First Currency Choice Pte Ltd and Pulse International Pty Ltd v Mainline Corporate Holdings Limited

[2007] APO 24

ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 763008 in the name of MAINLINE CORPORATE HOLDINGS LIMITED.

Title:          Dynamic Currency Conversion For Card Payment Systems.

Action: Oppositions under Section 59 of the Patents Act by

(1) FEXCO DYNAMIC CURRENCY CONVERSION LIMITED;

(2) FIRST CURRENCY CHOICE PTE LTD; and
(3) PULSE INTERNATIONAL PTY LTD.

Decision:          Issued 13 July 2007.

Abstract

The claims of the specification are significantly flawed on several points of clarity.

They inadequately distinguish the various defined codes and their interrelationship, and inadequately define the content of a bank reference table (“BRT”) in the context of the claimed invention.  Further, several claims are flawed in respect to the conditional nature of the setting of the currency.  The claims are quite distant from the supposed invention described by the applicant at the hearing.

Several claims also fail for lack of novelty and lack of inventive step, inadequately distinguishing the supposed invention from the prior art.

The applicant was allowed sixty (60) days from the date of this decision to propose suitable amendments to overcome the above findings.  If suitable amendments were not proposed within that time the application would be refused.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent application 763008 by MAINLINE CORPORATE HOLDINGS LIMITED, and oppositions thereto, under Section 59, by (1) FEXCO DYNAMIC CURRENCY CONVERSION LIMITED; (2) FIRST CURRENCY CHOICE PTE LTD; and (3) PULSE INTERNATIONAL PTY LTD.

BACKGROUND

1. Mainline Corporate Holdings Limited (“Mainline”) filed patent application 763008 on 1 September 1999.  The application claims priority from an application made in Ireland on 12 July 1999.  The application was advertised accepted on 10 July 2003.

2. Fexco Dynamic Currency Conversion Limited (“Fexco”), First Currency Choice Pte Ltd (“First Currency”) and Pulse International Pty Ltd (“Pulse”) filed notices of opposition to the grant of a patent on application 763008.  There was initially a fourth opponent.  That opposition was dismissed early in the process for failure to file a statement of grounds and particulars to support the opposition. 

3. On a belief that the remaining opponents were preparing similar cases against the application, Pulse subsequently requested that the evidence from the three remaining opponents be joined.  Specifically, Pulse requested that any evidence served by any of the other two opponents be deemed to be evidence served in relation to the Pulse opposition.  Pulse suggested this would alleviate duplication of effort and resources for the opponents and for the applicant.  The Patent Office put this proposal to the applicant Mainline, and to Fexco and First Currency.  Mainline did not respond.  Fexco indicated that it did not wish to combine its opposition and evidence with the other two opponents.  First Currency was agreeable to the proposal. 

4. On 9 September 2004 the Patent Office made the following direction.

   Evidence which is served in either of the oppositions by Pulse or First Currency is deemed to have been served in the other of these two oppositions in respect of application 763008.

5. The Patent Office letter also indicated the following.

   This means that the two opponents named in the direction and the applicant need only serve one set of evidence for these two oppositions.  Further, in the event that one of the oppositions is withdrawn, the remaining opponent would be able to rely on any evidence already served by the other opponent.

6. There have been numerous extensions of time granted in which the parties could serve evidence.  The evidentiary stages of evidence-in-support, evidence-in-answer and evidence-in-reply were completed on 3 May 2006.

7. On 7 July 2006 Fexco requested an amendment of the statement of grounds and particulars and filed two additional statutory declarations as evidence.  The amendment of the statement of grounds and particulars was to further particularise some particulars already mentioned and to delete several prior art documents that would no longer be relied upon.  The two additional declarations were formally regarded as an application to serve further evidence on 16 August 2006.

8. Just prior to a hearing, on 22 September 2006 Mainline served further evidence on Fexco and separate further evidence on First Currency and Pulse.

9. A hearing was held in Sydney on 26 and 27 September 2006.  Ms Katrina Howard of counsel, represented Mainline, instructed by Ms Rebekah Gay, solicitor, and by Mr Russell Davies, patent attorney, of Shelston IP.  Mr Chris O’Sullivan, patent attorney of F B Rice & Co, represented Fexco.  Mr Stephen Burley of counsel, represented First Currency, instructed by Mr John Dower, solicitor and patent attorney, by Ms Helen MacPherson, lawyer, by Ms Aviva Beck, lawyer, all of Freehills, and by Mr Julian Cook of counsel.  Mr Paul Savage, patent attorney also of Freehills, represented Pulse.  Mr Gerard Barry from Mainline, Ms Anna Thomas from Fexco, Mr Stefan Ollson from First Currency and Mr Todd Stanley from Pulse were also present.

   THE SPECIFICATION

10. The specification describes the invention as relating to card payment systems for use in a multi-currency environment.  Further the specification states the invention provides systems and methods for identifying an appropriate currency for individual transactions using a card payment system.

11. One desirable outcome discussed in the specification (page 4, lines 15-17) is for a cardholder to view or make payments in their home currency rather than the currency of the merchant for whom they are conducting the transaction.  A further desirable outcome (page 5, lines 4-6) is to provide for determining the currency of a cardholder at the point of sale automatically using only a payment card’s details.

12. The broadest claims in the specification are claims 1 and 14.  These claims are recited below.

    1.A data processing method for determining a preferred currency for association with charge, debit or credit card transaction between a merchant and a charge, debit or credit card cardholder comprising the steps of:

    obtaining the card number of the card from the cardholder, wherein the method further comprises the steps of:
    identifying an identifier code from said card number, determining the operating currency for said identifier code, by comparing said identifier code with entries in a table, wherein each entry in the table contains an issuer code or range of issuer codes and a corresponding currency code, and setting the currency for association with the card transaction as the determined operating currency for the issuer code.

    14.A system for use with a charge, debit or credit card transaction between a merchant and a charge, debit or credit card cardholder;

    having means for obtaining the card number of the card from the cardholder, wherein the system has means for determining a preferred currency for association with the transaction comprising:
    means for identifying an identifier code from said card number,
    means for determining the operating currency for said identifier code by comparing said identifier code with entries in a table,
    wherein each entry in the table contains an issuer code or range of issuer codes and a corresponding currency code, and
    means for setting the currency for association with the card transaction as the determined operating currency for the identifier code.

    STATEMENTS OF GROUNDS AND PARTICULARS

13. Fexco’s grounds of opposition are that the invention is not a manner of manufacture, is not novel, does not involve an inventive step, does not describe the invention fully, and the claims are not clear or fairly based on the matter described.  Fexco has provided particulars to support each of these grounds.

14. First Currency raised substantially the same grounds of opposition as Fexco and also added that the specification does not end with a claim or claims defining the claimed invention.  First Currency has provided particulars to support each of these grounds.

15. Pulse raised substantially the same grounds of opposition as First Currency and added that none of the claims is entitled to the claimed priority date.  Pulse has provided particulars to support all except the last ground of opposition.

    EVIDENCE

16. Fexco served evidence in support from Mr Chris O’Sullivan, patent attorney.  Mr O’Sullivan has included several exhibits of statutory declarations filed by various personnel in the corresponding New Zealand and European patent opposition proceedings.  The declarants in these proceedings from whom evidence is provided by Mr O’Sullivan were Mr Christopher O’Brien, Mr Russell Briant, Mr Charles Fillinger, Ms Connie Penn, Mr Denis Cleary and Mr Brian Connolly.

17. Mr O’Brien separately served evidence in support in the present opposition for Fexco.  This evidence is substantially the same as Mr O’Brien’s evidence under Mr O’Sullivan’s declaration apart from some corrections, and extra exhibits of Mainline’s patent application, Fexco’s statement of grounds and particulars, and four patent documents.  One correction in the body of Mr O’Brien’s declaration is to refer to $A rather than $NZ in paragraph 21 since the corresponding exhibit displays transactions in $A.

18. First Currency and Pulse served evidence in support from Mr Geoffrey Coffill, Mr Greg Storey, Ms Connie Penn, Mr Patrick Shiel, Mr Denis Cleary, Mr Edmond Ryan and Mr Charles Fillinger.

19. Mainline served evidence in answer to the Fexco opposition from Mr Gerard Barry, Mr John Duffy, Mr Glyn Walker and Mr Robert Wastyn.  The same declarants also provided evidence in answer for Mainline to the First Currency and Pulse oppositions.

20. Fexco served evidence in reply from Mr Daniel Lavecky, Mr Christopher O’Brien, Mr Charles Fillinger, Mr William Maley and Mr Denis Cleary.

21. First Currency and Pulse served evidence in reply from Mr Geoffrey Coffill, Mr Greg Storey, Mr Patrick Shiel, Mr Jeffrey Sachs and Ms Connie Penn.

22. There is significant overlap in the evidence and in the relationship of several declarants with the three opponents.  For instance, Mr Cleary has been employed by Fexco but has also presented evidence for First Currency and Pulse.  Similarly Ms Penn has been engaged as a technical consultant by Fexco but has likewise presented evidence for First Currency and Pulse.  Where it is necessary to distinguish the three opponents’ evidence in this decision, I will associate the declarants with the party for whom they gave evidence rather than by whom they were employed or engaged.

23. Fexco’s further evidence consisted of statutory declarations by Mr Cleary and Mr Fillinger.  Mr Cleary indicated in his declaration that certain pages were missing from his original exhibit DC-13.  He provided a full copy of DC-13 with his latest declaration.  Mr Fillinger’s declaration is intended to clarify a point that could have been read as a discrepancy between one of his earlier declarations and Mr Sachs’ declaration filed as evidence in reply.

    DISCUSSION

    FURTHER EVIDENCE

    Admissibility of Fexco’s Further Evidence of 7 July 2006

24. At the hearing Mainline had no objection to the admission of Fexco’s further evidence into the opposition nor did Mainline seek terms in respect to Fexco’s amended statement of grounds and particulars.  Fexco’s further evidence was allowed. 

    Admissibility of Mainline’s Further Evidence of 22 September 2006 served on Fexco

25. Mainline’s further evidence of 22 September 2006 consisted of statutory declarations by Mr Lyal Collins and Ms Gay, solicitor for Shelston IP.  Mr Collins’ evidence discusses Mainline’s patent specification and the prior art in Fexco’s evidence.  Mr Collins’ evidence also covers his experience in the Australian card payment industry and is responsive to Mr Lavecky’s evidence on the state of the art in that industry in Australia.  Ms Gay’s evidence provides explanations on how Mainline viewed the necessity to serve evidence by Mr Collins.  The principal point being that Fexco first provided evidence from a person with significant experience specifically in the Australian card payment industry (Mr Lavecky) in its evidence in reply, and consequently Mainline sought for the first time to serve responding evidence from an Australian witness of its own.

26. At the hearing Fexco had no objection to the admissibility of this evidence subject to being given appropriate opportunity to serve responding evidence.  I allowed Mainline’s further evidence on Fexco and gave Fexco four (4) weeks to serve evidence in response.  Fexco served responding evidence on 24 October 2006 from Mr O’Sullivan and Mr Cleary.

    Admissibility of Mainline’s Further Evidence of 22 September 2006 served on First Currency and Pulse

27. Mainline served evidence on First Currency and Pulse that was very similar though not identical to that served on Fexco on the same date, 22 September 2006.  The declarants are the same, namely Mr Collins and Ms Gay.  Mr Collins discusses Mainline’s patent specification and the prior art in First Currency and Pulse’s evidence.  He also describes his experience in the Australian card payment industry, and the state of the art in Australia, specifically addressing some of Mr Coffill’s and Mr Storey’s comments on the state of the art in Australia and overseas.  Ms Gay’s evidence provides explanations on how Mainline viewed the necessity to serve evidence by Mr Collins.  The principal point in this case being that Mr Coffill and Mr Storey, in their evidence in reply, both noted that Mainline’s witnesses, in evidence served to that point, did not have experience in the Australian card payment industry and that there were differences between the Australian and European card payment industries.  Consequently Mainline sought to serve evidence from an Australian witness.

28. At the hearing First Currency objected to the admissibility of this evidence. 

29. In her declaration Ms Gay outlined the difficulties Mainline has had in securing a suitable Australian witness.  She expressed the view that many potential witnesses are employed for, or consult to, companies or entities whose interests may best be served if the Mainline application was successfully opposed.  In these circumstances it seems an independent witness may have been hard to find.  Ms Gay also noted First Currency and Pulse completed their evidence in reply in April 2006.  Mainline identified Mr Collins as a potential witness in early August 2006 and had worked with Mr Collins to prepare the declaration served on 22 September 2006.  Ms Gay seemed to infer there has been no unreasonable delay in serving this evidence.

30. Ms Howard stated there were no flaws with Mainline’s initial evidence.  She stated Mr Collins’ evidence is not significantly different from that of Mainline’s Mr Barry and Mr Wastyn.  Ms Howard said there would consequently be no prejudice to the opponents by the inclusion of Mr Collins’ evidence.  Mainline merely sought the inclusion of Mr Collins’ evidence to support its case with an Australian witness well versed with the field of currency conversion for card payment systems in Australia as some of First Currency’s and Pulse’s declarants had been critical of the inexperience of Mainline’s witnesses of the Australian card payment industry.  Ms Howard stressed that Mr Collins’ evidence was significant only in respect to presenting an Australian perspective to deal with First Currency’s and Pulse’s criticisms.

31. Mr Burley noted Ms Howard’s comments that Mr Collins’ evidence was not significantly different from evidence already served by Mainline.  He exemplified this by stating that the first 15 or so pages of Mr Collins’ evidence, apart from introductory statements of Mr Collins’ experience, is a similar review of prior art already made by Mainline’s other declarants.  Mr Burley suggested Mainline was simply having another go using another declarant.  Mr Burley further noted Mr Collins is responsive to Mr Coffill’s and Mr Storey’s evidence in only about the last 2 pages of his evidence.  For these reasons Mr Burley submitted Mr Collins’ evidence was not significant enough to allow it to be admitted.

32. Mr Burley was also critical of evidence being served just prior to the hearing from a witness found in early August.  This had left First Currency no time to consider the evidence.  Further Mr Burley stated the fact that Mainline did not have an Australian witness could not have been a surprise to Mainline this late in the proceedings.  He submitted the recognition of the absence of an Australian witness was an inadequate explanation for the lateness of Mr Collins’ evidence. 

33. At the hearing I reserved my decision on the admissibility of Ms Gay’s and Mr Collins’ evidence in respect to the First Currency and Pulse oppositions.  On 23 October 2006, I allowed Mr Collins’ and Ms Gay’s evidence and gave First Currency and Pulse four (4) weeks to serve responding evidence.  In that letter I also indicated I would provide reasons for allowing that evidence in the substantive decision.

34. As Mr Collins’ evidence is technical evidence relating to the patent application and Ms Gay’s evidence is principally concerned with the circumstances leading up to the serving of Mr Collins’ evidence, I will mainly confine my comments to the admissibility of Mr Collins’ evidence and treat the admissibility of Ms Gay’s evidence as given.

35. The criteria for allowing an application to serve further evidence under Regulation 5.10 are well-established.  In Emory University v Biochem Pharma Inc., [1999] APO 50, in assessing an application to serve further evidence amongst other things, the delegate adopted the principles from Ferocem Pty Limited v Commissioner of Patents, (1994) 28 IPR 243, and A Goninan and Co Ltd v Commissioner of Patents and Another, (1997) 38 IPR 213, with respect to extensions of time. Relevant considerations are the discretionary nature of Regulation 5.10, the explanation of the delay in serving the further evidence, the interests of the parties taking part in the opposition, and the public interest. In assessing the latter, the delegate indicated with reference to the Goninan case, that a view needs to be formed as to the nature of the evidence sought to be adduced and the significance of that evidence for the opposition.

    Explanation of the delay in serving further evidence

36. The position outlined by Ms Gay indicates there has been a period of about 5 months from the completion of evidence in reply to the time of serving Mr Collins’ declaration.  First Currency and Pulse did not raise any major issue on this point apart from the evidence being served just prior to the hearing from a witness found about a month beforehand.  Given the difficulties outlined by Ms Gay in securing an independent witness, I think a time period of 3-4 months to find a suitable witness is not excessive.  The further month to two months taken to gather and submit evidence from the expert, once secured, also does not seem excessive to me.

37. Mr Burley seemingly took greater issue with Mainline’s supposed oversight in providing evidence from an Australian expert in the first instance.  On the other hand, in this case, this would seem to put Mainline in an onerous position.  The evidence in answer is meant to directly address the evidence in support from an opponent.  On the face of it, the latter evidence from First Currency and Pulse did not strongly indicate peculiarities in the Australian card payment industry.  Apart from Mr Coffill and Mr Storey the declarants for First Currency and Pulse seem to be overseas-based.  In any case all of First Currency’s and Pulse’s declarants have provided evidence in support in the main from a universal international perspective.  On this point it seems that Mainline adequately addressed that evidence in its evidence in answer.  In this case, the delay in serving Mr Collins’ evidence should be reckoned from the time of completion of the evidence in reply rather than from the time of serving evidence in answer.

1. I conclude there has been a satisfactory explanation for the delay in serving the further evidence.

   Interest of the parties in the opposition

2. Mainline’s interest lies in presenting an Australian perspective of the evidence it has already served.  First Currency’s interest seems to lie in the expeditious disposal of the opposition without undue delay dealing with further evidence.

3. Both of these positions are laudable.  The proceedings to date have necessarily been lengthy given the complexities of the case and the fact that there are three opponents.  For instance a period of almost three years transpired between advertisement of acceptance of the application and the completion of evidence to the evidence in reply stage.  If a further delay to deal with Mr Collins’ evidence was relatively short it would appear there would be no undue detriment to First Currency. 

4. Mr Burley intimated earlier that only about 2 pages of Mr Collins’ evidence is responsive with seemingly new material.  In such case it would seem the delay in dealing with this evidence is short.

5. Mainline seems to regard it as necessary to serve evidence from an Australian witness to answer the criticisms of First Currency’s and Pulse’s declarants in this respect and to provide a more complete picture of its evidence from an Australian perspective.  The latter position would also seem to enhance the prospect of a more just determination of the opposition.

6. I conclude the interests of the parties on balance favours the inclusion of Mr Collins’ evidence into the opposition.

   Public interest

7. The public interest calls for a balance between the requirements that oppositions be dealt with expeditiously and economically, and that a serious opposition be dealt with on its merits (Ferocem (supra) and Goninan (supra)).

8. The comments above on relative delay and a more just determination of the opposition apply equally under the public interest.  A consideration of the nature of the evidence would also assist in this case.

9. In the present case it seems the currency conversion art for card payment systems was not at the same stage of development around the world at the priority date of the application.  First Currency’s and Pulse’s declarants, namely Mr Coffill and Mr Storey, noted there were differences between Australia and Europe in respect to card based payment processes and infrastructure. 

10. Mr Coffill stated that electronic funds transfer point-of-sale (“EFTPOS”) terminals in Australia carried significantly more memory than POS terminals in Europe.  He said the reason for large memory capacity in Australian EFTPOS terminals was so new applications could be added remotely.  This was an advantage in Australia’s geographically widespread merchant network.  It would have been expensive to replace widespread EFTPOS terminals every time a new application was to be added or changed.

11. Mr Storey noted that Mainline’s Mr Barry mainly had experience that was only European based and suggested Mr Barry’s comments demonstrated the European card payments industry was less mature than the industry in Australia at the priority date of the application.  Mr Storey stated Australia had adopted a common approach to debit card transactions involving personal identification number (“PIN”) entry at EFTPOS terminals to validate transactions.  In Europe there was no uniform approach.  In many European countries, validation was by signature so POS terminals in Europe did not need software to deal with PINs. 

12. The above evidence suggests in some respects the art was more advanced in Australia than in Europe before the priority date of the application.  Further, Mr Coffill and Mr Storey commented on the absence of evidence from Mainline from people with experience in the Australian card payment industry. 

13. In the light of the above, it would seem the evidence of people experienced in the art in Australia is pertinent. 

14. The issue remains then as to whether Mr Collins’ evidence is pertinent.  From his evidence Mr Collins joined the banking industry by taking up a position at the Commonwealth Bank of Australia in August 1994, about 5 years before the priority date of the present application.  Subsequent to that he became involved in card payment services.  The time period of involvement in the industry prior to the priority date of the application may seem short.  On the other hand, the card payment industry, partially driven by peripheral activities such as e-commerce, and card and data security, has been a rapidly evolving industry.  On the face of it, I regard Mr Collins as having requisite Australian experience. 

15. Mr Burley suggested Mr Collins’ evidence does not add anything significant to the evidence already served by Mainline.  The first 15 pages, apart from statements of Mr Collins’ experience, cover material already covered by Mainline’s other declarants and only about 2 pages are responsive to Mr Coffill and Mr Storey. 

16. Mr Burley’s dissection of Mr Collins’ declaration is broadly correct.  Mr Collins’ discussion of terminology in the art and discussion of the prior art does not indicate peculiarities particularly pertaining to the art in Australia.  On the other hand Mr Collins disputes Mr Coffill’s statements about the capability of EFTPOS terminals in Australia before the priority date.  Mr Collins noted that Mr Coffill made some very general statements which he appeared to apply to all EFTPOS terminals.  Mr Collins stated though that, at the priority date of the application, there were a range of different EFTPOS terminals in use in Australia, many of which would not have had the necessary memory and processing capacity to run dynamic currency conversion applications.  Similarly Mr Collins has countered some of Mr Storey’s evidence, particularly highlighting Mr Storey’s lack of explanation as to how currency conversion occurred.  Such discussion does not seem to be the subject of Mainline’s other declarations.

17. I regard Mr Collins’ evidence as relevant to the present case.

    Allowability of the further evidence

18. I conclude Mr Collins’ evidence is allowable.

19. First Currency subsequently sought extensions of time to serve responding evidence.  These extensions were granted.  First Currency served the responding evidence on 22 January 2007.  This evidence consists of a statutory declaration from Mr Storey.

    CLARITY ISSUES

    “Card issuer”

20. The terminology, “card issuer”, has been used in at least two ways by the declarants in these oppositions.  Some have used the term to refer to a card scheme administrator such as Mastercard or VISA.  Others have defined the term to mean a card scheme member such as a bank or other financial institution that issues debit or credit cards.  The more consistent use throughout the evidence and in the specification is the latter use.  The present application at page 10 lines 12-14 and line 20 equates issuers with banks.  I will adopt the latter meaning for the term, card issuer.

    “Identifier code”, “issuer code” and “issuer identifier code”

21. Much of the evidence and discussion at the hearing focused on other terminology used in the patent specification and how it related in the art of card payment systems.  This seems to have been driven by varying degrees of ambiguity and inconsistency in both the descriptive part of the specification and in the claims. 

22. For instance, claims 1 and 14 define an identifier code and issuer code(s).  The claims define a comparison being made of the identifier code with entries in a table yet the entries in the table are then defined as containing issuer code(s).  The relationship between the two code types is not clearly defined in the claims.

23. Moreover, parts of the specification also suggest the terms are used interchangeably.  See for example the identification of an “identifier code” from the card number (line 8 and line 20 respectively of claims 1 and 14).  On the other hand, at page 5b line 23, page 14 line 23 and page 18 lines 4-5, an “issuer code” is described as being identified or obtained from the card number.  Similarly, in the last line of claim 1, “operating currency for the issuer code” is defined whereas in claim 14, “operating currency for the identifier code” is defined.  Still further, at page 6 line 5, and again at page 10 lines 17 and 18, the term “issuer identifier code” is used.  The latter codes are said at those lines of the specification to be contained as a list in a bank reference table (“BRT”).  On the other hand the flowchart in Figure 5 has a question of whether the BRT contains an entry for the “identifier code”.

24. There is a reasonable degree of consistency amongst the declarants of all three opponents as to the meaning of the codes and their function in their views.  Fexco’s Mr O’Brien, and First Currency and Pulse’s Mr Storey and Mr Coffill for example all described a bank identification number (“BIN”) being established by card scheme administrators for each member.  The description of a BIN was generally that it was a card prefix of usually six digits making up part of the card number.  These declarants noted that BIN look-up tables, from card scheme administrators, were used before the priority date of the present application to establish the currency of a card.  The opponents’ declarants generally equated at least the identifier code of the claimed invention with a BIN. 

25. Mr Storey further described his understanding of the issuer code of the claimed invention.  He understood the issuer code to refer to the Centre Information Block (“CIB”) which is identical to a Business Identification (“BID”).  The latter is a unique eight digit code issued to each card scheme member, such as a financial institution. 

26. There appear to be some differences inferred between a BIN and a BID.  One usually has six digits while the other has eight.  Also the BIN is stated to be a card prefix while one might infer the BID is a central string of characters from Mr Storey’s reference to the CIB.  Mr Storey states the CIB is unique to each card scheme member, such as a financial institution.  Since financial institutions commonly include banks, the difference in purpose between a BIN and a BID is not readily apparent though from Mr Storey’s statements.

27. For Mainline, Mr Barry referred to the specification at page 10 lines 13 and 14 to describe the “identifier code” as the portion of a card number that distinguishes between issuers.  He further referred to page 10 lines 16 to 18 to describe the “issuer identifier code” as the code as listed in a bank reference table (“BRT”) for each issuer.  These two descriptions by themselves are difficult to distinguish.  Both seem to describe a code that identifies the issuer. 

28. Page 10 lines 12 and 13 of the specification outline some ranges of card numbers for a small bank and for a large bank, and suggest the identifier code is extracted from a portion of those numbers.  Next, reference is made to Figure 6 which shows a sequence of numbers listing issuer identifier codes.  At the hearing Ms Howard stressed the numbers on page 10 and in Figure 6 are exemplary only and little significance should be attached to the numbers.  Nonetheless some example at page 10 referencing Figure 6 that demonstrated the relationship between “identifier codes” and “issuer identifier codes”, and what if anything made them different, would have been helpful.  The relationship between the identifier code and issuer identifier code is not clear from the specification or from this part of Mr Barry’s evidence. 

29. Mainline’s Mr Wastyn referred to page 10 lines 16-24 of the specification where it states the BRT may be created from a number of sources including the card scheme administration organisations or from data collected from a large number of cardholders.  Mr Wastyn said this is unique as the collection of information from different sources determines the preferred currency of the cardholder.  The BRT is what the logic for setting the preferred currency relies upon.  However the specification is unclear as to what this information is to enable the setting of the preferred currency.  Mr Wastyn stated the BIN table by itself is insufficient to accurately identify the preferred currency as banks may issue cards in multiple currencies.  Mr Barry also stressed the latter point in his evidence.  First Currency and Pulse’s Mr Coffill on the other hand stated a bank may have multiple BINs for multiple currencies in which cards can be issued by that bank.

30. The evidence from Mainline’s declarants seems to attempt to describe interrelationships between various codes and data tables to enable more accurate identification of the preferred currency for any particular card and to differentiate any of the codes from being interpreted as BINs.  The delineation of the codes and the means for achieving greater accuracy in identifying preferred currencies though do not appear to be clearly defined in the specification.  Rather the patent specification supports an interpretation that at least the identifier code is a BIN as the opponents’ declarants have done.  Page 10 lines 13-14 states the identifier code is the portion of a card number which distinguishes between issuers.  This statement is a loose concluding statement in respect to the card number ranges mentioned above.  For instance it is not clear at this passage whether the intent is to show how small banks are distinguished from each other and likewise the large banks, or to distinguish the exemplified small bank from the large one.  Mainline stressed at the hearing that little significance should be attached to the numbers.  That may be appropriate in this case.  From the specification it seems quite reasonable to interpret the identifier code as nothing other than a BIN.

31. At the hearing Mainline presented submissions further explaining the operation of the identifier code and the issuer identifier code in a BRT.  The length of the identifier code is the longest string of any entry in the BRT.  If the longest string in the BRT is of length “n”, then the first n digits of a card become the identifier code.  A card’s identifier code is then sequentially compared digit by digit with every entry in a BRT until a unique match is found amongst the leading digits.  The unique match in the BRT is then the issuer identifier code for that card.  The issuer identifier code is not necessarily of the same length as the identifier code and would desirably be of fewer characters. 

32. For instance, suppose the longest string in the BRT has eight characters.  Using the example provided in Mainline’s submissions, suppose a card number is 4612 4619 1234 1234.  On the basis of the longest string in the BRT the first eight digits then become the identifier code.  For this card number the identifier code would be 4612 4619.  This identifier code is then sequentially compared digit by digit with every entry in the BRT.  On my understanding of Mainline’s submissions, if there are two issuer identifier codes in the BRT beginning with 46 then there is no unique match and so the third character field is interrogated.  If this yields just 461 and 462 for example then the first one is the unique match with the first three digits of the identifier code.  In this way the issuer identifier code is a substring of the identifier code, specifically a leading end portion of the identifier code, of three characters rather than eight characters.  Mainline’s Mr Duffy noted this table arrangement significantly reduced the number of entries required in the table.

33. Ms Howard referred to statements in the specification (page 13 lines 7-10) that a BRT stores the leading digits of individual issuers of credit/debit cards in the world.  There is little at this passage on what these digits in the BRT represent and how they are derived, for instance that they may be at least a partial identification means of distinguishing issuers from each other, or a sub-string of an identifier code.  This reference at best only loosely describes the content of the BRT as presented above in Mainline’s submissions.  

34. Mainline’s Mr Collins in his further evidence went further by interpreting the same passage on page 13 to mean that the BRT holds sufficient digits of the card number to identify the account currency (my emphasis).  He said it may not be necessary for the BRT to include all of the digits of the identifier code in all cases.  This minimum derivation from the card number and the use of the minimum number of digits to identify the currency is a presumption that is not supported by the specification.  The specification simply refers to leading digits of individual issuers. 

35. Further, the claims of the application do not appear to suggest the table claimed is a particular one such as a BRT.  The leading digits of individual issuers could just as easily be interpreted as a BIN, as the three opponents’ declarants have done, making the BRT or the table defined in the claims equivalent to a BIN table.  The specification is very light on describing an invention that comes even close to what Mainline presented at the hearing. 

36. From Mainline’s submissions above, it seems the length of identifier codes is dependent on whatever the longest code is in the BRT.  Mr O’Sullivan for Fexco followed up Mainline’s submissions in his further evidence.  He noted from these submissions that the determination of an identifier code is dependent on first establishing the content of the BRT.  He stated there is no a priori information about how many digits of the card number comprise the identifier code.  It may be that the BRT is a standardised table where its operation and the contents thereof are well known and understood in the art.  On the other hand the claims do not define this.  The claims are silent of the table defined therein being a standard, well understood table in any way.  The table of the claims seems to be an arbitrary one. 

37. The essence of the specification states the identifier code is determined only from the card number.  See for instance the top box in Figure 5 and also the claims.  The specification is manifestly lacking a precursor step to determine the length of the identifier code by examining or relying on the lengths of the character strings in the BRT.  There seems to be a prior dependency on the content of the BRT to determine the identifier code that is not clearly borne out by the specification.

38. I regard all the claims as inadequately distinguishing the various defined codes and their interrelationship, and inadequately defining the content and operation of the BRT in the context of the claimed invention.  On account of the flaws in this regard with the whole specification, the omnibus claims at present are included as being flawed.

    “Preferred currency” and “operating currency”

39. The terms “preferred currency” and “operating currency” appear to be used interchangeably in the specification.  This also raises issues of clarity in the claims.  Claims 1 and 14 define a method and system having means, respectively, for determining a preferred currency.  The latter half of both claims, on the other hand, defines the determination of the operating currency and the setting of the currency for transaction as the determined operating currency.  The interchange of these terms is carried through the dependent claims too. 

40. On the other hand if the two terms are intended to take separate meanings then the steps to link the terms are inadequately defined in the present claims.  For instance, having set the operating currency for the transaction, one would then expect a step or a means of user input, or selection, or confirmation that the operating currency that is set is in fact the preferred currency.  In the absence of such a concluding step or means, it would appear a method or means for determining a preferred currency is not achieved by the present definitions in the claims.

41. First Currency and Pulse’s Mr Coffill correspondingly noted difficulties with claim 2.  If claim 1 defines the preferred currency to be that of the card then claim 2 is inconsistent in respect to defining that the preferred currency is set to the default currency of the merchant when no operating currency can be determined for the identifier code.  Claim 15 is similarly flawed.

1. Mr Coffill also referred to claim 7.  He suggested the claim of the transaction proceeding in the merchant’s currency, if the cardholder indicates the transaction is not to proceed in the preferred currency, made no sense in the context of claim 1 defining the currency being set to that of the card.  Claim 20 is similarly flawed.

2. From the above, the claims as a whole are flawed on account of there being no clear definition of a user confirmation step or that the setting of the currency from the look-up table is conditional upon a currency code being able to be determined from the table for the card.  If such were defined in claims 1 and 14 then the above-mentioned problems with claims 2, 7, 15 and 20 for example would appear to be overcome.

   Other clarity issues

3. There appear to be some minor errors in the specification.

4. Claim 12 is appended to later claim 14.

5. Claim 29 is unclear in respect to the expression, “another system”.  Without some definition or limitation of what this system is, the scope of the claim cannot be adequately determined.

6. Page 5 does not read on to page 5a.  There appears to be text missing at the bottom of page 5 in respect to discussion about an earlier patent document WO 97/04411.

   NOVELTY

7. The Meyers Taylor Pty Ltd v Vicarr Industries Ltd decision, (1977) 137 CLR 228, provides an appropriate test for novelty. The test is also known as the "reverse infringement test". Aickin J., at page 235, states:

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

8. The Rodi and Wienenberger AG v Henry Showell Ltd decision, (1969) RPC 367, states that infringement occurs where each and every one of the essential features of a claim is taken.

9. A practical application of the above decisions suggests a claim lacks novelty if a prior citation discloses all of the essential features of a claim. 

10. The Bristol-Myers Squibb Company v FH Faulding & Co Ltd decision, (2000) 46 IPR 553 at 576, states that what the authorities contemplate is that a prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention.

11. I will apply these tests to the present case.

12. The declarants of all three opponents cited the use of BINs or card prefixes to identify the issuing bank.  Further, that the corresponding currency for transaction in the currency of the cardholder could be determined from a BIN look-up table.  Fexco’s Mr O’Brien, First Currency and Pulse’s Mr Coffill, Mr Storey, Ms Penn and Mr Ryan all cited such use before the priority date of the application.  Much of the documentary material provided by the declarants also discloses such determination of currency from BINs and BIN look-up tables before the priority date.

13. Claims 1 and 14 of the application define the identifying of an identifier code from a card number, comparison of identifier code with entries in a table of issuer codes, which may from the interchangeable use of the term in the claims be seemingly regarded as identifier codes, and determining a corresponding currency from the table.  As Mainline’s Mr Barry and Mr Wastyn have stated, it may well be that the BIN is not completely determinative of the currency of the card in all cases as banks may issue multiple cards in different currencies.  On the other hand the claims do not clearly address or realise this point.  

14. I have noted earlier that the contents of the BRT as described in the specification or the table as claimed could easily render either table equivalent to a BIN table.  The claims relate the above prior use and disclosures from the opponents’ declarants. 

15. The principal feature of the claims that is lacking from these elements of the opponents’ evidence is the setting of the currency for association with the card transaction.  If any evidentiary prior art also discloses this feature, at least claims 1 and 14 would appear to be not novel.

16. The three opponents relied broadly on the same allegedly available prior art to anticipate the claims of the application.  They cited technical specifications, presentations and proposals for the installation of multi-currency card payment systems at the point of sale (“POS”), the principal ones of which are discussed in more detail below.  The opponents’ declarants in the main referred to these systems as dynamic currency conversion (“DCC”) systems, a phrase also used in the title of the present specification. 

17. Mr Barry though distinguished DCC systems from automatic currency conversion systems at the POS.  He made much of the description of the invention being about automatic currency recognition at POS and automatic default to the currency of the card taking place.  This system still allowed the default to be over-ridden.  Mr Barry asserted the cardholder is automatically offered the choice as to whether the transaction should proceed in the card’s currency or the merchant’s currency.  Mr Barry stated the problem of the prior art DCC systems was that the merchant must actively offer and select the currency for the transaction.  This also suggests the setting of currency is a crucial aspect.

18. In the evidence and at the hearing some discussion took place in respect to whether the claims defined manual processes.  In claim 1 some steps may be manual.  See for instance line 6 of the claim which defines obtaining the card number of the card from the cardholder.  The embodiments in the body of the specification include swiping the card through a magnetic strip reader to extract the card number or manually entering card details through a keypad (page 12 lines 15-18). On the other hand, the subject of the claim is a data processing method.  This implies at least some performance of some of the steps of the method electronically. 

19. The words “data processing” are not present as the subject of claim 14.  The subject of that claim is merely a system.  A system by itself could be a manual one.  Like claim 1, it may again appear that claim 14 defines manual processes or means to perform functions manually.  At least the obtaining of the card number from the cardholder could reasonably be regarded a manual function.  On the other hand, the claim defines the system having means for determining a preferred currency rather than there merely being a system for determining preferred currency.  Similarly the context of the claims as a whole and the specification’s references to automatic determination and conversion of currency at the POS (page 9 lines 5-9 for example) suggests, in this case, that some electronic processing is being defined, rather than an abstract manual system, for performing at least the currency determination and setting functions.

20. This situation is similar to the subject of the IBM Corporation v Commissioner of Patents decision, 22 IPR 417. In that case, a claim during examination was regarded as merely reciting and pre-empting a mathematical algorithm that produced an improved curve image without any limitation to any particular apparatus. On appeal, the Federal Court held that, when the specification was read as a whole, there was a necessary inference confining the claim to the operation of computers. In the present case, I think the proper interpretation is that at least the features of the claims of currency determination and currency setting are electronic processes or means. The seemingly crucial step of setting the currency, in this case, is an electronic step.

    The PRIAM system

21. Fexco’s Mr O’Brien attests that in late 1998 Fexco in partnership with another company began implementing a DCC system at the POS called PRIAM.  The system was described in a specification document dated 17 November 1998.  Mr Cleary and Mr Maley also exhibited this specification in evidence.  First Currency and Pulse’s Mr Coffill likewise tendered a copy of this specification in his evidence.

100. Mainline’s Mr Barry questioned the public availability of this specification stating there was no conclusive proof of publication date. 

101. Mr Cleary provided evidence in reply to obtaining the PRIAM specification in an attachment by electronic mail from Mr Maley on 30 November 1998.  Mr Cleary attested there were no confidentiality obligations that he or others at Fexco were bound by in respect to the PRIAM specification.  Mr Maley confirmed this.

102. On this basis I am prepared to accept the PRIAM specification was in the public domain before the priority date of the present application.

103. The PRIAM system is described as being required to support the function of multi-currency charging of customers’ credit cards.  It was a card terminal system.  Further a program was required to import card prefixes and their currency codes to allow the charging currency to be determined.  On entering the card number the system would check the card prefix and try to determine the charging currency.  If a card prefix could not be matched, all the terminal charging currencies, including the merchant’s or local currency, would be displayed and the customer could choose an available currency.  If the card prefix was found, the PRIAM specification states the home currency became the default although the customer could choose another local currency.  Exchange rates and the costs of the transaction in both the home and the merchant’s currencies were offered on screen.  Mr Barry suggested the home currency description is unclear.  Paragraph 6 of the PRIAM specification though states the card prefixes and their currency codes would allow the charging currency to be determined.  This indicates the home currency is the currency for that card.  This also seems to be consistent with Mainline’s own patent specification at page 4 lines 15-17 where the home currency is associated with the cardholder as “their home currency”.  The making of the home currency as the default also seems to be equivalent to the setting of the currency for association with the card transaction as claimed in the present application. 

104. I regard the features of claims 1, 3-6, 8-10, 14, 16-19, 21, 22, 26 and 32-35 as being disclosed by the PRIAM specification.

Fexco Presentation and Detailed Proposal to Harrods

105. In his evidence Mr Barry questioned the public availability of this material stating there was no conclusive proof of publication date.  Further that the proposal appears dated 16 January 2002 throughout (middle of the footer) except for the cover page supposedly dated 16 April 1999, which itself features form, font, font sizes and styles inconsistent with the rest of the document.  Additionally Mr Barry questioned Mr O’Brien’s knowledge of the Harrods proposal as Mr O’Brien was not among the recipients of the electronic mail message enclosing the Harrods proposal.

106. Mr O’Brien noted evidence that an initial presentation to Harrods took place in March 1999.  In the evidence in reply Fexco’s Mr Cleary and First Currency’s and Pulse’s Ms Penn stated the presentation was made on 11 March 1999 and copies of the presentation were handed to attendees and there were no restrictions placed on attendees to keep the material confidential.  Mr O’Brien further noted the subsequent detailed proposal was sent to Harrods on 19 April 1999.  Mr Cleary indicated he delivered the detailed proposal to Harrods on 19 April 1999 and explains the January 2002 date as the date he printed the current document.  He also confirmed it was his understanding that Harrods was under no obligation whatsoever to keep that proposal confidential.  

107. I am prepared to accept the Harrods presentation and the detailed proposal were in the public domain before the priority date of the present application.

108. Mr Savage for Pulse submitted the test of public availability might properly be considered in the context of supposing that Fexco had filed a patent application in respect to its material to Harrods some months after Fexco made the presentation and proposal.  Mr Savage indicated if there were no confidentiality obligations then there is no question that Fexco’s patent application would be found to be prior published by the Fexco presentation and proposal to Harrods.  He described this as a reverse novelty test and suggested the material to Harrods should then be equally regarded as publicly available against the Mainline application as it would be against the Fexco application.

109. The application of this test appears to be somewhat difficult.  The test presents a hypothetical scenario supposing that a party files a subsequent patent application for the same material it has presented elsewhere to another party.  Further it seems the test of public availability, in this case, is more appropriately determined directly by taking into account the facts surrounding the dissemination of the information.  Additionally it would seem that public availability is a necessary precursor before a decision of prior publication could be made.  I am unconvinced that this test is of assistance in the present case.  In any case, I have found the Harrods presentation and proposal were publicly available before the priority date of the present application.

110. First Currency and Pulse’s Mr Coffill described the presentation to Harrods as a way of providing DCC at the POS in a card transaction.  He further stated that if the card prefix is found in the currency look-up table, the system prompts the merchant to offer the cardholder the option of paying in their home currency.  Mr Cleary described the system as one for determining a preferred currency for association with a card transaction based on the card number.

111. The Harrods presentation and Harrods proposal each relate to systems identifying BINs and using currency recognition schemes via a look-up table.  If the customer’s home currency is found and different from the merchant currency then an alert is given for the merchant to offer the customer the option of paying in the home currency.  This does not seem to electronically set an operating currency as claimed in the present application.  Mr Burley submitted there is currency setting disclosed in the Harrods presentation at slide 7.  On the other hand the closest description is that there is automatic currency conversion when the cardholder selects their home currency.  This is not the same as a system electronically setting the currency for association with a card transaction as claimed.

112. I regard the claimed invention as novel over the Harrods presentation and subsequent detailed proposal as presented in the evidence.

Flexicom Material

113. Fexco’s declarant Mr O’Brien explains in his evidence a presentation of a Flexicom multi-currency system he made in Australia to National Australia Bank and Bank of New Zealand representatives on 18 March 1999.  Mr O’Brien submitted a substantially identical PowerPoint presentation in his evidence.  Mr Briant, from the Bank of New Zealand, concurs that Mr O’Brien spoke with him via teleconference on that date while making the presentation to the National Australia Bank representatives.

114. Mr O’Brien stated the Flexicom presentation was similar to the Harrods disclosures.  It may be the systems are similar.  On the other hand the level of disclosure of technical content in the Flexicom presentation is not as high as in the Harrods presentation.  The Flexicom presentation seems to be more of a sales presentation than a technical presentation.  There is no disclosure of methods of currency determination of cards or currency conversion such as for example the use of BINs and currency look-up tables.

115. Mr Shiel is a founding director of Flexicom.  He described Flexicom’s development of a multi-currency POS (“MCPOS”) computer programme in 1996.  Mr Shiel indicated a version MCPOS 3.17 was detailed in a functional specification dated 27 July 1998.  A further MCPOS 3.18 version Release Note was made available to the public on 20 August 1998.  Mr Shiel described a particular file in the 3.18 version of the Flexicom software as a two field file in the form of a searchable look-up table.  The first field contained six digits BINs.  The second field was a four character currency code field corresponding to the currencies of the card issuers cross-referenced with the corresponding BINs stored in the first field.  This file was used for identifying the currency of cards from the BIN on the cards.

116. This Flexicom material relates to identifying a BIN from a card and using a look-up table to establish a corresponding currency for that BIN.  If a card customer’s home currency is different from the merchant currency then the customer is offered the option of paying in their home currency or the merchant’s currency.  Mr Shiel indicated if there was no match in the look-up table then the Flexicom MCPOS system defaulted to the merchant currency.  On the other hand there is no clear disclosure of default to the home currency if a match is found.  The customer in this case is offered a choice of currency to pay in.  There is insufficient disclosure of setting an operating currency in the same way as claimed in the Mainline application.    

117. I regard the claimed invention as novel over the Flexicom system as presented in the evidence.

NaBanco Caribbean News article

118. In the evidence from all three opponents a NaBanco Caribbean News article of 31 May 1995 was cited.  Fexco’s Mr O’Brien stated the first DCC installation went live in the Caribbean in mid-1995 and that this article announced that installation.  First Currency and Pulse’s Mr Coffill stated the article discloses the use of a BIN table to determine whether to process the transaction in $US or the local currency.  First Currency and Pulse’s Mr Fillinger attested to NaBanco completing the development of a dual currency terminal in May 1995 in the Caribbean as cited in the article and that the system relied on BINs for currency recognition.

119. The news article is light on technical content.  While it mentions a BIN table within a terminal to determine which transactions should be in local or US dollars, the article does not describe how such determination is made with the BINs, much less that the determination and any setting of currency is made as claimed in the present application.

120. I regard the claimed invention as novel over the NaBanco article.

Other presentations

121. At the hearing Fexco further relied on a Fexco presentation to Selfridges.  Mr Cleary indicated this presentation took place on 5 May 1999.  The presentation is substantially the same as the Harrods presentation.  First Currency and Pulse further relied on a Fexco proposal to RetailLogic.  Mr Coffill indicated this presentation was publicly available on 9 July 1999.  The latter is similar to the Harrods detailed proposal at least in the content that most relates to the claims of the present application.  Neither of these disclosures come closer to anticipating the claimed invention than the Harrods documentation.

Patent literature

122. The three opponents also cited a number of patent specifications.  Of these patent specifications, in the submissions from the opponents and in my assessment, WO95/12169 and WO97/04411 warrant the closest scrutiny.

123. WO95/12169 effectively describes a system for accessing funds using a fixed value access card such as an electronic traveller’s cheque.  The amount on the card is redeemable through an automatic teller machine (“ATM”) or POS terminal.  Page 4 describes the use of BINs on cards to determine currencies of cards.  Further described is a system of automatic currency conversion at a central computer if a terminal’s currency is different from the card currency.  Debits of an account balance in the card currency can be made from an ATM or POS terminal.  On the other hand there is no clear disclosure of the details of look-up tables, or user selection of currency, or currency setting for a transaction between merchant and cardholder at a POS as claimed in the present application. 

124. I regard the claimed invention as novel over WO95/12169.

125. WO 97/04411 describes a customer-directed transfer system for transferring funds between accounts across international borders and in different currencies.  The document broadly describes interpreting information from a card, including data representing the financial institution that issued the card, using a card reader and that the terminal then consults a table to determine how to handle accounts associated with cards from the particular financial institution (page 17).  Claims 8 and 18 of the WO document define encoded data on the card that includes a number indicative of the financial institution and that the currency of the source account is obtained by referencing the encoded data with a table of financial institutions.  First Currency and Pulse’s Mr Coffill indicated this meant the card prefix or identifier code was used to determine the currency.  It is questionable whether the disclosure in the WO document amounts to identifier codes being compared in a table of issuer and currency codes as claimed in the present application.  It seems this would be more a presumption than an actual statement from the WO document.  Moreover the document seems to be silent about setting a currency for association with a card transaction as claimed in the application.

126. I regard the claimed invention as novel over WO97/04411. 

INVENTIVE STEP

127. Under section 7(2) of the Patents Act, an invention is taken to have an inventive step unless it would have been obvious to a person skilled in the art in light of the common general knowledge in the patent area before the priority date of the claims. Under sections 7(2) and 7(3) the common general knowledge may be considered either on its own, or together with prior art information which the skilled person could, before the priority date of the claim, be reasonably expected to have ascertained, understood and regarded as relevant.

128. The Wellcome Foundation Ltd v VR Laboratories (Aust.) Pty Ltd decision, (1981) 148 CLR 262 at 280, states the question is whether the invention would have been obvious to a hypothetical skilled addressee armed with the common general knowledge at the priority date. Also from that decision at page 286, an appropriate test is whether a person skilled in the relevant field, and 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.

129. The Aktiebolaget Hassle v Alphapharm Pty Limited High Court decision, 56 IPR 129 at [50]-[53], appears to approve of the Wellcome (supra) test.  In discussing what was meant by a matter of routine the High Court noted and accepted an affinity with the approach in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd, (1970) 87 RPC 157, of whether the person skilled in the art would directly be led as a matter of course to try what was claimed in the expectation that it might well produce a useful alternative. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No. 2] [2007] HCA 21, the High Court reviewed the legislative changes of the 1990 Patents Act, amongst other legislation, that have raised the threshold of inventiveness. The court stated at [50] though that the case law developed previously continues to be relevant not least because the legislation employs many familiar terms such as common general knowledge. General principles regarded by the High Court in Lockwood (supra) to be of continuing relevance, at [50]-[52], were that “obvious” means “very plain”, a scintilla of invention remains sufficient to support the validity of a patent, there must be some difficulty overcome, some barrier to be crossed, and an invention must be beyond the skill of the calling.

130. I will apply the above principles to the present case.

Field of the Invention

131. The specification discusses the general nature at the priority date of transactions involving card payment systems.  Generally card payment systems conducted transactions in the currency of the merchant.  The specification states a number of difficulties with this.  Restrictions to transactions in the currency of the merchant can be inconvenient for cardholders travelling abroad as travellers are unsure of the value of the transaction in their own currency.  Further that cardholders would not know the full cost of the transaction in their own currency until they received their card statements.

132. At the hearing and in the evidence, the parties generally were in agreement that the field of the invention was that of card payment systems in a multi-currency environment.  First Currency and Pulse submitted the person skilled in the art is one with a practical involvement in the design and operation of card payment schemes.  Mainline did not agree and submitted that view would suggest the person was a manufacturer of such schemes or systems.  Mainline further submitted if that was right then very few people would qualify as persons skilled in the art and consequently very little of any of the opponents’ evidence could be given any weight.

133. The law is replete with cases describing the characteristics of the appropriate person to whom a patent specification is addressed.  The Wellcome (supra) case at 270 describes a non-inventive worker in the field.  Similarly the Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd case, 144 CLR 253 at 293, refers to a non-inventive skilled worker in the field. I think that to view the person skilled in the present field of card payment systems as one only involved in manufacturing such systems is a somewhat narrow approach. Additionally First Currency and Pulse’s description of one involved in the design and operation of such systems does not seem so narrow as Mainline suggested. I am inclined to take a broader view. Nonetheless I would restrict the scope to one involved in card payment systems in a multi-currency environment. I regard the person skilled in the present art as one involved in the design or presentation or implementation or operation of card payment systems involving multiple currencies. The latter would include merchants or suppliers of products or services able to be purchased under such payment systems.

134. The parties addressed the weight to be given to the evidence of various declarants based on their experience in the field.  Mainline’s Mr Barry stated that the expertise of Fexco’s Mr O’Brien appeared to be in the sale of banking systems rather than technical developments thereof.  Mr O’Brien responded in evidence in reply that he holds tertiary qualifications in the relevant field and has worked in developing, and not just selling, computer based banking/commerce systems during a 20 year career.  Similar criticism has been directed at First Currency and Pulse’s declarants.  For instance that Mr Coffill had no direct involvement with DCC, and that Mr Cleary’s and Ms Penn’s presentations to Harrods and others were more in the nature of sales presentations and light on technical content.  In reply these declarants all substantiated their technical expertise and their familiarity with the field of the invention, that is, card payment systems involving multiple currencies.  I see insufficient reason to discount the evidence of the declarants on their knowledge of the art.

135. Mr Burley for First Currency and Pulse submitted that few of Mainline’s declarants had direct knowledge or experience of the Australian card payments industry before the priority date of the application.  Mr Coffill noted that Mr Barry, Mr Wastyn, Mr Duffy and Mr Walker all had experience only predominantly in Europe.  While Mr Coffill and Mr Storey discussed differences between the card payments industry in Europe and in Australia they also both indicated the industry was largely an international one.  I see insufficient reason to discount the evidence of these of Mainline’s declarants on their knowledge of the art.

136. Mr Burley further referred to Mr Storey’s declaration in response to Mainline’s Australian declarant Mr Collins.  Mr Burley noted Mr Storey’s comments that Mr Collins appeared to be experienced mainly in internet-based security including internet-based card payment system security.  Mr Storey suggested he would not expect Mr Collins to have been aware of all aspects of card payment systems or processes.  Mr Storey noted Mr Collins commented that he was not aware of developments in the card payment industry before the priority date of the application which provided currency conversion at the POS.

137. It may have been that Mr Collins’ experience in card payment systems involving multiple currencies was not as expansive as that of other declarants.  On the other hand Mr Collins had been involved in the banking industry in Australia since 1994 and in card payment services and particularly emerging POS systems from late 1997.  The experience may have been relatively light up to the priority date of the present application in mid-1999.  However the industry had been evolving rapidly at the time.  This is evidenced by much of the closest prior art, as discussed earlier, being publicly available only in the year preceding the priority date of the present application.  There was also a convergence of technologies amongst card payment systems, e-commerce, and card and data security.  Whilst noting Mr Collins’ lower level of experience in card payment services compared with other declarants, I see little reason to significantly discount what he has said, particularly as he is Mainline’s principal Australian witness.

State of the art

138. Fexco’s Mr O’Brien was based in Australia at the time of his declarations and has worked in the industry in Australia and in Europe.  He described DCC systems as follows.  A financial transaction would have been carried out between a supplier and a purchaser.  The supplier would normally have used their local currency.  The purchaser’s card would have had an allocated currency which would generally have been the local currency of its issuing bank as identified by the card’s BIN.  If the supplier’s local currency and the card currency were different, DCC allowed a card transaction of this type to be conducted in the currency of the card, by detecting the card number, associating the cardholder’s home currency with that card and applying a currency conversion at the time of the transaction.  The cost of the transaction was displayed in both the supplier’s local currency and the card currency to enable the purchaser to choose the currency of payment.  Mr O’Brien stated that DCC had been widely used in Western Europe since the mid 1990s and the principles of operation had been common knowledge to those in the banking industry around the world since that time.  Mr Lavecky and Mr Briant confirmed the dissemination of information about DCC in Australia and New Zealand before the priority date of the application.

139. First Currency’s and Pulse’s Mr Coffill stated it was his experience in the Australian card payments industry that the card payments industry is an international industry.  This is because the card associations are globally based and provide systems to their financial institution members’ operations that facilitate an ever-increasing number of cards being accepted at ever-increasing numbers of ATMs, merchant locations and financial institutions around the world.  Fexco’s Mr Lavecky similarly described the standardisation of credit card systems worldwide which was controlled by only a small number of companies throughout the world.  Mr Coffill described DCC in a similar way to Mr O’Brien and further stated he became aware in 1997 of DCC functionality being available in Europe.  First Currency and Pulse’s Mr Storey described his experiences of the Australian card payment industry at the priority date of the application.  He also stated the industry was an international one and that he became aware of DCC by 1997.  Mr Storey corroborated much of Mr Coffill’s evidence. 

140. Mainline’s Mr Barry did not dispute that DCC was well known before the priority date of the application.  Rather he differentiated the subject of the present application from DCC by stating the present application related to automatic currency recognition at the POS requiring no manual intervention by the merchant to select a currency for the transaction once the cardholder had made a choice of preferred currency. 

141. From the above it seems DCC was developed quickly with a view to making card transactions easier and more transparent in multiple currencies for international travellers.  Further that DCC was disseminated quickly in the card payment industry throughout the world and was generally well known in that industry from about 1997, about two years before the priority date of the application.  I am prepared to accept that DCC was common general knowledge in Australia at the priority date of the application.

142. The point of whether the determination of the card currency, from that part of the card number making up the BIN, was also part of the common general knowledge in Australia before the priority date is also a pertinent consideration in this case.  All three opponents’ declarants, Mr O’Brien, Ms Penn, Mr Coffill Mr Storey and Mr Ryan all attested that the use of BINs or card prefixes to determine card currencies by comparing entries in BIN and currency code tables was well known before the priority date of the application.  Mr Storey for instance went further to state the linking of BINs to card currencies was the fundamental way to process transactions using multiple currencies.

143. Mainline’s Mr Barry again did not dispute that it was known to use BINs in this way.  He and Mainline’s Mr Duffy though stated the BIN was an unreliable way of determining card currency.  Mr Barry particularly noted that the same BIN could apply to more than a single card issuer currency.  The issuing bank was at liberty to issue cards in a plurality of currencies.  Mainline’s Mr Walker accepted card BIN tables were known and used before the priority date of the application but only for the purpose of routing transactions and transaction settlements.

144. In evidence in reply Mr O’Brien, Mr Lavecky and Mr Coffill all acknowledged the BIN may not conclusively establish the right currency for all cards in all cases.  For example banks in a certain country may issue cards in a different currency from the currency used in that country.  However such occurrences were regarded as exceptions by the declarants.  These declarants iterated the BIN was used before the priority date of the application and would have reliably determined the cardholder’s currency in the majority of cases. 

145. From the above it seems to be accepted that DCC systems were not flawless before the priority date.  Nonetheless this does not detract from specific functionality about DCC systems possibly having been common general knowledge.  The use of the BIN as a means to determine the currency of a card is consistent.  While the primary function of a BIN was to identify the financial institution, and initially perhaps to also route transactions and transaction settlements, the use of a BIN as a means to identify the cardholder’s currency was well established before the priority date of the application.  It may have been the case that this method was inaccurate in some cases.  Nonetheless the method seems to have been universally recognised and adopted as a valid method for the majority of cases.  I regard the use of a BIN to identify cardholder currency in DCC systems was common general knowledge in Australia before the priority date of the application.

146. First Currency’s and Pulse’s Mr Coffill and Mr Storey provided some discussion of the differences between Australia and Europe in respect to the card payments industry.  Both suggested the industry in Australia was more mature at the priority date than in other parts of the world.  This may suggest there were other elements of common general knowledge at that date peculiar to Australia.  Mr Coffill said EFTPOS terminals in Australia carried significantly more memory than POS terminals in Europe so that new applications could be added remotely.  This was an advantage given Australia’s geographically widespread merchant network, covering city as well as remote rural areas, and eliminated the need to replace widespread EFTPOS terminals every time a new application was to be added or changed. 

147. It may have been the case that EFTPOS terminals in Australia carried significantly more memory than in Europe.  On the other hand Mainline’s Mr Collins stated there were a range of different EFTPOS terminals in use in Australia with different memory and processing capacity.  First Currency’s and Pulse’s Mr Storey responded in agreement with that statement but nonetheless stated that many of these terminals had the necessary memory and processing capability to run a DCC application.  Whether such memory and processing capability was for the running of DCC applications or the adding of additional applications remotely or for what other purposes has not been discussed in any significant detail by the declarants.  The evidence is inconclusive to establish that additional memory capacity over the capacity of European POS terminals for multi-currency functionality was common general knowledge in Australia at the priority date. 

148. Mr Storey advanced the maturity of the industry in Australia by stating that Australia had adopted a common approach to card transactions involving PIN entry to validate transactions at EFTPOS terminals.  Accordingly, validation occurred in real time.  Mr Storey indicated that in Europe there was no common approach at that time and validation in many European countries was by signature so POS terminals in Europe did not need to deal with PINs.

149. The use of PINs to validate transactions in real time at EFTPOS terminals has been a characteristic feature in the Australian retail and commercial sector for a significant period of time.  Mr Storey commented on the deployment of ATM and EFTPOS technology in Australia during the 1980s.  I am prepared to accept the use of PINs for validation in real time at EFTPOS terminals was common general knowledge in Australia well before the priority date of the present application.  This would suggest there were degrees of automation of processes in this industry that were common in Australia while they may have still been done manually in parts of Europe at that time.

Whether there is an Inventive Step

150. All three opponents appeared to place a heavy reliance at the hearing on the common general knowledge to support their assertions of lack of inventive step.  I have stated that DCC was common general knowledge in Australia before the priority date of the application.  Further that the use of BINs to identify cardholder currency in DCC systems was common general knowledge in Australia before the priority date.  As mentioned above under the novelty section, at least claims 1 and 14 broadly define the above except for the setting of the currency for association with the card transaction. 

151. Mainline’s Mr Barry indicated the invention’s automatic currency recognition at the POS and automatic default at the POS to the currency of the card was not a DCC system.  The setting of the currency was an automated step requiring no verbal communication between cardholder and merchant and requiring no manual intervention by the merchant once the cardholder had made the choice of currency for payment.  Mr Barry stated these manual features characterised existing DCC systems.  Mainline further submitted that the opponents had presented no evidence suggesting it was obvious to move from the DCC system requiring manual intervention to one where currency recognition and currency setting was automatic.

152. It may be easy to regard movement from a manual multi-currency system to an automatic one as obvious.  In this case, I think what would need to have been obvious though at the priority date was to have taken the step in moving from currency setting manually by a merchant, after confirmation of chosen currency from the cardholder, to an automatic default to the card currency.

153. Mr O’Sullivan for Fexco submitted Mainline’s own declarants had identified the motive of automation of the known manual process and therefore this could not be inventive.  For instance Mr Barry stated (paragraph 7 of declaration of 20 July 2005) that it became apparent to him that the marketplace could usefully be provided with an improved method where the cardholder could automatically be offered the opportunity to pay in the cardholder’s or merchant’s currency.  Mr Duffy stated one could conclude the next stage of development would be a form of card recognition to eliminate incorrect or accidental conversion and also have the service delivered on a traditional POS device.  Mr O’Sullivan submitted that nothing that is apparent, traditional or a market requirement can be an invention.

154. Mr Burley for First Currency and Pulse submitted that Mr Storey declared that he was “under-whelmed” by the patent application.  Mr Storey further stated that, for some time before the priority date, the Australian card payments industry had been moving towards greater automation of card transactions.  Mr Burley similarly noted Mr Coffill declared the claimed invention to be “bread and butter stuff” for him and anyone else working in the Australian card payments industry before the priority date.  Mr Coffill further stated if someone asked him to develop on-the-spot currency conversion at that time he would have used on-line real-time processing connecting the merchant EFTPOS terminal with a bank’s acquirer processing system, use that to identify the card prefix and the associated currency code to offer the cardholder the card currency amount to complete the transaction.

155. The above suggests high levels of activity were taking place in Australia before the priority date to develop and continually improve automated solutions in the industry, and roll out continually improving automated real-time transaction capability.  I have already mentioned the deployment of EFTPOS technology in Australia during the 1980s enabling PIN validation in real time remotely at such merchant terminals thereby enabling transactions to proceed automatically at the terminals.  DCC as described in the main by the parties involved the step where the merchant would be prompted by the system, if the system determined the card to be a “foreign” card, to manually offer the cardholder a choice of merchant or cardholder currency in which to conduct the transaction and the merchant then setting the chosen currency. 

156. With the degree of automation and real-time transaction developments taking place in Australia at the time, and given the availability of a multi-currency terminal at the POS and given an overseas person may prefer to pay in their own currency at such terminal, I regard that a person skilled in the art in Australia would plainly have been directly led at that time as a matter of course to take DCC as described above and consider setting the currency automatically by default to that of the card.  On this point I consider claims 1-11, 14-23, and 26-35 lack an inventive step.

157. Mr O’Sullivan for Fexco asserted the claimed invention also lacked an inventive step in the light of the common general knowledge in combination with other documents, principally those mentioned in the novelty section above.  Ms Howard for Mainline submitted the opponents had not presented any evidence that anyone in the card payments industry could reasonably be expected to have ascertained, understood and regarded the information in those documents as relevant.  In support Mainline relied on E I DuPont de Nemours & Co v Imperial Chemical Industries PLC, (2002) 54 IPR 304 at [107]-[108], Firebelt Pty Ltd v Brambles Australia Ltd, (2000) 51 IPR 531 at [15], and Nutrasweet Australia Pty Ltd v Ajinomoto Co Inc, (2005) 67 IPR 381 at [44].

158. In accordance with the above decisions, there is no direct evidence from the opponents in this case that persons skilled in the art generally could reasonably be expected to have ascertained the various technical specifications and proposal documents or the patent specifications already mentioned.  Mr Coffill for instance did not seem to know of many of the technical specifications or proposal documents prior to this opposition.  He further stated that he had not previously seen much of the patent literature cited in the opposition.  Other declarants were principally silent on whether patent documents were consulted in this industry.  Mr Coffill did state though that he was aware before the priority date of the technology described in the patent documents and non-patent documents.  Other declarants such as Mr Cleary and Mr O’Brien as presenters clearly had access to the technical specifications and proposal documents as did representatives of the firms to whom they presented their proposals.  As many of these presentations took place only in the year preceding the priority date of the present application it is questionable whether persons skilled in the art generally could have ascertained these documents at that time.

159. I find the opponents have provided insufficient evidence to establish that the documents relied upon in evidence could have reasonably been ascertained generally by persons skilled in this art before the priority date.  Nonetheless, in the present case, this does not seem to detract significantly from the opponents’ cases.  The more pertinent of the documents, for example the Harrods and RetailLogic documents in the main disclose DCC systems as described above.  I have found earlier that claims 1-11, 14-23, and 26-35 of the application lack an inventive step over DCC systems as known to many of the declarants before the priority date of the application.

MANNER OF MANUFACTURE

160. Mr O’Sullivan for Fexco submitted the claims define the automation of the step of cardholder or merchant currency selection in a card payment transaction.  He said there is no invention in the mere automation of a manual process.  I inferred that Mr O’Sullivan was referring to a known manual process.

161. Mr Burley for First Currency similarly submitted the claimed invention is no more than a method or scheme to automate a known manual system.  He further described the claims as utilising several known means for the known purpose of identifying the currency associated with the card.  Mr Burley relied on the Commissioner of Patents v Microcell Ltd decision, (1959) 102 CLR 232 at 235-236, to state that accordingly the claimed invention was not a manner of manufacture.

162. Submissions of automation of known processes, and submissions of use of a known product for a known purpose are tantamount to assertions of lack of inventive step.  In this case I think these points have already been sufficiently dealt with under inventive step.  I will not go over that ground again.

DECISION

163. I have found the claims of the specification are significantly flawed on several points of clarity. 

164. The operation of the invention as described by Mainline at the hearing is not fully supported by the specification.  All the claims of the specification, including the omnibus claims, inadequately distinguish the various defined codes and their interrelationship, and inadequately define the content of the BRT in the context of the claimed invention.  Further, several claims are flawed in respect to the conditional nature of the setting of the currency.  The claims are quite distant from the supposed invention described by Mainline at the hearing.

165. I have also found that several claims fail for lack of novelty and lack of inventive step, inadequately distinguishing the supposed invention from the prior art.

166. Given Mainline’s significantly enhanced description of the invention at the hearing over the material described in the specification, it may be difficult to extract suitable subject matter from the description and put it in the claims to overcome the above points against the claims.  As mentioned above, all the claims fail in a couple of significant areas of clarity.  On the other hand I am unprepared to say with conviction at this stage that there is no patentable subject matter in the body of the specification that could not legitimately be brought into the claims by amendment. 

167. Rather than refusing the application outright at this stage I allow Mainline sixty (60) days from the date of this decision to propose suitable amendments to overcome the above findings.  If suitable amendments are not proposed within that time I will refuse the application.

COSTS

168. All the parties principally submitted that costs should follow the event.  I see no reason to depart from this approach.  The opponents have all been successful.  I award costs against Mainline.

M. G. Kraefft
Delegate of the Commissioner of Patents

Patent attorneys for the applicant, Mainline          :  Shelston IP, Sydney

Patent attorneys for the opponent, Fexco              :  F B Rice & Co., Sydney

Patent attorneys for the opponent, First Currency   :  Freehills, Sydney
Patent attorneys for the opponent, Pulse                :  Freehills, Sydney