Innovia Security Pty Ltd v Visual Physics, LLC - [2015] APO 82

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v Visual Physics, LLC [2015] APO 82

Patent Application: 2010226869

Title:Micro-Optic Security and Image Presentation System

Patent Applicant:  Visual Physics, LLC
Opponent:  Innovia Security Pty Ltd
Delegate:  Matt Kraefft
Decision Date:  7 December 2015
Hearing Date:  21 September 2015, in Canberra

Catchwords: PATENTS – Section 59 – opposition to grant of patent – divisional application - synthetic magnification micro-optic system – lens/ icon image arrays – novelty - inventive step – person skilled in the art could be reasonably expected to have ascertained the document relied upon – obviousness established in light of prior art document – opposition successful.

Representation: Patent applicant: Mr Anthony Franklin SC, assisted by Ms Katrina Crooks, legal practitioner, Shelston IP, Sydney.
Opponent:Mr Craig Smith, of counsel, assisted by Mr Ken Bolton, patent attorney, Watermark, Melbourne.

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010226869

Title:Micro-Optic Security and Image Presentation System

Patent Applicant: Visual Physics, LLC
Date of Decision: 7 December 2015
DECISION
Claims 2, 4 to 18, 23, 28 to 35, 39 and 40 do not have an inventive step.
The defects to these claims are clearly capable of remedy by amendment. The applicant is allowed two (2) months from the date of this decision to propose suitable amendments to overcome the defects.
REASONS FOR DECISION
BACKGROUND

Visual Physics, LLC (“the applicant”) filed patent application 2010226869 on 30 September 2010. The application is a divisional application of 2004294182 (“parent application”). The latter application claims earlier priority dates from three US applications, the earliest of which was filed on 21 November 2003. Application 2010226869 was advertised accepted on 17 November 2011.
Securency International Pty Ltd filed a notice of opposition on 17 February 2012. A statement of grounds and particulars followed on 17 May 2012. By a change of company name, the opposition is now proceeding in the name of Innovia Security Pty Ltd (“the opponent”).
Following the opponent’s filing of evidence in support, the applicant made two requests, on 8th and 22nd August 2013, to amend the complete specification under Section 104 of the Patents Act. Those requests were the subject of an opposition. In a decision dated 25 November 2014, Innovia Security Pty Ltd v Visual Physics LLC, [2014] APO 76, the delegate allowed the amendments.
The evidentiary stages in this case from the opponent’s side have been rather lengthy. Suffice to say, the opponent was required to file its evidence in reply by 26 November 2013. The opponent filed a declaration on 25 November 2013 which it stated was partial evidence in reply to the applicant’s evidence in answer. On the same date the opponent also filed an application for an extension of time to complete its evidence in reply. After considering the application, a delegate of the Commissioner of Patents indicated an intention to refuse the extension of time. The opponent requested to be heard on the matter. On 3 January 2014, the opponent in any case filed a further declaration which it stated now completed the opponent’s evidence in reply. On the other hand, a deputy commissioner subsequently refused the extension of time, Innovia Security Pty Ltd v Visual Physics LLC, [2014] APO 15. In that decision, the deputy commissioner consequently directed that the declaration filed on 3 January 2014 was not evidence in reply. The opponent then applied to file the declaration as further evidence. As a result of a delegate’s intention to grant leave to file further evidence, the applicant requested to be heard. In a decision dated 17 June 2014, Innovia Security Pty Ltd v Visual Physics LLC, [2014] APO 39, the delegate allowed the filing of the declaration as further evidence. The applicant was then given time to file responding evidence.
Two further rounds of further evidence from the opponent and responding evidence from the applicant make up this opposition.
SPECIFICATION
The specification describes the invention as relating to a synthetic magnification micro-optic system that in an exemplary embodiment is formed as a polymer film. Use of the invention as a security device for overt and covert authentication of currency, documents and products as well as visual enhancement is also discussed.
Two patent examples of lens structures for document security are discussed. Both are stated to suffer from similar drawbacks. They result in a relatively thick structure that is not particularly suitable for use with document authentication. Their use of cylindrical or spherical lenses provides a narrow field of view resulting in fuzzy images and requiring exact and difficult alignment of the focal point of the lenses with the associated images. Additionally, they have not proven particularly effective as security or anti-counterfeiting measures.
The specification mentions a need in the industry for secure and visually unique optical materials that can facilitate overt authentication of currency, documents, manufactured articles and products and for optical materials that provide visual enhancement of manufactured articles, products and packaging.
The specification ends with 44 claims. Claims 1 and 2, as amended under Section 104, are the independent claims. They read as follows.
1. Film material comprising micro-images and a regular two-dimensional array of non-cylindrical lenses, the film material utilizing the regular two dimensional array of non-cylindrical lenses to enlarge the micro-images, and to form a synthetically magnified image through the united performance of a multiplicity of individual lens/icon image systems,
wherein the micro-images are formed from voids in a microstructure, and
wherein voids in the microstructure are filled or coated with evaporated metal material or dyed or pigmented material.
1. Film material comprising micro-images formed of a periodic planar array of a plurality of image icons and a regular two-dimensional array of non-cylindrical lenses, the film material utilizing the regular two dimensional array of non-cylindrical lenses to enlarge the micro-images, and to form a synthetically magnified image through the united performance of a multiplicity of individual lens/icon image systems,
wherein the micro-images are formed from voids in a microstructure, and
wherein voids in the microstructure are filled or coated with evaporated metal material or dyed or pigmented material, or another material.
STATEMENT OF GROUNDS AND PARTICULARS
The opponent has amended the statement of grounds and particulars twice. Both amendments have been allowed. The most recent amendment was principally in light of the allowance of the Section 104 amendment to the specification. The amended statement of grounds and particulars cited the following grounds of opposition in the present case. The invention as claimed is not a manner of manufacture, lacks novelty, and lacks an inventive step, and the claims are not clear, succinct or fairly based. The opponent has provided particulars for each of these grounds.
EVIDENCE IN SUPPORT
The opponent filed evidence in support from Dr Bruce Alfred Hardwick. Dr Hardwick is a chemical engineer and joined Note Printing Works (“NPW”), a division of the Reserve Bank of Australia, in 1983. He had worked for NPW and its successor, Note Printing Australia Limited (“NPAL”), until his retirement from the company in November 2005. As technical development manager, Dr Hardwick led the research and development team responsible for taking the polymer banknote into production. He also has had extensive experience domestically and internationally in various technical groups relating to banknote printing and security features. Dr Hardwick has principally presented evidence of the background knowledge of the art and of the alleged lack of novelty and inventiveness of the claimed invention.
EVIDENCE IN ANSWER
The applicant filed evidence in answer from Mr Graeme Mann and Mr Edward Stanley Radclyffe. Mr Mann relevantly joined 3M Innovative Properties Company (“3M”) in 1973 and was appointed Technical Services Manager. Around 1983, he began working for 3M on a joint project with the Australian Government Publishing Service and Department of Foreign Affairs to update the security features of the Australian passport using 3M technology. Mr Mann worked on this project until his retirement from the company in 2002. In his evidence, Mr Mann has principally differentiated claim 1, as accepted, from the prior art cited by the opponent and from what was commonly known in the relevant field before the earliest priority date. Mr Radclyffe is an engineer and has extensive experience in passport security dating from the 1980s with the Department of Foreign Affairs. He has been a member of working groups, director of sections within the department, and contractor in respect to passport operations and passport security development up until 2007. Mr Radclyffe has principally presented evidence on the background knowledge of the art and distinguished claims 2-43, as accepted, from the opponent’s prior art. He also discusses the inventiveness of all of the claims, as accepted.
EVIDENCE IN REPLY
The opponent filed evidence in reply from Dr Hardwick. His evidence principally addressed Mr Mann’s evidence in answer.
FURTHER EVIDENCE (1)
The opponent’s first round of further evidence consisted of a declaration from Dr Hardwick. This evidence principally addressed Mr Radclyffe’s evidence in answer.
EVIDENCE IN RESPONSE (1)
The applicant’s first round of responding evidence consisted of a declaration from Mr Radclyffe which was principally responsive to the opponent’s first round of further evidence.
FURTHER EVIDENCE (2)
The opponent’s second round of further evidence consisted of a declaration from Dr Hardwick. This evidence principally addressed the claims of the application as amended under Section 104.
EVIDENCE IN RESPONSE (2)
The applicant’s second round of responding evidence consisted of a declaration from Mr Radclyffe which was principally responsive to the opponent’s second round of further evidence.
FURTHER EVIDENCE (3)
The opponent’s third round of further evidence consisted of another declaration from Dr Hardwick. The opponent stated this evidence was similar to evidence allowed and filed in the parent application in response to further evidence filed by the applicant in the parent application. The opponent also indicated that the applicant’s further evidence in the parent application was similar in nature to the applicant’s first round of responding evidence in the present case. On this basis, the opponent stated it would be incongruous to deny the filing of this third round of further evidence in the present case. The applicant made representations that the further evidence should not be allowed but nonetheless declined to be heard on the matter. After considering comments from both sides, a delegate of the commissioner granted the opponent’s request to file this further evidence.
EVIDENCE IN RESPONSE (3)
The applicant’s third round of responding evidence consisted of declarations from Mr Radclyffe and Mr Mann which were principally responsive to the opponent’s third round of further evidence.
EVIDENCE FROM RELATED APPLICATIONS
The present application is related, directly or indirectly, to at least two other applications by the same applicant and opposed by the same opponent. The other applications are 2004294182, being the parent application, and 2006246716. The three oppositions were heard consecutively. Prior to the hearings, the applicant requested pursuant to Patent Regulation 5.23 that the Commissioner of Patents consult the evidence filed in each of the oppositions for the purposes of deciding each of the other oppositions. The Patent Office responded to this request indicating that a delegate had advised that the parties may raise Regulation 5.23 at the hearings in relation to any specific material.
At the beginning of the first hearing on the first day, I raised some concern whether the applicant’s request was capable of being met by Regulation 5.23. That regulation states that, for the purposes of deciding an opposition, the Commissioner may consult a document (my emphasis) that is relevant to the opposition and has not been filed “under this Chapter” and is available in the Patent Office. The delegate’s advice that Regulation 5.23 may be raised in relation to any specific material is consistent with the apparent application of the regulation in a limited way to a specific document or material. The applicant’s request was broader in wanting the evidence filed in any one opposition to apply across each of the other two oppositions as well. At the hearing the opponent indicated its consent to this proposal by the applicant. Accordingly I agreed to direct that evidence served in any one of the three oppositions is deemed to have been also served in the other two oppositions (Regulation 5.22). The direction was formally made on 6 October 2015.
Much of the evidence across the three oppositions was similar and thereby largely replicated. The two declarations though by Mr Mann, mentioned above, have been filed by the applicant only in the present opposition. Consequently the most obvious practical effect of joining the evidence across the three oppositions was that the Mann declarations were also available for the applicant in the oppositions against applications 2004294182 and 2006246716. In a similar way for example, the evidence of Mr Gary Fairless Power, initially filed only in the opposition against the parent application, was also available for the opponent in its oppositions against the present application and 2006246716.
Unless otherwise indicated, references to evidence in this decision relate to the material filed initially for the present case.
TERMS OF THE ART AND NATURE OF INVENTION
There does not appear to be any explicit definition in the specification of what is meant by a synthetic magnification micro-optic system (my emphasis). Mr Radclyffe indicated at [32] and [33] of his evidence in answer for AU2006246716 that the term “synthetic” referred to the creation of an image which is caused other than purely by the effect of the eye looking through the lens array. Page 4 of the specification discusses the ability to control the magnitude of the synthetic magnification by the selection of a number of factors, including the degree of skew between the axes of symmetry of the lens array and the icon array. Page 5 describes the skew in terms of the degree of rotational misalignment between the axes of symmetry of the two arrays. This description appears to refer to an optical effect known as the moiré effect. The moiré effect is a visual perception that occurs when viewing two substantially identical superimposed image arrays, where the image arrays differ in relative size, angle or spacing. In the case of a lens array overlaying an image array of identical objects, moiré magnification may be achieved. For example, if a lens array and image array have the same scale and are correctly aligned, all lenses would view the identical regions of their corresponding objects in the image array and the field of view would be uniform and the magnification would theoretically be infinite. If the lens array were rotated out of alignment to the image array, the initial single magnified image would split into a regular array of images with the number of visible images increasing and their individual sizes decreasing as the angular mismatch increases. Moiré magnification is described in some detail in Hutley et al (Exhibit BAH-16 to Dr Hardwick’s evidence in support). Also the relative scales of the arrays as well as the F number of the lenses can affect not only the magnification of the image but also its rotation, orthoparallactic movement and the apparent visual depth of the image above or below the image plane. From the above, I regard the specification as describing synthetic magnification to be the production of a magnified image by means other than lens magnification alone, with moiré magnification being one example of that.
The descriptive part of the specification contains elaborate discussion of the various optical relationships of the micro-lens and micro-image arrays, and the nature of the images, for producing the above-mentioned visual effects. On the other hand, the aspect of the present invention is not directed to such relationships and the images per se. Instead the claimed invention is directed to the film material, the constructional nature of the micro-structure within the film material and the filling or coating of voids in the micro-structure.
APPLICABLE LAW
As a consequence of the Intellectual Property Legislation Amendment (Raising the Bar) Act 2012 (“the Amendment Act”), there are substantial changes to the Patents Act 1990. The date of effect of those changes was 15 April 2013. The application of the Amendment Act in the present case depends on the date of the request for examination. The applicant filed its request for examination on 30 September 2010. Consequently the Patents Act as in force immediately before 15 April 2013 applies in the present case.
This means the former standard for opposition proceedings applies and the opponent bears the onus of establishing that it is clear or practically certain that a valid patent could not be granted (F Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 at [29], [67]; 50 IPR 305 at 311, 319; Commissioner of Patents v Sherman [2008] FCAFC 182 at [18], [22]; 79 IPR 426; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).
Section 18 of the Patents Act relates to patentable inventions. Relevant parts of subsection (1) appear below.
(1)Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:
(a)    is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
(b)   when compared with the prior art base as it existed before the priority date of that claim:
(i)is novel; and
(ii)involves an inventive step; and
(c)    is useful; and ………
At the hearing, the opponent pursued only the grounds of lack of novelty, lack of inventive step and lack of fair basis.
NOVELTY
Under subsection 7(1), an invention is taken to be novel unless it is not novel in the light of the prior art base. Information in a document forms part of the prior art base for the purposes of novelty if it was published before the priority date of a claim, or the information was contained in a specification published after the priority date of the claim under consideration and, if that information is, or were to be, the subject of a claim of the specification, that claim has, or would have, a priority date earlier than that of the claim under consideration (referred to as “whole of contents” novelty).
It is well established that the general test for lack of novelty is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd, [1977] HCA 19 at [20]; 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”.
This test is satisfied if the alleged anticipation discloses all the essential features of the invention as claimed (see Nicaro Holdings Pty Ltd v Martin Engineering Co [1990] FCA 40; (1990) 91 ALR 513 at 517). In order to meet this requirement, the prior art must "contain clear and unmistakeable directions to do what the patentee claims to have invented" (The General Tire & Rubber Company v The Firestone Tyre and Rubber Company Limited [1972] RPC 457 at 486).

In AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99, at [302], the full Federal Court held:
“Sufficiency of disclosure is a cardinal anterior requirement in the analysis of whether a prior art document anticipates a claimed invention. It is only after the stage of assessing the sufficiency of disclosure – which involves a determination about whether a prior document has “planted the flag” as opposed to having provided merely “a signpost, however clear, upon the road” or, perhaps, something less – that the notion of reverse infringement comes into play as the final and resolving step of the required analysis. It is not the first step of the required analysis; nor is it the only step”.
The above position does not appear to have been disturbed by the High Court on appeal. See AstraZeneca AB v Apotex Pty Ltd, [2015] HCA 30.
The opponent principally relied on the following document.
US 5712731 – Drinkwater patent
In evidence and in written submissions, the parties initially referred to the WO version of this document, WO 94/27254. However during the hearing, the US patent was more commonly referred to. I will also refer to the latter.
The Drinkwater patent discloses a security device, for security documents such as banknotes, that includes an array of micro-images that, when viewed through a corresponding array of substantially spherical micro-lenses, generates a magnified image. The micro-lenses may be applied to a transparent polymeric material that overlays the micro-images by embossing or curing. Column 3 of the Drinkwater patent describes the moiré effect in the following terms. When the micro-lens array and the micro-image array are perfectly aligned into register, each lens has underneath it a micro-image in perfect register so that an observer sees only one magnified image of the micro-images. However, if the spherical lens array is rotated relative to the image array, the single magnified image splits into a regular array of images with the number of visible images increasing and their individual sizes decreasing as the angular mismatch increases. This describes the claimed features in the present application of a film material utilizing a regular two dimensional array of non-cylindrical lenses to enlarge the micro-images, and to form a synthetically magnified image through the united performance of a multiplicity of individual lens/icon image systems.
The opponent noted that one of the methods described in the Drinkwater patent for creating micro-images was the use of intaglio printing which results in a relatively thick layer of ink. The opponent contended this formed a micro-structure within the meaning of claim 2 of the present application with voids between the areas of ink.
The Drinkwater patent primarily discloses micro-images being printed onto the substrate of a security document, for example by intaglio printing. Figure 7a of the present specification similarly illustrates icon elements deposited by common printing methods such as intaglio printing. Figure 7c appears similar to Figure 7a in its depiction of icon elements. However the specification states that Figure 7c depicts a microstructure approach to forming icon elements by the creation of voids or solid regions in the micro-structure.
The opponent submitted there was no relevant difference between Figures 7a and 7c or from the language of the claims to differentiate the layers of ink laid down by intaglio printing from a micro-structure that has voids in it. On the other hand, only Figure 7c is described as depicting a micro-structure arrangement. The specification is silent on Figures 7a or 7b relating to any micro-structure. Rather the specification describes those figures as depicting icon elements printed on the lower surface of an optical spacer, and icon elements as pigments, dyes or particles embedded in a supporting material on the optical spacer, respectively. The applicant’s evidence and submissions throughout are consistent with this in that those icon elements are not voids or solid regions in (applicant’s emphasis) a micro-structure. I concur. There is no micro-structure per se in Figures 7a or 7b having voids and solid regions. Additionally, while one could argue the scales across Figures 7a to 7c may not necessarily be uniform although there is insufficient reason to doubt they are uniform, the icon elements in Figure 7c have a clearly more pronounced relief profile than the printed elements in Figure 7a. In the context of the specification, I think it could not fairly be said that areas where there is no print are voids in a micro-structure and areas where there is print are solid regions in a micro-structure. In one embodiment, the Drinkwater patent discloses micro-images being printed onto the substrate of a security document. This does not disclose the claimed invention.
The Drinkwater patent though also discloses an embodiment where an image array is formed by selectively removing areas from an aluminium film to form images, by an etching process for example. In submissions, the applicant acknowledged this got closer to describing voids in a micro-structure. I expect this process would also result in a more pronounced relief profile. I am satisfied this embodiment in the Drinkwater patent discloses micro-images in the form of voids in a micro-structure.
The opponent noted the Drinkwater patent also taught an embodiment where the creation of the micro-lenses was by applying a varnish layer over the intaglio-printed micro-images and forming the lenses in that layer. The opponent submitted this varnish fell within the ambit of “another material”, as defined in claim 2 of the present application, which filled the voids in the micro-structure formed by the intaglio printing of the micro-images.
On the basis of my comment above that areas between print could not fairly be said to be voids in a micro-structure, it appears the opponent’s submission about the varnish layer cannot be sustained. If the alternative etched aluminium embodiment were relied upon as creating the voids, the applicant has correctly noted in submissions that the Drinkwater patent contains no description of filling or coating the voids created in the aluminium by the described etching process. In fact, both the WO version at page 20 lines 10 and 11 and the US patent at column 11 lines 37 and 38 describe an option, in forming the micro-images, of printing a protective layer on the aluminium then removing unprotected areas using an etch solution. Clearly the protective layer is applied selectively where the aluminium needs to remain. That is, the application of the protective layer in selected areas results in the creation of voids in unprotected areas upon etching. There is no disclosure of a protective coating subsequently filling or coating the created voids.
I conclude that claim 2 is novel over Drinkwater. Similarly claim 1 and the remainder of the claims are novel over Drinkwater.
INVENTIVE STEP
Subsection 7(2) of the Patents Act states that an invention is taken to involve an inventive step unless it would have been obvious to a person skilled in the art in the light of the common general knowledge, considered alone or together with the prior art. A document is prior art for this purpose if "a skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded [the document] as relevant" (Subsection 7(3) at the relevant time).
The test for whether an invention is obvious is whether it would have been a matter of routine to proceed to the claimed invention. In Wellcome Foundation Ltd v VR Laboratories (Aust.) Pty Ltd, [1981] HCA 12 at [45], 148 CLR 262 at 286, Aickin J stated:
"The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not."
The High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd, [2002] HCA 59, (2002) 56 IPR 129 at [50] – [53], appeared to approve of the Wellcome test. In discussing what was meant by a matter of routine the High Court noted and accepted an affinity with the approach in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd, (1970) 87 RPC 157, of whether the person skilled in the art would directly be led as a matter of course to try what was claimed in the expectation that it might well produce a useful alternative. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No. 2], [2007] HCA 21, (2007) 235 ALR 202, general principles regarded to be of continuing relevance, at [50] – [52], were that “obvious” means “very plain”, a scintilla of invention remains sufficient to support the validity of a patent, there must be some difficulty overcome, some barrier to be crossed, and an invention must be beyond the skill of the calling.
In AstraZeneca at [202] and [203], the full Federal Court found that if a problem addressed by a patent specification is itself common general knowledge, or if knowledge of the problem is part of the prior art information (Subsection 7(3)), then such knowledge or information will be attributed to the hypothetical person skilled in the art for the purpose of assessing obviousness. On the other hand, if the problem cannot be attributed to the hypothetical person skilled in the art in either of these ways then it is not permissible to attribute a knowledge of the problem on the basis of the inventor’s “starting point” such as might be gleaned from a reading of the complete specification as a whole. The High Court, on appeal in AstraZeneca AB v Apotex Pty Ltd, [2015] HCA 30, did not appear to disturb this position.
Person Skilled in the Art
Page 1 of the specification states that the unusual optical effects provided by the various embodiments of the disclosure can be used as a security device for overt and covert authentication of currency, documents and products as well as visual enhancement of products, packaging, printed material, and consumer goods. Pages 72 to 74 outline numerous and diverse fields of use such as government documents, currency, financial instruments, product and brand protection, health care, product packaging, electronic equipment, software, ticketing and individual products. The field of the alleged invention is not just restricted to optical security devices but is expandable more generally to visual enhancement features in a wide variety of devices. While the fields of use may be wide, the hypothetical person skilled in the art would nonetheless need to be knowledgeable and skilled in this case in the production of optical effects from small lens and image arrays. I would expect the appropriate person skilled in the art would be one with a science or engineering qualification together with qualifications or industry experience in optics, more particularly in optical devices.
The parties provided evidence from experts in two areas of application. Both areas related to document security though. The opponent’s Mr Power and Dr Hardwick both had significant experience principally in the banknote security industry before the earliest priority date. The applicant’s Mr Radclyffe and Mr Mann both had significant experience principally in the application of security features in passports. In this respect I regard all declarants in this case as able to have provided relevant evidence.
Mr Power and Dr Hardwick were also involved in research and development in this field. Mr Power was employed directly by the opponent. Dr Hardwick chaired a technical committee that oversaw the research and development of NPAL and of the opponent. In evidence in support, Dr Hardwick, at [9], indicated that he was an inventor in respect to a number of patents in the field of banknotes and banknote security. Mr Radclyffe stated he was also the named inventor on an Australian patent relating to images within a laminate. Mr Mann was appointed the staff scientist with his company in 1999 and gained the responsibility of researching and keeping up to date with competing technologies. He has stated he is the named inventor on four patents in the security field.
It appears the declarants from both sides in this case may be over-qualified above the appropriate, hypothetical person skilled in the art. Firstly I would note there is no evidence from personnel involved in visual enhancement features of general consumer merchandise, to which the present application is also stated to pertain. Secondly, in Root Quality Pty Ltd v Root Control Technologies Pty Ltd, [2000] FCA 980 at [70], the person skilled in the art or the skilled addressee was described as the uninventive skilled worker. The opponent’s Mr Power and Dr Hardwick both were involved in research and development with at least Dr Hardwick also being a listed inventor. Similarly the applicant’s declarants were listed inventors. I regard that the declarants on both sides were above the level of an uninventive skilled worker as required from the Root Quality decision. While it may be that, in some highly technical fields, the appropriate person skilled in the art is the researcher or even an inventive person, this does not appear to be the case in the present matter in the light of the stated problems in the specification of lens sizes and lens/image alignments. In this respect, it is noteworthy that the opponent’s Dr Hardwick stated, at [7] of his evidence in reply, that the person skilled in the art would have had a solid grounding and understanding of optics, but would not necessarily require a particularly high level of expertise in the field of optics.
I conclude that I need to treat the evidence from both sides with a little caution as the declarants are at a higher level in terms of representative, hypothetical persons skilled in the art to whom the specification is addressed. Nonetheless the specification is clearly directed to those with an interest in or involved in the design or production of optical effects with micro-lens and micro-image combinations regardless of field of use. All the declarants in this case fit that description and I give substantially the same weight to each declarant’s evidence.
Common General Knowledge
The opponent contended that the use of a moiré magnifier as an optically variable device, and its operating principles, were commonly known at the relevant time. The applicant did not counter the knowledge of moiré magnification at the relevant time. I am prepared to accept that the phenomenon of moiré magnification was common general knowledge at the priority date. However Mr Radclyffe, at [30] of his evidence in answer, stated that moiré magnification to his knowledge had not been used in any specific instances in the security device field. In evidence in support at [31], Dr Hardwick indicated an awareness of conference papers published from a series of conferences, the Optical Security and Counterfeit Deterrence Techniques conferences. In evidence against the parent application, Dr Hardwick exhibited two papers from these conferences that related to the use of moiré effects in banknotes and similar documents. One of those papers was replicated in evidence in the present case (exhibit BAH-27 to Dr Hardwick’s first round of further evidence). The exhibits were dated between 2000 and 2002. In his third round of further evidence, Dr Hardwick stated at [10] that many people involved in research and development of security features attended these conferences, presented papers thereat, brought back copies of the conference papers, or would have been aware of the conferences, or accessed the conference papers, published by a particular professional society as the SPIE Proceedings. He specifically mentioned himself, other members of his research team, and others involved in research and development in the area of optical document security from other organisations who attended the conferences. At [12], Dr Hardwick maintained that the conference papers formed part of the common general knowledge of people working in research and development in the field of optical security devices and documents at the priority date.
This evidence is telling by the high level at which it is pitched. Dr Hardwick referred throughout to people involved in research and development and to the presenters at these conferences. This would illustrate the caution with which I need to consider the evidence in this case as discussed in the preceding section. Mr Radclyffe, and similarly Mr Mann, on the other hand stated they were not aware of these conferences or papers from the SPIE Proceedings at the priority date. At [8] of his first round of evidence in response, Mr Radclyffe also indicated he did not recall others mentioning the conferences or the SPIE Proceedings as a source of information about technologies in the security device field. I am inclined to the latter view. I am not convinced the representative person skilled in the art, as discussed in the preceding section, would have been aware of the conferences or SPIE Proceedings to the extent that the papers therefrom would have been regarded as part of the common general knowledge at the relevant time. Moreover, the evidence in this case appears to contain just a few papers from those proceedings within three years before the priority date that related to moiré effects in banknotes and similar security documents. The evidence does not appear to clearly establish it was common general knowledge to apply or use the phenomenon of moiré magnification in devices or materials in particular industries including the security device field.
The opponent pressed the point by referring to the Hutley paper and the Drinkwater patent. Both documents provided a similar explanation of the creation of moiré magnification effects. The Hutley paper did not discuss applications for the moiré magnifier other than express the knowledge of its commercial use in novelty brooches and its potential feasibility in image processing, office copiers and cameras. The Drinkwater patent was one of the patents discussed in the background section of the present patent specification and describes a security device including an array of micro-images coupled with an array of substantially spherical micro-lenses. The opponent submitted the Drinkwater patent formed part of the common general knowledge on the basis that Mr Power regarded the Drinkwater patent as extremely well-known at the time and Dr Hardwick regarded the patent as known in the circles he worked in. While the Drinkwater patent may have been well known in the circles of the opponent’s expert declarants, this does not necessarily mean its contents were common general knowledge in the field (Minnesota Mining and Manufacturing Co. v Beiersdorf (Australia) Ltd., [1980] HCA 9, (1980) 144 CLR 253). The applicant’s Mr Radclyffe, at [23] of his evidence in answer, considered it unlikely that average skilled persons in the field of security devices would have had details of patents as part of their common general knowledge, other than one or two very famous patented technologies. He stated that none of those were relevant in the present case. Mr Radclyffe further stated, at [4] of his first round of evidence in response, that, from discussions with many people in the industry, patents were very rarely if ever discussed. In evidence in answer at [23], Mr Mann considered that patents would have been a source of research when looking at competing technologies. He did not consider that persons working in the field would have had a day to day knowledge of the contents of patents or used them as general reference material. Until the present matter, Mr Mann had not heard of the Drinkwater patent.
I conclude the evidence in these proceedings is insufficient to show the Drinkwater patent was common general knowledge at the relevant time. Mr Power exhibited a further patent (exhibit GFP-6) that related to moiré-based security devices. However that document was not pressed.

I conclude the evidence is insufficient to show it was common general knowledge at the relevant time to apply or use the phenomenon of moiré magnification in security devices or other similar applications.
Whether There is an Inventive Step
Common General Knowledge Alone
The opponent relied on the Drinkwater patent being common general knowledge to submit the claimed invention was obvious in the light of the common general knowledge alone. In the alternative the opponent relied on the Drinkwater patent as a subsection 7(3) document. Since I have found the Drinkwater patent was not part of the common general knowledge at the relevant time, and there being no other substantive challenge on the basis of the common general knowledge alone, I conclude the claimed invention has an inventive step in the light of the common general knowledge alone. I will thus next consider whether the Drinkwater patent qualifies as a subsection 7(3) document.
Whether the Prior Art Could be Ascertained, Understood and Regarded as Relevant
At the relevant time, subsection 7(3) restricted prior art information used to support lack of inventive step to that which the person skilled in the art could be reasonably expected to have ascertained, understood and regarded as relevant.
As mentioned earlier, Mr Mann considered that patents would have been a source of research when looking at competing technologies. Mr Radclyffe considered that skilled persons in the field would have commonly known the details of one or two very famous patented technologies. This suggests that persons skilled in the art would have considered conducting searches of patents or patented technologies, or otherwise made themselves aware of patents in appropriate circumstances. The Drinkwater patent is a particular example of one that persons skilled in the art appeared to have some regard of. The opponent’s declarants appeared to have a particularly high regard of the Drinkwater patent. The patent is also discussed in the background section of the present application.
On the available evidence in this case, I conclude the relevant person skilled in this art could be reasonably expected to have ascertained the Drinkwater patent. Moreover I have little doubt that the person skilled in this art would have understood the Drinkwater patent and regarded it as relevant.
Drinkwater Patent
In respect to claims 1 and 2 of the application, the opponent submitted the only relevant difference from the micro-images disclosed in the Drinkwater patent was that the voids were filled or coated with either evaporated metal, or a dyed or pigmented material. The opponent indicated the clear purpose for this claimed feature was to introduce a level of contrast between the voids and the solid areas and that the person skilled in the art would have understood at the relevant time that the creation of images arose by the contrast between those two components. At [70] of his evidence in support, Dr Hardwick stated that it occurred to him that if you were to create an image by producing voids in a micro-structure and that if you were to leave the voids empty, you would hardly be able to see the image as there would be little contrast. Dr Hardwick further stated it was well known that the best images would have significant contrast between the background and the voids and so it would be obvious to fill the voids with a contrasting material. Dr Hardwick also indicated that if he wanted to create a coloured or reflective image, it would be obvious to fill the voids with ink or metal. In this context the opponent submitted it would have been trivial at the relevant time to conceive of varying that contrast by introducing a colour or reflective element to the void component.
The applicant submitted the opponent’s position presupposed that Drinkwater disclosed the filling or coating of the voids in the first place. As discussed above, this is not disclosed. Moreover Dr Hardwick’s statements at [70] open with the contrast issue occurring to him. The point in time of this issue occurring to him is not divulged. Dr Hardwick’s comment may be contrasted with the requirement to establish obviousness in this case that the issue was known as part of the common general knowledge in the field at the relevant time. Several conditional statements are also apparent at [70] of Dr Hardwick’s evidence in support. For instance the realisation of the contrast issue presupposed the creation of an image by producing voids in a micro-structure. Also, the obviousness or otherwise of filling the voids with ink or metal presupposed a desire to create a coloured or reflective image. The evidence in this case is light on regarding such presuppositions to have been common general knowledge at the relevant time. The evidence before me is insufficient to establish that the person skilled in the art in this case would have been directly led as a matter of course at the relevant time from Drinkwater to fill or coat the created voids with evaporated metal material or dyed or pigmented material.
I conclude that claim 1 of the application has an inventive step over Drinkwater.
Claim 2 of the application alternatively defines the voids being filled or coated with “another material”. Dr Hardwick stated at [69] of his evidence in support that it was extremely common to apply protective coatings or to overprint security devices at the priority date, especially with regard to polymer banknotes. He suggested these techniques would either coat or fill voids in a micro-structure. The applicant submitted that a protective coating or a sealing layer was clearly different from filling or coating voids as in the claims of the application. The applicant noted the descriptive part of the specification stated that the underside of the icon layer may be optionally sealed by a sealing layer, and that this was clearly a separate step and simply the provision of a protective layer over the array of icon elements after the voids have been filled or coated with another material. On the other hand, claim 2 is unspecific as to any separate step or process that could differentiate the application of a protective layer from any other step or process, sequential or otherwise, of filling or coating the voids with a material. The descriptive part of the specification may well describe embodiments where a high refractive index coating may line icon elements, that is, follow the profiles of icon elements, and/or where icon elements are filled with a material and then subsequently overlaid with a protective coating or sealing layer. However such specificity is not defined in claim 2. The claim includes within its scope the case where a protective coating overlays the voids, filled or unfilled. The application of protective coatings has been long-established practice in many fields to mitigate the occurrence of damage to products or devices. As mentioned above, Dr Hardwick stated that it was extremely common to apply protective coatings to security devices. He particularly noted the need to prevent degradation when in use. I am prepared to accept it would have been a matter of course at the relevant time for a person skilled in the art to proceed from the disclosure of Drinkwater and apply a protective coating over the voids created in the micro-structure by the aluminium film-based embodiment.
I conclude that claim 2 of the application does not have an inventive step over Drinkwater.
The following claims, insofar as being dependent on claim 2, would appear to suffer a similar fate.
Claim 4 defines the additional feature of the micro-images being formed from solid regions in the micro-structure in combination with the voids. The applicant submitted there was no evidence of prior art use of the formation of an image from this combination. On the other hand, the remaining aluminium, following the etching process that forms the micro-images in Drinkwater, is akin to solid regions in the micro-structure. The combination of solid regions and voids in a micro-structure forming micro-images is disclosed in Drinkwater. I conclude that claim 4 does not have an inventive step over Drinkwater.
Claims 5 and 6 define one or more of the several visual effects described in the specification when viewing the synthetically magnified image, and a range of azimuthal and elevation viewing positions over which the image is visible. The defined effects may include orthoparallactic movement, the apparent visual depth of the image above or below the image plane, movement between those depths, changes in image form depending on viewpoint and 3D effects. The Drinkwater patent discloses these effects and approaches for producing them in at least columns 3 and 4 of the document. I conclude that claims 5 and 6 do not have an inventive step.
Claim 7 merely defines a range for the elevation positions. I conclude this claim also does not have an inventive step.
Claims 8, 9 and 18 define the colouring or otherwise of the synthetically magnified image or options of the visual nature of the background. The Drinkwater security device would inherently possess many of these features. I conclude these claims do not have an inventive step.
Insofar as claims 10 to 12 additionally define an optical spacer, the applicant has acknowledged the use of an optical spacer was standard practice. In respect to claim 10’s alternative definition of the micro-images being protected by a sealing layer, I have already determined above that it would have been a matter of course at the relevant time for a person skilled in the art to proceed from the disclosure of Drinkwater and apply a protective coating. I would further regard the nature of the sealing layer as a polymer (claim 13) and the various optional optical properties of the sealing layer (claim 14) as well within the practice of the person skilled in this art to have applied as a matter of course at the relevant time. I conclude that claims 10 to 14 do not have an inventive step.
Claims 15 to 17 define base geometries of the lenses and the interstitial space between lenses in the lens array. One of the alternative geometries is substantially circular. Dr Hardwick particularly noted, at [111] in evidence in support, that circular lenses were of course the most common. He also noted that, in Drinkwater, the lenses were spheres on a square base. I conclude the claimed geometries were not inventive. The claimed interstitial space between lenses would also have been inherent or obvious at the relevant time. I conclude that claims 15 to 17 do not have an inventive step.
Claim 23 defines alternatives of forming micro-images from dyes embedded in a supporting material or providing shadow images of the micro-images by illumination by a strongly directional light source. Dr Hardwick stated at [119] in evidence in support that it was common at the relevant time to find micro-images formed from dyes embedded in a support material. Similarly, it would have been perfectly natural that shadow images would have been created of relief micro-structures when illuminated by a strongly directional light source, and also that the shadow images would move as the direction of illumination moves. I conclude that claim 23 does not have an inventive step.
Claim 28 defines micro-images having grayscale or tonal patterns wherein a transparent bas-relief micro structured micro-image layer is provided which utilizes an air, gas or liquid volume. Similar to claim 23, the grayscale or tonal patterns of claim 28 would have been a natural feature of a relief micro-structure based on light source, viewpoint and tonal properties of the ink or fill material. As to the second feature of claim 28, the utilization of air would similarly have been a natural consequence of the normal environment of use of the claimed film material. I conclude that claim 28 does not have an inventive step.
Claim 29 additionally defines a sealing layer to entrap the air, gas or liquid volume. As discussed of the sealing layer in claims 10, 13 and 14, I would similarly conclude that claim 29 does not have an inventive step.
Claim 30 additionally defines a process of forming the micro-images from dyes embedded in a supporting material by dye sublimation transfer into a dye receptor coating. Dr Hardwick indicated at [128] in evidence in support that this appeared to be a typical and standard technique. I would consider likewise and therefore conclude that claim 30 does not have an inventive step.
Claims 31 to 35 define various features of a substrate associated with a film material as of any one of the earlier claims. The various features include the film material being combined with printed information, the film material covering only a portion of the substrate, the use of adhesive, and the nature of incorporating the film material into the substrate. As mentioned earlier, the Drinkwater patent discloses a security device for security documents such as banknotes. Furthermore, column 14 in respect to Figure 5 of Drinkwater describes an embodiment involving a substrate, of a security document, in which micro-images are printed on one side of the substrate while micro-lenses are cast or moulded into the other side of the substrate. The substrate in other areas may be provided with an opacifying coating which could then be printed over with security indicia. I conclude that claims 31 to 35 do not have an inventive step.
Claim 39 defines currency having a film material as of any one of several of the earlier claims. As Drinkwater is clearly addressed to banknotes as one example of application, I conclude that claim 39 does not have an inventive step.
Claim 40 defines alternatives for the currency of claim 39 where the film material may alternatively be used as a security thread in paper currency, or provide features in polymer currency or paper currency. The substrate in Drinkwater may be a plastics substrate (column 14, line 36). Consequently, at least the polymer currency variant is disclosed. I conclude that claim 40 does not have an inventive step.
In summary, I have found that claims 2, 4 to 18, 23, 28 to 35, 39 and 40 lack an inventive step over the Drinkwater patent.
FAIR BASIS
The opponent submitted the claims of the application were not fairly based on the matter described in the specification because features to achieve the desired objects of the invention were omitted from the claims. To support this contention, the opponent principally relied on the requirement for a real and reasonably clear disclosure in the body of the specification of what was claimed (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd, [2004] HCA 58; 217 CLR 274). The opponent stated the application was clearly directed to achieving certain unusual optical effects (page 1a lines 11-12) for inclusion as part of an optically variable device in a security document. Those distinct visual effects were described in greater detail from page 5 line 20 onwards and included orthoparallactic movement, and the presentation of images that appeared to rest above or below the icon plane as well as move between those two positions. By contrast, the claims were not directed towards features to produce each of these identified visual effects.
As mentioned earlier, the aspect of the present invention is on the film material, the constructional nature of the micro-structure within the film material and the filling or coating of voids in the micro-structure, rather than the optical relationships per se of the micro-lens and micro-image arrays for achieving the described visual effects. In this respect, the elaborate description of the latter in the specification is of little consequence in respect to the nature of the film material as claimed and described. I am satisfied the claims are supported by the matter described in the specification.
CONCLUSION
I have concluded that claims 2, 4 to 18, 23, 28 to 35, 39 and 40 do not have an inventive step over Drinkwater. The defects to these claims are clearly capable of remedy by amendment. I allow the applicant two (2) months from the date of this decision to propose suitable amendments to overcome the above defects.
COSTS
The parties generally submitted that costs should follow the event. The applicant further submitted that account should be taken of the significant narrowing of the case by the opponent. For instance, the opponent reduced the number of alleged prior art references relied upon to principally just one in its written submissions. On the other hand the opponent noted that the applicant had amended the patent specification after the evidence in support had been filed thus indicating a concession by the applicant as to the effectiveness of the opposition against the accepted claims.
The applicability of these submissions is not readily apparent in this case. It is not unusual for an opponent to reduce the breadth of its case during opposition proceedings. On the other hand, the amendments to the patent specification during these proceedings have not significantly varied the scope of the claims in their broadest form. Still, the opponent has been the successful party.
In the present circumstances I see insufficient reason to depart from the normal practice that costs follow the event. I award costs in accordance with Schedule 8 against the applicant, Visual Physics, LLC.
M. G. Kraefft
Delegate of the Commissioner of Patents