Innovia Security Pty Ltd v Visual Physics LLC - [2014] APO 76

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v Visual Physics LLC [2014] APO 76

Patent Application: 2010226869
Title:Micro-optic security and image presentation system

Patent Applicant:  Visual Physics LLC
Opponent:  Innovia Security Pty Ltd
Delegate:  Dr S. K. Aggarwal
Decision Date:  25 November 2014
Submission Filed:  15 September 2014, in Canberra
Catchwords:  PATENTS – opposition to the allowance of amendments under subsection 102(1) and paragraphs 102(2)(a) and 102(2)(b) of the Patents Act 1990 – amended claims in-substance disclosed – amended claims in-substance fall within the scope of the granted claims and comply with subsection 40(3) – amendment allowed - cost in accordance with Schedule 8 awarded against the opponent.

Representation: Patent applicant: Shelston IP, Sydney, NSW
Opponent:Watermark, Hawthorn, Victoria

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010226869

Title:Micro-optic security and image presentation system

Patent Applicant: Visual Physics LLC
Date of Decision: 25 November 2014
DECISION
I have found that the proposed amendments satisfy the requirements of subsection 102(1) and paragraphs 102(2)(a) and 102(2)(b) of the Patents Act 1990, and consequently the opposition fails on all grounds. Thus subject to appeal, I dismiss the opposition and allow the amendments.
I award costs against the opponent.
REASONS FOR DECISION
Background

Patent application 2010226869 (“the application”) directed to a Micro-optic security and presentation system was filed on 30 September 2010 as a divisional of 2004294182 by Visual Physics LLC (“the applicant”). The application proceeded to acceptance and was advertised accepted on 17 November 2011. A notice of opposition was filed in the name of Securency International Pty Ltd on 17 February 2012. A statement of grounds and particulars was filed on 17 May 2012 and the evidence in support was completed on 24 May 2013. The opponent advised the Commissioner of its change of name to Innovia Security Pty Ltd (“the opponent”) on 19 March 2013.
On 8 August 2013, the applicant filed a request to amend the complete specification together with a request to the Commissioner to stay the opposition proceedings. The request to stay the opposition proceedings was refused. On 22 August 2013, the applicant filed a further statement of proposed amendments. On 26 August, the applicant completed its evidence in answer. The opponent filed an intention to file evidence in reply on 26 September 2013.
On 2 October 2013, a delegate of the Commissioner directed the opponent to file their comments on the applicant’s proposed amendments by 13 October 2013. The opponent provided their comments on the proposed amendments on 14 October 2013.
On 24 February 2014, a delegate of the Commissioner granted leave to amend the complete specification of the application in accordance with the statement of proposed amendment filed on 8 August 2013 and 22 August 2013 by the applicant. The amendments were advertised on 13 March 2014 for the purpose of opposition.
A notice of opposition to the allowance of amendments was filed by the opponent on 13 May 2014 and a statement of grounds and particulars was filed on 13 June 2014. The grounds of opposition specified in the statement of grounds and particulars are that the amendments do not comply with subsection 102(1) and paragraphs 102(2)(a) and 102(2)(b) of the Patents Act 1990. However, no evidence was filed by either of the parties.
Subsequent to the correspondence with the parties, a delegate of the Commissioner directed the parties on 28 July 2014 that they will be heard on the basis of written submissions. The opponent filed their written submissions on 18 August 2014 while the applicant filed their responding written submissions on 8 September 2014. The opponent filed their written submission in reply on 15 September 2014.
The requests to amend the patent specification are the subject of this decision.
The Particulars
The statement of grounds and particulars opposes the amendments under subsection 102(1) and paragraphs 102(2)(a) and 102(2)(b) of the Patents Act. Under paragraph 102(2)(b), it is asserted that the proposed amendments would not comply with subsection 40(3).
The Specification
The present invention relates to a synthetic magnification micro-optic system wherein the optical effects provided by the system can be used for authentication of currency and documents. The optical effects can also be used for visual enhancement of various products.
The Nature of Amendments
The specification before amendment contained 43 claims (“the accepted claims”) with claim 1 being the only independent claim.
The statement of proposed amendment filed on 8 August 2013 amends claim 1 and adds a new independent claim 2. The remaining claims have been consequentially renumbered and their respective appendancies revised. The proposed amendment also replaces page 3 and 3A of the accepted specification with new pages 3 and 3A.
The statement of proposed amendment filed on 22 August 2013 amends new independent claim 2 and replaces new page 3 with another page 3.
The particulars relate to claims 1 and 2 after the amendments (“the amended claims”). These claims 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~~, or another material~~.
2. 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.
[Deleted text is struck out, added text is underlined]
Evidence
No evidence was filed by the parties. I will provide the details of written submissions filed by the parties as necessary in the later paragraphs.
Law Relating to Allowability of Amendments
The request for examination in relation to the patent application was filed before 15 April 2013. As a consequence, substantive amendments of the Patents Act brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 do not apply to the present application. This includes an amendment to subsection 102(1) which precludes the inclusion of subject matter extending beyond the original disclosure.
Instead, the relevant sections of the Patents Act in the current case are sections 102(1) and (2) as they existed prior to the introduction of the Raising the Bar Act. These are set out below:
(1)An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in-substance disclosed in the specification as filed.
(2)An amendment of a complete specification is not allowable after the relevant time if, as a result of the amendment:
(a) a claim of the specification would not in-substance fall within the scope of the claims of the specification before amendment; or
(b) the specification would not comply with subsection 40(2) or (3).
(2A) For the purpose of subsection (2), relevant time means:
(a) in relation to an amendment proposed to a complete specification relating to a standard patent - after the specification has been accepted.
(3)This section does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification.
The applicable parts of section 40 of the Patents Act 1990 as they apply to the present case are set out below:
(2)A complete specification must:
(a) describe the invention fully, including the best method known to the applicant of performing the invention; and
(b) where it relates to an application for a standard patent – end with a claim or claims defining the invention.
(3)The claim or claims must be clear and succinct and fairy based on the matter described in the specification.
It is plain from the wording of section 102 that the test provided by this section of the Patents Act is confined to matters which arise as a result of amendment (see Kornelis’ Kunsthars Producten Industrie BV v WR Grace & Co-Conn (1994) AIPC 91-056 at 38,204). Consequently any pre-existing deficiencies in the specification which are unaffected by amendment are irrelevant to the present action.
I have noticed that the opponent have referred to sections 102(1) and section 40(3) of the Patents Act in their amended form following the introduction of the Raising the Bar Act. However, as noted earlier, these amendments do not apply to the present application. Therefore, I will consider the allowability of the applicant’s proposed amendments on the basis of the relevant sections of the Patents Act as they existed before the introduction of the Raising the Bar Act.
Paragraph 102(1): In-substance Disclosed in the Specification as Filed
When determining whether a matter is in-substance disclosed in the specification as filed, the courts have basically applied the test for fair basis. Thus for an amended claim to claim matter in-substance disclosed in the specification as filed, the amended claim must be fairly based on the specification as filed (see United-Carr Incorporated's Application [1971] RPC 23, RGC Mineral Sands Pty Ltd v Wimmera Industrial Minerals Pty Ltd (1998) 42 IPR 353).
Under Section 40(3), fair basis is “concerned purely with the relationship between the body and claims of the one specification.” (Lockwood Security v Doric Products [2004] HCA 58; 217 CLR 274; 212 ALR 1; 79 ALJR 260). As was noted in Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; 207 CLR 1; 177 ALR 460; 75 ALJR 518 “a comparison between the matter described in the specification and the claim which defines the scope of the monopoly”, following the reasoning of Barwick CJ in Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23; (1994) 180 CLR 236 when he said:
“The question whether the claim is fairly based is not to be resolved ... by considering whether a monopoly in the product would be an undue reward for the disclosure. Rather, the question is a narrow one, namely whether the claim to the product being new, useful, and inventive, that is to say, the claim as expressed, travels beyond the matter disclosed in the specification.”
As was noted in Lockwood (supra):
“the statutory test as expounded by Barwick CJ does not call for any evaluation of whether the breadth of the claims exceeds "the technical contribution to the art embodied in the invention", merely for an evaluation of whether the claims travel beyond the matter described in the specification”
I also note that it was said in Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd [1988] FCA 162 at [54]:
“The circumstance that something is a requirement for the best method of performing an invention does not make it necessarily a requirement for all claims; likewise, the circumstance that material is part of the description of the invention does not mean that it must be included as an integer of each claim. Rather, the question is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification”
This was cited with approval in Lockwood (supra).
The first particular states that the as result of the amendments, the scope of amended claim 1 extends to matter not disclosed in the complete specification as filed. The particular is related to the interpretation of the term “micro-images” defined in amended claims 1 and 2.
The opponent submitted that the introduction of amended claim 2 enforces a different interpretation on the term “micro-images” of amended claim 1. They put the view that the micro-images of accepted claim 1 would be understood by a skilled addressee to be arranged in a periodic array because the specification does not contemplate the micro-images to be anything other than a periodic array. The amended claim 2 defines the “micro-images” to be “formed of a periodic planar array of a plurality of image icons” which requires the amended claim 1 to encompass “micro-images” that are not a periodic planar array when the claims are construed against redundancy. The opponent further submitted that while the scope of claim 1 may not have been beyond the invention described in the absence of the amended claim 2, the explicit characterisation of micro-images in the amended claim 2 forces a broader interpretation on amended claim 1 and therefore, the complete specification now claims matter that extends beyond that disclosed at the date of filing.
Disagreeing with the opponent, the applicant submitted that the specification as filed provides clear disclosure of embodiments in which micro-images are formed in non-periodic arrays and referred to parts of the specification. They added that on this basis both the amended claims 1 and 2 are fairly based on matter disclosed in the specification as originally filed. Referring to the embodiment shown in Figs. 5a-c of the specification, the applicant submitted that Fig. 5b shows an icon element array 84 with a progressively changing array axis orientation angle 86 which provides an example of a non-periodic array of micro-images.
In response, the opponent submitted that columns of icon elements in Fig. 5b become progressively angled from left to right because the period of each icon element row incrementally increases from bottom to top and that the period of the top row of icon elements is the greatest. The opponent stated that while the respective periods of each icon element row are different, the icon elements in each row have a regular period. The opponent further submitted that a non-periodic array of micro images viewed through a periodic lens array will not generate the “Unison^TM”optical effects as described in the specification and accordingly the embodiment shown in Figs. 5a-c does not disclose an arrangement of non-periodic micro-images.
None of the parties made any submissions on what constitutes a “periodic array”. The online Macquarie Dictionary defines the term periodic as meaning “2. occurring or appearing at regular interval”. In light of this, I consider that a periodic array in the present context would be one wherein the icon elements recur at a regular interval in the array.
The opponent’s submissions regarding the array of icon elements shown in Fig. 5b are confusing. I cannot understand how the icon elements in each row can have a regular period when the period of each icon element row is incrementally increasing from bottom to top of the array. Furthermore, the opponent’s argument that a non-periodic array of images viewed through a periodic lens array will not generate a certain optical effect relates to inutility which is irrelevant to the present consideration.
Looking at the columns of icon elements, I do not consider that Fig. 5b represents an array having icon elements recurring at regular interval. Therefore, there is no basis for the opponent’s argument that the specification as filed does not contemplate the “micro-images” to be anything other than a periodic array. In my view a person skilled in the art, while reading the specification as a whole, would not exclude non-periodic arrays from the scope of the term “micro-images”.
I conclude that the introduction of amended claim 2 does not broaden the scope of the amended claim 1 and the specification does not claim matter not in-substance disclosed in the specification as filed.
Consequently, the amended claims meet the requirements of sub-section 102(1) and the opposition fails on this ground.
Paragraph 102(2)(a): In-substance Fall Within the Scope of the Claims Before Amendment
A useful test for considering the allowability of an amendment under paragraph 102(2)(a) is whether a proposed new claim would extend the patent monopoly in the sense that it would make something an infringement which is not an infringement already. This view was expressed in AMP Incorporated v Commissioner of Patents (1974) AOJP 3224 at page 3227 where the High Court stated:
“The amending claim must in-substance fall within the scope of the claims before amendment. The reference to substance imports the kind of test which is appropriate to a consideration of the question whether on not a particular act or a particular article is an infringement of the patent.”
I note that the allowability of an amendment under paragraph 102(2)(a) is determined by reference to the scope of the claims as a whole before the amendment. It is not that a proposed new claim must in-substance fall within the scope of every claim before amendment, rather it only need to in-substance fall within the scope of broadest claim(s) before amendment. This finds support in Robertshaw Controls Co v GSA Industries Ltd (1991) AIPC 90-784 at page 37,460 where it was pointed out that:
"There is also the fact that the Act does not require amended claim 3 to fall within the scope of the omnibus claim before amendment, but only within the scope of the claims ... while it may be that new claim 3 does not fall within the scope of the previous omnibus claim (a matter which I do not have to decide), it certainly falls within the scope of claim 1 before amendment, and consequently does not contravene the provisions of s. 78(2)(a) [the predecessor of section 102(2)(a )]."
The particular under this ground of opposition states that in light of the scope of amended claim 1 resulting from the construction enforced by the addition of amended claim 2, the amended claim 1 no longer falls within the scope of the claims of the specification before amendment.
I have already concluded that the addition of amended claim 2 does not broaden the scope of claim 1. In view of this there is no basis for the opponent’s argument in this matter.
Consequently, the opposition fails on this ground.
Paragraph 102(2)(b): Comply With Subsection 40(3)
Claims must be clear and succcinct and fairly based on the matter described in the specification
In relation to the above ground of opposition, the statement of grounds and particulars raises several aspects of non-clarity and one of non-succinctness in respect of the amended claims 1 and 2.
In their submissions, the opponent have raised many issues in regard to the clarity of independent and several dependent claims. A number of the issues relate to lack of antecedents and minor clarity problems. It is noteworthy that most of these issues do not arise as a result of the amendments as the applicant is not proposing to amend the accepted claim 1 and the dependent claims in any significant manner.
The only issue of any significance relates to amended claim 2 wherein the opponent have submitted that the claim defines the micro-images to be formed of a periodic planar array (line 1-2) while also to be formed from filled or coated voids in the microstructure (lines 6-7). In response, the applicant submitted that when the phrases in the claim are read together in proper context, it would be readily apparent to a skilled addressee that the term planar surface of the microstructure defines a general reference level, while the voids are defined with respect to that reference and that there is no contradiction in the terminology. I am inclined to agree with the applicant that the claim is clear when construed as a whole.

Overall, I find that there is no merit in the opponent's arguments regarding clarity. All are matters which are easily understood when the specification is read as a whole, as should be expected. In my opinion, a person skilled in the art would have no problem in construing the amended claims.
In regard to non-succinctness, the opponent submitted that the amended claim 2 simply repeats the vast majority of amended claim 1 and does not provide any further restriction on the phrase “micro-images” which is not already present in the amended claim 1. They further stated that the claims are unnecessarily lengthy due to their repetitious nature and either the amended claim 1 or the amended claim 2 could be succinctly rewritten as a dependent claim. I have already found that the amended claims 1 and 2 define differing set of features and hence there is no basis for the opponent’s argument in the current matter.
The particular raised under subsection 102(1) has also been raised under paragraph 102(2)(b) to assert that the amended claim 1 is not fairly based on the specification.
I note that the test for fair basis involves a comparison of the amended claims with the amended description. The amendments to the specification relate to a minor amendment to a consistory statement and an insertion of a new consistory statement corresponding to the amended claim 2. Considering that there are no significant amendments to the specification and I have already found that the amended claims meet the requirement of subsection 102(1), there cannot be any basis for the opponent’s argument in the present matter.
Consequently, the opposition fails on this ground.
Conclusion
I have found that the proposed amendments satisfy the requirements of subsection 102(1) and paragraphs 102(2)(a) and 102(2)(b) of the Patent Act 1990 and, as a consequence, the opposition fails on all grounds relied on. Thus, subject to appeal, I dismiss the opposition and allow the amendments.
Costs
Ordinarily in proceedings such as these, costs follow the event. There appears to be no special circumstances applying in relation to this matter which warrants varying that approach. Therefore, I award costs in accordance with Schedule 8 of the Patents Regulations against the opponent.

Dr S. K. Aggarwal
Delegate of the Commissioner of Patents