Groupon, Inc. - [2022] APO 30

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Groupon, Inc. [2022] APO 30

Patent Application: 2020200206
Title:Consumer device payment token management

Patent Applicant:                   Groupon, Inc.
Delegate:  Dr N. R. Madsen – Deputy Commissioner of Patents
Decision Date:  28 April 2022
Hearing Date:  Written submissions completed 24 March 2022

Catchwords: PATENTS – section 45 – examiner’s objection – a method using tokens to facilitate point-of-sale transactions using electronic devices – manner of manufacture – invention in substance directed to a mere scheme – application refused

Representation: Spruson & Ferguson

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2020200206
Title:Consumer device payment token management

Patent Applicant: Groupon, Inc.
Date of Decision: 28 April 2022
DECISION
The claims of the application are not directed to a manner of manufacture, and I see no patentable subject matter in the specification. The application is refused.
REASONS FOR DECISION
BACKGROUND

Groupon, Inc. (the applicant) filed patent application 2020200206 on 10 January 2020 as a divisional application of application 2014214650. It has an earliest priority date of 11 February 2013. The parent application was subject to two examination reports before lapsing, while the present application received three adverse examination reports. At all times the claims have received objection under the ground of manner of manufacture. On 18 November 2021, following the latest report on the present application, the applicant requested to be heard. In that report, objections that the claims were not clear and that the claims were not for a manner of manufacture were present. The applicant was invited to file written submissions which were duly filed on 24 March 2022 along with proposed amendments.
The standard of proof that applies in the present case is the balance of probabilities (subsection 49(1)). I must accept the application if satisfied on the balance of probabilities that the application complies with the Act. If I am not so satisfied, then I can refuse the application. Also, the final date for acceptance of the application is 5 March 2022, however paragraph 13.4(1)(g) of the Patent Regulations is available to extend the time for gaining acceptance to 3 months (or longer if appropriate under sub-regulation 13.4(3)) from the date of the present decision.
SPECIFICATION
According to the specification at [0002], the embodiments of the invention relate, generally, to token management for secure transactions using a secure device. While the “BACKGROUND” section of the specification provides little discussion of the state of the art at the priority date of the present invention, it notes that financial transactions between merchants and consumers typically require a form of payment to be presented to the merchant. The specification discusses devices may be used at a point-of-sale (e.g., point-of-sale devises, such as cash registers, credit card readers, etc.). It is noted that there is a desire for improvement in current systems. The specification then follows with a number of paragraphs and consistory statements essentially broadly summarising the invention. At paragraph [0045] an “Overview” section of the specification provides a neat summary of the concepts of the invention as follows:
Embodiments discussed herein may be configured to provide techniques for securing and/or otherwise verify consumer identification and payments using a consumer device that interfaces with merchant devices. For example, a consumer may carry a consumer device as the consumer walks into a merchant's shop. The consumer device may be configured to interface with a merchant device, such by establishing a wireless connection with the merchant device. Through this interface the consumer may be automatically identified by the merchant device. However, rather than passing private consumer data via the wireless connection, the consumer device may be configured to send a wallet identifying token to the merchant device. As discussed in greater detail herein, the wallet identifying token reveals little or no useful information to unauthorized devices. The merchant device sends the wallet identifying token to a central system (e.g., a payments processing network), such as via a secure connection and, once the wallet identifying token is validated, the merchant device receives consumer information in return.
At this point it is useful for me to clearly recognise the technology that the present invention relates to. The above excerpt makes clear that technology of the present invention can be easily visualised for constructional purposes as that involved in conventional Tap and Go™ or payWave™ arrangements where a customer uses near field technology in their mobile phone to enact a payment via wireless communication with a merchant terminal. Inevitably, data must be received at the customer device in order to setup the near field system to function as a payment device, and inevitably, a merchant terminal must communicate with some central system for transaction processing. At the priority date of 11 February 2013, the use of near field device technology for transaction initiation was widespread (I provide some references to such technology later in the decision). This understanding is consistent with the entirety of the specification which does not itself purport to provide for any modification or improvement to the underlying physical architecture or specific software arrangements of the relevant wireless communication technology. With this in mind, I will turn to the embodiments described in the figures to lay out the nature of the described invention.
Figs 1a and 1b are a useful depiction of the invention claimed in the specification. The specification notes that in the figures the consumer device and merchant device are configured to wirelessly communicate with each other and may be running a Bluetooth-compliant protocol or may be able to access any other type of public access network. Such configuration is consistent with the possibility of the consumer device and merchant interacting via near field communication with each other, and further being connectable with a central system via some kind of broader network that may involve the internet. The figures are largely self-explanatory to the extent that certain steps occur in a sequentially numerical order (for example in Fig. 1a the order being steps 102, 104, 106 and then 108).
Delving with a little more detail with reference to Fig. 1a, the specification discusses that at 102, a central system may be configured to send wallet identifying data to a consumer device. The central system refers to any marketing system, payment processing system, coupon provider system and or any other type of promotional system controlled by a merchant, third party, and/or any other type of user. The wallet identifying data may comprise one or more keys, random numbers, codes and/or other types of tokens. This data can be transmitted over a public network or secured network, including via the internet. In circumstances where a consumer interacts with a merchant, tokens may be sent to the merchant device after which the merchant device will send tokens to the central system. The central system may validate those tokens before sending customer identifying data to the merchant device at 108. The specification notes that the customer identifying data may be interpreted by the merchant device as identifying and authenticating the customer in anticipation of a transaction.
Fig. 1b provides more detail in relation to the actual facilitation of a financial transaction that follows on from Fig. 1a. At step 122, the merchant device will send transaction data to the consumer device, and this may include a transaction ID, a merchant ID, and a payment amount. At 124 the consumer device will then send approval data for the transaction signing this approval data with a private key associated with a token. At 126, this information is sent by the merchant device to the central system and the central system will look to validate the transaction. When the transaction is validated, the central system will send confirmation of such to the merchant device. A receipt can then be sent from either the merchant device or the central system to the customer device.
Figures 3 and 4 relate closely to the figures presented above but are provided to represent a communication method between devices in the system that involve temporal actions. Again, these figures are largely self-explanatory, depicting what each device or system “says” to another device or system, and when it is “said”.
The remaining figures respectively show example device screens of a consumer device during the transaction process (Figs. 5 & 6), an example system network architecture of the present invention (Fig. 7), and a schematic bock diagram of circuitry in for example, a central system, a consumer device or a merchant device (Fig. 8). Each of these physical arrangements is presented by the specification in a manner that essentially provides for any possibility for implementation that is within the known skill of the person skilled in the art.
THE CLAIMED INVENTION
Legal Principles of Construction
While the rules of construction for an Australian patent specification are well summarized in Decor Corp v Dart Industries [1988] FCA 399; 13 IPR 385, the correct application of these rules to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 81 IPR 228 at [118] – [120]:
"the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear ... while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole ... it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification ... terms in the claim which are unclear may be defined or clarified by reference to the body of the specification."
I also note that the requirement that the claims are clear is understood to be satisfied if a person could ascertain "whether or not what he proposes to do falls within the ambit of the claim" (Monsanto Co v Commissioner of Patents (1974) 48 ALJR 59).
Examiner’s objection to clarity
The following is the examiner’s objection to the clarity of the claims prior to amendment.
“Claims 1 and 15 as proposed to be amended lack clarity for the following reasons:
· These claims recite "send the consumer identifying data associated with the validated first wallet identifying token to the merchant device." However, the merchant device instead receives the validated token, not the identifying data. For the purposes of examination, I have construed these features as though the merchant device received the consumer identifying data.
· The feature of "the first wallet identifying token transmitted while the consumer device lacks connectivity with the networked device from the consumer device to the merchant device..." is grammatically unclear due to it being ambiguous as to what part of the claim the "from the consumer device to the merchant device is referring to. The claims can be read as:
a) the "from the consumer device to the merchant device" feature is referring to the lack of connectivity between the consumer and networked devices;
b) the "from the consumer device to the merchant device" feature is referring to the transmission of the token.
For the purposes of examination, I have construed these claims in line with option (b), which appears to be the intended meaning by the Applicant.”
Amendments made to the claims on 24 March 2022 address both of these issues of clarity raised by the examiner, making changes to ensure construction in alignment with the examiner’s proposed construction. Thus, these objections have been overcome and I will not address them further.
The claimed invention
The specification, as presently proposed to be amended on 24 March 2022 includes two independent claims directed to similar subject matter, claim 1 constituting a payment processing system and claim 15 constituting a machine implemented method. I consider the proposed amendments to be allowable in accordance with section 102 of the Patents Act. At this point of the decision, I need only present claim 1.
A payment processing system comprising:
a networked device comprising processing circuitry configured to:
generate a plurality of wallet identifying tokens that are associated with a plurality of private keys such that each wallet identifying token is associated with (a) a private key and (b) consumer identifying data that identify a consumer;
send the plurality of wallet identifying tokens and the plurality of private keys to a consumer device of the consumer for storing as a reserve of wallet identifying tokens, the plurality of wallet identifying tokens received by the consumer device via first consumer device communication capabilities associated with a first consumer device communication range;
receive from the consumer device, via a merchant device utilizing first merchant device communication capabilities associated with a first merchant device communication range, a first wallet identifying token, the first wallet identifying token transmitted, while the consumer device lacks connectivity with the networked device, from the consumer device to the merchant device via second consumer device communication capabilities associated with a second consumer device communication range and received by the merchant device via second merchant device communication capabilities associated with a second merchant device communication range upon the consumer device coming within the second merchant device communication range, the second merchant device communication capabilities being less secure than the first merchant device communication capabilities, the second consumer device communication capabilities being less secure that the first consumer device communication capabilities; and
compare the first wallet identifying token with the plurality of wallet identifying tokens to determine whether the first wallet identifying token corresponds to at least one wallet identifying token of the plurality of wallet identifying tokens; and
wherein, in circumstances where the first wallet identifying token corresponds to at least one wallet identifying token of the plurality of wallet identifying tokens and the first wallet identifying token was received during a redemption period for the first wallet identifying token, the processing circuitry validates the first wallet identifying token and is further configured to:
send the consumer identifying data associated with the validated first wallet identifying token to the merchant device for the merchant device to identify and authenticate the consumer in anticipation of a financial transaction, the consumer identifying data received by the merchant device via the first merchant device communication capabilities associated with the first merchant device communication range;
receive, from the merchant device utilizing the first merchant device communication capabilities associated with the first merchant device communication range, secured payment approval data that comprises consumer approval data signed by the consumer device with a first private key of the plurality of private keys, wherein the first private key is associated with the validated first wallet identifying token;
determine the first private key associated with the validated first wallet identifying token from among the plurality of private keys;
generate payment approval data by validating the secured payment approval data with the first private key associated with the validated first wallet identifying token; and
facilitate the financial transaction based on the payment approval data.
Understanding the scope of the claims
While I do not consider there to be any specific difficulties in construing the claims it is useful to step through the features as the independent claims are quite lengthy. Claim 1 is directed to a payment processing system, and the embodied physicality of the system is best understood with an eye to Fig. 1a and Fig. 1b. The payment processing system essentially consists of three physical “entities” in the form of some kind of physical computer system. There is a central system/networked device, a consumer device, and a merchant device. Each of these computerised elements has communication capabilities via two means, and each of the elements communicate the other elements thereby sharing information.
Regarding these communication capabilities, the consumer device communicates with the central system via a first communication capability, and with the merchant device via a second communication capability. The merchant device is similar in that it communicates with the central system via its own first device communication capability, and further communicates with the customer device via a second device communication capability. The claim makes clear that second device communication capabilities of the merchant device and the consumer device are less secure than the first communication capabilities.
While this wording is somewhat cumbersome, it is clear to me what the communication capabilities are referring to. Put simply, I understand that this architecture reflects the Tap & Go™ or payWave™ type arrangement where devices can be setup for use over some kind of network connection (such as the internet) and are used for payment using near field technology at the point of sale. At the point of sale in such technology is a merchant device that is used to scan for example, a customer’s mobile phone, to facilitate a transaction. That merchant device is inevitably connected in some way to a network (such as the internet) such that transactions may be fulfilled. To this extent, the idea that customer devices and merchant devices are connected to a central system via the internet and are further able to communicate with each other using some less secure near field technology appears nothing new. On my understanding this appears to represent the fundamental architecture of modern contactless payment technology.
The specification itself does not purport to improve upon this fundamental technological arrangement, nor does it purport to improve upon any communication mechanisms between devices. It discusses at [00168] that the central system may couple to merchant devices by a range of types of network as follows:
Central system 702 may be coupled to one or more merchant devices (e.g., merchant device 710) via network 708. In this regard, network 708 may include any wired or wireless communication network including, for example, a wired or wireless local area network (LAN), personal area network (PAN), metropolitan area network (MAN), wide area network (WAN), mobile broadband network, or the like, as well as any hardware, software and/or firmware required to implement it (such as, e.g., network routers, etc.). For example, network 708 may include a cellular telephone, an 802.11, 802.16, 802.20, and/or WiMax network. Further, the network 708 may include a public network, such as the Internet, a private network, such as an intranet, or combinations thereof, and may utilize a variety of networking protocols now available or later developed including, but not limited to TCP/IP based networking protocols.
Figure 7 shows the same network examples used to connect the central systems to the consumer device. Regarding the connection between customer and merchant devices the specification discusses the use of a PAN (Personal Area Network) at [00104].
For example, the connection may be a wireless connection over a PAN (e.g., via PAN network 716 shown in Fig. 7). Some suitable PAN protocols may include Bluetooth, Infrared Data Association (irDA), wireless USB, ZigBee, WiFi, and Z-Wave. In some embodiments, other types of connections between the consumer device and merchant device, such as direct wire, Internet, near field communications and/or radio frequency identification technologies, may be used. A "PAN connection," as used herein, may refer to any wireless connection between the consumer device and the merchant device (e.g., via network 716 rather than network 708, as shown in Fig. 7). Similarly, a "PAN," as used herein, may refer to any suitable network for the connection.

The fundamental architecture of communication between the claimed devices appears well known. This architecture is well reflected by modern, widely used, cashless payment technologies that had been in place since before the priority date of the present application (See for example an article discussing the use of cashless payment technology at the 2012 Olympics and which outlines the history of contactless payment).
The remainder of the claim involves a method that plays out upon the fundamental architecture that I have discussed above. The steps of this method can be laid out as follows:
1.   The central system/networked device generates a plurality of wallet identifying tokens associated with a plurality of private keys such that each wallet identifying token is associated with (a) a private key and (b) customer identifying data.
2.   The central system/networked device sends the wallet identifying tokens and the private keys to a consumer device for storage as a reserve of tokens.
3.   The consumer device sends a first wallet identifying token to the merchant device when within range and while the consumer device is not connected to the central system/networked device, and the central/system then receives the first wallet identifying token from the merchant device.
4.   The central system/networked device compares the first wallet identifying token with the plurality of tokens to determine correspondence.
5.   If there is correspondence, and if the first wallet identifying token was received by the central system/networked device during a redemption period for that token, the central system/networked device validates the token.
6.   The central system/networked device then sends the customer identifying data to the merchant device.
7.   The central system/networked device then receives from the merchant device, secured payment approval data that comprises consumer approval data signed by the consumer device with a first private key of the plurality of private keys, the first private key being associated with the validated first wallet identifying token.
8.   The central system/networked device determines the first private key associated with the validated first wallet identifying token from among the plurality of private keys.
9.   The central system/networked device generates payment approval data by validating secured payment approval data with the first private key associated with the validated first wallet identifying token
10. The central system/networked device then facilitates a financial transaction based on the payment approval data.
To put it briefly, the central system generates tokens and associates these tokens with private keys and customer identifying data. Tokens and keys are sent to the consumer for storage in some kind of electronic wallet. A token is sent from the consumer to the central system via the merchant when the consumer is close enough to the merchant device (while the consumer device is not internet enabled for example) and the central system validates the token. After validation, the central system sends customer identifying data to the merchant device, after which time approval data is generated by the consumer device using one of the private keys. After receiving this approval data from the merchant, the central system determines the first private key and validates the approval data with the first private key thereby facilitating a transaction. In performing these steps, a transaction is facilitated involving tokens in a manner that does not require the consumer to be always in connection with the central system, the tokens being used as a proxy identifier so personal information is not shared at a particular point. Figs. 3 and 4 are a helpful depiction of the method steps.
MANNER OF MANUFACTURE
Legal Principles
I have summarised the law regarding manner of manufacture in recent decisions Accenture Global Services Limited [2022] APO 8 and Nasdaq Technology AB [2021] APO 39. Briefly, I reiterate that the High Court has stated in In National Research Development Corporation v Commissioner of Patents (“NRDC”), [1959] HCA 67, (1959) 102 CLR 252 that for patentability to be found there must be “some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art …- that its value to the country is in the field of economic endeavour”. However, it is clear that this is not exhaustive of the considerations with the High Court in D’Arcy v Myriad Genetics Inc (“Myriad”), [2015] HCA 35, noting at [23] that a “case-by-case” methodology is required, and at [144] that the task is one to be approached as a matter of substance:
“Whatever words have been used, the matter must be looked at as one of substance and effect must be given to the true nature of the claim.”
In the present context where the invention lies in a computer implemented method, relevant principles (developed in cases Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177; (2015) 328 ALR 458 (RPL Central) and Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150; (2014) 227 FCR 378 (Research Affiliates)) are those usefully summarised and generally accepted by Robertson J in Rokt Pte Ltd v Commissioner of Patents [2018] FCA 198 at [189] as follows:
“17.1 The Court must decide, as matter of substance not form, whether the claimed invention is the proper subject-matter for a patent: RPL Central at [99]; Research Affiliates at [106], [117].
17.2 This requires consideration of both the claims of the Application and the invention described in the body of the specification: RPL Central at [114].
17.3 The assessment is not done mechanically. There are no precise guidelines or mathematical formula. It is “a question of understanding what has been the work of, the output of, and the result of, human ingenuity” and then applying the developed principles: Research Affiliates at [116]. See further RPL Central at [112]:
Recognising that the claims are to a method and system comprising a combination of integers, it is necessary to understand where the inventiveness or ingenuity is said to lie ...
17.4 One well-settled principle is that a distinction exists between a technological innovation and a business innovation. A technological innovation is patentable. A business innovation is not: Research Affiliates at [94]; RPL Central at [100]. Consequently, a business method or scheme is not, per se, a proper subject for letters patent: RPL Central at [96]. Nor are abstract ideas, mere intellectual information or mere directions for use patentable: Research Affiliates at [101]; RPL Central at [100].
17.5 A computerised business method or scheme can, in some cases, be patentable. However, “[w]here the claimed invention is to a computerised business method, the invention must lie in that computerisation”: RPL Central at [96] (emphasis added). This requires “some ingenuity in the way in which the computer is used”: RPL Central at [104]. It is not a patentable invention “to simply ‘put’ a business method ‘into’ a computer to implement the business method using the computer for its well-known and understood functions”: RPL Central at [96]. In other words, if the ingenuity lies in the business method or scheme alone, the invention will not be patentable despite the computer-implementation.
17.6 Thus, a claimed invention must be examined to ascertain whether it is in substance a scheme or plan, or whether it can broadly be described as an improvement in computer technology: RPL Central at [96]. Contrary to [the applicant’s submissions at [49]], this is a binary distinction: the invention is either an unpatentable scheme or plan, or it is a patentable improvement in computer technology. In conducting the analysis, it is useful to:
17.6.1      ascertain whether the contribution to the claimed invention is technical in nature: RPL Central at [99], Research Affiliates at [114];
17.6.2      consider whether the invention solves a “technical” problem within the computer or outside the computer: RPL Central at [99], Research Affiliates at [103];
17.6.3      consider whether the invention results in an improvement in the functioning of the computer, irrespective of the data being processed: RPL Central at [99], Research Affiliates at [118];
17.6.4      consider whether the invention requires merely “generic computer implementation”, as distinct from steps which are “foreign” to the normal use of computers: RPL Central at [99], [102]; Research Affiliates at [101]; and
17.6.5 consider whether the computer is merely the intermediary, configured to carry out the method using program code for performing the method, but adding nothing to the substance of the idea: RPL Central at [99].”
The Full Federal Court decision in Commissionerof Patents v RoktPte Ltd [2020] FCAFC 86 (Rokt 2) confirmed and applied these principles. It appears a sensible approach, consistent with the above principles for considering patentability, to consider whether the invention constitutes a technical solution and/or solves a technical problem.
Following the Rokt 2 decision, the Full Court has found adversely for patentability for two further inventions. In the first decision, Commissioner of Patents v Aristocrat Technologies Pty Limited (Aristocrat ’21) [2021] FCAFC 202, it was found that a game implemented on an electronic gaming machine was not patentable. After first identifying the claimed invention as involving a mere game which was unpatentable, the Full Court asked whether the claimed invention was a computer-implemented invention before determining that for the claims to be patentable, there needed to be “an advance in computer technology”. The same considerations were applied by Perram J in Repipe Pty Ltd v Commissioner of Patents [2021] FCAFC 223, where it was also noted by Nicholas J with reference to RPL Central that the claimed method did not “involve any improvement in computer technology or any unusual or unconventional technical method or effect capable of giving rise to patentable subject matter”.
Examiner’s Objection to Manner of Manufacture
The general basis for the examiner’s objection under the ground of manner of manufacture is expressed as follows:
“…considering the combination of integers and their interactions as claimed does not appear to produce any technical contribution that solves a technical problem. The various devices communicate to carry out a transaction based on exchanging tokens (identifiers) and other information. In other words, they implement a particular payment protocol. However, a payment protocol is nothing more than a set of business rules that define the required transmission of information between parties to allow a transaction to occur - which is not patentable. While implementing a payment protocol within a computing system can in some circumstances indeed involve the overcoming of technical problems or require technical ingenuity, I cannot identify such in the present claims.
Therefore, the Applicant’s contribution to the art does not lie in the use of tokens to solve the two identified problems. I instead consider that it lies in the particular arrangement of the integers and how they interrelate – in other words, the scheme. This scheme is a payment protocol to store wallet identifying tokens at a consumer device so that a transaction with a merchant can take place when the consumer device has no connectivity with a validating networked device.”
Applicant’s Submissions
The following is a summary of the applicant’s submissions:
·The claimed invention is to an artificial state of affairs achieved through the new claimed process… “The artificial state of affairs is physical in terms of the transmission of personal/sensitive data which would conventionally be transmitted through the communication channel that has the risks of data interception. This is more than simply storing information in memory and transmitting the information over a network, in that the invention specifies the way in which the information is transmitted”. They submit another reason for the artificial state of affairs is that operations of computers are changed physically by performing the invention.
·The effect of the invention is the reduction in the risks of sensitive information being intercepted providing for a more secured electronic transaction. They submit the effect is achieved by “the way in which tokens are used, the way in which personal data is transmitted, and the way in which the approval data is processed and transmitted”.
·“The invention is useful in the field of cybersecurity of financial technology”.
·“The claimed invention creates an improvement in the computer system… The improvement lies in the way different types of data are used, processed, and transmitted allowing an electronic transaction to be connected without an active connection between the consumer device and the networked device at the time of the transaction, providing enhanced data security”.
·“…the claimed invention addresses a technical problem associated with cybersecurity of implementation of transactions in the field of financial technology… the invention addresses the problem of how to successfully performing (sic) an electronic transaction without an active connection between the consumer device and the central system at the time of the transaction and without exposing personal data…”
·It is the interaction of technical features of “a wallet identifying token, sending consumer identifying data to the merchant device from the networked device in the claimed way, and transmitting from the consumer device to the merchant device consumer approval data signed by the private key associated with the wallet identifying token” and the other features as a whole that solve the problem. The applicant notes that the working interrelationship is to be considered in determining patent eligibility.
·“The networked device, the consumer device, and the merchant device configured to perform the claimed operations are also not conventional networked device, consumer device, and merchant device as existing at the priority date.”
·“The specific communication channels envisaged are not an arbitrary choice of known techniques such as Bluetooth, WiFi, NFC, WEP, WIPA or WPA 2, because if it is, one would use the direct channel between the consumer device and the merchant device. The reason behind the claimed invention is, without an active connection between the consumer device and the central system at the time of the transaction, the consumer is left with using the unsecure network between the consumer device and the merchant device. As described above, such an unsecure network exposes the customer to the risks of sensitive information (e.g., personal data) being exposed due to the nature of the unsecure network. The problem associated with the risks of data exposure and the resulting potential of data interception is a practical, real-world problem confronting transaction system consumers in the field of cybersecurity of financial technology. The problem is technical in nature.”
·“…the invention works around the conventional systems, by sending the personal data from the networked device to the merchant device upon the consumer device coming within communication proximity to the merchant device and wallet identifying data provided from the consumer device to the merchant device validated.”
·“The invention provides a technical solution to the practical, real-world problem confronting transaction system consumers… the technical solution involves using different forms of data to perform various functions in relation to data security and transmitting the different types of data over communications channels of different levels of security.”
Consideration
I will turn to consideration of the issue of manner of manufacture with a mind to fully address the range of factors identified in the various Full Federal Court decisions.
Does the invention solve a technical problem within the computer or outside the computer?
The applicant broadly notes that the invention lies in the field of cybersecurity of financial technology, and I do not consider this to be an inappropriate general characterisation. Regardless, merely identifying a field of the invention falls short of an analysis of the substance of the invention, with a key consideration being the nature of the problem that is solved by the invention. Regarding the problem, the applicant submits that the claimed invention addresses a technical problem of how to successfully perform an electronic transaction without an active connection between the consumer device and the central system at the time of the transaction without exposing personal data.
Firstly, I accept that one may characterise a lack of connectivity between two devices as a technical problem. If a consumer device cannot connect directly to a central system, and an invention solves this problem by improving the physical connection between devices such that the consumer device can connect directly to the central system, then a technical problem may inevitably be solved. However, the present invention does not solve this problem. The present invention uses an alternative and pre-existing communication channel to enable a transaction to occur in the instance that there is no active connection. In this manner the claimed invention circumvents such a potential technical problem.
In considering the nature of the described invention earlier in this decision it was clear to me that the present invention is implemented on well-known architecture for contactless transactions. This architecture involves a consumer device, functioning for example in place of a credit card, which communicates over a near field network with a merchant device to initiate a transaction. In such technology a merchant device will connect via a network such as the internet to a central processing system. Also, at some point the consumer device will be connectable with a central processing system via a network such as the internet. Contactless transactions are typically initiated and processed irrespective of whether the consumer device is connected to the internet and thereby a central system. On the basis of my understanding of the fundamental technology involved in the present invention, the present invention does not appear to address any technical limitations that exist inside or outside this technology.
With a mind to the typical technology used in this art, I consider the problem of how to successfully perform an electronic transaction without an active connection between the consumer device and the central system at the time of the transaction without exposing personal data, is one of a logistical nature. While the invention is tied to the performing of an electronic transaction, no physical or technical limitations of an electronic transaction or data transfer are addressed. The problem can also be viewed as how to facilitate electronic transactions that avoid exposing personal data where the consumer and central entities cannot communicate with one another using a normally more secure means than that between the consumer and merchant in existing contactless transaction technology. The present invention solves this problem via the specific method steps laid out above at paragraph 21. These steps clearly do not address a technical limitation within or outside a computer or computerised system, and instead reflect a communication or data sharing method between entities (consumer, merchant, central system) to facilitate a transaction which avoids sharing/exposing personal information.

The applicant also suggests that the invention addresses risks associated with data exposure and the resulting potential for data interception. I accept this is true and that it is a real-world problem confronting consumers that their data may be identified and used inappropriately by nefarious parties. However, these risks can be mitigated by improvements that are technical in nature and they can also be mitigated by improvements that are not technical in nature. The present invention does not improve the technology involved in implementing the method. Instead, it addresses what can be viewed as a logistical or administrative problem of: what information to communicate to particular entities (consumer, merchant, central system); when particularly entities should communicate; and what administrative decisions/processing steps each entity should make, in order to facilitate an electronic transaction when certain entities cannot communicate and where there is a desire for not exposing personal data. This is not an inherently technical problem.
With this in mind I refer to the applicant’s submissions where they suggest that the invention “works around the conventional systems, by sending the personal data from the networked device to the merchant device upon the consumer device coming within communication proximity to the merchant device and wallet identifying data provided from the consumer device to the merchant device validated”. This is true, the present invention “works around” the technical limitations of convention systems by way of administrative solutions. The invention does not address technical limitations but instead seeks to provide an improved administrative method for communication between entities for facilitation of a transaction that avoids the sharing of personal information on conventional contactless transaction technology.
Does the invention result in improvement in the functioning of the computer, irrespective of the data being processed? Can the invention be broadly described as an improvement in computer technology? Is the solution technical?
The applicant submits that the effect of the invention (being reduction of risk of sensitive information being intercepted) is achieved by “the way in which tokens are used, the way in which personal data is transmitted, and the way in which the approval data is processed and transmitted”. I interpret this submission as suggesting that the invention may lie in the “way” that the technology is being used to implement the claimed invention.
Similar to the discussion above, I cannot see any improvement to computer function or more specifically, any improvement in the technological steps of transmitting or processing data. The claims present the transmission and processing of information in generic terms, with the specification discussing that any number of well-known methods may be used. While the invention may well be said to lie in the way in which tokens are used, and the way in which entities communicate at certain points in the process in transmitting and processing certain information, there are no steps in the claimed invention that can be said to relate to improved computer function or technology. Instead, the way the tokens are used, and the way entities communicate is better described as a mere implementation of a data transfer method between entities, the method being directed towards what information is shared, when it is shared and with which entity, and what processing actions are taken on the basis of that information. I do not consider this to provide for a technical solution as a matter of substance.
The technology is well represented by the commonly known contactless payment architecture that is described with reference to generic technology depicted in Figs 1a., 1b., 7 and 8. While the solution involves technical elements in the form of computerised devices and communication therebetween, nothing is added to the technological state of the art in contactless transaction technology. While it can be said that the claimed invention provides for an improvement to a method performed on a computer system, there is no improvement to the computer system itself.
Is the computer merely an intermediary or tool for performing the method while adding nothing of substance to the idea?
The applicant has appropriately invited me to ensure I consider the claimed invention as a whole. There is no doubt that this is an important aspect of considerations. One must consider the individual elements of the claim in seeking to identify some kind of technical improvement and also consider the coming together of these known elements to understand whether collectively, the elements provide for a technical improvement. I understand the applicant’s submission to be that there is a working interrelationship between a wallet identifying token, sending consumer identifying data to the merchant device from the networked device in the claimed way, and transmitting from the consumer device to the merchant device consumer approval data signed by the private key associated with the wallet identifying token.
I agree that there is a working interrelationship present in the claim. On my construction, this working interrelationship primarily arises in the method that is performed using conventional technology of contactless transactions. This method is summarised above at paragraph 21, and there is no doubt that features within the method combine to produce a process involving a working interrelationship. However, this is the case for any number of processes or schemes having a codependency of steps. The question remains as to whether the invention as a matter of substance is directed towards a mere scheme that is merely computer implemented, or for example, a method implemented on computer technology that solves some kind of technical problem or involves some kind of improvement to computer function.
In the present invention, the underlying technology performing the invention is nothing more than standard contactless transaction technology, considered as a collection of devices. The computer technology is not improved in any way and this standard technology is clearly the tool upon which a transaction method is performed. This method is well reflected in Figs. 3 and 4, where standard, generically defined computerised elements representing entities (consumer, merchant, central system) add nothing of substance to the idea constituting the invention.
The applicant submits that the networked device (central system), consumer device, and the merchant device are not conventional as existing at the priority date. However, this is only true to the extent of the information they are sharing and the sequence of steps in which they communicate with each other and process certain information. The invention is thus characterised as a matter of substance by what information is shared and when, and not by an improvement to the computer as a tool. To the extent claimed and described in the specification, the networked device, consumer device and merchant device are merely the standard intermediary tools for contactless transactions.
Does the application of the method produce a practical and useful result? Does the invention produce a technical effect?
While a scheme itself can be said to be “practical and useful”, this is insufficient for a positive finding of patentability (see Repipe Pty Ltd v Commissioner of Patents [2019] FCA 1956 at [39], Research Affiliates at [114] and RPL Central at [40]). This idea is drawn from the line of Full Federal Court authority discussed above that makes clear that an artificially created state of affairs in the claimed invention is insufficient in itself to guarantee patentability, the invention needing to be considered as a matter of substance. The applicant submits that an artificial state of affairs is achieved through the claimed process.
While I agree it is true that physical actions are occurring in the form of transmission of data, I do not agree that the avoidance of sending personal data to mitigate risk of data interception is sufficient to confer patentability. The decision to send certain information between certain entities is an administrative or business decision. The effect of mitigated risk is enabled by communication of information of particular content. While seemingly “practical and useful” in a general sense, this effect is clearly not technical and does not relate in any way to a physical improvement to some technical or material device/process or action.
I agree that the invention is more than simply storing information in memory and transmitting the information over a network. To this extent the invention lies in a communication/data sharing method that sends certain information at certain times between device entities (central system, consumer device and merchant device) in such a manner that certain information is not exposed in circumstances where consumer device and central system cannot communicate. The effect of this invention is not technical in that it does not result in any improvement to some kind of physical device or phenomenon. The effect of the invention as a matter of substance is an improved administrative process.
Does the invention lie in the generation, presentation, or arrangement of intellectual information?
The invention is clearly more than just the generation, presentation, or arrangement of intellectual information. The invention lies in the creation, sharing and processing of information to facilitate a transaction in a particular context where entities/devices cannot communicate directly and where there is a desire for withholding of personal information. This factor does not impact the consideration of patentability to any significant degree.
CONCLUSION
Turning to the factors above, the fact that the invention does not solve a technical problem inside or outside the computer and constitutes a set of steps that are merely implemented on the standard technological architecture present in the context of contactless transactions weighs heavily against patentability. While the invention as a matter of substance is more than simply information and is useful, this is insufficient to confer patentability. The invention is a mere scheme implemented in standard, well-known or generically defined technology. This scheme draws similarity to the “ordered set of steps for two entities (a merchant and a buyer) to communicate with each other to share information” discussed in the decision of the delegate in Google LLC [2018] APO 44 at [53]. There the delegate noted:
“Relevant information is commonly held on a mobile device and the claimed invention provides a sequence of steps for retrieving that information. In this sense, the two relevant devices are conducting a conversation, using generic technology, for the purpose of sharing information to conduct a transaction. While there are two taps, I do not consider there to be any material or technical advantage in the division of the communication protocol into two stages. The two stages are conducted to emulate the classical interaction between a merchant and a customer whereby they are first asked if they own a loyalty card (as a first step in a procedure) before they are asked to pay for an item (a second step in a procedure) … With this understanding it appears to me that that the substance of the invention is nothing more than a mere communication scheme that has been “merely computer implemented”. The invention is well characterised as a “business innovation” as opposed to a technical innovation.”
The present invention can be viewed similarly as a communication scheme merely computer implemented, the scheme representing a “conversation” between standard devices. Further similarities are found with the invention in Rokt 2 which was directed towards a business scheme involving data sharing between three computerised entities being consumer devices, an advertisement system, and a publisher system. The technology used to implement the invention in Rokt 2 was entirely standard and generically defined.
As such I find independent claim 1 and by extension claim 15 are not for a manner of manufacture.
In the course of my review of the specification, as set out above, I could not identify any technical disclosure that could form the basis of a patentable claim. Thus there is no patentable subject matter in the dependent claims either and I cannot see any prospect of overcoming this by amendment. For example, dependent claims either include well-known technical functions in the context of contactless transactions or relate to further elements of the scheme such as: time durations of payment/redemption periods; initiation of payment/redemption periods; validating on the basis of the payment/redemption period; use of tokens at a second merchant; maintaining wallet reserves; or processing transactions on the basis of corresponding keys.
Therefore, I refuse the application.
Dr N. R. Madsen
Deputy Commissioner of Patents