Innovia Security Pty Ltd v OVD Kinegram AG

Case •

[2016] APO 14

•

15 March 2016

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Innovia Security Pty Ltd v OVD Kinegram AG [2016] APO 14

Patent Application:                2004249864

Title:Optical safety element and system for visualising hidden information

Patent Applicant:                   OVD Kinegram AG

Opponent:  Innovia Security Pty Ltd

Delegate:  Xavier Gisz

Decision Date:  15 March 2016

Hearing Date:  22 December 2015, in Canberra

Catchwords:  PATENTS - opposition to the grant of the patent under s 59 – opposed on the basis of that the invention lacks novelty, inventive step, utility, clarity, fair basis, and full description – opposition unsuccessful on all grounds – costs awarded against the opponent.

Representation:  Patent applicant:  Dr Mark Horsburgh of Fisher Adams Kelly

Opponent:J Roger Green of Watermark and Ian Lindsay of Innovia Security Pty Ltd

IP AUSTRALIA

AUSTRALIAN PATENT OFFICE

Patent Application:                2004249864

Title:Optical safety element and system for visualising hidden information

Patent Applicant:                   OVD Kinegram AG

Date of Decision:                   15 March 2016

DECISION

None of the grounds of opposition have been made out. The claimed invention is novel, inventive, useful, clearly defined, and is fairly based. The description provides a full description of the invention. I direct that the application proceed to grant subject to any appeal. I award costs according to schedule 8 against the opponent, Innovia Security Pty Ltd.

REASONS FOR DECISION

Background

  1. Application 2004249864 in the name of OVD Kinegram AG (the Applicant) is the Australian national phase entry of PCT application PCT/EP2004/006466 (publication number WO 2004/113953) and has a priority date of 25 June 2003. A request for examination was filed on 31 October 2007. The notice of acceptance of the Application was published on 8 October 2009. A notice of opposition was filed on 8 January 2010 by Securency International Pty Ltd which has since changed name to Innovia Security Pty Ltd (the Opponent). A Statement of Grounds and Particulars was served on the Applicant on 8 April 2010. The Statement of Grounds and Particulars was later amended on 19 March 2014.

  2. Evidence in Support was completed on 9 May 2012. Evidence in Answer was completed on 7 November 2013. Evidence in Reply was completed on 7 February 2014. The Applicant completed further evidence on 17 June 2014. The Opponent’s responding evidence was completed on 13 October 2014. The Applicant’s second round of further evidence was completed on 28 January 2015. The Opponent’s responding evidence was completed on 27 March 2015.

  3. The hearing was held in Canberra on 22 December 2015.

    Evidence

  4. The Opponent has provided the following evidence:

    (a) a declaration by David Lindsay dated 10 April 2012 (with Exhibits IDL-1 to IDL-11)

    (b) a first declaration by Dr David Pizzanelli dated 2 May 2012 (with Exhibits DJP-1 to DJP-10)

    (c) a declaration by Dr Bruce Hardwick dated 29 January 2014 (with Exhibits BAH-1 to BAH-13)

    (d) a second declaration by Dr David Pizzanelli dated 5 February 2014 (with Exhibits DJP-11 to DJP-22)

    (e) a first declaration by Dr Robert Lee dated 6 February 2014 (with Exhibits RAL 1 to RAL-12)

    (f) a third declaration by Dr David Pizzanelli dated 15 September 2014 (with Exhibits DJP-23 to DJP-30)

    (g) a declaration by Mr Ian Lancaster dated 29 September 2014 (with Exhibits IML-1 to IML-3)

    (h) a second declaration by Dr Robert Lee dated 2 October 2014 (with Exhibits RAL-13 to 17)

    (i) a declaration by Ms Francoise Daniel dated 3 October 2014 (with Exhibits FD-1 to FD‑4)

    (j) a third declaration of Dr Robert Lee dated 27 March 2015 (with Exhibit RAL-18).

  5. The Applicant has provided the following evidence:

    (a) a first declaration by Ir Karel Schell dated 1 May 2013 (with Exhibits KS-1 to KS-6)

    (b) a first declaration by Dr Wayne Tompkin dated 31 October 2013 (with Exhibits WRT‑1 to WRT-8)

    (c) a second declaration by Ir Karel Schell dated 4 November 2013 (with Exhibit KS-7)

    (d) a second declaration by Dr Wayne Tompkin dated 17 June 2014 (with Exhibits WRT‑9 to WRT-27)

    (e) a declaration by Dr Harald Walter dated 12 January 2015 (with Exhibit HW-1)

    (f) a declaration by Dr Mark Horsburgh dated 28 January 2015 (with Exhibits MAH-1 and MAH-2).

    Specification

  6. The specification ends with 20 claims including two independent claims. The independent claims 1 and 19 are reproduced below:

    1.   An optical security element (1) having a substrate layer (14), wherein a relief structure (17) defined by relief parameters is shaped in a surface region (21, 27, 33, 4, 50, 7, 65) of the substrate layer, which region is defined by an X-axis and a Y-axis, for producing an optically perceptible effect, characterised in that one or more of the relief parameters defining the relief structure in the surface region (21, 27, 33, 4, 50, 7, 65) are varied periodically in accordance with a periodic parameter variation function, that the surface region (21, 27, 33, 4, 50, 7, 65) is divided into one or more pattern regions (23, 30, 29, 35, 502, 74, 66) and a background region (22, 28, 34, 501, 73, 66), that one or more of the relief parameters defining the relief structure relief shape, relief depth, spatial frequency and azimuth angle in the background region (22, 28, 34, 501, 73, 66) and the one or more pattern regions (23, 30, 29, 35, 502, 74, 67) are varied periodically in accordance with a periodic parameter variation function (53, 54, 55), wherein the relief structure is a diffraction grating and the period of the parameter variation function is between 20 μm and 300 μm, and that the one or more of the relief parameters defining the relief structure (17) relief shape, relief depth, spatial frequency and azimuth angle in the one or more pattern regions (23, 29, 30, 35, 502, 74, 67) are varied in accordance with a parameter variation function which is phase displaced with respect to the parameter variation function of the background region (22, 28, 34, 501, 73, 66).

    19.  A system for visualizing items of concealed information comprising a security element (1) having a substrate layer (14) in which a relief structure (17) defined by relief parameters is shaped in a surface region (21, 27, 33, 4, 50, 7, 65) of the substrate layer (14), which region is defined by an X-axis 10 and a Y-axis, for producing an optically perceptible effect, characterised in that one or more of the relief parameters defining the relief structure in the surface region (21, 27, 33, 4, 50, 7, 65) are varied periodically in accordance with a periodic parameter variation function, that the surface region (21, 27, 15 33, 4, 50, 7, 65) is divided into one or more pattern regions (23, 30, 29, 35, 502, 74, 66) and a background region (22, 28, 34, 501, 73, 66), that one or more of the relief parameters defining the relief structure relief shape, relief depth, spatial frequency and azimuth angle in the background region (22, 28, 34, 501, 73, 66) and the one or more pattern regions (23, 30, 29, 35, 502, 20 74, 67) are varied periodically in accordance with a periodic parameter variation function (53, 54, 55), wherein the relief structure is a diffraction grating and the period of the parameter variation function is between 20 μm and 300 μm, that the one or more of the relief parameters defining the relief structure (17) relief shape, relief depth, spatial frequency and azimuth angle in the one or more pattern regions (23, 29, 30, 35, 502, 74, 67) are varied in accordance with a parameter variation function which is phase-displaced with respect to the parameter variation function of the background region (22, 28, 34, 501, 73, 66), and that the system further has a verification element (20, 57, 101) which has a verification grating which is defined by a periodic transmission function and whose period corresponds to the period of the parameter variation function.

    The invention

  7. The invention is an optical security element formed from a diffraction grating structure that forms both the foreground and background regions. The diffraction grating structure has associated periodic parameters such as varying depth and frequency. A parameter of the background region is phase shifted (displaced) with respect to the foreground region, thus the foreground region will appear different to the background region and an image can be so formed. The parameter variation function has a period between 20µm and 300µm. The image can be discerned with the use of a verification element.

    Embodiments

  8. The diffraction grating structure has three dimensions. The depth of the grating is defined in the z-axis, while the surface pattern of diffraction grating is defined in the x and y axes. The parameter variation function can be varied in any of these three dimensions.

    Embodiment 1

  9. Figure 2b and accompanying description discloses an embodiment where the parameter variation function is varied in the x and y axes.

  10. The description states at page 11 lines 28 to 32:

    “As can be seen from Figures 2a and 2b the azimuth angle of the relief structure 17 is varied in the background regions 22 and 28 and the pattern regions 23, 30 and 29 by parameter variation functions which are phase-displaced relative to each other through 180 degrees and which are otherwise identical.”

  11. The description further states at page 12 lines 2 to 19:

    “A phase displacement of 180 degrees permits a particularly great contrast between the pattern region and the background region. It will be appreciated that it is also possible in that respect to deviate somewhat from the phase displacement through 180 degrees. In addition advantages can also be enjoyed in deviating considerably from a phase displacement of 180 degrees and providing for example a phase displacement of 45 degrees or 135 degrees, in the one pattern region or the other. Thus it is possible for example to implement concealed grey scale images in which the grey scale is encoded by means of the phase displacement.

    Without use of the verification element 20 the surface region 27 now appears to be homogeneous to the human viewer as the mean azimuth angle which can be resolved by the human eye is constant in the pattern regions 29 and 30 and in the background region 28 surrounding them. A homogeneous optical effect which is dependent on the viewing angle is then afforded for the viewer in the surface region 28, that effect being dependent on the azimuth angle range covered by the parameter variation function and on the selected spatial frequency of the relief structure 17.”

    Embodiment 2

  12. Figures 6a and 6b and accompanying description disclose the parameter variation function varied in the z axis.

  13. The description states at page 17 lines 7 to 18:

    “Figure 6a shows a relief structure 61 whose profile depth is varied with a constant spatial frequency by a periodic parameter variation function with a period 63.

    The relief structure 61 is preferably a first-order diffraction structure (spatial frequency range varies in the range of the wavelength) or a zeroorder diffraction structure (line spacing is less than the wavelength of the light). The profile depth is altered by the periodic parameter variation function more slowly in comparison with the spatial frequency of the diffraction grating in dependence on the value of the X-axis or in dependence on the value of the X-axis and the Y-axis. The period of the parameter variation function is between 10 μm and 100 μm and is preferably of a value around 100 μm.”

    Embodiment 3

  14. Figure 7 and accompanying description disclose the parameter variation function varied in the z axis.

  15. The description states at page 19 lines 3 to 29:

    “If a verification element with a period which corresponds or almost corresponds to the period of the parameter variation function is applied to the surface region 7 the pattern region 74 becomes visible. Depending on whether the grating lines cover the profile shapes 75 or 76 of the pattern region 74, the viewer sees a dark pattern region against a light background region or a light pattern region against a dark background region. If the surface region is turned through 180 degrees, the viewer sees the complementary impression.

    Thus for example when the partial regions 71 are covered by grating lines 77 in the surface region 7 there is the effect shown in Figure 7d, that the pattern region 74 appears dark and the background region 73 appears light. If the surface region 7 is turned through 180 degrees, that gives the situation shown in Figure 7e, of a light pattern region 74 against a dark background region 73. As the period of the parameter variation function is less than the resolution capacity of the human eye, the grating lines 77 are not visible to the viewer so that, when viewing the surface region in the situation shown in Figure 7d the dark surface region 74 against the light background region 73 is visible to the viewer while in the situation shown in Figure 7e the light background region 74 is visible against the dark background region 73. That additional tilting effect when viewing from directions which are turned through 180° relative to each other forms an additional security feature.”

    Construction

    Phase displaced

  16. The description states at page 11 line 28 to 32 (with my emphasis in bold):

    “As can be seen from Figures 2a and 2b the azimuth angle of the relief structure 17 is varied in the background regions 22 and 28 and the 30 pattern regions 23, 30 and 29 by parameter variation functions which are phase-displaced relative to each other through 180 degrees and which are otherwise identical.”

  17. The description states at page 18 lines 12 to 15 and lines 23 to 28 with my emphasis in bold):

    “A further embodiment of the invention will now be described with reference to Figures 7a to 7e, in which the relief shape of the relief structure is varied periodically in accordance with the parameter variation function.”

    “The width of the partial regions 71 and 72 is less than 300 µm so that the partial regions 71 and 72 cannot be resolved by the human eye. The relief shapes 75 and 76 represent asymmetrical, mutually mirrored structures so that the profile shape 76 can also be viewed as a relief structure 75 in which the azimuth angle is turned with respect to the relief shape 75 through 180 degrees.”

  18. Thus in embodiments 1 and 2 the image diffraction pattern is identical (but phase shifted) in relation to the background diffraction pattern, whereas in embodiment 3 the image diffraction pattern is a mirror inverted in relation to the background diffraction pattern.

  19. I consider that the term ‘phase displaced’ can only include a phase-shift of the same parameter variation function. Thus embodiments 1 and 2 disclose ‘phase displaced’ parameter variation functions, whereas embodiment 3 does not.

    Optically perceptible effect

  20. Claim 1 is directed to: “An optical security element ... for producing an optically perceptible effect”. The Applicant states in their submissions at paragraph 1.10.1:

    “The first few lines of the claim define the environment for the invention. The optical security element has a substrate layer with a relief structure, which later in the claim is defined to be a diffraction grating. The relief structure produces an optically perceptible effect. That is to say, there is an optical effect that is perceptible in normal viewing. Recourse to the body of the specification explains that, in at least one embodiment, the optically perceptible effect is “striking colour and brightness changes” (pg 3 ln 17).”

  21. Thus the words ‘optically perceptible effect’ are intended to mean an ‘optically variable effect’, i.e. the appearance changes in intensity and/or colour with angle. This is consistent with the description and in the absence of any plausible alternative interpretation I consider this to be the appropriate construction of this term.

    OPPOSITION UNDER SECTION 59

    Onus of proof

  22. The request for examination in this case was filed on 31 October 2007. Therefore, the substantive amendments of the Patents Act brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, including subsection 60(3A) which allows the Commissioner to refuse a patent application if satisfied on the balance of probabilities that a ground of opposition exists, do not apply to the present application. Instead, the onus of proof in this opposition proceeding lies with the opponent, who must establish that it is clear that a valid patent cannot be granted (F.Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 at [29], [67]; [2000] FCA 283; 50 IPR 305; Commissioner of Patents v Sherman [2008] FCAFC 182 at [18], [22]; [2008] FCAFC 182; 79 IPR 426).

    Grounds of Opposition

  23. The patent application was opposed on the grounds that the claims of the patent application lack novelty, inventive step, utility, clarity, fair basis, and that the invention is not fully described.

    Novelty

  24. 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 (Justice Bennett in Danisco A/S v Novozymes A/S (No 2) [2011] FCA 282 at [248]; [2011] FCA 282; (2011) 91 IPR 209 at [248]). It is well established that the general test for anticipation is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd [1977] HCA 19 at [20]; [1977] HCA 19; (1977) 137 CLR 228 at 235:

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

  25. 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 at [19]; [1990] FCA 40; (1990) 16 IPR 545 at 549). To meet this requirement, the prior art must contain “clear and unmistakable directions” to the claimed invention (Pfizer Overseas Pharmaceuticals v Eli Lilly and Co [2005] FCAFC 224 at [314]; [2005] FCAFC 224; (2006) 68 IPR 1 at 67 [314]). However, if the prior publication contains a direction which is capable of being carried out in a manner which would infringe the patentee’s claim, but would be at least as likely to be carried out in such a way that would not do so, the patentee’s claim will not be anticipated (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd (1971) 1A IPR 121 at 138). Where a prior publication does not explicitly disclose all of the integers of the claimed invention, it would still deprive the claimed invention of novelty if (i) the skilled reader understands the disclosures of the prior publication to include a missing integer, and (ii) if the document contains a direction to use a process that inevitably or inexorably results in something within the claim (Justice Bennett in Danisco (No 2) [2011] FCA 282 at [248]; [2011] FCA 282; (2011) 91 IPR 209 at [248]).

  26. The Opponent alleged the claimed invention lacked novelty in light of the following documents:

    ·US 5,991,078

    ·Exelgram™ Covert Image (Exhibit RAL-10)

    ·Hologram Industries holograms (Exhibit DJP-17)

    D1 - US 5,991,078

  27. D1 discloses a device using diffraction gratings to form images. The diffraction gratings forming images are contrasted against the adjacent background diffraction gratings. The image diffraction gratings have different physical characteristics than the background diffraction gratings, and thus have different visual characteristics.

  28. D1 discloses two embodiments. The first embodiment shown in figure 3 shows large contiguous areas of diffraction gratings. The second embodiment shown in figure 8 shows small discrete areas (pixels) of diffraction grating.

    Embodiment 1 – figure 3

  29. Figure 3 shows the diffraction gratings in uniform regions A and B.

    Embodiment 2 – figure 8

  30. Figure 8 shows the diffraction grating in mesh of pixels X and Y.

    The structure of the diffraction gratings as it relates to both embodiments is shown in figures 1 and 2.

  1. The Opponent made the following submissions in relation to embodiment 1 of D1:

    “Claim 1 lacks novelty in view of this document.

    D1 discloses an optical security element in which a relief structure (combined with diffraction gratings A and B) is formed in a surface region. The surface region is divided into pattern regions A and a background region B. The azimuth angle of the relief structure is varied in each of regions A and B according to a periodic function, and the parameter variation functions of regions A and B are phase-displaced with respect to each other. We refer to column 6, lines 9 to 13, 33 to 42, and 56 to 63, and Figures 2(a) and 3 of D1.

    With reference to Figure 3, D1 describes a background region of grating and a pattern region wherein the letters 'DNP' are depicted being formed from an area of gratings, wherein the grating structure is the reverse of the structure in the background region. Referring still to Figure 3, grating 'B' is the background area and grating 'A' is the foreground area forming the letters 'DNP' and arrows indicate the direction of light travelling across the gratings 'B' and 'A' in opposite directions.

    The gratings of 'A' and 'B' in Figure 3 may also be replaced with the alternative gratings of Figure 2(a) and Figure 2(b). We refer to column 6, lines 56 to 63. The relief structure of regions 'A' and 'B' can therefore vary in angle ('A' has 'upward convex curves' and 'B' has 'downward convex curves'), vary in curvature ('wavy lines' of Figure 2(a) and (b)) and vary in pitch ('grating pitch d is locally varied'). As illustrated in Figure 2(a), the 'wavy lines' are periodic in nature and, if the angle is varied between regions, they are necessarily phase displaced with respect to each other.

    D1 does not explicitly disclose the feature of claim 1 that "the period of the parameter variation function is between 20 µm and 300 µm", but this feature is an inessential feature of the claim and would be inherent in the diffractive structure of D1. As explained by Dr Pizzanelli, "the upper limit of 300 microns (µm) is above the maximum width that an element can be before it is discernible by the human eye at typical reading distance'', and "the lower limit of 20 microns (µm) is the smallest that a plastic filter (or grating, or a lenticular lens array could resolve" [Pizzanelli, first declaration, paragraph 33].

    D1 discloses all the essential features of claim 1.”

    Is the period of parameter variation function an essential feature?

  2. The Opponent contends that the period of the parameter variation function being between 20 µm and 300 µm is an inessential feature. In response the Applicant states in their submissions:

    “The key feature of the claim is that the period of the parameter variation function is below the visible perception of the human eye in normal, unaided, viewing conditions. This means that without a verification device the viewer sees only an integrated image, such as striking colour and brightness changes generated by the relief structure.”

  3. All features of a claim are taken to be essential unless it can be established that a claimed feature makes no contribution to the invention. I accept that the parameter variation function being less than 300 µm is below the threshold of what can be resolved by the unaided human eye. Since the invention relates to a device with visible effects, a feature relating to the visibility of the effect makes a contribution to the invention, thus the feature is considered essential.

    Novelty of claim 1 in light of embodiment 1

    Phase displaced

  4. Embodiment 1 shown in figure 3 has arcuate diffraction gratings (as shown in close up in figure 1). The description states at column 6 lines 1 to 8:

    “As for a diffraction grating B composed of a group of downward convex curves, which is in upside-down relation to the diffraction grating A, as shown in FIG. 1(b), if the visual point is moved from the left to the right, the bright region moves from the right to the left in the opposite direction to the direction of movement of the visual point in the reverse relation to the diffraction grating A shown in FIG. 1(a).”

  5. A downward convex curve that is not considered phase displaced in relation to an upside-down upward convex curve; instead this is considered an inversion (consistent with how I have construed embodiment 3 of the presently opposed invention).

  6. Alternatively embodiment 1 discloses the use of the wavy line diffraction gratings of figure 2 rather than the arcuate lines of figure 1. These wavy line diffraction gratings are not considered phase displaced, as explained in relation of embodiment 2 below.

    Period of parameter variation function

  7. Embodiment 1 does not disclose the period of parameter variation function and I do not consider it to be inherent that the period of diffraction gratings would be in the range of 20µm to 300µm, thus this feature of claim 1 is not disclosed in the first embodiment of D1.

    Novelty of claim 1 in light of embodiment 2

    Period of parameter variation function

  8. D1 discloses at column 2 lines 33 to 34:

    “Preferably, the divided pixels are not smaller than 30 μm in size.”

  9. The question is whether pixel size of at least 30 μm implies that the period of parameter variation function is also of at least this size.

  10. The description of figures 2(a) and 2(b) states:

    “Diffraction gratings which are respectively composed of upward convex curves and downward convex curves, as described above, may be combined together to form diffraction gratings C and D composed of wavy lines, for example, as shown in FIGS. 2(a) and 2(b). If the visual point is moved on the diffraction gratings C and D with a light source disposed in the same way as the above, a region that looks bright on each grating surface moves as indicated by the arrows. Accordingly, if such diffraction gratings C and D are observed with the visual point being moved, the region that looks bright also moves in the same direction or in the opposite direction, and this region shines in rainbow color. Accordingly, remarkable display and design effects are obtained.”

  11. The description states at column 8 lines 36 to 56:

    “Let us consider an example of multiplexing two display patterns each comprising diffraction gratings composed of curved lines, as shown in FIG. 3, or an assembly of such diffraction gratings, or multiplexing two display patterns each comprising a diffraction grating assembly comprising partial straight-line diffraction gratings, as shown in FIG. 5. FIGS. 6(a) and 6(b) show examples of such display patterns. First, each display pattern is divided into fine mesh pixels. Preferable mesh patterns are a regular triangle, a square, a regular hexagon, etc. because with these patterns no dead regions are produced. Next, the divided mesh pixels are alternately selected in both the vertical and horizontal directions. FIGS. 7(a) and 7(b) respectively show two groups of mesh pixels selected from the display patterns shown in FIGS. 6(a) and 6(b). In this example, pixels, which are formed in square mesh patterns, are selected in the form of checkered patterns, shown by X and Y. The selected pixels X and Y are superimposed so that the pixels X and Y alternate with each other in both the vertical and horizontal directions with their original positions maintained, as shown in FIG. 8.”

  12. D1 discloses the mesh pixels X and Y can be formed from diffraction gratings composed of curved lines, but does not explicitly state that the curved lines are the diffraction gratings C and D (figures 2(a) and 2(b)). However, I consider this disclosure to be implicitly referring to both the upward and downward convex curves of figure 1 and the wavy lines in figure 2.

  13. Figures 2(a) shows a single wavelength, whereas Figure 2(b) shows one and a half wavelengths. Thus the parameter variation function is the same as the same as the width of the element in Figure 2(a) and 1.5 times the width of the element in Figure 2(b). Assuming each of figure 2(a) and 2(b) represents a single pixel, and assuming the minimum pixel size is 30 µm, the period of the parameter variation function of figure 2(a) is 30µm and the period of the parameter variation function of figure 2(b) is 20µm. Thus I consider there is an inherent disclosure of the parameter variation function of the image and background parameter variation function to be between 20µm and 300µm.

    Phase displaced

  14. The Opponent submissions refer to paragraph 36 of Mr Pizzanelli’s first declaration which states:

    “It is also noted, that the gratings of A and B in Figure 3 may also be replaced with the alternative gratings of Figure 2(a) and Figure 2(b). (column 6, lines 56 to 63) The relief structure of regions "A" and "B" can, therefore, vary in angle ("A" has "upward convex curves", "B" has "downward convex curves"), vary in curvature ("wavy lines" of Figure 2(a) and (b)) and vary in pitch ("grating pitch d is locally varied"). As can be seen in Figure 2(a), the ''wavy lines" are periodic in nature and, if the angle is varied between regions, they are, necessarily, phase-displaced with respect to each other.”

  15. I have construed the term ‘phase displaced’ to only include shifts of phase. I do not consider expanding or compressing the wavelength to fall within the scope of the term ‘phase displaced’. Consequently this feature is not disclosed in embodiment 2 of D1, and thus the claims are novel in light of D1.

    Exelgram™ Covert Image

  16. Mr Lee states at paragraphs 45 and 47 of his first declaration:

    “Annexed as Exhibit RAL-10 is a copy of a marketing brochure (the "Exelgram™ brochure") produced by CSIRO in August 2000 for the Exelgram™ optically variable device (OVD) technology. The 3rd page of the Exelgram™ brochure describes the Exelgram TM Covert Image feature as follows:”

    “The Exelgram™ brochure was used by CSIRO to market the Exelgram™ optically variable device (OVD) technology in Australia and foreign countries from 2000 up to the priority date in 2003 recall that when I attended International conferences after August 2000 took multiple copies of the Exelgram™ brochure with me for distribution to potential customers who attended the conferences, such as the Intergraf conference in Vienna in September 2000. There was another example of the Exelgram™ Covert Image feature that was produced and marketed by CSIRO in conjunction with Leonhard Kurz (Kurz) before the priority date. In 2002 CSIRO produced an origination master plate with an Exelgram TM diffraction grating that included the Exelgram™ Covert Image feature. The master plate was then sent to Kurz for them to produce rolls of security foils incorporating the Exelgram TM diffraction gratings. Annexed as Exhibit RAL-11, is a sample of the Exelgram™ diffraction grating that included the Exelgram TM Covert Image feature from a roll of foil produced by Kurz for CSIRO bearing a date of 25 April 2003. CSIRO would have received the rolls of foil from Kurz shortly after 25 April 2003, and after receiving the rolls of foil, I stamped the circular part of the foils bearing a diffraction grating of my portrait and the Exelgram TM Covert Image feature onto my CSIRO business cards.”

  17. Dr Lee’s statement on the public availability of the Exelgram brochure is corroborated by the evidence of Dr Pizzanelli, Mr Lancaster and Ms Daniel. On the basis of this evidence I am satisfied that the Exelgram™ brochure was publicly available before the priority date.

  18. The first sentence in the Exelgram brochure states:

    “EXELGRAM™ (US Patent no. 5,825,547) is an electron beam originated and industry proven high security optically variable device (OVD) technology exclusively reserved for banknotes, high value financial transaction documents, ID cards and other official government documents.”

  19. I note that patent US 5,825,547 was not filed as evidence in the opposition. I have referred to the disclosure of US 5,825,547 to determine whether I should rely upon the information in this document under the provisions of Reg 5.11. As will be explained below in this decision, this document does not alter the outcome of the decision and so I do not intend to rely on this document under Reg 5.11.

    Exelgram™ as disclosed in US 5,825,547

  20. The Exelgram technology is based on tracks with diffractive relief structure contained within each track. The diffractive relief structure can be formed from straight or curved lines. The tracks are arranged in parallel. The tracks can be divided into segments and a portion of the image information is contained in each segment.

  21. The closest embodiment of US 5,825,547 to the claimed invention is illustrated in Figure 8.

  22. The accompanying description states (with my emaphsis in bold):

    “The patterns shown in both FIG. 8 and FIG. 10 are used to generate pixels in the image planes. Each of the left-hand 14 and right-hand tracks 15 in each case includes two segments (16,17), the top half 17 being one segment and the bottom half 16 being another. Each segment generates one pixel. The patterns shown are used to generate pixels having one of sixteen different greyscale values. Segments with flatter lines produce darker pixels in the image plane, and segments with steeper lines (more sharply angled parallelograms) produce lighter pixels. A large number of track segments from different tracks can thus be used to generate a complete image with sixteen greyscales.”

  23. The gratings are arranged in accordance with a parameter variation function (the function is given at column 4 line 65 to column 5 line 17). The description states:

    “The track segments illustrated in FIG. 4 have a width of about 15 micron and a length of about 30 micron, although they can be scaled up or down in size as required.”

  24. Thus there is a disclosure of a parameter variation function of 30µm which is within the range claimed.

  25. Varying the steepness of lines (diffraction gratings)  is not considered to fall within the scope of the term ‘phase displaced’ as required by the claims. Consequently the claims are novel in light of US 5,825,547, and there is no need to rely on it under Reg 5.11.

    Exelgram™ as disclosed in Exelgram™ brochure and samples

  26. The Exelgram™ brochure discloses at least one feature beyond what is described in US 5,825,547. For example, the Exelgram™ describes a covert feature that can be revealed with a verification element:

    “Another high security EXELGRAM™ option is a macroscopic covert image feature hidden to the naked eye except when the device is overlaid by a transparent screen imprinted with a coded periodicity in alignment with that of the embedded covert image. Macroscopic covert images of this type may consist of logos, line artwork, text or combinations thereof.”

  27. The Exelgram™ brochure contains very little information regarding the structure of the diffraction gratings. The Opponent relies on the Exelgram™ samples that Mr Lee states at paragraph 42 of his first declaration were publicly available before the priority date.

  28. Paragraph 43 of Mr Lee’s first declaration states:

    “Annexed as Exhibit RAL-8 is are a series of three micrographs at low, medium and high magnification of the part of the diffraction grating which includes the Exelgram TM Covert Image feature. The first micrograph (Fig A) is a low magnification micrograph showing an Exelgram TM diffraction grating with individual tracks each extending longitudinally across the image area, the length of individual tracks varying according to the particular covert image. The second and third micrographs (Figs B & C) at medium and high magnification show that the tracks are of two distinct types; one type including background tracks, and the other type including image tracks. The background tracks form a negative tone version of the covert image and the image tracks form a positive tone version of the image are arranged in an alternating track arrangement. In the context of a particular covert image, the background tracks may be thought of as (e.g.) a negative (or positive) tone version of the image to be hidden. The image tracks then comprise alternating strips of positive (or negative) tone versions of the same image interlaced between strips of background tracks or pixels. Within each track the azimuth angle of the grating groove elements varies periodically along the track in accordance with a parameter variation function. The period of the parameter variation function is from about 30 μm upwards. Within each track, the groove element depth also varies periodically along the track by the nature of the ebeam lithography writing process.”

  29. The structural detail of the diffraction gratings is shown in the micrographs of the Exelgram™ sample in exhibits RAL-8. As far as I can discern, the diffraction gratings are in blocks with the diffraction gratings at different angles.

  30. The argument that the blocks of diffraction gratings can be considered a parameter variation function is not persuasive; although a block of straight diffraction gratings could be considered a function (i.e. a constant function), it cannot be considered a parameter variation function since there is no variation in the function. The blocks cannot collectively be considered a periodic parameter variation function as required by the claims, since the variation is made to form an image and thus is not periodic. Furthermore, blocks of diffraction gratings at different angles are not considered phase-displaced with respect each other. Consequently the claims are novel in light of this document.

    Holograms by Hologram Industry

  31. David Pizzanneli states at paragraph 26 of his second declaration:

    “Example (1) of Exhibit DJP-17 is a hologram called "Car" which was made by Hologram Industries in conjunction with the American company, Graphic Security Systems Corporation (GSSC) in January 1999. This was a hologram showing a 3D image of a toy car. On inspection using a standard GSSC de-coding lenticular lens the hologram revealed the previously hidden lettering "GSSC" across the surface of the hologram. In the attached document from Hologram Industries a photograph is shown both of the hologram with the covert lettering being revealed by the lenticular lens and a macroscopic photograph showing the phase-modulated line structure of the hologram to form the letter "S".”

  32. These are reproduced below:

  33. Mr Pizzanelli states at paragraph 31 of his second declaration:

    “Example (2) of Exhibit DJP-17 is a hologram called "Gazipur" which was made by Hologram Industries in conjunction with the company, Jura Security Prepress (JSP) in August 2002. The hologram was manufactured as a continuous pattern material with an over text in one direction and a second, covert text at right-angles to the first, which became legible with a lenticular decoding screen, revealing the letters "JSP".”

  34. Mr Pizzanelli states at paragraph 33 of his second declaration:

    “Example (3) of Exhibit DJP-17 is a hologram called "Rose des vents" which was also made by Hologram Industries in conjunction with the company, Jura Security Prepress (JSP), in October 2002. This hologram was manufactured as a 20 mm x 20 mm self-adhesive (kiss-cut) label with an overt image and a covert text which became legible with a lenticular decoding screen, revealing the letters "JSP".”

  35. Ms Daniels states in her declaration at paragraphs 12 and 13:

    “My company, Hologram Industries produced several holograms with covert and scrambled image features similar to the Exelgram™ Covert Image Feature in the 1990s and early 2000s. Attached as Exhibit FD-4 is a sheet with three samples of holograms with covert image features manufactured by my company between 1999 and 2002. The first example entitled "Car" was manufactured in January 1999 in conjunction with our partner, Graphic Security Systems Corporation (GSSC). The second and third examples entitled "Gazipur" and "Rose des Vents" were manufactured in August 2002 and October 2002 respectively in conjunction with our partner, Jura Security Press (JSP).

    I have been asked whether the three samples of holograms with covert images features shown in Exhibit FD-4 were made publicly available before the priority date of 25 June 2003. I have made appropriate enquires within my company, and I can confirm that all the three samples of holograms with covert images featured in Exhibit FD-4 were shown by Hologram Industries to possible customers before 25 June 2003 without any specific agreement regarding confidentiality.”

    Were the Hologram Industry samples OPI?

  1. Ms Daniels states that “all the three samples of holograms ... were shown by Hologram Industries to possible customers before 25 June 2003”.

  2. Merely showing a customer a hologram sample does not allow the customer to understand microscopic structure of the hologram and there is no evidence to establish that customers shown the holograms were able to discern the structure of the holograms. Furthermore, given the microscopic nature of nature of diffraction gratings and holograms it is unreasonable to assume that a customer, even a customer with a good knowledge of diffraction grating and holograms could deduce the structure from simply looking at such a sample.

  3. Because of the microscopic features of the holograms could not be discerned by the customers, no further novelty analysis is necessary. The claims are considered novel in light of the Hologram Industry samples.

    Inventive step

  4. The test for obviousness was provided by Justice Aicken in Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd [1981] HCA 12 at [45]; 148 CLR 262 at 286 as follows:

    “The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not.”

  5. The High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 at [51]- [53]; approved this approach, in addition to that taken in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd [1970] RPC 157 at 187 in which Graham J had posed the question:

    “Would the notional research group at the relevant date in all the circumstances directly be led as a matter of course to try [the claimed invention] in the expectation that it might well produce a useful [desired result]?”

  6. The Opponent argued that the claims lack an inventive step in light of the following documents:

    D1 - US 5,991,078
    Exelgram™ Covert Image

  7. I will also consider whether the claims lack an inventive step in light of US 5,825,547.

    Person skilled in the art

  8. The Opponent states in their submission:

    “To the extent that there is any difference in opinions between the opinions between any of Dr Pizzanelli, Dr Hardwick, Dr Lee, Mr Lancaster, and Ms Daniel and the opinion of Ir Schell, Dr Tompkin, and Dr Walter, Innovia submit that the evidence of Dr Pizzanelli, Dr Hardwick Dr Lee, Mr Lancaster and Ms Daniel should be preferred over that of Ir Schell, Dr Tompkin and Dr Walter.”

  9. Each of the experts have experience in security documents and all can provide useful insight to the knowledge and expected activity of a person skilled in the art. The opinion of each expert on each point is assessed on its merit, rather than merely relying on an ‘argument by authority’.

    The problem

  10. The description states at page 2 lines 19 to 22:

    “Now the object of the invention is to improve the level of safeguard against forgery of optical security elements and to provide a system for the visualisation of items of concealed information, which ensures a high degree of safeguard against forgery.”

  11. The description states at page 3 lines 21 to 24:

    “Accordingly an optical security element according to the invention provides a security feature which is very difficult to copy or to imitate but which on the other hand can be easily verified by a user by means of an associated verification element.”

  12. I consider the problem is in finding a security element that is difficult to copy but easy to verify.

    Ascertained, understood and regarded as relevant

  13. The art of security documents is competitive and well documented in patents, research papers, conference papers, and textbooks (see for example Mr Hardwick’s first declaration at paragraphs 10 and 15). Consequently I consider it reasonable that a person skilled in the art would review all these relevant sources of information.

  14. Both US 5,991,078 and US 5,825,547 clearly relate to security elements that a person skilled in the art could be reasonably expected to review in an effort to address the identified problem. I am satisfied that a person skilled in the art would have ascertained, understood and regarded as relevant these patents.

  15. The Opponent states in relation to whether the Exelgram™ brochure would have been ascertained:

    “Innovia submits that the Exelgram™ Covert image feature (D21-D23) was a piece of prior art information that the skilled person could, before the priority date, reasonably be expected to have ascertained, understood and regarded as relevant. Brochures publishing the Exelgram™ Covert image feature were widely distributed by Dr Lee at International conferences before the priority date. At least three people with different organisations, Dr Pizzanelli, Mr Lancaster and Ms Daniel have independently confirmed that they, or their company in the case of Ms Daniel, received a copy of the Exelgram™ brochure featuring the Exelgram™ Covert image feature before the priority date. Therefore, the skilled person working in the field of diffractive security devices could reasonably be expected to have ascertained the Exelgram™ brochure featuring the Exelgram™ Covert image feature before the priority date. The skilled person on reading the Exelgram™ brochure would have understood its contents, including the description of the Exelgram™ Covert image feature, and would have regarded the brochure, including the Exelgram™ Covert image feature, as relevant. Further, the skilled person, after reading the Exelgram™ brochure, could reasonably be expected to have obtained samples of the Exelgram™ Covert image feature, from an enquiry with Dr Lee at CSIRO, who had samples available that had been made by made by Kurz for promotional purposes, such as the sample cheque produced in about 2000 (Exhibit RAL-8), rolls of security foils made by Kurz for CSIRO in April 2003 (Exhibit RAL-11), and Mr Lee's business cards (Exhibit RAL-12), incorporating the Exelgram™ Covert image feature.”

  16. The evidence suggests that the Exelgram™ brochure was widely distributed within the security device industry. As the Exelgram™ technology is clearly of relevance to the problem which the person skilled in the art sought to overcome, I consider it reasonable that a person skilled in the art could be expected to ascertain this document. I also consider that the person skilled in the art could be reasonably expected to ascertain samples of Exelgram™.

    D1 - US 5,991,078

    Embodiment 1 – Figure 3

  17. I have found that embodiment 1 of D1 does not disclose two of the features of claim 1: a) the diffraction gratings being in a phase displaced relationship, and b) the period of the parameter variation function being between 20µm and 300µm.

  18. The Opponent argues in the submissions that the claims lack an inventive step as follows:

    “D1 does not explicitly disclose the feature of claim 1 that "the period of the parameter variation function is between 20 µm and 300 µm, but this feature would be inherent in the diffractive structure of D1. As explained by Dr Pizzanelli, "the upper limit of 300 microns (µm) is above the maximum width that an element can be before it is discernible by the human eye at typical reading distance", and "the lower limit of 20 microns (µm) is the smallest that a plastic filter or grating, or a lenticular lens array could resolve".”

  19. I do not consider it would have been obvious to a person skilled in the art to modify embodiment 1 of D1 such that it included phase displaced relationship and a period of the parameter variation function being between 20µm and 300µm. The reasoning is essentially the same as is provided in relation to embodiment 2 below.

    Embodiment 2 – Figure 8

  20. I have found embodiment 2 of D1 does not disclose the feature of the diffraction gratings being in a phase displaced relationship. I can see is no motivation for a person skilled in the art to make modifications of this embodiment such that it would result in the claimed invention. The diffraction gratings of figure 2(a) and 2(b) have different colour and intensity because of they have different wavelengths. If a mesh of diffraction grating pixels were of the same wavelength (which is less than 300µm) but phase displaced with respect to each other were used, the effect would be much more subtle (and likely imperceptible). Thus a person skilled in the art would not be motivated to make such a modification to D1.

    Exelgram™ as disclosed in US 5,825,547

  21. I have found the Exelgram™ technology as disclosed in US 5,825,547 discloses all the features of claim 1 except the image diffraction grating parameter variation function being “phase displaced” with respect to the background diffraction grating parameter variation function.

  22. There is no evidence which establishes what steps a person skilled in the art would take, nor the motivation in doing so, to make the parameter variation function of segments phase displaced with respect to each other. Furthermore, the person skilled in the art would not be motivated to modify the disclosure to create such a subtle effect, when the patent describes a clearly discernible effect that allows the control of intensity (greyscale) of pixels.

    Exelgram™ as disclosed in the brochure and samples

  23. I have found the Exelgram™ brochure and samples do not disclose a diffraction grating with a parameter variation function. I have further found that it does not disclose a diffraction gratings in any type of phase displaced arrangement.

  24. Even if the teaching of US 5,825,547 were imported into the teaching of the brochure, the invention would still be considered inventive for the reasons provided with respect to US 5,825,547.

    Clarity

  25. While the rules of construction for an Australian patent specification are well summarized in Decor Corp v Dart Industries 13 IPR 385, the correct application of these rules to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 81 IPR 228 at [118] – [120]:

    "the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear ... while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole ... it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification ... terms in the claim which are unclear may be defined or clarified by reference to the body of the specification."

  26. I also note that the requirement that the claims are clear is understood to be satisfied if a person could ascertain "whether or not what he proposes to do falls within the ambit of the claim" (Monsanto Co v Commissioner of Patents (1974) 48 ALJR 59).

    Parameter variation function

  27. The Opponent states:

    “Claim 1 is not clear. Claim 1 states that "one or more of the relief parameters defining the relief structure ... are varied periodically in accordance with a periodic parameter variation function", and further that "one or more of the relief parameters ... in the background region and the one or more pattern regions are varied periodically in accordance with a periodic parameter variation function". Claim 1 lacks clarity because it is not clear whether the periodic parameter variation function for the relief structure as a whole is different than that in the background region and the one or more pattern regions. If the function is the same in both cases, then claim 1 is not succinct.”

  28. I have found in construing the claim that the parameter variation function of the background and the image are the same but phase-displaced with respect to each other. This is plain from the claim alone, and also with made plain in the specification. I do not consider the claim to be written so inefficiently as be considered to lack succinctness.

    Mean azimuth angle is constant

  29. The Opponent states in their submissions:

    “Claims 5, 12 and 18 refer to mean values of azimuth angle and spatial frequency. It is not clear from the specification how the mean values are calculated, nor over which regions (or spatial coordinates) the calculation is performed. Claims 5, 12 and 18 thus lack clarity.”

  30. Claim 5 defines that:

    “the mean azimuth angle ... is constant.”

  31. A diffraction grating with an azimuth angle varied periodically is another way of saying the diffraction gratings are composed of wavy lines rather than straight lines. It is inherent that the calculation of the mean would be a comparison of each successive wavelength. The mechanics of summing (and averaging) the angles of a wavy line are well known from calculus (e.g. the angle at each point of a curve is its derivative).

  32. If each period of the wave is identical then the average (mean) azimuth angle will be constant from one wavelength to the next. Thus this excludes complex wave patterns such as modulated wave patterns, where each period of the wave is not identical.

  33. Claim 5 further defines that:

    “the mean azimuth angle in relation to the resolution capacity of the human eye is constant”

  34. Claim 1, to which this claim is ultimately appended, already defines that the period of wave is less than 300µm which is below the resolution of the human eye, thus the words “in relation to the resolution capacity of the human eye” are considered redundant and add no further limitation to the claim. Consequently I consider claim 5 to be clear.

    Dependence on the X-axis

100. The Opponent argues:

“Claims 6, 8 and 9 lack clarity owing to use of the term "in dependence on the value of the X-axis". Dr Pizzanelli found difficulty in interpreting this phrase, and considered it could mean either a) "dependent on the value of the X-axis" or b) "independent of the value of the X-axis" [Pizzanelli, first declaration, paragraph 44, and paragraphs 46 and 47]. Therefore this term is ambiguous and lacks clarity.”

Claims 6, 8 and 9 are as follows:

6.  An optical security element according to one of claims 4 and 5 characterised in that the parameter variation varies the azimuth angle of the diffraction grating (28, 33) periodically in dependence on the value of the X-axis.

8.  An optical security element according to claim 7 characterised in that the parameter variation function is a sine function which varies the azimuth angle of the diffraction grating (28) in dependence on the value of the X-axis.

9.  An optical security element according to one of claims 4 to 6 characterised in that the parameter variation function varies the azimuth angle of the diffraction grating (4) periodically in dependence on the value of the X-axis and the value of the Y-axis.

101. The words “in dependence on the value of the X-axis” are simply defining a function where the azimuth angle of the curve can be determined at any point from the value at the X axis, for example a sine function.

102. The words “in dependence on the value of the X-axis and the value of the Y-axis” defines a function where the azimuth angle of the curve at any point requires both the value on the X and Y axis, for example a parametric equation. Consequently I consider this aspect of the claims to be clear.

Antecedents

103. The Opponent argued various terms in the dependent claims did not have antecedents in the earlier claims. I consider that “the phase displacement” of claim 3 refers to the term “phase displaced” in claim 1. I consider the term “parameter variation” of claim 6 refers to the “parameter variation function” of claim 1.

Fair basis

104. The requirement that the claims be fairly based on the description is a requirement of consistency of the claims with the description or, more particularly, with the invention described.  Subtests accepted in LockwoodSecurity Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 69, 98-99 as being relevant to the consideration of fair basis are:

…whether there is a real and reasonably clear disclosure of the claimed invention in the specification [from Société Des Usines Chimiques Rhône-Poulenc v Commissioner of Patents (1958) 100 CLR 5 and cited with approval in Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79] or

…whether the claims travel beyond the subject matter of the invention described in the specification [Olin v Super Cartridge (1977) 180 CLR 236].

Verification element

105. The Opponent argues:

“It is apparent on the face of the specification that the essence of the invention is the combination of diffraction gratings which are phase-shifted with respect to each other (in order to provide concealed information), together with an associated verification element (in order to reveal the concealed information). The essential feature of an associated verification element is absent from claims 1 to 17. Accordingly, each of claims 1 to 17 lacks fair basis.”

106. The Applicant argues:

“The claim lists all the required structural elements of the optical security element. The verification element is not part of the invention but is used with the invention the reveal the effect of the invention.”

107. A component of a machine or system can be a patentable invention. There is no requirement that the claim to an inventive component must also define the entire machine or system if the invention resides in the component. In this case the invention resides in the arrangement of diffraction gratings on a surface. I do not consider the verification element to be essential to the arrangement of diffraction gratings. Thus this aspect of the claim is fairly based.

Transmission function

108. The Opponent states:

“Claim 20, which is appended to claim 19, requires that the transmission function of the verification element is a non-binary transmission function. The specification is completely silent as to this feature of the verification element. Accordingly, claim 20 lacks fair basis.”

109. The description states at page 7 line 32 to page 8 line 4:

“Further improvements in the degree of safeguard against forgery can be achieved if, instead of a binary verification grating, a verification grating is used which is defined by a non-binary transmission function, for example by a sinusoidal transmission function. Visualisation of the concealed information accordingly requires a complex, individualisable verification element, whereby the level of forgery safeguard of the system is increased.”

110. A verification grating is considered binary when it either allows or prevents the transmission of light. A sinusoidal transmission function would have a periodic gradient between transparency and opacity. I consider the description provides a real and reasonably clear disclosure of this feature.

Fully described

111. Section 40(2)(a) of the Patents Act requires that the invention be described fully, with the appropriate test set out in the High Court decision of Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) HCA 8; 207 CLR 1; 177 ALR 460; 75 ALJR 518 at [25]:

“Section 25(2)(h) of the Patents and Designs Act 1907 (UK) ("the 1907 Act"), as amended by s 3 of the Patents and Designs Act 1932 (UK), made it a ground of revocation that the complete specification did not "sufficiently and fairly describe and ascertain the nature of the invention and the manner in which the invention [was] to be performed". The resemblance to s 40(2)(a) of the 1990 Act will be apparent. Speaking of the 1907 Act in No-Fume Ltd v Frank Pitchford & Co Ltd[43], Romer LJ repeated par (h) of s 25(2) and continued:
"[I]n other words, [it is essential] that the patentee should disclose his invention sufficiently to enable those who are skilled in the relevant art to utilise the invention after the patentee's monopoly has come to an end. Such disclosure is, indeed, the consideration that the patentee gives for the grant to him of a monopoly during the period that the patent would run. ...
It is not necessary that he should describe in his specification the manner in which the invention is to be performed, with that wealth of detail with which the specification of the manufacturer of something is usually put before the workman who is engaged to manufacture it."


The question is, will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty?” (my emphasis)

Verification element

112. The Opponent states at paragraphs 149 to 151 of their submissions:

“Page 3, lines 21-24 of the specification state that "an optical security element according to the invention provides a security feature which is very difficult to copy or to imitate but which on the other hand can be easily verified by a user by means of an associated verification element".

As noted in 144 to 147 above, there is no part of claim 1 (or dependent claims 2 to 17) which incorporates an "associated verification element".

The specification is silent as to how the combination of features in claim 1 - in particular, the two regions of relief structure which are phase-shifted with respect to each other- can act as a security element in the absence of a verification element. Indeed, it is repeatedly stated that in the absence of a verification element, the security element appears homogeneous (see, for example, page 7 lines 12-14; page 16 lines 28-30; page 21 lines 23-24). Accordingly, the subject matter of at least claim 1 is not fully described.”

113. The claim is to a component (optical security element) of a system (visualising concealed information). The system comprises two components, an optical security element and verification element, which have been fully described. Whether there are deficiencies in how the invention is claimed (rather than how it has been described) is more suitably addressed in the consideration of fair basis.

Contrast

114. The Opponent states:

“Claim 3 recites that "the phase displacement of the parameter variation function between the pattern region and the background region is selected in accordance with the contrast to be set". Apart from a cursory statement that "it is possible ... to implement concealed grey scale images in which the grey scale is encoded by means of the phase displacement" (page 12 lines 9-11), the specification provides no guidance whatsoever as to how the phase displacement is to be selected in order to achieve a particular desired effect. The subject matter of claim 3 is therefore not fully described.”

115. The description states at page 12 lines 2 to 11:

“A phase displacement of 180 degrees permits a particularly great contrast between the pattern region and the background region. It will be appreciated that it is also possible in that respect to deviate somewhat from the phase displacement through 180 degrees. In addition advantages can also be enjoyed in deviating considerably from a phase displacement of 180 degrees and providing for example a phase displacement of 45 degrees or 135 degrees, in the one pattern region or the other. Thus it is possible for example to implement concealed grey scale images in which the grey scale is encoded by means of the phase displacement.”

116. I consider this excerpt adequately describes this aspect of the invention.

Utility

117. The issue of utility was considered by the Full Court of the Federal Court in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 where Emmett J at 81 stated:

“A claim is bad if it covers means that will not produce the desired result, even if a skilled person would know which means to avoid. That is to say, everything that is within the scope of a claim must be useful, otherwise the claim will fail for inutility.”

118. The Opponent states in their submissions at paragraphs 144 to 147:

“The stated object of the invention is to "improve the level of safeguard against forgery of optical security elements and to provide a system for the visualisation of items of concealed information" (page 2, lines 19·21).

It is contended in the specification that this object is attained by an optical security element having features substantially in line with claim 1, and in particular, variation of parameters of a relief structure in periodic fashion, wherein one or more pattern regions are phase·displaced with respect to a background region (page 2, line 23 - page 3, line 1). The difference between pattern regions and background only becomes apparent when the security element is viewed with the aid of a verification element. Otherwise, the surface of the security element appears homogeneous (page 12, lines 12-13).

It is noted that claim 1 does not contain any reference to a verification element with which the security element is matched. Dependent claim 18 is the first claim which includes this feature ("the mean azimuth angle of the relief structure respectively corresponds to the azimuth angle of an associated verification grating").”

119. The Applicant states in their submissions:

“The assertions of the Opponent in paragraphs 144 to 147 of the submissions are correct. Only the conclusion that there is a lack of utility is incorrect. It is true that the effect of the invention is only viewable with a verification element but it is not the use of the invention that is claimed but the structure. The verification element is not part of the structure of the optical security element. It is an additional element to be used with the claimed optical security element. If the contention of the Opponent were correct it would mean, for example, that an internal combustion engine could only be claimed with fuel.”

120. I am satisfied that everything in the scope of claim 1 is useful; a device with diffraction gratings in the arrangement defined in the claim could be used as an optical security element. Consequently the invention in claim 1 is useful.

Conclusion

121. The patent application was opposed on the grounds that the claims of the patent application lack novelty, inventive step, utility, clarity, fair basis, and that the invention is not fully described. I have not found any of the claims to be invalid on any of these grounds. Consequently the opposition fails on all grounds.

Costs

122. I see no reason to depart from the normal outcome that costs should follow the event. Costs are awarded according to Schedule 8 against the opponent, Innovia Security Pty Ltd.

Xavier Gisz
Delegate of the Commissioner of Patents

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