Innovia Security Pty Ltd v De La Rue International Limited
[2017] APO 25
•1 June 2017
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v De La Rue International Limited [2017] APO 25
Patent Application: 2010255516
Title:Improvements in Security Substrates
Patent Applicant: De La Rue International Limited
Opponent: Innovia Security Pty Ltd
Delegate: Greg Powell
Decision Date: 1 June 2017
Hearing Date: 21 February 2017, in Melbourne. Additional documents filed under regulation 5.23 after the hearing
Catchwords: PATENTS – section 59 – opposition to grant of patent – whether claimed invention was novel – whether claimed invention had inventive step – evidence does not establish that claims lack novelty and inventive step
Representation: Counsel for the applicant: Mr Tom Cordiner SC
Counsel for the opponent: Mr Ian Horak
Patent attorneys for the opponent: Magda Bramante, Phillips Ormonde Fitzpatrick, and Mr Ian Lindsay, IP Manager of Innovia Security Pty Ltd.
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010255516
Title:Improvements in Security Substrates
Patent Applicant: De La Rue International Limited
Date of Decision: 1 June 2017
DECISION
The opposition is unsuccessful.
Costs in accordance with Schedule 8 awarded against Innovia Security Pty Ltd.
REASONS FOR DECISION
Background
De La Rue International Limited (“the applicant”) filed patent application 2010255516 on 24 May 2010 as PCT/GB2010/001033. The application is based on a GB application filed on 4 June 2009. Application 2010255516 was advertised accepted on 30 April 2015. Innovia Security Pty Ltd (“the opponent”) filed a notice of opposition on 30 July 2015. A Statement of Grounds and Particulars (“SGP”) followed on 30 October 2015. The parties completed the evidentiary stages on 11 July 2016. On 23 September 2016 the opponent filed a request to amend its SGP. That request was allowed on 13 October 2016.
The hearing was held on 21 February 2017. During the hearing the opponent made reference to samples of banknotes that had been photocopied during the preparation of evidence, with the photocopies forming some of the exhibits present in the evidence in support. The applicant had inspected the notes during preparation of the evidence in answer and they had also asked for the notes to be brought to the hearing for inspection, so that the applicant could make submissions on the notes during the hearing. I observed that the actual notes were not in evidence and questioned whether the evidence in answer had been prepared having viewed the notes. I observed that, if the evidence in answer had been prepared on the basis of only the photocopies that had been annexed to the evidence in support, there was no need for the actual notes to be entered into evidence. However, I also indicated that if the applicant was disputing the difference between the notes and exhibits, then the notes had to be in evidence. As the applicant did dispute the difference between the notes and exhibits, I allowed the notes under regulation 5.23. These notes arrived after the hearing.
Specification
The specification describes the invention as relating to improvements in security substrates (such as banknotes) incorporating a security feature which inhibits the ability of counterfeiters to produce counterfeit notes. The security element is said to be designed so that the feature can be seen in transmitted light, but cannot be seen in reflected light. Specifically, the specification notes the increasing technical capabilities of colour photocopiers and points to a:
“demand to introduce features which are discernible by the general public but which are "invisible" to, or viewed differently, by a photocopier”,
and sets out to design a security feature such that, when the substrate is photocopied, it cannot be seen.
Applicable Law
As a consequence of the Intellectual Property Legislation Amendment (Raising the Bar) Act 2012 (“the Amendment Act”), there are substantial changes to the Patents Act 1990. The date of effect of those changes was 15 April 2013. The application of the Amendment Act in the present case depends on the date of the request for examination. The applicant filed its request for examination on 15 March 2013. Consequently the Patents Act as in force immediately before 15 April 2013 applies in the present case.
This means the former standard for opposition proceedings applies and the opponent bears the onus of establishing that it is clear or practically certain that a valid patent could not be granted (F Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283; 50 IPR 305 at 311, 319; Commissioner of Patents v Sherman [2008] FCAFC 182; 79 IPR 426; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).
Statement of Grounds and Particulars
The grounds listed by the opponent were:
(i)the claims were not novel;
(ii)the claims lacked an inventive step;
(iii)the claims were not for a manner of manufacture;
(iv)the claims lacked utility;
(v)that the specification did not describe the invention fully or end with claims defining the invention; and
(vi)the claims were not clear, succinct or fairly based on the matter described in the specification.
The amended SGP differed from the original only in the addition of further particulars under the grounds of novelty and inventive step. At the hearing the opponent only pursued the grounds of lack of novelty and lack of an inventive step. Novelty was on the basis of documents as well as the prior use of banknotes in Australia and around the world.
Evidence
Evidence in Support consists of statutory declarations by:
(i)Christopher Peter Tierney with supporting Exhibits CPT–1 to CPT–29 (Tierney 1); and
(ii)Darren Phillips with supporting Exhibits DP–1 to DP–7
Evidence in Answer consists of statutory declarations by:
(i)Richard Bryan Jotcham with supporting Exhibits RBJ–1 to RBJ–32 (Jotcham);
(ii)Nikhil Nirmal Ramchand with support Exhibit NNR–1; and
(iii)Elizabeth Janet Lawson with supporting Exhibits EJL–1 and EJL–2.
Evidence in Reply consists of statutory declarations by:
(i)Christopher Peter Tierney (Tierney 2); and
(ii)Magda Khalil Bramante with supporting Exhibits MKB–1 to MKB–4.
The Specification
The specification ends with 27 claims. Claim 1 is the only independent claim and is:
“A security substrate comprising an at least partially light transmitting carrier supporting a security feature said security feature comprising at least first and second layers, at least one of said first and second layers covering an area which is less than a full surface area of the carrier and which at least partially overlaps the other layer, wherein the layers have substantially the same colour and texture and the reflective contrast ratio of the overlapping areas and the non-overlapping areas is less than 20% and the transmissive contrast ratio of the overlapping areas and the non-overlapping areas is greater than 3%; such that when the security substrate is viewed in reflected light, the first and second layers are substantially indiscernible from each other and have the appearance of a single homogenous area; and when the substrate is viewed in transmitted light, the first and second layers are clearly distinguishable from each other.”
The invention is best exemplified by figures 1, 4 and 5 of the specification reproduced below:
As is clear from the figures, first (12) and second (13) layers of ink are printed on a substrate (11). The inks are said to have the same colour and texture and the reflective and transmissive contrast ratios are such that, when the substrate is viewed in reflective light (figure 4), the two different layers cannot be discerned, while, when viewed in transmissive light (figure 5), the two different layers can be distinguished from each other and a pattern is seen.
With reference to the contrast ratios defined in claim 1, I note that the applicant conceded (supported by Jotcham at [57]) that, if a security element having the same construction exhibited the effect exemplified by figures 4 and 5, that security element would inherently possess the transmissive and reflective contrast ratios defined in the claims. As such, given the evidence provided by the opponent with respect to whether certain banknotes had the ratios, it is not necessary to make reference to it. All that would be required is demonstration that they behaved as shown in figures 4 and 5.
Construing the claims
The terms “substantially the same colour” and “substantially indiscernible” in claim 1 need to be construed.
“substantially the same colour”
The applicant submitted that the specification used “colour” in its broadest, normal meaning that it was made up of hue, shade, tint and tone. They noted the evidence of Jotcham [42] where he stated that the invention did not rely on making one layer darker than another by the addition of carbon black. They also noted Jotcham [58(c)] where it was stated:
“substantially the same colour [means] that the ink is not necessarily identical in colour, that is, it is not necessarily from the same ink pot. However, it is very close to being the same. Colours that are substantially the same would not be differentiated by a photocopier”
In relation to the point about differentiation by a photocopier, the applicant noted statements by Mr Jotcham (see Jotcham [18(b)]) that photocopiers do not detect a variation in thickness (or tone) because there was no variation in colour when there is a variation in thickness (or tone).
From this, the applicant concluded that “same colour” required the layers of the security element of the claim required ink with the same hue, shade and tint, although not necessarily the same tone.
The opponent accepted that the claims were limited to layers having “substantially the same colour”, but submitted that the specification did not support the applicant’s interpretation. They noted that the claims did not speak in terms of hue, shade, tint and tone. The opponent produced some paint samples that are available at many hardware stores and noted, for example that while there are various (no doubt trademarked) colour names like “antique white”, “natural white”, “whisper white”, “white on white” and the like, they were all substantially the same colour – i.e. white – even though they each might have slightly different tinting, shade or tone. They noted that the specification made no distinction between shades, or hues insofar as the claims were concerned. They noted Tierney 2 at [77] which spoke of adding carbon black to make the image clearer in transmitted light. Mr Tierney stated:
“This small amount of carbon black does not change the colour but makes a very slight difference to the tone or shade.”
It appears that the applicant has taken the position that determination of colour involves, in some way, the use of a photocopier. The opponent does not. Both arguments have some merit. I agree with the opponent insofar as “substantially the same colour” does not mean identical colours and that the specification does not speak to the hue, shade, tint and tone that the applicant put forward. However, I also do not think it can be said that differences in hue, shade, tint and tone play no part in the determination. Noting that the specification places no small emphasis on the security element not being “seen” by a photocopier, it must be the case that the colours are such that the photocopier does not distinguish between them. The only evidence I have on this point is that of Mr Jotcham. Taking the paint samples of the opponent as an example, it would appear that, if a photocopier would print different colours having scanned the different samples, then, in the context of the present application, those colours are not “substantially the same”. I will proceed to assess the evidence having this interpretation in mind.
“substantially indiscernible”
The opponent submitted that “substantially indiscernible” meant that the image seen would be clear in transmitted light but not clearly visible in reflected light. In the opponent’s submission (based on Tierney 2 at [42]) if, in the area where the image was meant to appear, something like a blotch could be seen in reflected light, but the image could not be clearly made out, then it could be said to be substantially indiscernible in reflected light. It was not a requirement that the image be invisible in reflected light so that a person looking at the banknote did not know the image was there at all. What was required was that the image would not be visible in the reflected light of a photocopier.
The applicant submitted that “substantially indiscernible” meant that the image was very difficult to see because the difference between the two layers of ink was very difficult to discern. In the applicant’s submissions, if something was apparent to the eye, such as a blotch, then that blotch was not “substantially indiscernible”, regardless of whether or not the blotch actually showed a clear image when viewed in reflected light, since the claim only required the difference between the layers to be discernible, not the detail of what the difference was. Moreover, the applicant submitted that the determination of whether something was “substantially indiscernible” should be met in all lighting and background conditions.
I asked the applicant whether such an interpretation made the claim unclear since, as was pointed out by the opponent, it would require a person who made a banknote to go to every person in the world and, under every possible lighting condition, ask them whether they could see the image in reflected light. The applicant responded that it did not require such effort since it was really only necessary to test the extremes (i.e. black and white). They also pointed out that the claim required the differences between the layers to be substantially indiscernible when “viewed in reflected light”. They noted that pages 9 and 10 of the specification stated:
“It is extremely difficult to obtain an exact correlation between the observer assessment and the measured contrast values because the observer is affected by variable ambient conditions and by print and design elements. However experimental work has shown that the feature does not work adequately if one of the following criteria are not met:-
(i)in transmission the image cannot be seen (Transmission contrast ratio too low);
(ii)in reflection the image is not substantially hidden (Reflection contrast ratio too high) .
It has been found that the limit of the transmission contrast ratio below which the image cannot be seen is 3-5%. The upper limit of the reflectance contrast ratio above which the image is not hidden in reflection is 8-20%.
Figure 6 shows a set of results taken from two sets of samples using the aforementioned method. One set of samples has been produced using an optically variable (OV) pigment and a set of samples have been produced using a metallic pigment. The combination of transmission contrast ratio and reflection contrast ratios which provide the required different views in reflection and transmitted light are those limited to the left hand zone A. The combinations in Zone B are those which may work, depending on design and viewing conditions.”
Figure 6 shows:
While it is clear from this passage where the parameters for the claim came from, what is missing is the lighting and background conditions used for the test. These results are essentially meaningless when it comes to determining what sits within the scope of claim 1, unless the opposite of what the applicant contends for is established – that is, that, as long as there is some combination of lighting and background that makes the differences in layers substantially indiscernible, then that incidence is within the claim.
In the case of this term, and in contrast to their position with respect to the term “substantially the same colour”, the applicant’s position is that the use of a photocopier plays no part in determining the indiscernibility of the image. The opponent’s position, also in contrast with their position with respect to “same colour”, is that a photocopier does play a part in that, if it cannot be seen in a photocopy, then the image is indiscernible. In my opinion, similar to my reasoning for the term “same colour”, the focus of the specification on avoiding reproduction by a photocopier controls the determination of whether a specific instance falls within the scope of “substantially indiscernible”. That is, notwithstanding that the claim only talks in terms of “viewed in reflected light”, this does not limit the viewing to be done by a user of the banknote.
NOVELTY
Under subsection 7(1), an invention is taken to be novel unless it is not novel in the light of the prior art base. Information in a document forms part of the prior art base for the purposes of novelty if it was published before the priority date of a claim, or the information was contained in a specification published after the priority date of the claim under consideration and, if that information is, or were to be, the subject of a claim of the specification, that claim has, or would have, a priority date earlier than that of the claim under consideration (referred to as “whole of contents” novelty).
It is well established that the general test for lack of novelty is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd, [1977] HCA 19; 137 CLR 228 at 235 [20]:
“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”.
This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (see Nicaro Holdings Pty Ltd v Martin Engineering Co, [1990] FCA 40; (1990) 91 ALR 513 at 517). In order to meet this requirement, the prior art must “contain clear and unmistakeable directions to do what the patentee claims to have invented” (The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited, [1972] RPC 457 at 486).
What a prior art document teaches is to be distinguished from what might be “included” or “encompassed”. As was stated in Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No. 3), [2011] FCA 846 at [180] (citations omitted):
“In EI Du Pont de Nemours & Co v Imperial Chemical Industries PLC Bennett J distinguished between what a prior art document teaches for the purpose of a disclosure undermining novelty and what might be “included” or “encompassed in” a prior art document. A prior broad disclosure thus may not be sufficient “in the absence of the skilled addressee understanding or perceiving” the later claimed invention therein. To the same effect, in IGT (Australia) Pty Ltd v Aristocrat Technologies Australia Ltd Heerey and Middleton JJ also distinguished between a prior art document which merely includes or encompasses a later invention (which will not anticipate the patent), and a prior art document which gives the skilled addressee clear or unmistakeable directions to make or perform the invention (which will anticipate the patent and so is novelty-destroying). In so doing their Honours referred at [55] to the decision of the Full Court in ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc which “concluded that a prior art patent did not deprive the claimed invention of novelty, despite the fact that, read literally, the terms used in [the] prior art patent were sufficiently broad to encompass the claimed invention” because (quoting the Full Court at [51]):
‘A familiar metaphor illustrating the concept of anticipation is that the prior inventor must clearly be shown to have planted his flag at the precise destination before the patentee: General Tire at 485, 486. In the present case, the appellants’ argument involved the skilled addressee rummaging through the [the prior inventor’s] flag locker to find a flag which [it] possessed and could have planted.’”
In a similar vein, the Full Federal Court stated in Apotex Pty Ltd v Sanofi-Aventis [2009] FCAFC 134 at [104]:
“There is anticipation if the skilled addressee would add missing information to what is disclosed in the prior art as a matter of course and without the application of inventive ingenuity or undue experimentation.”
Given the aspect of prior use in the present opposition, I note that prior use requires a relatively high standard of proof. The UK Appeal Tribunal discussed the standard of proof required to establish prior use in Seiller's Application [1970] RPC 103. At page 106 Graham J. stated:
“In my judgement it is necessary that proof of prior user in opposition cases should be very clear. Normally in the absence of cross-examination, this will involve corroboration of a mere statement as to recollection in a declaration, particularly where the time interval involved is considerable. Such corroboration is often best found in documents contemporary with the fact to be proved. Each case, however, must be considered on its own facts, and I say expressly that I am not attempting to lay down any rule as to what is or is not sufficient in any given case.”
The UK Court of Appeal approved these comments in Dunlop Holdings Limited's Application [1979] RPC 523 at 548. A similar approach is evident in Windsurfing International Inc v Borsimex Pty Ltd, (1984) AIPC 90-135. Towards the end of section 8.38 Waddell J. stated:
“It is essential that an allegation of prior public use should be strictly proved. Evidence which is uncorroborated is undoubtedly suspect and should be scrutinised with particular care. The Court must be satisfied that the proof is sufficient in the circumstances, having regard to the gravity of the allegation.”
Similarly in Aspirating IP Limited v Vision Systems Limited, [2010] FCA 1061, (2010) 88 IPR 52, at [200], Besanko J stated:
“The correct principle is that a prior public use must be strictly proved and evidence which is not corroborated must be scrutinised with care, particularly where it is evidence of events which occurred many years ago.”
In Damorgold Pty Ltd v JAI Products Pty Ltd, [2015] FCAFC 31, Yates J at [94]-[96] commented on the essential features of the invention (a spring-assisted roller blind mechanism in that case) only being discernible by disassembling the product. Where the evidence pointed to no potential customer having disassembled the product and no complete examination having taken place, then the features of the product were not disclosed to customers. At [96], Yates J stated that the relevant question is not whether the product was made publicly available. In applying the notion of “enabling disclosure”, as explained in Merrell Dow Pharmaceuticals Inc v H N Norton & Co Ltd, (1995) 33 IPR 1, neither the mere public availability of a product, nor its use in public, necessarily means that the features of the product have been made publically available.
US Patent 4,307,899 – (“D1”)
Figures 1a and 1b below show the invention described in D1:
D1 discloses a security substrate for a card comprising a light transmitting carrier (T) covered by three layers (4, 5, 6). The second layer (5) has a shape in the shape of a “7” cut out and the third layer (6) is in the shape of a “7” and partially overlays the cut out. D1 discloses that all three layers can be white. The effect is that there are three separate areas of the card (1, 2, 3) which each have a different number of layers. For example, the first area (1) has two white coatings positioned above one another, the second area (2) only has one layer, while the third area (3) has three layers. D1 teaches that, when viewed in transmitted light, assuming all layers are white, the areas will have a white/medium gray/dark gray graduation as the number of layers increase. However, D1 then states:
“When viewed in incident light, this light/dark effect is reversed, area 3 appearing light, area 2 dark and area 1 semidark. If white is used exclusively, the corresponding gray graduations will result.”
This strongly suggests that the image is discernible in reflected light. The opponent points to column 2, lines 20–35 of D1 which state (emphasis in opponent’s submissions):
“Owing to the color coating which overlaps only in part, arbitrarily graduated optical effects are possible in which, in spite of a homogeneous appearance, the areas which are brightest when viewed by transmitted light are brighter than the general surrounding areas and the darkest areas appear darker than the surrounding hallmark areas.
In particular, when employing the inventive markings outside of multilayered laminates, a final homogeneous color layer is preferably provided which covers the entire printed layer structure. Due to the homogeneous uppermost color layer, the underlying hallmark area becomes almost invisible when viewed by incident light. This effect can be varied as desired by varying the thickness or color density of the uppermost printed coating.”
as evidence of the feature that that the areas have a homogenous appearance in incident light but the images are visible when viewed by transmitted light. However, in my opinion, this passage does not stand for what the opponent thinks it stands for. Assuming for the moment that the colours are the same, rather than contrast ratios between the first and second layers creating the “invisibility” of the image in reflected light, in D1 it is another, overlying layer that achieves it. As such D1 does not disclose all the features.
In any event, D1 does not disclose whether the layers have the “same colour” and/or that the image is “substantially indiscernible” in reflected light, using the construction I have applied to these terms. That is, it is unclear from D1 whether (i) a photocopier would print different colours having scanned the layers of the card as exemplified in D1, or (ii) the image would not be seen in a photocopy. Mr Tierney does not address this but simply states that the “layers may all be white (column 2, line 64 and claim 15 in column 15) and so would have substantially the same colour and texture.” (see [150] of Tierney 1). The opponent’s submissions of what is “white”, particularly given their use of paint samples, throw doubt on this.
The claims are novel in light of D1.
Australian Banknotes – $5, $10, $20, $50, $100 (collectively known as D2)
The opponent relied upon the prior use of these banknotes as teaching the invention to the person skilled in the art.
For prior use to be determined it has to be first established that the article which is alleged to disclose the invention has been provided to a person who was free in law and equity to make use of it. As the opponent pointed out, consistent with Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588 at [43], the opponent did not have to necessarily provide evidence that the banknotes they relied upon were not subject to confidentiality restrictions. I agree in this case. The banknotes are well and truly in circulation and the applicant has not provided any evidence that they could not be inspected. Their attack on the evidence was via different paths.
The applicant submitted that these could not be relied upon as the claim was directed to a ‘substrate” while banknotes were formed by over-printing the substrate. As such, in the applicant’s submission, an inspection of banknotes would not reveal (i) that the substrate has at least two partially overlapping layers of the same colour, or (ii) that the layers on the substrate are substantially indiscernible from each other when the substrate, not the banknote, is viewed in reflected light.
There is some force to this submission in that it might be said that the over-printing would lessen the visibility of the image in reflected light such that what was discernible in reflected light, when viewing only the substrate, would be substantially indiscernible when viewing the banknote. However, I do not believe that this argument is sustainable, particularly given that the main focus of the specification is on banknotes having the effects. I cannot see how it would be possible for a banknote which has the effect to be made from a substrate that does not. In any event, I note that Mr Tierney in Tierney 2 ([50(a)]) makes the point that over-printing can sometimes make the image even more visible in reflected light, which tends to support a view that having the effect in the substrate to begin with is the norm. I also note that Tierney 2 ([53]) states that the final design is at the choice of the banknote printer and that relying on the final print applied by the banknote printer for the country to achieve a desired effect was not desirable; particularly where the final print may not cover the part of the substrate where the image was located. That is, if the effect is visible in a banknote it is not by accident and is due to the substrate or carrier.
The opponent’s submissions in the case of a lack of novelty in light of these banknotes were essentially:
(i)These notes were freely available;
(ii)As such, the security features used in the bank notes could be seen;
(iii)One of the security features was something known as a “shadow image”;
(iv)As established by exhibit CPT-2, a “shadow image” was one which was not obvious in reflected light, but was visible when the note was held up to the light;
(v)The person skilled in the art was free to inspect the banknote to try and determine how the shadow image was formed;
(vi)Upon inspection the person would have seen that the shadow image was formed by first and second layers which at least partially overlapped, with the layers have substantially the same colour and texture;
(vii)As the feature was only visible in transmitted light, it followed that the contrast ratios of the layers fell within the scope of the claim.
Mr Tierney clearly states that he inspected the notes. He also states that he expects “that if a person with experience in security substrates did not know how the shadow image was made (a point which I do not accept), then they would understand from inspecting the actual banknote how it was constructed”. He states that he often uses an eye glass to inspect the notes which allows him “to identify where a layer of print has been laid in the opacifying layers and where it has not”.
I agree with the opponent that, from the photocopies that were supplied of the Australian $10, $20, $50 and $100 banknotes that there is an image that is not visible in the photocopies, but is visible when the actual note is held up to the light. As such, it follows that the image is substantially indiscernible as I have interpreted that term. I do not agree that the image is indiscernible in the $5 banknote. As noted by Mr Jotcham in his evidence ([65]), the image is discernible on the photocopy. I also note that Mr Tierney does not explicitly state that he inspected the banknotes in evidence. Instead he says ([44]) that he was aware of how banknotes were produced and explains two methods of making a “shadow image”. Those methods involve the use of at least two overlapping layers, with one of the layers modified to form an image when the banknote is viewed in transmitted light. However, accepting for the moment that the banknotes in evidence are formed from two overlapping layers, the evidence falls short as to whether the layers are, at the very least, of the same colour as I have interpreted that feature. Mr Tierney does not explain what his inspection of the banknotes involved as to this point. He states that the same colour would have been used ([50]), but that it is not sufficient for a finding of novelty. The question that arises is, were the banknotes in fact made this way? Was the colour of the layers such that, when scanned by a photocopier, there would no difference in the subsequent printing of that scan? It follows that I cannot be certain on the evidence that there are “clear and unmistakable directions” embodied in the banknote that lead to the claimed invention.
I find that the claims are novel in light of the Australian $5, $10, $20, $50 and $100 banknotes.
The finding is a close run thing. However, I note the words of Gyles J in Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis [2008] FCA 1194 at [91]:
“Anticipation is deadly but requires the accuracy of a sniper, not the firing of a 12 gauge shotgun”
This requirement for specificity remains true even where, as here, the shotgun would appear to have a fairly narrow spread.
World Polymer Banknotes published in 2006 (D3) and first edition (D13)
Similar issues arise with D3 and D13.
Both documents are different editions of the same publication which is a discussion of the various polymer banknotes in use throughout the world. Page 2 discusses the development of the Australian banknotes in the form of a biaxially orientated polypropylene (“BOPP”) coated on each side with two opacifying layers of ink (usually white) except for an area(s) that was deliberately left clear for creating an optically variable device (“OVD”). I note that the documents do not explicitly indicate that the clear area is the OVD. Rather the inference is that the clear area forms a window. I note that the documents state:
“The transparent window where the OVD is located is a key security feature of a polymer banknote. It is easily identifiable allowing anyone to be able to authenticate a banknote instantly”
The documents also state that one security feature that could be incorporated was a “shadow image”. The documents both state that a shadow image:
“is an excellent optically variable device that is not obvious in reflected light but visible when the note is held up to the light. It is produced by altering the opacity and sometimes the colour of the opacifying layers”
The documents also state that:
“an optically variable 'shadow image' can be created by the application of Optically Variable Ink (OVI) enhancing its fidelity and colour shift characteristics”.
However, all of this is some way from what is claimed. Accepting that the shadow image is one which is substantially indiscernible in a photocopy of the banknote (and I could not see any mention of photocopiers in D3 or D13), the disclosure of two layers of (white) ink which create a transparent window for an OVD is not necessarily the same as two layers of ink which overlap to form the OVD. Furthermore, the colour of the layers forming the shadow image is not necessarily the same.
There are no clear and unmistakeable directions in either D3 or D13 of the claimed invention. The claims are novel in light of these documents.
Van Renesse, Rudolf, “Optical Document Security” Artech House, 2005, 3rd ed (D4)
The disclosure of D4 is similar in some ways to D3 and D13. D4 states the Bicentennial Australian $10 banknote issued in 1988:
“consisted of a biaxially oriented polypropylene (BOPP) coated on both sides with two opacifying white ink layers except for the transparent window, which is characteristic of this substrate”,
and that:
“The 1988 bicentennial note contained a DOVlD with the portrait of Captain Cook in the transparent window”.
D4 states that this substrate was known as the GuardianTM substrate and further states that:
“The Guardian substrate allows the incorporation of a substitute of the shadow watermark discussed [earlier in D4], a shadow image or pseudo-watermark, by locally modulating the transparency of the opacifying layers.” (emphasis in original)
D4 also notes:
“The transparent window is a security feature in itself that thwarts photocopying and scanning, a feature that can be inspected very easily and has become the main public security feature in Australia and New Zealand.”
However, the extract of D4 in evidence goes no further than this. Assuming that the shadow image discussed in D4 is the same as that discussed in D3 and D13, such that a substantially indiscernible (as understood in this case) image is formed, and that it is formed by two layers, are the layers used to generate this feature the same colour? Like D3 and D13, the assessment of colour in relation to their photocopying result is missing for D4.
I am not satisfied that the claims lack novelty in light of D4.
Hardwick, Bruce et al “Guardian™ Substrate as an Optical Medium for Security Devices” published in Optical Security and Counterfeit Deterrence Techniques III, SPIE - The International Society for Optical Engineering, Vol. 3973, 2000 (D5).
Again, the disclosure of D5 has a lot of similarities with D3, D4 and D13. In common with those documents, D5 explains that the GuardianTM substrate is a BOPP substrate with two opacifying ink layers. The opponent pointed to the passage under the heading “Substrate Properties” in D5 which they noted said:
“The degree of coverage of the opacifying layers may be varied to enhance the security rating of the substrate. For example, clear windows are created by no opacifying coverage and a shadow image is created by varying the opacifying coverage according to the design.”
However, they did not go on to the very next sentence of the passage which states:
“The functionality of the shadow image is accomplished by the use of a combination of inks and design.” (my emphasis)
As with D3, D4 and D13, the shadow image is stated in D5 to be a security feature that is invisible in reflected light and visible in transmitted light.
The opponent focussed on the statement by Mr Tierney in his evidence (Tierney 2 [86]) that:
“A person in the security substrate industry would understand precisely how a shadow image was made from these descriptions. The transparency of the opacified layers is modified by varying the coverage of the opacified layers which can include a design.”
The applicant noted that Mr Jotcham pointed to the explanation of shadow images in D5 where it was said:
“Good quality shadow images are achieved by a careful selection and control of colour and opacity of the opacifying layers while maintaining a homogenous printing surface characteristics of the substrate that are required for other security printing processes” (my emphasis)
The applicant noted Mr Jotcham’s statement in his evidence ([131]) that:
“given that the 'control of colour and opacity' is necessary, it would appear that the shadow image in the Hardwick document is made by using inks of different colours. I read the reference to 'opacifying layers' as meaning one layer on one side of the note and the other opacifying layer on the other side of the note. The ink would be controlled so that it is not bumpy. As such, the requirement of claim 1 that the layers have substantially the same colour is not present in the Hardwick document.”
Mr Tierney states in reply to this evidence (Tierney 2 [87]) that:
“Mr Jotcham states that the reference to "control of colour and opacity" in the Hardwick article suggests to him that use of different colour inks is required. I disagree. Controlling colour means maintaining the same colour.”
However, the same problems that exist with D3, D4 and D13 are also present in D5. I think it assumes too much. The assessment of colour in relation to photocopying is not present. Indeed, it is difficult to see how this could be assessed from the disclosure of D5. Also, a statement that “controlling colour” means “maintaining the same colour” does not establish that this is what D5 is disclosing. As I noted above, D5 mentions the use of inks and design. This leaves open the possibility that different inks are used when creating the shadow images. In any event, as I have stated for D3, D4 and D13, whether the shadow image is substantially indiscernible when photocopied is something I have assumed to be true without actually finding such a disclosure in the documents. This may not be the case.
Noting the need for a “sniper” as per Apotex (supra), the evidence on file does not definitively establish that D5 discloses the claimed invention. I am not satisfied that the claims lack novelty in light of D5.
US 6471248 (D6)
Figure 1 below shows the invention described in D6:
The opponent submitted that D6 disclosed a substrate (10) of BOPP having a first layer of opacifying ink (15 or 16) and a second layer (13 or 14). A security device (20) is positioned so that at least part of it is aligned with the half-window (18). The opponent pointed to column 4 lines 14–17, which indicated that:
“The opacifying layers of ink 13, 14, 15 and 16 may comprise any one or more of a variety of opacifying inks which can be used in the printing of banknotes or other security documents” (my emphasis).
as a teaching of the use of the same ink (as well as different inks).
The opponent noted that at column 4 lines 54–55, D6 disclosed that, when the substrate is viewed in reflected light from the side labelled “B”, the security device was “barely visible or not visible at all”. They further noted that, at column 4 lines 63–65, D6 disclosed that when the substrate was viewed from side “B” in transmitted light “the whole of the security device 20 is also visible”.
There are two main problems with the opponent’s position. Firstly, the inks do not have to be the same. While I note that D6 states that the opacifying layers of ink may comprise any one or more of a variety of opacifying inks, this does not equate to a disclosure of the requirement in the claims that inks be the same colour. In this regard I note that it was said in General Tire (supra) at 485 to 486:
“If … the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee’s claim, but would be at least as likely to be carried out in a way which would not do so, the patentee's claim will not have been anticipated, although it may fail on the ground of obviousness. To anticipate the patentee’s claim the prior publication must contain clear and unmistakeable directions to do what the patentee claims to have invented … A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.”
Clearly, the use of the same ink (and, it is assumed, the same colour) is not the only way the invention in D6 could be carried out. It follows that D6 does not anticipate the claims.
Secondly, it is clear from D6 that the security device is a separate element to the opacifying layers. The claims of the present application define the security element as:
“comprising at least first and second layers …wherein the layers have substantially the same colour and texture”
It is clear that the security element (20) shown in D6 is not comprised of any of the layers (13, 14, 15 and 16) in the same way as it is in the present application.
It follows that the claims are novel in light of D6.
Other banknotes and substrates (D10, D14, D15, D16, D17, D18, D19, D20, D21, D22)
The banknotes listed as these documents in the SGP were, variously, examples of promotional banknotes produced by various banknote printing companies to promote their products, Mexican banknotes, Honduran banknotes, Israeli banknotes, Zambian banknotes, Nigerian banknotes and Vietnamese banknotes. All were said to disclose the features of claim 1.
However, the disclosure issues that apply to the other Australian banknotes (D2), at least in terms of whether the layers of the security element are the “same colour”, also apply to these banknotes. There is no evidence to establish that the opacifying layers of D10, D14, D16, D18 and D19 are the “same colour” as I have construed that term.
Moreover, in addition to not establishing that the layers of the security element are the “same colour”, the photocopies of D15, D20, D21 and D22 show the shadow image. While it is not necessarily fully distinct (although is very distinct in D21), it is, nonetheless, visible in the photocopy and cannot be said to be “substantially indiscernible” as required.
I will also note that I cannot see a shadow image in D17. Notwithstanding guidance provided by the opponent as to where to look, the effect seems to be far too subtle for me to see. As such, while I cannot see a shadow image in reflected light, I also cannot see it in transmitted light and therefore, the claimed contrast ratios are not evident from D17.
It follows that the claims are novel in light of D10, D14, D15, D16, D17, D18, D19, D20, D21 and D22.
INVENTIVE STEP
Subsection 7(2) of the Patents Act states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art. A document, or two or more related documents if a person skilled in the art would treat them as a single source of information, is prior art for this purpose if “a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant” (Subsection 7(3) at the relevant time).
The test for whether an invention is obvious is whether it would have been a matter of routine to proceed to the claimed invention. In Wellcome Foundation Ltd v VR Laboratories (Aust.) Pty Ltd, [1981] HCA 12, 148 CLR 262 at 286 [45], Aickin J stated:
"The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not."
The High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd, [2002] HCA 59, (2002) 56 IPR 129 at [50] – [53], appeared to approve of the Wellcome 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, (2007) 235 ALR 202, general principles regarded 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.
Where the invention lies in a combination of integers, the question is not whether each individual integer was obvious but rather whether the combination as a whole was obvious when compared to the prior art base. In Alphapharm at [41], the High Court stated:
“The claim is for a combination, the interaction between the integers of which is the essential requirement for the presence of an inventive step. It is the selection of the integers out of ‘perhaps many possibilities’ which must be shown by Alphapharm to be obvious, bearing in mind that the selection of the integers in which the invention lies can be expected to be a process necessarily involving rejection of other possible integers.”
Person Skilled in the Art
In Root Quality Pty Ltd v Root Control Technologies Pty Ltd, [2000] FCA 980, Finkelstein J stated at [70] and [71] that the skilled addressee is the person to whom the patent is addressed and who must construe it. Such person works in the art or science with which the invention is connected or is likely to have a practical interest in the subject matter of the invention. A variety of people may have that interest. Finkelstein J further noted various descriptions given to the skilled addressee. These included the “uninventive skilled worker in the particular field” (Leonardis v Sartas No 1 Pty Ltd, (1996) 67 FCR 126) and the “person skilled in the art” (Genentech Inc v Wellcome Foundation Ltd, (1989) 15 IPR 423).
Page 1, lines 2–5 of the present application states that the present invention “relates to improvements in security substrates incorporating a security feature which inhibits the ability of counterfeiters to produce counterfeit notes. The opponent submitted that the use of “notes” limited the field to banknotes since the preferred embodiment was directed to banknotes. The applicant suggested a broader field of security documents. Nonetheless an emphasis on document security was prevalent, as evidenced by both of the applicant’s declarants having experience in this field. In the present case, I do not think that the field should be narrowed to one of banknotes only. While I accept that this is basically the total focus of the description, I note that the claims are not so limited. Indeed, in the one claim that mentions banknotes (claim 27), it also mentions passports, certificates “or other document of value”. As such, I expect the hypothetical person skilled in the present art would have been knowledgeable and skilled in the production of security elements of value documents, with banknotes being the most obvious example.
In spite of the narrow field of focus for the opponent, the parties did not appear to significantly dispute who the hypothetical person skilled in the present art may have been. Rather, they challenged each other’s declarants as not being representative. For example the opponent pointed out that Mr Jotcham did not indicate any direct, practical experience with security elements for banknotes. They noted Mr Jotcham’s position that banknotes have specific requirements and submitted that this meant Mr Jotcham could not have the requisite knowledge to comment on security features in banknotes. The opponent also pointed out that the experience of Mr Jotcham was derived from his work in the United Kingdom and so he may have limitations to comment on practices in the field in Australia at the relevant time. They also noted that Mr Jotcham’s technical experience appeared to date from 1999 and earlier and, therefore, given the significant changes in polymer banknotes since 1999, would be limited.
On the other hand, the applicant contended that Mr Tierney was over-qualified. They noted that Mr Tierney helped develop, and had access to, the proprietary methods employed by NPA and Securency (prior incarnations of Innovia) in the production of their polymer banknote technology. Indeed, the applicant noted Mr Tierney’s statement that he was one of only four persons in the world considered to have “sufficient knowledge of all aspects of the printing presses of banknotes to enable” him to perform the role of a counterfeit examiner for Australian banknotes. Drawing parallels between the assessment of Dr Hardwick in Innovia Security Pty Ltd v De La Rue International Limited [2015] APO 31 at [54], the applicant submitted that evidence from Mr Tierney of common general knowledge, while it could not necessarily be disregarded, should be treated with caution as it would be above that of the ordinary person skilled in the art in the somewhat less rigid field of document security generally.
Mr Tierney’s evidence indicates that he was clearly a well-regarded person in the banknote security field. His evidence is clearly relevant in the present case. Similarly it is not the case that Mr Jotcham cannot comment on matters around document security. Nevertheless, I accept that Mr Jotcham has had lesser experience with banknotes and, as such, his evidence in relation to what was known in relation to banknote security may well be incomplete. This must also be balanced against their inventiveness in the sense that both have been responsible for developing patented inventions. While I will determine the weight to be accorded to their respective evidence where appropriate in this decision, in the area of banknotes, I will prefer Mr Tierney’s evidence.
Common General Knowledge
The “common general knowledge” is a well established concept and I do not consider it necessary to discuss the relevant Authorities beyond the usual observation that it consists of the background knowledge and experience that is available to all in the relevant field.
The opponent submitted that the common general knowledge in the present field was in Mr Tierney’s evidence in support. This common general knowledge was said to include shadow images. The opponent submitted that the common general knowledge was:
(a)these shadow images appear on all polymer Australian bank notes circulating prior to the priority date;
(b)the shadow images were also used on various promotional banknotes which are, in turn, cross-referenced in industry publications such as World Polymer Banknotes;
(c)shadow images were used worldwide and were considered a traditional banknote security feature; and
(d)shadow images on banknotes were widely used and promoted to persons who would be the ultimate users of substrates.
It was also submitted by the opponent that the method by which shadow images are incorporated into substrates were well known to persons in the art. Mr Tierney highlighted two methods which he submitted were well known in the production of shadow images. The first method involved printing layers on BOPP as follows:
In Mr Tierney’s evidence he states that the opacifying ink would be the same colour (Tierney 1 [50]). He noted that the area of no opacifying ink could be in a particular shape (e.g. a star) which would not be obvious in reflected light but viewable in transmitted light. Mr Tierney states (Tierney 1 [50]) that, from the work he did with Note Printing Australia, this method was used on all banknotes printed in Australia since at least 1992. He states that the majority of polymer banknotes which incorporate a shadow image are also printed in this way.
The second method put forward by Mr Tierney also involved printing layers onto a BOPP as follows:
The positive print image was laid down to one side of the BOPP layer and was formed from an opacifying ink having a different tone of the ink used for the first and second coats. The different tone is said to be created by adding carbon black or another colour to the white ink. The image is said to be viewable in transmitted light. Mr Tierney stated that this type of shadow image had been incorporated into banknotes overseas since at least 2005.
The applicant disputed this common general knowledge. The applicant submitted that the evidence of Mr Jotcham showed that, while it might be said that shadow images were known in the art, information about how shadow images were made in each polymer note in circulation around the world at June 2009 was not commonly known. To support this, they pointed to documents raised by Mr Tierney in his evidence which, while discussing shadow images and their property of being visible in transmitted light but essentially invisible in reflected light, did not explain how they were made. The applicant submitted that the reason Mr Tierney was well acquainted with the methods was that, at the priority date, given his work with Note Printing Australia, he had access to proprietary information. The applicant stated that it would be unlikely that a banknote manufacturer will tell their competitors or counterfeiters how to make the security devices, nor was the method discernible from the device itself. Consequently a bald assertion in this case that these methods were common general knowledge was not enough.
However, in this case, I believe that this may be enough. I believe that Mr Jotcham’s relative lack of experience in banknote security counts against him. While recognising the existence of shadow images (Jotcham at [16b]), upon being asked about methods of creating a shadow image on a polymer banknote, Mr Jotcham notes that banknotes have specific requirements and attempts to explain possible approaches, of creating them. He lists a number of possible approaches, none of which match Mr Tierney’s methods. He then makes the statement (at [34]):
“Accordingly, although there may be various mechanisms for creating watermarks, it is not clear to me (and certainly would not have been clear to me at the priority date) that any of these methods would provide a practical watermark without the necessity for further research and development. Were I to attempt to use any of these mechanisms before the priority date, I would have had to undertake a wide variety of experiments with different materials which varied in such factors as viscosity, colour, type and thickness. Even then, I consider that at the end of the research and development process, I may still not have a watermark having sufficient resolution and clarity to be an effective security device.”
In my opinion, this highlights Mr Jotcham’s lack of familiarity with security elements for banknotes and why I am prepared to take Mr Tierney’s statements as they are. It is not that he is lying when he says that he is unaware of the construction of shadow images; it is simply that he does not know how they are made. Mr Jotcham clearly feels he needs time to do research when it comes to banknotes. While it is true that I have said the field of the invention is not limited solely to banknotes, it does not follow that only those without extensive banknote knowledge (such as Mr Jotcham) can comment on the common general knowledge. The applicant’s statement that Mr Tierney’s knowledge must have been proprietary is itself a bald assertion and an inference I am not prepared to make.
That being said, however, I have doubts that both methods are common general knowledge in Australia. Specifically, Mr Tierney quite clearly states (Tierney 1 [54]) that the second method “has been incorporated into banknotes overseas since at least 2005” (my emphasis). Is this enough to establish that the method is common general knowledge in Australia? As already noted, Mr Tierney says that his first method “is the way in which all banknotes have been printed in Australia since at least 1992.” He also says that “[t]he majority of polymer banknotes which incorporate a shadow image are also printed in this way.” The words would suggest that a minority of overseas banknotes are created using the second method. I do not think this leads to a finding that the second method is common general knowledge in Australia and I will not consider it any further.
Inventive Step in Light of Common General Knowledge
Taking the first method, with reference to claim 1, it appears that it was well known in the art to create a security substrate composed of a light transmitting carrier supporting a shadow image. It appears known that a shadow image is composed of first and second layers, with at least one of these layers not completely covering the full surface area of the carrier. While Mr Tierney states that the shadow image created by this manner is indiscernible in reflected light and visible in transmitted light, he does not explicitly say that the shadow image produced by the first method is substantially indiscernible when it is photocopied. However, I note that Mr Tierney states that Australian banknotes have used the first method for producing shadow images since 1992. I also note that at least some of the photocopies of Australian banknotes in evidence do not show a shadow image, and that the image is certainly visible in transmitted light. Consequently, I am prepared to accept that the substrate produced by the first method is one where the first and second layers are substantially indiscernible from each other when photocopied and that, when the substrate is viewed in transmitted light, the first and second layers are clearly distinguishable from each other. It follows that it could be said that the first method produces a substrate where the first and second layers have a reflective contrast ratio between the overlapping and non-overlapping areas of less than 20% and a transmissive contrast ratio between the overlapping and non-overlapping areas of greater than 3%.
However, can it be said that use of layers having the “same colour”, in the sense that I have interpreted that term, is common general knowledge? Mr Tierney says that the opacifying layers of the first method are “white” which, I believe, I am to interpret as establishing that the use of the same colour was common general knowledge. However, it must be recognised that the opponent at the hearing produced a number of paint samples which were all named with a variation of the simple term “white”. Their position was that, given that these were all variations of “white”, the “same colour” could encompass variations on a general theme. However, as I discussed above, I have concluded that, if a photocopier would print different colours having scanned the different paint samples supplied by the opponent, then, in the context of the present application, those colours are not “substantially the same”. Therefore, to answer my question would require evidence that the colour of the opacifying ink used for each layer in the first method must have the same result when scanned by a photocopier. This evidence is not on file. Without it, I cannot conclude that it is common general knowledge that the layers of the first method have the “same colour” as I have interpreted that term.
I cannot find that the claimed invention lacks an inventive step over the common general knowledge, at the relevant time, when considered alone.
Inventive Step in Light of Documents Considered With Common General Knowledge
Prior to determining whether the claims lack an inventive step in light of a document considered with the common general knowledge, it is the normal practice to determine whether the document in question would have been ascertained, understood and regarded as relevant. However, in the present case such a determination need not be carried out since, assuming that the documents discussed above were ascertained, the differences between them and claim 1 has not been addressed in evidence.
Specifically, for D1, D2, D3, D4, D5, D10, D13, D14, D15, D16, D17, D18, D19, D20, D21 and D22, there is no evidence to suggest that the same colour would be used for the two layers. It is impossible to tell from an inspection of the banknotes and the opponent’s evidence did not address the point.
In respect of D6, assuming that it could be said that the reference to the use of “one or more of a variety of opacifying inks” is enough to establish that the person skilled in the art would be directly led as a matter of course to try one variety of ink in the expectation that it might well produce a useful alternative, D6 discloses a separate security element not formed by the opacifying layers. The claims of the present application define the security element as:
“comprising at least first and second layers …wherein the layers have substantially the same colour and texture”.
No evidence was led as to the motivation to adjust the disclosure of D6 so that the first and second layers would play a part in forming the security element. The security element seems to have a discrete existence independent of the opacifying layers.
It follows that I cannot find that the claimed invention lacks an inventive step in light of D1, D2, D3, D4, D5, D10, D13, D14, D15, D16, D17, D18, D19, D20, D21 and D22.
CONCLUSION
The opposition is unsuccessful. The evidence provided does not establish that the claims lack novelty or lack an inventive step.
COSTS
Both parties sought their costs. The general rule is that costs should follow the event. I see no reason to vary that approach in this case. The opposition is unsuccessful. I award costs in accordance with Schedule 8 against the opponent, Innovia Security Pty Ltd.
Greg Powell
Delegate of the Commissioner of Patents
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