

20. This excerpt discloses the regions 34 (regions 35-38 in figure 9) being surrounded by the (opacifying) zone 33 (region 39 in figure 9).

21. In embodiments in figures 3 to 6 of ‘467 the carrier substrate 10 is transparent. For example, page 31 lines 1 to 15 states:

    “The carrier substrate 10 is the carrier substrate of the banknote. In a region 32, the carrier substrate 10 is embodied in transparent fashion. If the carrier substrate 10 consists, for example, of a plastic film or of a multilayered laminate of a plurality of plastic layers, then these plastic layers are embodied such that they are transparent to the human observer in the region 32. If a paper substrate is involved, then the carrier substrate 10 preferably has in the region 32 a window-shaped perforation, which is then covered on both sides by the layers shown in figure 3. Outside the region 32, the carrier substrate 10 is preferably embodied in opaque fashion, that is to say printed with corresponding opaque layers or provided with a correspondingly colored layer.”

22. In the embodiment of the invention in ‘467 relating to figures 7, 8 and 9 the document is silent as to whether the carrier substrate 10 is transparent or non-transparent.

23. Mr Reid states in his 5.23 declaration at paragraph 7:

    “The figure 7 device and the figure 8 device are divided into adjacent zones and, unlike figures 1 to 6, have differently appearing optically variable effects and different information items in the zones. The figure 7 and figure 8 devices are embodied like the figure 1a and 2 devices (see page 35 lines 30 to 32 and page 36 lines 23 to 26) and the film element (consisting of the adhesive layer, decorative layer and the transparent layer) is made off the carrier substrate and is subsequently applied to one side of it. Unlike the figure 6 device, the figure 7 and figure 8 devices do not have a window in the carrier substrate. I say this not only because the carrier substrate 10 is solid shading in the figures, but also because the devices in figures 7 and 8 rely on reflected light whereas figure 6 relies on transmitted light (see page 35 lines 19 to 25).”

24. Mr Reid has inferred the substrate 10 is non-transparent for two reasons:

    a)The solid shading (hatching) of substrate 10 figure 8

    b)The embodiments in figures 7, 8 and 9 are described only in terms of reflected light (and not transmitted light).

25. I agree that the embodiments in figures 7, 8 and 9 are described only in terms of reflected light and not transmitted light. Consequently, I consider that the carrier substrate 10 in the embodiment of figures 7, 8 and 9 is not transparent. Because the carrier substrate 10 is non-transparent, the regions 35 to 38 cannot be considered windows (either half-windows or full windows).

26. Thus, integers (III) and (IV) – as they relate to the window regions – are not disclosed in ‘467.

    Integers (V) and (VI) and (VII) - providing a security device in each window region exhibiting an optically variable effect of different appearance from one another

27. Mr Hardwick states in his supplementary declaration:

    “Step (b) requires providing a security device in each window region by at least forming an optically variable effect generating relief structure, and each of the security devices exhibiting different appearances. This is disclosed in AU'467 at page 37 lines 18 to 24 in relation to Fig 7-8, and page 38, lines 10 to 14 in relation to Fig 9. The microlenses in these figures are optically variable effect generating relief structures.”

28. ‘467 states at page 37 lines 18 to 24:

    “It is furthermore possible that as zones 34 regions having differently embodied and/or oriented microimage grid and microstructure grid, as illustrated previously in figures 1b, 1e, 1d, 1e, and zones 33 for generating a further optically variable information item are arranged adjacent to one another alongside one another.”

29. ‘467 states at page 38 lines 10 to 13 (with my emphasis in bold):

    “Figure 9 shows a multilayer body 9 comprising the regions 35, 36 and regions 37 and 38. In the regions 35 to 38, the microimage grid and the microstructure grid respectively differ from one another…”

30. ‘467 states at page 38 line 38 to page 39 line 7 (with my emphasis in bold):

    “By way of example, there can be movement effects in the regions 35 to 38 and a surrounding region 39 without a movement effect or a movement effect in the region 38 with a region 37 surrounding or adjoining the latter without a movement effect, for example with a hologram and/or with optically variable pigments or else in each case contrary movement effects in the regions 35 to 38.”

31. The microimages differing from one another and/or the contrary movement effects in regions 35 to 38 are considered a clear disclosure that the regions 35 to 38 are of different appearance.

32. Integers (V) and (VI) and (VII) (with the exception of the regions being window regions as already found in relation to integers (III) and (IV)) are disclosed in ‘467.

    Integers (VIII), (IX), (X), (XI), (XII), and (XIII) - each optically variable effect generating relief structure is formed using a common cast-cure process

33. Page 30 lines 31 to 36 states:

    “If a separate layer 13 is applied to the carrier layer 10, this can advantageously be a radiation-curing lacquer, into which the microlenses 21 are embossed by means of an embossing roller and the lacquer is subsequently cured e.g. using UV radiation.”

34. The microlenses are formed with a cast-cure process.

35. The description states at page 36 lines 29 to 32 (with my emphasis in bold):

    “The layer 13 is thus fashioned partially, such that the layer 13 with the microlenses 21 is not provided in the zones 33 or in a portion of the zones 33.”

36. Mr Hardwick states at paragraph 10 of the supplementary declaration:

    “Fig 8 shows a similar multilayer body 7 to the configuration shown in Fig 7, but with some differences. In Fig 7, the microlenses in zones 33 are overprinted with a lacquer layer 30 such that the microlenses stop performing its sampling function in zones 33, to create a visual 'gap' between adjacent zones 34. In Fig 8, the microlenses are omitted in the first zone 33 (see red arrow below). It is stated on page 36 that the transparent layer 13 is not provided in the region of the zones 33, meaning the material forming the transparent layer 13 is only selectively deposited in other regions. Alternatively, the layer 13 may still be deposited in zones 33, but microlenses are not impressed in the zones 33 and a planar surface profile or a substantially smooth or planar surface profile is formed instead. This is shown in the third zone 33 (indicated by blue arrow below).”

37. Mr Hardwick states at paragraph 31 of his supplementary declaration:

    “The last part of claim 1 requires the plurality of optically variable effect generating relief structures to be formed using a common cast-cure process. As I mentioned in my first declaration, a cast-cure process, which involves printing a curable resin material, embossing relief structures into the curable resin material, and then curing the curable resin, is a commonly known process by the security industry and is the same as the "soft embossing" technique I described above. Further, the configuration shown in Fig 7 of AU'467 has to be formed using a single printing-embossing-curing process, because the microlenses extend in a continuous layer. The configuration shown in Fig 8 of AU'467 is also formed using a single printing-embossing-curing process because nobody would be motivated to perform separate embossing steps when it is sufficient to create the microlens surface relief structure in a single embossing step.”

38. Mr Reid states at paragraph 46 of his supplementary declaration:

    “In paragraph 31, Hardwick states that the microlens surface relief structures in figure 7 and figure 8 are formed in a single embossing step. I agree with this statement. However, this is very different to what is claimed in the Opposed Application. First, the figure 7 and figure 8 devices are made off the document. Secondly, each of the figure 7 and figure 8 devices is a single device. Accordingly, I do not agree that a common cast cure process has been used to make two or more devices directly onto the substrate. Hardwick states that ‘the configuration shown in Fig 7 of AU’467 has to be formed using a single printing-embossing-curing process, because the microlenses extend in a continuous layer’. However, the reason the microlenses extend in a continuous layer is because the microlenses are part of a single device. If one were to provide two such devices separately in different windows with an opacifying layer between the windows, there would be no need to have a single continuous layer of microlenses.”

39. Putting aside Mr Reid’s understanding of what constitutes a substrate, Mr Reid and Mr Hardwick agree that the microlens surface relief structures in figure 7 and figure 8 are formed in a single embossing step. I consider that the microlens surface relief structures are formed in a common cast-cure process.

40. Integers (VIII), (IX), (X), (XI), and (XII) – each optically variable effect generating relief structure is formed using a common cast-cure process – are disclosed in ‘467.

    Can the film element of ‘467 alone be considered a security document?

41. If the film element (formed by layers 12 and 13) were a stand-alone item, and not affixed to the carrier substrate 10, then this stand-alone item would prima facie disclose all the manufacturing steps of the claimed invention.

42. The description of ‘467 states at page 18 line 27 to page 19 line 17:

    “The carrier substrate 10 is preferably a paper substrate having a layer thickness of between 10 μm and 200 μm. If the multilayer body 1 is a packaging, then the carrier substrate can also be a (thick) cardboard or plastic substrate. However, it is also possible for the carrier substrate 10 to be a substrate comprising one or a plurality of layers. The carrier substrate 10 preferably forms the carrier substrate of a valuable document, preferably of a banknote, and is thus, for example, optionally also printed with one or a plurality of layers on the front side and/or on the rear side.

    The film element comprising the layers 11, 12 and 13 is applied in the form of a patch or strip onto the carrier substrate 10. Said film element is thus, for example, a security thread or security strip, in particular a window security thread or window security strip. However, it is also possible for the film element to cover the entire region of the carrier substrate 10 over the whole area. The film element comprising the layers 11, 12 and 13 is preferably applied as a transfer layer of a transfer film, in particular of a hot embossing film, onto the substrate 10. However, it is also possible for the film element to be embodied as a laminating film or as a security thread and to be applied as such onto the carrier substrate 10 or to be introduced into the carrier substrate 10.”

1. The purpose of the carrier substrate 10 appears to be to provide strength and durability to the security document, while the film element provides the aesthetic and security features to the security document.

2. Although not stated explicitly, it is implied that the film element does not have characteristics (such as strength and durability) to act as a stand-alone security document. Consequently, I consider that the film element cannot ‘in itself’ be considered a security document.

   Would a PSA modify ‘467 such that the film layer was formed on a transparent layer?

3. I have found that the embodiment in figures 8 and 9 of ‘467 discloses all the features of claim 1 except the feature of window regions (since figures 8 and 9 do not disclose a transparent carrier substrate). The question is what modifications a person skilled in the art could be reasonably expected to make to ‘467.

4. One other embodiment of ‘467 is shown in figure 6:

5. The corresponding description states at page 34 line 32 to page 35 line 17:

   “Figure 6 shows a multilayer body 6 comprising the carrier substrate 10, the adhesive layer 11, the decorative layer 12 with the microimages 22 arranged in the region 31, and the transparent layer 13 with the microlenses 21 arranged in the region 31. The abovementioned layers are embodied like the correspondingly designated layers of the multilayer body 1 and 2 according to figure 1a to figure 2 with the difference that, in the region 31, a window-shaped perforation is additionally provided in the carrier substrate 10. With regard to the configuration of these layers, reference is thus made to the explanations above. Furthermore, a translucent layer 20 is arranged between the decorative layer 12 and the transparent layer 13. The translucent layer 20 preferably consists of a colored lacquer layer and preferably has a layer thickness of between 1 μm and 30 μm.

   Furthermore, the decorative layer is embodied such that the transparency of the decorative layer is different in the image regions and in the background regions; by way of example, the background regions are configured in fully transparent fashion and the image regions are configured in opaque fashion.

6. In this case the window is formed from a window-shaped perforation 32 rather than a transparent layer.

7. Page 31 lines 1 to 25 provides further information in understanding the region 32 in Figure 6:

   “The carrier substrate 10 is the carrier substrate of the banknote. In a region 32, the carrier substrate 10 is embodied in transparent fashion. If the carrier substrate 10 consists, for example, of a plastic film or of a multilayered laminate of a plurality of plastic layers, then these plastic layers are embodied such that they are transparent to the human observer in the region 32. If a paper substrate is involved, then the carrier substrate 10 preferably has in the region 32 a window-shaped perforation, which is then covered on both sides by the layers shown in figure 3. Outside the region 32, the carrier substrate 10 is preferably embodied in opaque fashion, that is to say printed with corresponding opaque layers or provided with a correspondingly colored layer. Onto the carrier substrate 10, a film element comprising the layers 11 and 13 is then applied onto the front side and a film element comprising the layers 11, 12 and a layer 15 is applied onto the rear side. The layer 15 is an optional protective lacquer layer. The application of these film elements onto the carrier substrate 10 can be carried out by means of one of the methods described above, for example by means of transferring the transfer layer of a transfer film or laminating a laminating film onto the carrier substrate 10.”

8. To summarise this passage: if the substrate is made of paper then the region 32 is made from a perforation. On the other hand, when the substrate is made from a polymer, then the region 32 can be made from a transparent material which is surrounded by opaque material (for example, a printed opaque layer).

9. The embodiment in figure 6 is similar to the embodiment in figures 8 and 9. Given the similarity of the visible layer in the embodiment in figure 6 and the embodiment in figures 8 and 9, I consider it reasonable that a person skilled in the art to perform routine experimentation with different features of these embodiments.

10. I consider that a person skilled in the art would, as a matter of routine, combine the teachings of the embodiment in figure 6 of a transparent layer (perforation) with the embodiment in figures 8 and 9 of a plurality of optically variable regions. I consider a person skilled in the art would further understand that instead of a perforation, a transparent substrate could be used (as per disclosure in ‘467 at page 31 lines 1 to 25).

    Would the PSA modify ‘467 such that the security document was formed without the step of attaching to a carrier substrate?

11. I note that a feature asserted by the Applicant as being an important aspect of the invention is that the security document is formed without being attached to a carrier substrate. It is possible that, to overcome the inventive step deficiency found in this decision, the Applicant would want to amend the claims to include this limitation. In the interests of efficiency and to avoid doubt at the final determination stage of the opposition I will decide on the inventive step of such a hypothetical amendment.

12. I have found above that a person skilled in the art would, as a matter of routine, modify the embodiment in figures 8 and 9 such that the film was attached to a transparent carrier substrate. I have also found that the film alone cannot be considered a security document. The question now is whether a person skilled in the art would, as a matter of routine, modify ‘467 such that a security document with the features in the embodiment in figures 8 and 9 would be formed without a carrier substrate.

13. Mr Hardwick notes at paragraph 17 of his supplementary declaration that ‘467 discloses applying the relief structure directly to a carrier substrate, rather than forming a film with relief structures which is then attached to the carrier substrate. I note that although ‘467 does indeed disclose applying the relief structures directly to the carrier substrate, this is in a different embodiment than the embodiment of figures 7, 8 and 9. Specifically, ‘467 states (in relation to the embodiment of figure 3) at page 30 lines 27 to 36:

    “In this case, the transparent layer 13 can be linked integrally with the carrier layer 10, that is to say that the microlenses 21 can also be introduced, preferably embossed, directly as surface relief into the carrier layer 10 without the use of a separate layer 13. If a separate layer 13 is applied to the carrier layer 10, this can advantageously be a radiation-curing lacquer, into which the microlenses 21 are embossed by means of an embossing roller and the lacquer is subsequently cured e.g. using UV radiation.”

14. Figure 3 of ‘467 is shown below:

15. Mr Hardwick states in his supplementary declaration at paragraphs 18 and 19:

    “I would choose the soft embossing method to create the configuration of Fig 7, which involves printing a UV resin layer onto a supporting substrate, embossing the relief structures into the supporting substrate, and curing the UV resin layer. This method is consistent with the disclosure of AU'467 and also consistent with what I mentioned in my first declaration. As the microlenses extend continuously in Fig 7 in a single transparent layer 13, a single UV resin printing step and a single embossing step would be sufficient to create the relief structure in multiple zones 33 and 34.

    The configuration shown in Fig 8 can be produced similarly, except that the layer of curable resin is not applied as a continuous layer, but selectively deposited in predefined regions. This can be easily achieved by designing an appropriate printing cylinder. For example, with gravure printing cylinders, ink cells are formed on the surface of the printing cylinder at locations corresponding to where ink should be deposited onto a printing medium. If ink cells are provided continuously across the printing cylinder surface, then a continuous layer of ink will be deposited by the printing cylinder. If ink cells are selectively provided in predefined regions, then only those regions with the ink cells will deposit ink onto the printing medium. Therefore, I will still use a single UV resin printing step and a single embossing step to create the relief structure in multiple zones 33 and 34 of Fig 8.”

16. Mr Reid states at paragraph 39 in his supplementary declaration:

    “With respect to paragraphs 18 and 19 [of Mr Hardwick’s supplementary declaration], I note that the figure 7 and figure 8 devices are created off the security document and subsequently applied to it. This requires two production processes: first embossing the microlenses into the film, and secondly applying the film to the substrate. As I said in paragraph 108 of my First Declaration (and above at paragraph 25(a)), soft embossing off the substrate or film for later application on to a security document is very different to soft embossing directly onto a separate carrier substrate.”

    Mr Reid states at paragraph 108 of his first declaration:

    “It may be that in stating the soft embossing "technique was well known in the security document field prior to 2013", Hardwick is referring to soft embossing foils. In this regard, Hardwick states in paragraph 30 that: "Soft embossing is an alternative method widely used by foil producers to create foils." (This also appears to be referred to in BAH-26.) However, soft embossing foils is very different to soft embossing directly onto a polymer substrate. For example, when soft embossing a foil, there are no registration issues in that there is no requirement to ensure that the embossing occurs in the windows of the substrate. Also, the embossing would only occur on one side of the foil. If a foil is soft embossed, it still needs to be applied to the substrate. I maintain my view that I have set out above that soft embossing polymer substrates was not commonly known in the industry before the priority date. The soft embossing technique generally was known, but not in terms of being able to use this technique to successfully produce a relief structure by soft embossing the polymer substrate itself.”

17. I consider the steps articulated by Mr Hardwick to manufacture a security document with a single transparent layer (rather than two transparent layers – the transparent layer of the film, and the transparent layer of the carrier substrate), resemble the steps to manufacture just the film layer alone. Mr Reid states “soft embossing off the substrate or film for later application on to a security document is very different to soft embossing directly onto a separate carrier substrate”. However, the main difference or difficulty noted by Mr Reid – that of registration of the windows – is already overcome by the disclosure of ‘467. The other difference in the manufacture of the windows onto film (which is then attached onto a substrate) compared with the manufacture of the windows directly onto the substrate is presumably in the choice of materials and the dimensions (including thickness) of the security document. However, I consider those difference to be matters of routine to a person skilled in the art such that the desired outcome was achieved, that is, a device of sufficient strength and durability suitable to make a security document.

18. I consider that a person skilled in the art would, as a matter of routine, modify ‘467 such that the security document with the features in the embodiment in figures 8 and 9 was formed without the step of attaching to a carrier substrate.

    Inventive step AU 2010294467 - Claim 1 conclusion

19. The embodiment of AU 2010294467 shown in figures 8 and 9 discloses all features of claim 1 except the feature of windows (because this embodiment has a film adhered to an opaque carrier substrate). I am satisfied that a person skilled in the art would modify the embodiment in figures 8 and 9 of ‘467 such that the carrier substrate was transparent.

20. Consequently, I consider the invention defined in claim 1 to lack an inventive step in light of AU 2010294467.

    Inventive step AU 2010294467 - Dependent claims

    Claims 2 and 3

21. Claim 2 defines:

    A method according to claim 1, wherein the different appearances of the security devices is a result of one or more of:
    different information content;
    different size of displayed information;
    different colour; and/or
    different optically variable effect generating mechanism.

22. Claim 3 defines:

    A method according to claim 1 or claim 2, wherein the optically variable effect generating relief structures of the respective security devices are different.

23. ‘467 states at page 38 lines 10 to 13:

    “Figure 9 shows a multilayer body 9 comprising the regions 35, 36 and regions 37 and 38. In the regions 35 to 38, the microimage grid and the microstructure grid respectively differ from one another…”

24. ‘467 discloses at page 38 lines 31 to page 39 line 21:

    “In addition, an advantageous combination of zones 34 having optically variable information items with adjacent zones 33 having an optically variable information item contrasting therewith is possible, for example as individual motifs within an overall motif, in order that the zones 33 can serve as a contrasting optical reference to the optically variable information item in the zones 34. By way of example, there can be movement effects in the regions 35 to 38 and a surrounding region 39 without a movement effect or a movement effect in the region 38 with a region 37 surrounding or adjoining the latter without a movement effect, for example with a hologram and/or with optically variable pigments or else in each case contrary movement effects in the regions 35 to 38.

    Contrasting optically variable information items can also be generated, for example, by virtue of the fact that, in one or a plurality of regions 35 to 38, a microstructure grid is provided above a microimage grid or above other optically variable motifs and, in other regions 35 to 38 directly or indirectly adjacent thereto, the microstructure grid is either extinguished, for example by means of a lacquer layer having a similar refractive index, or is not provided.

    It is likewise possible to provide in the regions 35 to 38 optically variable information items adjacent with optically static information items, for example single-colored regions or multicolored, non-optically variable motifs, adjacent to one another.”

25. I consider the “microimage grid and the microstructure grid [that] respectively differ from one another” in the above quoted passages from ‘467 to be disclosures of different information content. I consider the disclosure of a hologram in one of the window regions of ‘467 to be “different optically variable effect generating mechanisms” (final option in claim 2) and different relief structures (claim 3).

26. I consider that two other options in claim 2: “different size of displayed information” and “different colour”, are not explicitly disclosed in the embodiments in figures 8 and 9 of ‘467. However, I consider these to be matters of routine variation to a person skilled in the art.

27. Consequently, each of the alternative options in claim 2 and the invention defined in claim 3 lack an inventive step in light of ‘467.

    Claim 4

28. Claim 4 defines:

    A method according to any of claims 1 to 3, wherein the relief structures are formed in register to the gaps defining the window regions in the at least one opacifying layer.

29. Figures 7 and 8 show that the relief structures and gaps with opacifying layer are formed in register.

30. Claim 4 lacks an inventive step in light of ‘467.

    Claim 5

31. Claim 5 defines:

    A method according to any of claims 1 to 4, wherein in step (b1) of the common cast-cure process, the curable material is applied to the same surface of the substrate within at least two window regions in a single application step, preferably a single printing step.

32. The curable material is applied in a single application step to the same surface with the at least two window regions in ‘467 as shown in figures 7 and 8.

33. Claim 5 lacks an inventive step.

    Claim 6

34. Claim 6 defines:

    A method according to any of claims 1 to 5, wherein in step (b2) of the common cast-cure process, the respective relief structures on the same surface of the substrate within at least two window regions are formed in a single forming step, preferably a single embossing step.

35. I have found that the common cast-cure process as defined in claim 1 is equivalent to cast-cure process being performed in a single step. I have found that ‘467 disclose a common cast cure process.

36. Claim 6 lacks an inventive step in light of ‘467.

    Claim 7

37. Claim 7 defines:

    A method according to any of claims 1 to 6, wherein a first common cast-cure process is used to form a plurality of optically variable effect generating relief structures on the first surface of the substrate and a second common cast-cure process is used to form a plurality of optically variable effect generating relief structures on the second surface of the substrate, the first and second common cast-cure processes preferably being performed in register with one another, most preferably in an in-line manufacturing process.

38. ‘467 does not disclose forming optically variable relief structures on both sides of the security document.

39. I consider that forming optically variable relief structures in the window regions on both sides of the security document presents complexity beyond the formation of optically variable relief structures on one side of the security document. Mr Hardwick’s evidence at paragraph 38 of his supplementary declaration does not sufficiently explain why or how a person skilled in the art would, through only routine steps, make such a modification. I also note that if the underside of the film had relief structures then the optically variable effect of these structures would be extinguished (or at least substantially diminished) when affixed to a transparent carrier substrate. Consequently, I consider this feature to be inventive in light of ‘467.

40. Claim 7 is inventive in light of ‘467.

    Claim 8

41. Claim 8 defines:

    A method according to any of claims 1 to 7, wherein step (a) comprises applying at least one opacifying layer to the first surface of the substrate which comprises gaps defining the plurality of window regions, and preferably step (a) further comprises applying at least one opacifying layer to the second surface of the substrate, wherein still preferably at least one of the window regions is a half window region, the at least one opacifying layer on the second surface of the substrate overlapping the gap in the at least one opacifying layer on the first surface of the substrate to form the half window region.

42. ‘467 discloses applying an opacifying layer which comprises gaps defining a plurality of window regions as already discussed in relation to integer II.

43. Claim 8 lacks an inventive step in light of ‘467.

    Inventive step AU 2010294467 conclusion

44. Claims 1-6 and 8 lack an inventive step in light of AU 2010294467.

    Costs

    Costs in relation to the main opposition

45. Although the opposition is successful, this is only on the basis of the documents raised under Reg 5.23 that I instigated and not on the basis of the documents raised by the Opponent in the evidence stages prior to the hearing. To put it plainly, the Opponent has been unsuccessful in their opposition to the grant of the patent.

46. As the specification was amended during the opposition, the Applicant is taken to essentially concede the opposition up to the time the amendments were allowed. After the amendments were allowed, the Opponent has been unsuccessful in their opposition.

47. Costs are awarded against the Applicant up to the day the parties were informed that the amendments had been allowed (23 September 2019). Costs are awarded against the Opponent the day after the parties were informed the amendments had been allowed (24 September 2019).

    Costs in relation to the Reg 5.23 information

1. There are no cost items in the schedule associated with preparation of evidence and documents under Reg 5.23.

2. On 22 October 2020 the Applicant requested that the costs be varied on the basis that the Opponent filed a declaration when they had been directed to file submissions relating to the Reg 5.23 information. On 28 October 2020 I gave the Opponent the opportunity to make submissions on the variation of costs. The Opponent provided submissions on the variation of costs on 12 November 2020.

3. In the letter dated 18 September 2020 I stated:

   “It is lamentable that the Opponent has not complied with the direction made on 9 June 2020 by attempting to file evidence in place of submissions. I note that the behaviour of the parties can be taken into account in the award of costs.”

4. The Applicant stated in the letter of 22 October 2020:

   “The Applicant incurred significant costs as a result of the Opponent filing the 3rd Hardwick declaration, as it had to not only review the 3rd Hardwick declaration, but also consider its implications on the progress of the proceeding and how it should address the Opponent’s unpredictable actions, prepare submissions objecting to the 3rd Hardwick declaration and prepare a request for an extension of time for the Applicant to file its submissions in compliance with the 9 June direction. These costs amounted to AU$6,500, including our fees and counsel’s fees. A table setting out a breakdown of these costs is set out in Annexure A to this letter. The provision of this breakdown is not intended to waive legal professional privilege over any communications referred to in the table.

   We emphasise that these are costs that arise directly as a result of the Opponent’s failure to comply with the Commissioner’s directions, and that the Applicant would not have incurred had the Opponent simply filed submissions as directed.”

5. In light of the significant cost incurred by the Applicant as a result of the Opponent’s failure to comply with a direction, I consider it appropriate that a variation of costs is made.

6. The Opponent states in their letter of 12 November 2020:

   “The Commissioner will not depart from an award of costs on this basis unless the circumstances clearly warrant doing so (Colgate-Palmolive Co and another v Cussons Pty Ltd, 28 IPR 561). s, [sic] his Honour Justice Sheppard referred to the case law and identified the following circumstances which may justify exercising discretionary power when deciding costs:

   • where a party makes allegations of fraud knowing them to be false or makes irrelevant allegations of fraud;
   • where proceedings were commenced for some ulterior motive;
   • where proceedings were commenced or continued in wilful disregard of known facts or clearly established law;
   • where allegations were made which ought never to have been made;
   • where the proceeding was unduly prolonged by groundless contentions; or
   • where there was an imprudent refusal of an offer to compromise.”

7. The Opponent further states:

   “A late filed Declaration, which may be argued to be treated as submissions, is not the same as any of the special circumstances outlined above, therefore, the Applicant's cost claim has no credible basis.”

8. Although Colgate-Palmolive gives a list of examples where an exercise of discretion in the award of costs is appropriate, the list is not intended to be exhaustive. Justice Sheppard states at paragraph 25 (with my emphasis in bold): “…[I]t is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion.”

9. The general principle from Colgate-Palmolive is “there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice”. In this case the Applicant incurred costs associated with the Opponent’s failure to comply with a direction which I consider is sufficiently special or unusual to justify a variation of costs.

10. Although the Applicant has incurred significant cost from the Opponent’s actions, I also consider that the Applicant could have resolved the matter more efficiently, for example by simply asking for clarification from the Office about how the further declaration filed by the Opponent would be treated. On balance I consider it appropriate to award 50% of the actual costs incurred by the Applicant as a result of the Opponent’s failure to comply with a direction. In this way the parties share the cost associated with the Opponent’s actions.

    Conclusion on costs

11. Costs are awarded (according to Schedule 8) against the Applicant up to the day the parties were informed that the amendments had been allowed (23 September 2019). Costs are awarded against the Opponent (according the Schedule 8) from the day after the parties were informed the amendments had been allowed (24 September 2019).

12. The costs are varied such that 50% of the costs incurred by the Applicant (as a result of the Opponent’s failure to comply with a direction) of $6,500 are awarded against the Opponent, CCL Secure Pty Ltd. (i.e. $3,250).

    Conclusion

13. The opposition is successful. Claims 1-6 and 8 lack an inventive step in light of AU 2010294467.

14. The Applicant is given 2 months from the date of this decision to propose suitable amendments to overcome this finding of lack of inventive step.

    Xavier Gisz

    Delegate of the Commissioner of Patents