Innovia Security Pty Ltd v De La Rue International Limited
[2015] APO 31
•25 June 2015
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v De La Rue International Limited [2015] APO 31
Patent Application: 2008277472
Title:Security Device and Method
Patent Applicant: De La Rue International Limited
Opponent: Innovia Security Pty Ltd
Delegate: O L Haggar
Decision Date: 25 June 2015
Hearing Date: 11 May 2015 in Canberra
Catchwords: PATENTS – opposition to the grant of a patent – whether filing a document in compliance with subregulation 5.5 (2) has the effect of adducing the document in evidence – whether to rely on a document pursuant to regulation 5.23 – whether the claimed invention is novel – whether the claimed invention lacks an inventive step – whether the claimed invention is a manner of manufacture – whether the claims are fairly based – whether the claims are clear – opposition unsuccessful on all grounds – costs awarded against the opponent
Representation: Patent applicant: Tom Cordiner of counsel instructed by Nik Ramchand and Aaron Yates of Davies Collison Cave
Opponent:Watermark
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2008277472
Title:Security device and method
Patent Applicant: De La Rue International Limited
Date of Decision: 25 June 2015
DECISION
I dismiss the opposition and award costs according to Schedule 8 of the Patents Regulations against Innovia Security Pty Ltd.
REASONS FOR DECISION
Background
Patent application 2008277472 was filed by De La Rue International Limited (De La Rue) on 12 June 2008 under the provisions of the Patent Cooperation Treaty as international application PCT/GB2008/002021 with a claimed priority date of 19 July 2007. The application was advertised as accepted on 9 May 2013.
The opposition
Innovia Security Pty Ltd (Innovia) filed a notice of opposition to the application on 9 August 2013 and a statement of grounds and particulars on 8 November 2013. A request to amend the statement of grounds and particulars was allowed on 21 October 2014.
The opposition was heard in Canberra on 11 May 2015. Both parties filed written submissions prior to the hearing. Tom Cordiner of counsel appeared on behalf of De La Rue. Innovia was not represented at the hearing.
Grounds of opposition
The grounds of opposition specified by the statement of grounds and particulars are that:
- the claimed invention is not novel;
- the claimed invention does not involve an inventive step;
- the claimed invention is not a manner of manufacture;
- the specification does not comply with subsection 40(2)(a); and
- the specification does not comply with subsection 40(3).
Innovia’s written submissions nevertheless state that “[i]nvalidity under sub-section 40(2) is not pursued in these submissions” and, consequently, I will proceed on the basis that Innovia has abandoned any reliance on this ground of opposition.
The evidence
The evidentiary stages of the opposition were completed on 14 July 2014. Evidence in support consists of a declaration by Bruce Alfred Hardwick dated 9 February 2014 (Hardwick 1) with Exhibits BAH1 to BAH-7. Evidence in answer consists of a declaration by Daniel John Reid dated 12 May 2014 (Reid) with Exhibits DJR-1 to DJR-4. Evidence in reply consists of a declaration by Bruce Alfred Hardwick dated 14 July 2014 (Hardwick 2) with Exhibits BAH-8 and BAH-9.
I will refer to the relevant parts of the evidence where appropriate.
The specification
The specification generally relates to a security device, a method of manufacturing a security device, and a security document which incorporates the security device. Examples of security documents with which the security device can be utilised include banknotes, fiscal stamps, cheques, postal stamps, certificates of authenticity, articles used for brand protection, bonds, and payment vouchers.
By way of background, the specification explains that a variety of security devices have been proposed in the past to prevent security documents from being counterfeited or fraudulently produced, and are particularly useful if readily verifiable by a user but difficult to copy. The specification continues as follows:
“An example of such a security device is a see-through feature in which complementary features are provided on each side of a document precisely registered to one another such that when the document is held up to light, the image on the back will fit exactly into spaces within the image on the front. For example, each image could comprise a series of coloured segments, segments on one side of the sheet fitting within the spaces between the segments on the other. Printing of these images is normally carried out with specialised lithographic presses which allow simultaneous front and back printing during one printing run. See-through features have four modes of visual inspection – the image on the first side of the document viewed in reflected light, the image on the other side of the document viewed in reflected light, the composite image viewed by transmitted light as viewed from the first side and with the image on that side predominating, and finally the composite image as viewed on the other side of the sheet with the image on that side predominating. On transmissive viewing of see-through features the image on the opposite side of the document is seen to be in register in a genuine document.”
The specification next briefly refers to a number of prior art see-through security features which it acknowledges perform satisfactorily, but nevertheless states that:
“… there is always a requirement to provide see-through features which exhibit novel surprising effects to prevent counterfeiting.”
In the absence of any identified known problem with the prior art see-through security devices, it seems that as alluded to by the specification the aim of the invention could simply be said to provide a “useful alternative”.
The specification ends with 39 claims. The independent claims are in the following terms:
“1. A security device comprising a substrate having a viewing region; a first pattern of a first colour and a second pattern of a second colour on one side of the viewing region; a third pattern of the first colour and a fourth pattern of the second colour on the other side of the viewing region, wherein the first and second patterns on the one side of the viewing region overlap the fourth and third patterns respectively on the other side of the viewing region whereby
a)when each side of the viewing region is viewed in reflected light, the patterns on that side can be distinguished by at least their colours, and
b)when the viewing region is viewed in transmitted light, from either side of the substrate, the viewing region is sufficiently transparent that subtractive colour mixing between the overlapped different colours results in a perceived single resultant colour being visible.
34. A method of manufacturing a security device, the method comprising providing a substrate having a viewing region; printing a first pattern of a first colour and a second pattern of a second colour on one side of the viewing region, and a third pattern of the first colour and a fourth pattern of the second colour on the other side of the viewing region, wherein the first and second patterns on the one side of the viewing region overlap the fourth and third patterns respectively on the other side of the viewing region whereby
a)when each side of the viewing region is viewed in reflected light, the patterns on that side can be distinguished by at least their colours, and
b)when the viewing region is viewed in transmitted light, from either side of the substrate, the viewing region is sufficiently transparent that subtractive colour mixing between the overlapped different colours results in a perceived single resultant colour being visible.”
The specification summarises the invention as residing in a new type of see-through feature which exploits subtractive colour mixing whereby, when the viewing region is viewed in reflection on either side, the contrast between the first and second colours enables the individual patterns on that side to be distinguished from one another. However, when the viewing region is viewed in transmission on either side, as a result of the subtractive colour mixing of the first and second colours the light transmitted through the overlapping sets of patterns has the appearance of a single colour. According to the specification, it is consequently no longer possible to distinguish one individual pattern from the other.
Standard of proof
Examination of the application was requested on 15 September 2011. As a result, substantive amendments of the Patents Act brought about by the Intellectual Property Laws Amendment(Raising the Bar) Act 2012 do not apply. This includes the amendment to subsection 60(3A) that allows the Commissioner to refuse an application if satisfied on the balance of probabilities that a ground of opposition exits.
Consequently, the former standard for opposition proceedings applies and Innovia must establish that it is clear or practically certain that a valid patent cannot be granted (F Hoffman La RocheAG v New England Biolabs Inc [2000] FCA 283; 50 IPR 305 at 311, 319; Commissioner of Patents vSherman [2008] FCAFC 182 at [18], [22]; 79 IPR 46; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).
Considerations
Novelty
A claimed invention is deprived of novelty if it has been given to the public before the priority date, either by prior use of a product or process, or by publication of information that equates to the claimed invention (Danisco A/S v Novozymes A/S (No 2) [2011] FCA 282; 91 IPR 209 at [248]). It is well established that the general test for anticipation or want of novelty is the reverse infringement test (Meyers Taylor Pty Ltd v Vicarr Industries Ltd ([1977] HCA 19; 137 CLR 228 at [19]), and this test is satisfied if the alleged anticipation discloses all of the essential features of the invention as claimed (Nicaro Holdings Pty Ltd v Martin Engineering Co ([1990] FCA 40; 16 IPR 545 at [19]).
To meet this requirement, the prior art must contain “clear and unmistakable directions” to produce the invention as claimed (Pfizer Overseas Pharmaceuticals v Eli Lilley and Company [2005] FCAFC 224; 68 IPR 1 at [314]). However, if the prior publication contains a direction which is capable of being carried out in a manner which would infringe the claimed invention, but would at least as likely be carried out in such a way that would not do so, the invention as claimed will not be anticipated (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-486; 1A IPR 121 at 138, Novozymes A/S v Danisco A/S [2013] FCAFC 6; 99 IPR 417 at [177]).
The same level of disclosure is required of a drawing or photograph used as an alleged anticipation (Van der Lely NV v BamfordsLtd [1963] RPC 61 at 71), or an alleged prior use of the invention as claimed (Old Digger Pty Ltd v Azuko Pty Ltd [2000] FCA 676; 51 IPR 43 at [152]).
To appreciate the issues in dispute under this ground, it is necessary to have regard to the case pressed by Innovia in its statement of grounds and particulars:
“1.1 Claims 1-39 are anticipated through prior publication and use of the polymer based New Zealand banknotes, first issued in 1999.
1.1.1The relevant New Zealand banknotes are the $5, $10, $20, $50, and $100 denominations.
1.1.2Each denomination includes a fern design including two colours (A1 and B1), and a complementary fern located on the opposite sides with opposite colouring (B2 and A2), such that A1 overlaps B2 and B1 overlaps A2. As each banknote allows transmission of light, and each colour is due to subtractive colour effects, in transmission light each firm [sic] appears as a single colour determined by the subtraction of colours A and B.
1.2Claims 1-39 are anticipated through prior publication and use of the polymer based Australian banknotes, first issued in 1994.
1.2.1The relevant Australian banknotes are the $5, $10, $20, $50, and $100 denominations.
1.2.2Each denomination includes a seven pointed star, with three elements of the star printed on one side and the remaining four elements printed on the other. Each side therefore includes a points [sic] made from a first colour (A), and points made from a second colour B (such as white).
1.2.3When viewed through transmissive light, the overall effect is a single colour distinguishable from A and B.”
The statement of grounds and particulars indicates that the banknotes identified above are represented in the document it designates as D1: World Polymer Banknotes, Peter Eu, Ben Chiew, Stane Straus, 2nd Edition, (2006), pages 28-34 and 81-86 (document D1).
This line of attack immediately creates difficulties for Innovia. As observed by Mr Cordiner, the particular banknotes relied on have not been produced in evidence which means that Innovia must instead depend on document D1 itself as proof of the alleged anticipation. A copy of document D1 was filed with the statement of grounds and particulars in compliance with subregulation 5.5(2). However, this did not have the effect of adducing document D1 in evidence. The clear inference that arises from a collective reading of subregulations 5.7 and 5.8(1)(b) is that all documents that an opponent intends to rely on must be filed with its evidence in support.
A closely analogous situation was considered by a delegate of the Commissioner in Coal Corporation of Victoria v David WilliamHinkley and Brian Alan Nugent [1993] APO 56. In the course of his reasons the delegate said:
“In the present case, the opponents have filed a statement of grounds and particulars which identifies a number of documents, but has not served any evidence in the opposition … The opponents presented a number of arguments associated with this issue:
Firstly, it was in effect argued that the Commissioner had ready access to the patent specifications identified in the statement, and that therefore I should consider those documents.
… I observe that even though the material had previously been filed with the Commissioner … it was not served in the opposition in accordance with [the former] Regulation 5.8. Thus this material does not form evidence that the opponent [sic] can rely upon.”
Relevantly for present purposes, document D1 was not exhibited by Hardwick 1 and therefore does not form part of the evidence in these proceedings. Nevertheless, in order to protect the public interest, the Commissioner retains a discretionary power to rely on documents that are not formally in evidence. This power is conferred by regulation 5.23:
“(1) For the purposes of deciding an opposition, the Commissioner may consult a document that:
(a) is relevant to the opposition; and
(b) has not been filed under this Chapter; and
(c) is available in the Patent Office.(2) If the Commissioner proposes to rely on the document, the Commissioner must give the parties:
(a) notice of the Commissioner’s intention to do so; and
(b) a copy of, or access to, the document; and
(c) an opportunity to give evidence or make representations about the document.”Given the manner in which each party has conducted its case, subregulation (2) is not in issue. There is also no doubt concerning the availability of document D1. On the question of relevance, I see no reason to depart from the carefully considered reasoning of the delegate in Merial Limited v Bayer Intellectual Property GmbH [2015] APO 16 at [24]-[25] that:
“… a decision under regulation 5.23 must have regard to the nature of the information and whether the information is likely, if not certain, to change the outcome of the opposition in a significant way. If the new information is not likely to change the outcome of the opposition in a significant way, there is little advantage gained by bringing it into the opposition … In other words, the new information needs to be significantly better than what is already in evidence.”
As I have said, document D1 is paramount to Innovia’s case on alleged anticipation, and from a preliminary assessment of its relevance it seems that reliance on document D1 may well change the outcome of the opposition in a significant way. I therefore intend to take account of document D1 pursuant to regulation 5.23.
Document D1 contains full colour illustrations of the front and rear sides of the complete series of the Australian and New Zealand polymer banknotes listed in the statement of grounds and particulars. Innovia has not attempted to demonstrate where all of the essential features of the claimed invention can be found in any of these illustrations. It simply submits that in each of them “there are regions overlapping on each side of the note which are in different colours, and when viewed in transmission these regions appear to merge into one colour.”
This submission is unaided by the evidence of Innovia’s own expert, Dr Hardwick, who surprisingly does not challenge the validity of the claimed invention for want of novelty. As best can be determined, the closest his evidence comes to supporting the position for which Innovia contends is at Hardwick 1 [23] where he discusses the security feature known as a see-through register device:
“An example familiar to the Australian public would be the seven pointed star which has featured on Australian bank notes issued since the 1990s. When viewed in reflection mode (light source and person viewing the note are on the same side of the note), only a portion of the star is visible (either three or four points of the star depending on the particular side of the note). However, when viewed in transmission mode (light source and person viewing the note are on opposite sides of the note), the two partial images overlap to make viewable the entire seven pointed star.”
I understand Dr Hardwick to be here discussing the same seven pointed star referred to in the statement of grounds and particulars at [1.2.2] and [1.2.3].
The portions or partial images of the seven pointed star spoken of by Dr Hardwick can with little effort be detected in document D1 where each side of the Australian banknotes at issue is shown in reflection mode. However, the explanatory text in document D1 does not mention these partial images, let alone identify their characteristics or the technical effect produced by them. This information only begins to emerge when attention is redirected to the extract from the Reserve Bank of Australia publication exhibited as BAH-3 which briefly explains the range of security features adopted in Australian polymer banknotes, including a see-through register device:
“Diamond-shaped patterns are printed inside a circle on both sides of a banknote. When a genuine banknote is held up to the light, the patterns should line up perfectly to form a seven-pointed star within the circle.”
Only one side of a banknote is shown in BAH-3. As all seven points of the star are visible, it seems that what BAH-3 effectively depicts is an Australian banknote of the kind found in document D1 as it would appear in transmission mode.
The specification discloses a number of different forms of patterns that are encompassed by the invention. These are said to include geometric patterns. As a matter of ordinary English, I consider that patterns that are “diamond-shaped” meet this description. Nevertheless, the case for Innovia does not in my opinion establish that the diamond-shaped or partial images of the seven pointed star are constituted by first-to-fourth patterns as required by the claimed invention. It will be remembered that the claims call for the provision of a pair of patterns on each side of the substrate viewing region of the presently defined security device (which for the sake of simplicity can be equated with each side of a banknote). In accordance with the claimed invention, the patterns of each pair of patterns on either side of the banknote differ from one another as well as from each of the pair of patterns on the opposing side of the banknote.
It is self-evident that this information cannot be derived from BAH-3. Recourse to document D1 does not assist Innovia either. As I interpret document D1, each illustrated partial image cannot unequivocally be said to consist of first and second patterns.
This aside, what is more certain from BAH-3 is that in order to produce the appearance of a complete image (viz. a seven pointed star) when viewed in transmission, the partial images on each side of the banknote do not overlap as asserted by Dr Hardwick. Mr Reid sets out what he understands by “overlap”, and differentiates this from the notion of “perfect registration” which pervades Dr Hardwick’s evidence. Mr Reid argues that the term “overlap” signifies that the partial images are misaligned. BAH-3 does not contemplate such an arrangement. As reasoned at Reid [54] (with original emphasis):
“… in this example [viz. what he has described as ‘the seven point star see-through feature’] during transmission, the two partial images align, rather than overlap, to create a complete image.”
This evidence is not disputed in Hardwick 2. Hardwick 1 does not take Innovia’s case any further due to its imprecise use of the term “overlap”. In any event, Mr Reid’s evidence is to my mind in complete accord with the statement in BAH-3 that when held up to the light, that is to say, when viewed in transmission, the patterns in each partial image “should line up perfectly”. As alternatively put by De La Rue’s submissions at [8.2], “the images do not overlap but instead fit into the spaces of the opposing image.”
Before proceeding to the final issue of sufficiency of disclosure on which the parties disagree, I will briefly address the apparent suggestion at [1.2.2] of the statement of grounds and particulars that white may be regarded as a colour. If accepted as correct, the partial images on both sides of the Australian banknotes illustrated in document D1 could possibly then be judged to consist of first and second colours. It could also be said that when each side of the illustrated banknotes is viewed in reflection, the partial images on that side are distinguishable by at least their colours in commonality with the claimed invention. Nevertheless, I am not persuaded by this proposition. BAH-6 is an extract from a text which discusses the fundamentals of optical document security, including colour theory in general. On pages 12 and 13 it characterises white as being colourless or colour neutral. Dr Hardwick does not proffer a contrary view.
Regardless, the fact remains that irrespective of their colour, the partial images disclosed by document D1 do not overlap. There is also what is perhaps the most striking deficiency in Innovia’s case, namely, its failure to substantiate that the seven pointed star disclosed by BAH-3 has resulted from subtractive colour mixing between the partial images printed on both sides of the banknote, or that the partial images disclosed by document D1 would lead to this result.
Although expressed in very general terms, Hardwick 1 at [34] provides a useful overview of this aspect of the claimed invention:
“For each partial image, one section is coloured a first colour (colour A) and the other a second colour (colour B). The key to the invention of claim 1 is that the sections are such that colour A of one partial image overlaps colour B of the other partial image, and colour B of the first partial image overlaps colour A of the other partial image. Colours A and B are selected such that in transmission mode, the colours subtractively mix to produce a third colour (colour C).”
On the other hand, there is simply no direction in either BAH-3 or document D1 to employ partial images on both sides of the banknote that are formed of first and second patterns, each in its own colour, which overlap the opposing colours of the pair of patterns on the other side of the banknote so that when viewed in transmission a single resultant colour is perceived. Reid at [58] has described this as a “disappearing effect” which he directly contrasts with the optical effect produced by the see-through registration devices known to him, including the seven pointed star, involving the “appearance” of an image.
In light of the foregoing, Innovia has to this point fallen well short of proving anticipation of the claimed invention. The outcome is the same when the disclosure of document D1 as it relates to the New Zealand banknotes illustrated by it is taken into consideration. These banknotes are referenced at [1.2.4] of the statement of grounds and particulars.
Similarly to the Australian banknotes it depicts, document D1 illustrates both sides of the New Zealand banknotes in question when viewed in reflection. Each side is shown in this mode to include a number of partial images of a fern leaf. Innovia has not in this instance sought to rely on a disclosure equivalent to BAH-3. Nevertheless, on a comparison with the likewise depicted Australian banknotes, I accept the uncontroverted evidence at Reid [55] and [58]-[59] that when viewed in transmission, the partial images align rather than overlap to create a full image of a fern leaf. Further to this, although it is arguable whether the partial images can be deemed to comprise first and second opposing colours, document D1 does not on any view suggest that the full (fern leaf) image is produced by subtractive colour mixing between the partial images.
Innovia’s written submissions at [5.1.1] have raised the added contention that the claimed invention is anticipated by the see-through registration devices utilised in Canadian and Indian banknotes. Although by no means made clear by Innovia, this contention appears to be linked to the disclosure of exhibits BAH-4, BAH-8 and BAH-9. Hardwick 2 at [5] concedes that BAH-8 “post-dates the priority date”. However, nothing turns on this since, as a consequence of the limited information provided by them, the most that can said of any of these exhibits is that their disclosure does not go beyond that of BAH-3.
For the above reasons I find that the claimed invention has not been anticipated by any of the material relied on by Innovia. This ground of opposition accordingly does not succeed.
Inventive step
According to subsections 7(2) and 7(3) as they were before the commencement of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, the invention is in the present case taken to involve an inventive step, when compared to the prior art base, unless the invention would have been obvious to the person skilled in the relevant art in the light of common general knowledge within Australia either considered alone or together with the information specified in subsection (3). This information includes one or a combination of two or more pieces of prior art information being information that the person skilled in the art could be reasonably expected to have ascertained, understood and regarded as relevant by the person skilled in the relevant art.
Innovia chiefly relies on common general knowledge alone.
The test for whether an invention is obvious (non-inventive) is to ask whether it would have been a matter of routine to proceed to the claimed invention. In Wellcome Foundation Ltd v V.R. Laboratories (Aust) Pty Ltd [1981] HCA 12 at [45]; 148 CLR 262 at 286, it was stated:
“The test is whether the hypothetical addressee faced with the same problem would have taken as matter of routine whatever steps might have led from the prior at to the invention, whether they be the steps of the inventor or not.”
The High Court approved this approach in Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59; 212 CLR 411.
The person skilled in the relevant art
The question of whether a claimed invention involves an inventive step is to be determined through the eyes of the person skilled in the relevant art.
In Root Quality v Root Control Technologies Pty Ltd [2000] FCA 980; 49 IPR 225 at [71], the person skilled in the relevant art was generally said to be “the person who works in the art or science with which the invention is connected.” As further explained:
“In Catnic Lord Diplock said (at 242) that skilled addressees are ‘those likely to have a practical interest in the subject matter of [the] invention’. A variety of people may have that interest. There are those who might wish to make or construct the invention, those who may wish to compound the invention and those who may wish to use the invention.”
While the skilled person may be assumed to be well-versed in the relevant art, such a person must be taken to be non-inventive (Minnesota at 293).
The identity of the person skilled in the relevant art is determined in the light of the problem the invention is intended to solve. However, as said before, the specification has discussed various prior art see-through security features without identifying any known problem with them. I am therefore of the view that the aim of the invention can be put broadly as the provision of a security device which utilises an alternative see-through feature. This view is shared by both parties.
It is also not disputed that the skilled person is someone having experience in the field of document security. However, the parties disagree on whether their respective declarants are representative of the skilled person and, consequently, whether any weight can be placed on the opposing views expressed by them.
Briefly put, De La Rue points to the extensive experience and renown of Dr Hardwick, both in Australia and internationally, as a leading figure in the research and development of security devices for security documents including banknotes. It proceeds by arguing that Dr Hardwick’s professional background places him into the category of an over-qualified expert, and thus his evidence should be discounted in favour of the evidence of Mr Reid which is based on his practical interest in the design and manufacture of security devices for banknotes and other security documents. For its part, Innovia submits that Mr Reid’s experience is limited to the production of security documents having security features, whereas the specification is directed to persons engaged in the research and development of those features.
In Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; 222 ALR 155 at [154], the Full Court provided the following guidance when assessing expert evidence:
“Section 7(2) of the Act refers to the hypothetical person “skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim”. That person is wholly hypothetical. Much evidence is admissible from persons none of whom would precisely answer the statutory description. Some may be more skilled in the relevant art than others. Some may be skilled and inventive; some may be brilliant; some may be plodders; some may be aware of particular pieces of art claimed to be part of the common general knowledge and others not. It is for the Court, having admitted relevant evidence, to come to a conclusion as to the application of [section 7(2)].”
In the present case I am inclined to the view that the knowledge acquired by Dr Hardwick through his work in research and development exceeds that to be normally expected of the skilled person. The evidence additionally attests to his inventive capacity (Hardwick 1 at [11]). Nevertheless, it cannot be denied that Dr Hardwick is highly qualified in the relevant art. I therefore do not consider that his evidence can be disregarded altogether, although in coming from the perspective of a skilled inventive worker it must be treated with a good deal of caution.
I also believe that Mr Reid is suitably placed to give evidence having some probative value. Mr Reid states that he has spent nearly his entire career in the security printing industry, primarily working with banknotes. Reid at [9]-[11] provides some insight into the extent of his considerable practical experience in banknote production as a consequence of which Mr Reid claims that he “became very familiar with the state of the art in Australia with respect to security devices for use with documents such as banknotes” and “also maintained an awareness of developments overseas”. In light of his particular experience, I think it unreasonable to suggest that Mr Reid would not have gained relevant knowledge of document security devices during the course of his duties.
Common general knowledge
The notion of common general knowledge was described in Minnesota at 292 as involving:
“… the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of making improvements in old, and it must be treated as being used by an individual as a general body of knowledge.”
The common general knowledge will encompass not only material that is retained in the memory of the skilled person, but also material that the person knows of, and to which they might refer as a matter of course, or habitually consult. This material could include, for example, standard texts and handbooks (ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [1999] FCA 345; 45 IPR 577 at [112]).
The state of the common general knowledge is a question of fact which must be determined on the basis of expert evidence. It is therefore unfortunate that the evidence in these proceedings is of limited assistance in determining what may be regarded as commonly known by those working in the relevant art.
Nevertheless, what the evidence does firmly establish is that it was commonly known to print banknotes on a polymer substrate. The use of security features in polymer banknotes was also well known in the art. One form of security feature has been referred to in the evidence as a see-through register device. A primary example of such a device is the seven pointed star which Dr Hardwick claims has featured on Australian banknotes issued since the 1990s. Mr Reid does not dispute this. Dr Hardwick and Mr Reid have both confirmed that other examples of see-through register devices used in conjunction with polymer banknotes which produce the same optical effect as the seven pointed star are also known to them. I therefore accept that see-through register devices, including the seven pointed star, had assimilated into common general knowledge.
Further to this, the seven pointed star is disclosed in document D1 and BAH-3. As said earlier, BAH-3 is an extract from a Reserve Bank of Australia publication concerning the security features found in Australian polymer banknotes, and thus in my opinion its contents can be safely assumed to have also formed part of the background knowledge of the skilled person.
An associated issue surfaces from Innovia’s written submissions at [6.2.12]:
“… the concept of see-through register [sic] formed part of the common general knowledge of the person skilled in the art before the Priority Date. This includes both printing incomplete images that combine under transparent [sic] viewing to form a complete image, and identical (though mirrored) images intended to precisely overlap when viewed in transmission.”
It is not in dispute that the type of see-through register device first mentioned above is commonly known. The seven pointed star is a case in point. However, the provenance of the second-mentioned type of see-through register device is the subject of considerable debate.
Dr Hardwick asserts that it was known at the priority date to utilise perfect registration to print a first image on one side of a security document and the same (mirror) image on the other side of the document (Hardwick 1 at [30]). Mr Reid has rightly argued that this evidence is not corroborated by any examples of see-through security devices of this nature. According to Mr Reid, all of the see-through devices referred to by Dr Hardwick comprise partial images on either side of the banknote which form a complete image when viewed in transmission, “for example … a ‘50’ on the Canadian note … the seven-pointed star on the Australian note … and two ferns on the New Zealand note” (Reid at [55] and [58]). Mr Reid again makes the point that the partial images perfectly align rather than overlap.
In responding to Mr Reid’s criticism, Hardwick 2 at [4] draws attention to the “Mahatma Gandhi” series of Indian banknotes first issued in 1996. As evidenced by BAH-8 and BAH-9, this series of banknotes incorporated a floral design see-through register device. Dr Hardwick submits that:
“One of the images constitutes an ‘outline’ of the floral design, while the other is the ‘filled-in’ floral design. However, in my opinion, this feature corresponds to printing the same image on either side of a substrate (one the mirror image of the other), in perfect register … The only difference between the images is the interior content, however the outlines are in perfect register.”
BAH-9 states that the floral design is printed in “accurate back to back registration”. To this extent I therefore accept Dr Hardwick’s submission. BAH-9 further states that the design is printed “both on the front (hollow) and back (filled up) of the note” which correlate to what Dr Hardwick has referred to respectively as the “outline” and “filled-in” images of the floral design. However, it is plain that BAH-9 is here speaking of partial images (comparable to those found for example in document D1) and not, as alleged by Dr Hardwick, mirror images of the floral design. The statement in BAH-9 that the floral design “will appear as one floral design when seen against the light” confirms that his allegation is misguided.
The position with respect to selective colour mixing is not as clear-cut. As its title suggests, the document from which BAH-6 is extracted provides a comprehensive coverage of the optical characteristics of document security devices. Although there is no direct evidence on the point, the inherent nature of this document is such that I have formed the opinion that it can be regarded as a standard text in the art. I therefore consider that the contents of BAH-6 formed part of the common general knowledge. What BAH-6 verifies from the outset is that the theory of subtractive colour mixing has been long understood, and that its results are familiar even to the layperson such as in the classic example that “yellow and blue yield green”. Knowledge of the rules of subtractive colour mixing is said to have been applied in a number of ways including paint mixtures, colour photography, digital copying techniques, and colour printing.
After acknowledging that the application of subtractive colour mixing to the printing of counterfeit documents is an ongoing concern, BAH-6 states at page 15 that the “only countermeasure [to counterfeiting] appears to be the application of security features that are difficult to imitate and yet easy to reliably authenticate by the general public.” One such security feature is described in section 5.2.3 in which “spatially related image elements” are printed “in seamless front-to-back register on both sides of a document” so that when viewed in transmission “the register of front and back image elements is revealed.” This security feature bears obvious similarities to the see-through register devices I have already discussed at length, and thus in this respect BAH-6 goes no further than document D1 or BAH-3. Most relevantly, BAH-6 does not suggest the use of subtractive colour mixing as a document security feature, either alone or in conjunction with a see-through register device of the type it has described.
On this the basis I conclude that the concept of subtractive colour mixing had entered into common general knowledge, but that its application as a document security feature had not.
Is the claimed invention obvious?
Innovia submits that as the concepts of see-through registration and subtractive colour mixing are matters of common general knowledge, the claimed invention does not involve an inventive step.
This submission improperly relies on hindsight reasoning. It also ignores the principle that where, as in the present case, the claimed invention lies in a combination of features, the question is whether the combination, and not each individual feature, is obvious when compared to the prior art base (Alphapharm at [41], Minnesota Mining & Mining Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9 at [16]; 144 CLR 253 at 293).
To recap once more, the broad aim of the invention is to provide an improved security device which utilises a see-through feature. I have already found that security features of this character, namely, see-through register devices, are common general knowledge. The case for Innovia is essentially that in seeking to improve these known devices, the skilled person would as a matter of routine have integrated them with subtractive colour mixing to thereby arrive at the claimed invention.
It seems to me that when so broadly put, many different approaches might be considered in addressing the aim of the invention. Mr Reid remarks (at [36] and [63]) that see-through register devices are only one of many features used in the industry to protect security documents. On my reading of them, BAH-3 and BAH-6 are not inconsistent with this evidence. These security features are diverse and include a transparent window containing a stylised image (also shown, for example, at pages 30-31 of document D1), fluorescent inks, and various printing processes such as intaglio embossing. Against this background Mr Reid states (at [61]) that if presented with the task of improving see-through devices, he would have “explored the possibility of incorporating a portion of a partial image on each side of a substrate into a transparent window using Simultan printing.” Mr Reid explains that Simultan printing allows partial images to be printed simultaneously on both sides of a document in perfect front-to-back registration. I have no reason to regard this evidence as other than entirely plausible.
Mr Reid further qualifies his evidence in two significant respects. First, he says that unlike the claimed invention, the see-through register devices known to him do not utilise partial images of opposing and overlapping colours. Second, he states that he was not aware of any see-through register devices that exploited subtractive colour mixing.
This evidence is not contested on any footing by Dr Hardwick. However, I note with interest from Hardwick 1 at [26] that the effectiveness of known see-through register devices as a document security feature is enhanced by their use of partial images that are printed in perfect back-to-front register. As explained by BAH-6 at page 135, this is because any offset of the partial images indicating a probable counterfeit is easily detected on visual inspection. It consequently becomes apparent that the common general knowledge teaches away from see-through register devices having overlapping partial images.
The evidence therefore does not support the conclusion that the skilled person would have been naturally led to the claimed invention. I have found that neither element of the claimed invention identified by Innovia is a matter of common general knowledge. On the evidence before me, the employment of a see-through register device having overlapping partial images as in the claimed invention runs contrary to conventional thinking in the art. It is evidently also not known to use subtractive colour mixing by any means as a document security feature. There is no evidence whatsoever to show that the skilled person would be somehow prompted to depart from conventional thinking by incorporating overlapping partial images in a see-through register device in preference to those that are in perfect alignment, with the intention of additionally incorporating subtractive colour mixing between the partial images which even at the conceptual level had not been previously adopted as common practice. The unsubstantiated assertions made by Dr Hardwick regarding the merit of the claimed invention do nothing to remedy this evidentiary gap.
Innovia has in effect submitted at [6.4] that any exhibit on which it relies which is not found to be indicative of common general knowledge should be favourably reassessed as subsection 7(3) information. I have earlier found that some of these exhibits are common general knowledge, but that none of them disclose or even suggest the presently defined combination of features. It is difficult to see how my conclusions as to inventive step would differ in any material sense by simply assuming in Innovia’s favour that one or more of the exhibits it has put forward would have been ascertained, understood and regarded as relevant by the skilled person.
It follows that this ground of opposition does not succeed.
Manner of manufacture
Innovia’s case under this ground is essentially that as the concepts of see-through registration and subtractive colour mixing are both well known, the claimed invention involves nothing more than the selection of colours for a conventional security feature (see-through register). This to a large part repeats the same contentions made under the ground of inventive step. Innovia submits that the claimed invention is consequently “merely characterised by its printed subject matter” which is non-patentable.
It is clear from authority that if a claim is to be rejected because it is not in respect of a manner of manufacture, it must be for reasons other than for want of novelty or inventiveness (N V PhilipsGloeilampenfabrieken v Mirabella International Pty Ltd [1995] HCA 15; 183 CLR 655). Nevertheless, as held in Philips, subsection 18(1) introduces a threshold of inventiveness which, if not satisfied, will deny patentability. As explained at 454:
“… That does not mean that the threshold requirement of an “alleged invention” corresponds with or renders otiose the more specific requirements of novelty or inventive step … It simply means that, if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be proper subject of letters patent under the Statute of Monopolies is absent, one need go no further.”
In the present case I do not perceive any suggestion on the part of Innovia that the claimed invention fails to meet this threshold requirement of inventiveness. Rather, it seems to me that its case rests on the fact that any presentation of information characterised solely by the content of that information has been traditionally held as belonging to the fine arts and therefore excluded from patentability.
This exclusion does not apply if the effect of the presentation of information is to serve a technical or “mechanical” purpose (Pitman’s Application [1969] RPC 646 at 650).
As is apparent from my preceding considerations, the claimed invention does not merely reside in a security device characterised by nothing more than the selection of colours. It is true that the claimed invention speaks of patterns on both sides of the viewing region that are in contrasting and opposing colours. However, the patterns are further defined as being arranged in a physical way, namely, “the first and second patterns on one side of the viewing region overlap the fourth and third patterns respectively on the other side of the viewing region”.
The claims dictate that the consequence of this arrangement of coloured patterns is two-fold, depending on whether the viewing region is viewed in reflected or transmitted light. It is worth repeating that in the latter mode:
“… subtractive colour mixing between the overlapped different colours results in a perceived single resultant colour being visible”
There can be no doubt that this result serves a technical purpose. When viewed in reflection the overlapping patterns on either side of the viewing region are easily distinguished by the contrast in colours of each pattern. This is not the case in transmission where the contrasting colours are replaced by a single subtractively mixed colour. As highlighted throughout the specification, the perceptible optical effect of transforming from different colours in reflection to a single colour in transmission permits ready detection of the authenticity of the document to which the present security device is applied.
Thus the claimed invention is not characterised purely by intellectual information as alleged. This ground of opposition accordingly does not succeed.
Subsection 40(3) – Fair Basis
Innovia’s case under this ground is put forward in its written submissions as follows:
“… claims 1 and 2 are not fairly based on the specification as filed. The purported invention relies upon the difficulty in producing images in perfect registration on either side of the substrate. Claims 2 and 3 require that the images are in register and perfect register respectively. This implies that the scope of claim 1 includes non-registered imagery, which we submit is inconsistent with the invention described. Furthermore, the recitation of ‘perfect register’ in claim 3 implies some lesser registration requirement in claim 2. We submit that this also inconsistent with the invention described.”
In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58; 217 CLR 274; 212 ALR 1, the High Court said that the words “fairly based” in subsection 40(3) refer to a relationship between what is claimed and what is described in the body of the specification. The High Court emphasised that in assessing whether a claim is fairly based, it is necessary to take into account the construction of the specification as a whole. As stated at [87]:
“A ‘coincidence of language’ between a claim and part of the body of the specification does not establish fair basing if that part of the language of the specification does not reflect the description of the invention in the light of the specification as a whole.”
The High Court also observed (at [91]) that the requirements of subsection 40(3) would only be satisfied by the inclusion of a consistory clause if the specification, when read as a whole, corresponded with the consistory clause.
In short, Innovia asserts that whereas claim 1 requires respective pairs of the coloured patterns it defines to “overlap”, the invention described by the specification as a whole is limited to patterns that are in “perfect register”. The consistory clause at page 3 of the specification again refers to overlapping patterns, and the question which therefore arises is whether the description of the invention in the specification, read as a whole, corresponds with the consistory clause.
As already mentioned, the specification commences with a general discussion of the background of the invention and follows this with a consistory clause which so far as is relevant reproduces the language of claim 1. However, it quickly becomes apparent that the provision of patterns that do not just overlap is no more than an embodiment of the invention described. As stated at page 4 lines 10-13 (with added emphasis):
“… preferably the third pattern is in register with and superimposes the second pattern, and the fourth pattern is in register with and superimposes the first pattern.”
This much is reinforced by the specification at page 4A lines 18-20 where it states (again with added emphasis) that “the preferred embodiments of the current invention have the same two colours on either side in substantially perfect register”. At page 5 lines 3-4 the specification refers to “the requirement that at least in some areas of the viewing region the patterns on either side of the substrate are in substantially perfect register.” However, I agree with Mr Cordiner that when taken in context this is a reference to the aforementioned preferred embodiments, and not the general nature, of the invention.
The specification then proceeds to describe the invention with reference to the accompanying drawings. The specification states, and Innovia does not dispute, that the drawings relate to non-limiting examples of the invention described. The majority of the drawings illustrate patterns that are applied in substantially perfect register. However, the description concerning Figures 6a to 6c verifies that even in its preferred form the invention envisages the use of patterns that simply overlap.
For the above reasons there is no disconformity between the consistory clause and the invention as described by the specification as a whole. Claims 1 and 2 therefore do not lack fair basis as alleged.
I accordingly find that this ground of opposition does not succeed.
Subsection 40(3) - Clarity
The statement of grounds and particulars asserts that the specification does not comply with subsection 40(3) since the term “sufficiently transparent” used in claim 1 cannot be ascribed a clear meaning. The statement further contends that it is not clear what restriction is imposed by the term “in register” in claim 2 as compared to the term “in perfect register” in claim 3.
The principles to be applied in claim construction are well established (Flexible Steel Lacing Company v Beltreco Ltd [2000] FCA 890; 49 IPR 331 at [70] – [81], Pfizer Overseas Pharmaceuticals v Eli Lilly and Company [2005] FCAFC 224; 68 IPR 1 at [247]-[250], H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 at [52]-[54]). Of particular note is that the words used in a claim are to be given the meaning a skilled person would attach to them, having regard to their own personal knowledge and to textual disclosures in the body of the specification which, together with the claims, must be read as a whole. Thus the use of an imprecise term in a claim does not give rise to ambiguity, so long as it can be understood in a practical, commonsense manner.
In my opinion, the context in which the terms complained of appear in the specification does not lead to any ambiguity as to their meaning, a view which is obviously shared by Dr Hardwick (cf. Hardwick 1 at [26] and [29]). I also note the evidence of Mr Reid regarding the distinction between “registration” and “perfect registration” which I think is of considerable weight given his expertise in security document printing.
Innovia’s written submissions additionally assert that the scope of claim 8 cannot be determined due to the vague nature of the term “or the like”. Innovia similarly objects to the terms “preferably” and “more preferably” in claims 18 and 19. However, neither Dr Hardwick nor Mr Reid has expressed any difficulty with the clarity of these claims, and it bears comment that as a matter of construction the effect of terms such as “and the like” and “preferably” is well understood.
This ground of opposition therefore does not succeed.
Conclusion
100. I have found that the opposition does not succeed on any of the grounds relied on. The opposition is therefore dismissed.
Costs
101. Innovia has not been successful and I can see no reason why costs should not follow the event. I will award costs against Innovia.
O L Haggar
Delegate of the Commissioner of Patents
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