Innovia Security Pty Ltd v Giesecke & Devrient GmbH
[2013] APO 53
•20 September 2013
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v Giesecke & Devrient GmbH [2013] APO 53
Patent Application: 2005309050
Title:Security arrangement for security documents
Patent Applicant: Giesecke & Devrient GmbH
Opponent: Innovia Security Pty Ltd
Delegate: Greg Powell
Decision Date: 20 September 2013
Hearing Date: 28 August 2013
Catchwords: PATENTS - section 59 – opposition to the grant of a patent – construction of claims – whether the claims are clear and fairly based – no claims found to lack clarity or fair basis - whether the claimed invention is novel – anticipatory use or publication not established – whether the claimed invention involves an inventive step – obviousness not established – opposition unsuccessful – no award of costs
Representation: Patent applicant: Cullens, Brisbane
Opponent:Watermark, Melbourne
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2005309050
Title:Security arrangement for security documents
Patent Applicant: Giesecke & Devrient GmbH
Date of Decision: 20 September 2013
DECISION
The opposition is unsuccessful on all grounds. Subject to appeal, I direct the application to proceed to grant.
No award of costs.
REASONS FOR DECISION
Background
Application 2005309050 in the name of Giesecke & Devrient GmbH (“Giesecke”) was filed on 15 November 2005 and accepted on 20 July 2010. Securency International Pty Ltd filed a Notice of Opposition on 5 November 2010. Securency International Pty Ltd subsequently changed its name to Innovia Security Pty Ltd (“Innovia). The evidence in support of the opposition was completed on 8 May 2012. Evidence in answer was completed on 5 October 2012.
Shortly before the completion of evidence in answer, Giesecke filed amendments on 3 October 2012. Those amendments were allowed unopposed on 12 March 2013. Consequently, the opposition has proceeded on the basis of the amended claims.
A hearing was held on 28 August 2013 in Canberra to decide the opposition. Innovia was represented by J. Roger Green (patent attorney of Watermark, Melbourne), assisted by Ken Bolton (patent attorney of Watermark, Sydney). Giesecke did not appear at the hearing. While written submissions by Claude Anese (patent attorney of Cullens, Brisbane) were filed for Giesecke, the requisite fee was not paid. As a consequence I do not have to have regard to these submissions. As it turns out nothing arises as a consequence of this, but it is clearly not a desirable situation for Giesecke to be put in.
The Opposition
Innovia opposed the grant of a patent on the basis of:
(i)lack of novelty
(ii)lack of inventive step
(iii)non-compliance with section 40(3)
Each party relied upon evidence by one declarant. Evidence in support consists of a declaration by Bruce Alfred Hardwick with exhibits BAH-1 to BAH-22. Evidence in answer consists of a declaration by Dr Stefan Zeuner with exhibits SZ1 to SZ3. No evidence in reply was filed. I will refer to the relevant parts of the evidence where appropriate
The Specification
The present invention relates to security arrangements for what are described in the specification as “homogeneous security documents”. The specification indicates that these type of documents are “security or valuable documents which are of the same kind or nature, or essentially alike”. Documents such as banknotes, stocks, bonds, admission tickets and the like were given as examples of such documents, although the preferred embodiments were described in terms of banknotes.
While acknowledging that prior art security documents have security elements on them that are difficult to counterfeit, the specification notes that knowledge of what these security elements actually are is not very common in the general population. With respect to what is called a “self-verifying banknote” (i.e. a banknote that has two elements that can be brought together by folding the banknote to create an effect that confirms the authenticity of the banknote), the average citizen is said not to know what effect of the authentic banknote they are looking for and can be tricked by some convincing effect. The specification also notes that such elements of self-verifying banknotes are typically counterfeited along with the rest of the document, resulting in an authentic-seeming document.
In seeking to overcome these problems, the present application proposes a security arrangement made of up of 2 elements – an authenticating feature and a verification element. The characteristic of the invention is that the authenticating feature of the security arrangement of one security document can only be verified in what is called a “damageless check” by using the verification element of the security arrangement of another security document of the same kind or nature. In the preferred embodiments, the specification describes banknotes which each include both an authenticating feature and a verification element, where the authenticating feature of one banknote is verified by the verification element of another banknote, by positioning one note on top of the other.
Verification occurs in a number of ways. In one embodiment, the authenticating feature and the verification element have different polarisations which, when the two elements are stacked, create a particular effect (e.g. displaying a number). In another embodiment, the verification element is a lenticular array which, when placed over an authenticating feature, shows different images depending on the angle of viewing. In another embodiment the verification element is two transparent regions in the document which act in the same way as “3D glasses” so that, when the authenticating feature is viewed a three dimensional image effect is created.
The specification ends with 24 claims in the following terms:
1. A security arrangement for one of a plurality of homogeneous security documents, having an authenticating feature that is characteristic for the security documents and at least one verification element for checking the authenticating feature of others of the plurality of homogeneous security documents, in which a damageless check of the authenticating feature of the security arrangement is practicable exclusively through a predefined combination effect with a verification element of a security arrangement disposed on another homogeneous security document.
2. The security arrangement according to claim 1, characterized in that a check of the authenticating feature of the security arrangement occurs in a predefined relative position of the authenticating feature and the verification element.
3. The security arrangement according to claim 2, characterized in that the authenticating feature and the verification element of the same security arrangement are geometrically so disposed to one another that they cannot be brought into the predefined relative position on the security document without damage.
4. The security arrangement according to claim 2 or 3, characterized in that the authenticating feature and the verification element of the same security arrangement are coordinated with each other in such a way that, in the predefined relative position, the authenticating feature and the verification element of the same security arrangement do not display the predefined combination effect.
5. The security arrangement according to any one of claims 2 to 4, characterized in that the predefined relative position is a stacking of the authenticating feature and the verification element with a certain spacing.
6. The security arrangement according to any one of claims 1 to 5, characterized in that the authenticating feature and/ or the verification element are/ is formed to be transparent.
7. The security arrangement according to any one of claims 1 to 6, characterized in that the authenticating feature and the verification element of the security arrangement of a security document are disposed in or over a common window area or hole in the security document.
8. The security arrangement according to any one of claims 1 to 7, characterized in that the authenticating feature and the verification element of the security arrangement of a security document are disposed in immediate proximity to one another on the security document.
9. The security arrangement according to any one of claims 1 to 8, characterized in that the verification element comprises an optical imaging element for examining the authenticating feature of other security arrangements disposed on homogeneous security documents.
10.The security arrangement according to claim 9, characterized in that the optical imaging element constitutes a magnifying lens or a distortion lens.
11. The security arrangement according to any one of claims 1 to 8, characterized in that the authenticating feature includes an area printed on with metameric inks, and the verification element comprises a filter element for viewing the metameric ink area of other security arrangements disposed on homogeneous security documents.
12. The security arrangement according to any one of claims 1 to 8, characterized in that the authenticating feature comprises a first linearly polarizing window area, and the verification element comprises a second linearly polarizing window area.
13. The security arrangement according to any one of claims 1 to 8, characterized in that the authenticating feature comprises a first fine line pattern, and the verification element comprises a second fine line pattern, the two line patterns producing interference effects when the authenticating feature and the verification element are stacked.
14. The security arrangement according to any one of claims 1 to 8, characterized in that the authenticating feature and/ or the verification element exhibit a diffraction effect, a lenticular array effect, a liquid crystal effect or a thin-film or multi-layer-film effect for checking the authenticating feature.
15. The security arrangement according to any one of claims 1 to 14, characterized in that the security arrangement includes at least two verification elements for checking the authenticating feature of others of the plurality of homogeneous security documents, a check of the authenticating feature occuring [sic] with the simultaneous use of two or more verification elements that are disposed on one or multiple of the plurality of homogeneous security documents.
16. The security arrangement according to claim 15, characterized in that the two verification elements are disposed at interpupillary distance and are formed in the manner of stereoscopic glasses, the authenticating feature of a security arrangement evoking a three-dimensional image impression when viewed with both eyes through the two verification elements of a security arrangement applied on another security document.
17. The security arrangement according to claim 15, characterized in that, to check the authenticating feature of the security arrangement, two verification elements and the authenticating feature must be brought into the predefined sequence on top of one another.
18. The security arrangement according to claim 17, characterized in that the bringing on top of one another of the two verification elements of a security arrangement required for the check makes the authenticating feature of the same security arrangement inaccessible.
19. The security arrangement according to any one of claims 1 to 18, characterized in that, in addition to the authenticating feature, the verification element is also formed characteristically for the security document such that a check of the authenticating feature is practicable only with such security arrangements whose verification element exhibits a characteristic design corresponding to the authenticating feature.
20. The security arrangement according to any one of claims 1 to 18, characterized in that only the authenticating feature is formed characteristically for the security document, such that a check of the authenticating feature is practicable with any verification element of a security arrangement disposed on another homogeneous security document.
21.A security document, such as a security paper, value document or the like, having a security arrangement according to any one of claims 1 to 20.
22. The security document according to claim 21, characterized in that the authenticating feature and the verification element are geometrically so disposed on the security document that they cannot be brought into a predefined relative position required for the authenticity check without damage to the security document.
23. The security document according to claim 21 or 22, characterized in that the authenticating feature and/or the verification element are/is disposed in or over a window area or hole in the security document.
24. The security document according to any one of claims 21 to 23, characterized in that the security document is a security paper or a value document.
DECISION
Case to be answered
In addition to the case set out in their Statement of Grounds and Particulars, at the hearing Innovia raised what they considered to be further section 40 defects in the claims; specifically in relation to claims 1, 4, 18 and 22. When I asked Innovia at the hearing what I should do in relation to the discrepancy between their Statement and the case they wanted to run at the hearing, they indicated that, while these issues were not in the Statement, they nevertheless fell within the ground set out in section 59(c) – the specification not complying with subsection 40(2) or 40(3). Innovia also indicated that the new matters were things that the Commissioner should have regard to. This is fine as far as it goes, but it does not relieve Innovia (or any opponent) from accurately recording the case that the applicant is expected to meet. The Statement of Grounds and Particulars is an important document that necessarily circumscribes the case that the opponent can run at a hearing. Where important issues are raised outside the bounds of the Statement, this will likely be taken into account in the award of any costs.
In the present case, while only one of the new issues raised could be said to be “important”, I will, nonetheless, address all issues that Innovia raises.
SECTION 40(3)
Innovia submitted in their Statement of Grounds and Particulars and at the hearing that claims 1, 3, 4, 18, 20 and 22 lacked fair basis and/or clarity. It is therefore necessary that I construe the claims to determine whether they are clear and fairly based.
Sheppard J summarised the rules of construction for a patent specification in Décor Corp v Dart Industries 13 IPR 385 at 400. This summary has been referred to in numerous subsequent judgements, and was endorsed by the Full Federal Court in Pfizer Overseas Pharmaceuticals v Eli Lilly [2005] FCAFC 224.
It is a recognised tenet of Australian patent law that each claim must be read as part of the entire specification (Electrical and Musical Industries Ltd v Lissen Ltd 56 RPC 23 at 39), and thus the meaning of the words used in a claim may be affected by what is said in the body of the specification (Rosedale Associated Manufacturers Ltd v Carlton Tyre Saving Co Ltd [1960] RPC 59 at 69). While noting that it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim, by adding to those words glosses drawn from other parts of the specification (Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 and Decor Corporation Pty Ltd v Dart Industries Inc (supra)), it is legitimate to refer to the rest of the specification to explain the background to the claims, to ascertain the meaning of technical terms and resolve ambiguities in the construction of the claims (see Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 476).
More recently, the correct approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70, 81 IPR 228 at [118] – [120]:
"the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear … while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole … it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification … terms in the claim which are unclear may be defined or clarified by reference to the body of the specification"
I also note what Middleton J said in Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214, 100 IPR 451 at [139]:
"It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense. The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent. From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date."
Under Section 40(3), fair basis is “concerned purely with the relationship between the body and claims of the one specification.” (Lockwood Security v Doric Products [2004] HCA 58; 217 CLR 274; 212 ALR 1; 79 ALJR 260). As was noted in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; 207 CLR 1; 177 ALR 460; 75 ALJR 518 “a comparison between the matter described in the specification and the claim which defines the scope of the monopoly”, following the reasoning of Barwick CJ in Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23; (1994) 180 CLR 236 when he said:
“The question whether the claim is fairly based is not to be resolved ... by considering whether a monopoly in the product would be an undue reward for the disclosure. Rather, the question is a narrow one, namely whether the claim to the product being new, useful, and inventive, that is to say, the claim as expressed, travels beyond the matter disclosed in the specification.”
As was noted in Lockwood (supra):
“the statutory test as expounded by Barwick CJ does not call for any evaluation of whether the breadth of the claims exceeds "the technical contribution to the art embodied in the invention", merely for an evaluation of whether the claims travel beyond the matter described in the specification”
Claim 1
At the hearing Innovia indicated that claim 1 did not satisfy section 40(3) for effectively three reasons:
(i)the claims and description failed to disclose how to select security documents which could be considered “homogeneous” ;
(ii)how the effect can be “practicable exclusively” between the two elements of the security arrangements; and
(iii)it was not clear what “damageless” meant.
I note that the issue of a lack of clarity with the term “damageless” was the issue not mentioned in the Statement of Grounds and Particulars, but raised for the first time at the hearing.
“homogeneous”
I do not agree with Innovia. As I noted above, “homogeneous security documents” were described to be those type of documents that are “security or valuable documents which are of the same kind or nature, or essentially alike” (my emphasis). That, coupled with the preferred embodiments make it very clear to me what is being defined here. The security documents are of the same type without being identical. I note that Innovia’s expert, Mr Hardwick, also had no problem interpreting the term.
“practicable exclusively”
While this term may appear confusing at first, the situation is clear cut. When reading the specification as a whole (as I am required to do), it is quite clear, as was recognised by Mr Hardwick for Innovia, that this term is meant to indicate that the security check can only be carried out in one way (in this case, by using another security document). While Mr Hardwick stated in his evidence that he did not think that claim 1 conveyed that limitation, and that may be so of claim 1 in isolation, as is clear from the decisions listed above, reference to the specification is permitted where a term is unclear. The term “practicable” seems to me to fit the situation well in so far as the claim is defining a device. The term “practicable exclusively” means that the check is “achievable”, “feasible”, “operable”, “possible”, “attainable”, “doable”, or “workable” (to borrow a few words from a thesaurus), in one way only.
“damageless”
This term was key to the opposition and, as I have noted above, while it was not within the case that the opponent was permitted to present, I will address it.
The opponent submitted that “damageless” lacked clarity noting that there was no definition of this term in the specification. The opponent noted that while the word “damage” was used, there was no definition of that term either. The opponent submitted that while at page 13 lines 14–17 the specification discussed an embodiment in which:
“self-verification of the banknote … is … not possible without damage to the note”,
there was no description of how self-verification would cause damage.
It is true that the specification does not provide an explicit definition of “damageless”. It is also true that the specification does not explicitly define “damage”. However, I cannot see how this presents an insurmountable problem in assessing the meaning of these terms.
There are several places in the specification where damage to a security document, or an element of a security document, is discussed. As noted by the opponent, page 13 lines 14–17 the specification discussed an embodiment in which:
“self-verification of the banknote … is … not possible without damage to the note”,
While the opponent chooses to stop there in their submissions, the description continues on discussing the embodiment in figure 2 where the authenticating feature and verification element are part of a panel as shown here:
It is immediately apparent that the verification element (24) cannot be placed over the authenticating feature (22) so as to accurately align the two areas denoted by the “5” simply by folding. Common sense dictates that, to achieve a proper verification, the panel would have to be physically split down the centre (36). I am satisfied that it is this kind of split which is the “damage” discussed in the passage quoted by the opponent.
As an alternative when discussing this embodiment, the specification states that:
“In an alternative embodiment, the security arrangement 20 is formed in the window area with such high stiffness that it cannot be damagelessly folded about its centerline 36. It is also possible to dispose the authenticating feature and the verification element at the given stiffness so small and with such small spacing that, due to the minimal curvature radius, they cannot be laid on top of one another when folded. In both cases, the authenticating feature 22 and the verification element 24 of the same note cannot physically be brought on top of one another.”
This also makes it clear the kind of damage that has to be done to allow a proper verification to occur.
As another example, at page 14, when discussing figure 4a (as shown here):
the specification states:
“In the security arrangement 40 in fig. 4(a), except for the quadratic shape, the authenticating feature 42 and the verification element 44 are formed principally as in fig. 2. However, in contrast to the embodiment there, the authenticating feature 42 and the verification element 44 are not only disposed immediately next to each other, but are additionally twisted 90° toward each other. This makes it impossible to lay the verification element 44 in the correct orientation on the authenticating feature 42 of the same banknote without destroying the banknote.”
While this passage uses “destroying” rather than “damaging”, as with the embodiment in figure 2, it is clear that a successful verification cannot be done without splitting the panel. The damage being contemplated is the same.
As a final example, figure 10 discloses this embodiment:
The specification notes:
“a damage-free self-verification of a banknote 116 is not possible, since the authenticating feature 112 and the verification element 114 cannot be brought on top of one another in the correct orientation by rolling or folding the banknote.”
As with the previously discussed embodiments, correct verification cannot occur without splitting the note.
In all of this, it is obvious that “damage”, as contemplated by the specification, is something which renders either the security document or the security arrangement no longer fit for purpose.
In his evidence, Innovia’s expert, Mr Hardwick, stated:
“In this field, I would take “damageless” to mean that the life of the security document is not shortened and, therefore, any “damage” that is caused, shortens the life of the security document”
While this is superficially attractive, with all due respect to Mr Hardwick, it seems to me that his definition does not take into account the context of the term’s use. If it were true that anything that shortened the life of a security document constituted “damage”, then it could be said that exposure to air (containing, as it does, oxygen which has corrosive properties), exposure to light (where it is well known that photons can degrade plastics, etc) or even handling by a person (where the acids and oils on the person’s skin corrode the object handled) could all be said to be something which shortens the life of the banknote. As is clear from the above discussion, and mindful of the comments of Middleton J in Eli Lilly and Company Limited v Apotex Pty Ltd (supra), this is clearly not what is envisaged by the specification of the present application. A “damageless check” is one which does not render the item checked no longer fit for purpose. Innovia focussed on folding of a banknote as being an example of damage. Noting the above discussion, I cannot see how simply folding a banknote, for example, is something which renders that banknote no longer fit for purpose. Folding is something that is expected to be done with banknotes.
Claim 3
Innovia indicated that claim 3 did not satisfy section 40(3) for two reasons:
(i)the claims and description did not disclose how, solely on the basis of their geometric disposition, the authenticating feature and the verification element could not be brought into the position required for verification.
(ii)the claims and description did not disclose what is the “damage” that is defined and what the damage is caused to.
Regarding (i), Innovia maintained that it was not possible to envisage an arrangement where the geometric disposition alone would prevent the verification check and, therefore, the claims and description did not provide fair basis or a clear and succinct disclosure of the features of claim 3.
Innovia’s argument cannot be successful. The argument’s basis is that the authenticating feature and the verification element cannot be brought into the required position for verification only by the geometric disposition. This is not what claim 3 defines. That wording does not appear.
Purely for completeness, I note that Innovia further stated with respect to claim 3 that, even if the authenticating feature and the verification element were placed side by side on opposite sides of the security arrangement, it would “still be possible for some embodiments covered under claim 3” to be brought into the relevant position. This argument seems to ignore that fact that if the elements were so placed on the security arrangement that they could be brought into position, then they are not “embodiments covered under claim 3”.
For (ii), I have covered this extensively in my discussion of “damageless” above. While it is true that there is no explicit statement along the lines of “without damage to [feature]”, I cannot see why this claim is not clear. While Innovia indicated that the claim includes within its scope damage to unknown features, including elements unrelated to the security arrangement or document, this conclusion seems to me to have been achieved by reading this claim completely out of context. Furthermore, while it is also true that the type of damage that might be expected is not explicitly defined, I do not see why that needs to be done. Innovia mentioned that folding a banknote damages it to a certain extent, but, as I have already said, that is a regular, everyday occurrence with respect to banknotes. The damage defined in claim 3 is clearly unrelated to that type of thing.
Claim 4
Innovia submitted, for the first time in this opposition, that claim 4 lacked clarity as it was inconsistent with claim 2, to which it could be appended. This submission has no merit. It relies on completely ignoring the fact that the authenticating feature and verification element of claim 2 are located on different security documents. Claim 4 is defining features of the authenticating feature and verification element of the same security arrangement. They are not inconsistent.
Claim 18
Innovia also raised for the first time the contention that claim 18 lacked clarity because it was not clear how the authenticating feature of a security arrangement became inaccessible when two verification elements of other security arrangements were brought together on top of each other. This submission misses the point of the requirement of clarity. A need for clarity is to ensure that the scope of the claim is clear. While there might be detail missing from the claim that appears in the description, and that missing detail may give rise to a lack of fair basis, such a consideration is not relevant to assessing clarity. In my opinion claim 18 is quite clear (and, I believe, fairly based). It is clearly defining that the authenticating feature of a security arrangement that is being used to verify the authenticating feature of another security document is inaccessible. It is clear what does, and does not, fall within the scope of this claim.
Claim 20
Innovia stated that claim 20 was not clear because, while it defined that the authentication feature was formed “characteristically” for the security document it was on, it was appended to claims which required the security documents to be homogeneous which would require the authenticating features to be the same (otherwise the documents would not be homogeneous).
This argument cannot succeed as it relies on the incorrect interpretation that Innovia has applied to “homogeneous”. As I noted above with respect to claim 1, in this particular case, indenticality is not required for the security documents to be considered “homogeneous”. Claim 20 is undoubtedly fairly based and clear.
Claim 22
Finally, for the first time in this opposition, Innovia submitted that claim 22 was redundant. The submission was that claim 22, which was appended to claim 21, restricted claim 21 by introducing the features of claim 3. However, as claim 21 was already appended to claim 3 that restriction was already present and the claims were not clear and concise.
This submission is flawed. Assuming that these two claims are defining the same feature (and I note that the words are not exactly the same), then, given my finding for claim 3, claim 21 is not unclear.
With respect to conciseness, and assuming that Innovia meant to object to a lack of succinctness (as a requirement of “conciseness” does not appear in the Patents Act), it must be borne in mind that claim 21 is a multiple dependent claim which is appended to “any one of claims 1 to 20” and, when construing claims, there is generally a presumption against redundancy. Given that presumption, it would be expected that the reader would recognise that the appendency of claim 21 would be limited only to those claims that resulted in a sensible construction. As such, the claims cannot be considered to lack succinctness.
NOVELTY
Innovia provided a number of citations that it submitted rendered the claims as lacking novelty and inventive step. The citations were:
(i)WO 98/15418 (D1)
(ii)WO 00/41159 (D2)
(iii)US 2002/0117845 (D3)
Innovia also relied upon two banknotes, being:
(iv)The Australian Federation $5 banknote (D4)
(v)The New Zealand Millennium $10 banknote (D5)
Each one of these pieces of prior art discloses a banknote (i.e. a security document) having a security arrangement composed of an authenticating feature and a verification element. The authenticity of the banknote can be checked by placing the verification element over the authenticating feature. As such, this prior art discloses most of the features of claims 1 and 21.
All the prior art listed by Innovia teaches self-verification. In addition, D1–D3, at least, all teach that the verification check can be done by using another banknote. To bring these citations into the claims, Innovia’s submission relied upon their interpretation of what “damageless” checks were. As I understand their submission, the logic relied upon by Innovia was as follows:
(a)D1–D3 all teach a self-check by folding the banknote and folding causes “damage”;
(b)however, D1–D3 also teach that verification can be done using another banknote;
(c)it is clear that verification with another banknote involves no folding; and
(d)therefore, the only damageless check of a banknote that can be carried out using the banknote of D1–D3 is a check with another banknote.
However, this line of logic falls because of the misinterpretation of “damageless” that I have addressed above. In my opinion, folding a banknote is not something that causes damage. Or, to put it another way, the self-verification described in D1–D3 is a damageless check. As such, there is no disclosure of carrying out a damageless check only by using at least two banknotes.
While there is discussion in D1–D3 of authenticating using two different banknotes, and it is clear that the Australian and New Zealand banknotes listed as D4 and D5 above could be verified by banknotes of the same series, the claims of the present application do not deal in the possibility of authentication with different documents. They define that the only way authentication can be done is with different documents. There is no teaching of this feature in the prior art relied upon by Innovia.
Moreover, even if I am wrong about the interpretation of “damageless” and I take as its meaning the definition proposed by Innovia’s expert, D1–D5 still do not disclose the features of claim 1 or 21. They simply do not teach a damageless check which does not shorten the life of the banknote. As I have mentioned above, the wide definition put forward by Innovia would seem to limit a damageless check to being one that is done in a vacuum, in the dark and without any touching of the banknote. At the very least, D1–D5 all require the verification check be done by a person physically handling the banknote so as to position it properly, and with some sort of exposure to light to reveal the optical effects that are produced by the appropriate positioning of the authenticating feature and the verification element. These would shorten the life of the banknote, even though the “shortening” would be a small effect. There is no “damageless check” disclosed in D1–D5.
The claims do not lack novelty.
INVENTIVE STEP
It follows from the novelty discussion that the claims also do not lack an inventive step.
At the hearing I asked Innovia, on the assumption that “damageless” was clear and capable of a meaning that meant the claims were novel, why would the claims lack an inventive step in light of D1–D5? Innovia responded by pointing to various statements in D1–D3 that indicated that verification could be done using two banknotes. I do not dispute that these statements exist. They clearly suggest that using two security documents in a verification step. However, there is no suggestion in any of the prior art relied upon by Innovia to carry out a verification solely by using at least two security documents. Indeed, the overwhelming focus of the prior art listed above is the convenience, and greater desirability, of self-verification. The whole point of the inventions disclosed in D1–D5 is that the banknotes described therein are constructed so that a verification check that can only be done with another banknote can be avoided.
The present claims require (c.f. “practicable exclusively”) the security document to be constructed such that the user is forced to use another security document to check authenticity unless they want to render the security document no longer fit for purpose. I cannot see why a person skilled in the art would, as a matter of routine, alter the security arrangements described and shown in the prior art so as to ensure that verification can only be carried out using at least two security documents. There appears to be nothing in the evidence, driven as it is by a particular interpretation of “damageless”, to suggest such a step be taken.
I cannot find that the claims lack an inventive step.
CONCLUSION
The opposition is unsuccessful on all grounds. In my opinion the claims are clear, fairly based, novel and inventive. As such, the application should now proceed to grant.
COSTS
Innovia noted that Giesecke had filed amendments in response to some of the section 40 issues raised in the Statement of Grounds and Particulars and characterised that as a tacit admission that some of those grounds of opposition had been made out. Innovia submitted that, given this admission, Innovia was entitled to costs up to the day that the amendments were filed.
The amendments filed by Giesecke deleted accepted claims 6, 7 and 8. Innovia had raised section 40 defects against accepted claims 6, 7 and 8. It would also be correct to say that, had those accepted claims remained in the specification, I would have found them to lack fair basis. In that regard Innovia could be said to have protected the public interest by ensuring that clearly invalid claims were not granted. However, it must be noted that Innovia has been unsuccessful on all “major” grounds such as novelty and inventive step that they raised in their opposition and on all other “minor” grounds such as clarity and fair basis remaining after the amendment. Innovia also raised issues at the hearing that were not foreshadowed in their Statement.
The matter is finely balanced. I note section 3.9.1 of the Patent Manual of Practice and Procedure where it is stated:
“The Federal Court in Patent Gesellschaft AG v Saudi Livestock Transport and Trading 33 IPR 461 set out a number of principles relevant to the award of costs:
- As a general proposition, in the absence of special circumstances, costs follow the event but the costs should reflect the degree of success obtained and the successful party may be ordered to pay some costs in respect of unsuccessful aspects of the case. - Hughes v Western Australian Cricket Association Inc (1986) 66 ALR 660; ATPR 40-748. Relevant matters in relation to this issue include: relative failures and successes of the parties, time spent on particular issues, the interrelationship between issues, and the level of involvement of the various parties in leading evidence and making submissions at the hearing. – H Lundbeck A/S v Alphapharm Pty Ltd (No 2) [2009] FCAFC 118.
- The community's interest in economy and efficiency in litigation may be reflected in qualification of the presumption that a successful party is entitled to its costs. - Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261.
- The costs order in a patent case should, where appropriate, reflect the extent to which significant sums of costs have been thrown away by reason of one party, albeit successful overall, raising and pursuing unsuccessful points. - C Van Der Lely NV v Ruston's Engineering Co [1993] RPC 45.
- Where a successful party raises issues or allegations improperly or unreasonably, the court may not only deprive him of costs but might order him to pay the whole or part of the unsuccessful party's costs. - Rediffusion Simulation Ltd v Link-Miles Ltd [1993] FSR 369.
- However, a successful party who neither improperly nor unreasonably raised issues or made allegations on which he failed ought not to be ordered to pay any part of the unsuccessful party's costs. - Rediffusion Simulation Ltd v Link-Miles Ltd [1993] FSR 369”
Noting this guidance and points 1 and 5 in particular, I think that it is appropriate in the circumstances that I make no award of costs.
Greg Powell
Delegate of the Commissioner of Patents
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