Kabushiki Kaisha Universal v Aristocrat Leisure Industries Pty Limited

[1997] APO 25

official notice

decision of a delegate of the commissioner of patents

Application  :          No. 653873 in the name of KABUSHIKI KAISHA UNIVERSAL

Title:          Coin Selector for Coin-Operated Machine and Error Detecting Method Against Deceit in Coin Insertion

Action:          Opposition by ARISTOCRAT LEISURE INDUSTRIES PTY LIMITED

Decision:          Issued            .

Abstract

The opposition was upheld on the ground that the invention does not involve an inventive step when the common general knowledge was considered with a prior art document that would have been ascertained, understood and regarded as relevant.

The ground of non-compliance with section 40 was not upheld.

Documentary evidence establishing common general knowledge admissible, even though not particularised.

Costs awarded against the applicant.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 653873 by KABUSHIKI KAISHA UNIVERSAL  and opposition thereto by ARISTOCRAT LEISURE INDUSTRIES PTY LIMITED

background

Patent application 653873 by Kabushiki Kaisha Universal was filed on 15 December 1992 and allocated the application number 30162/92.  It claims Convention priority from Japanese basic application 3-333444 filed 17 December 1991.  Application 30162/92 was advertised accepted on 13 October 1994 and given the six-figure number 653873.

A notice of opposition to application 653873 was filed on 13 January 1995 by Aristocrat Leisure Industries Pty Limited.  All evidentiary stages were completed within the time periods provided by the Patent Regulations, with the exception of the evidence in reply, for which an extension of one month was required.  The evidence in reply was served on 12 February 1996.

The statement of grounds and particulars lists three grounds: non-compliance with section 40 and  paragraphs 18(1)(b)(i) (novelty) and 18(1)(b)(ii) (inventive step) of the Patents Act.

The matter was heard on 3 March 1997 in Sydney.  The applicant was represented by Mr Jack Redfern, patent attorney of the firm Shelston Waters, Sydney.  The opponent was represented by Mr Chris Owens, assisted by Mr Brett Lunn, patent attorneys of the firm F B Rice & Co, Sydney.

THE SPECIFICATION

The subject matter of the opposed application concerns machines of the coin or token operated (“coin-freed”) type.  Such machines include vending machines and money-changing machines, but it is clear that the present invention mainly has in mind the coin operated machines of the poker machine variety (also referred to as slot machines or fruit machines).  The overall operation of such machines is so well known that it is unnecessary to detail it here.

When coins are placed into the coin insertion passageway of a poker machine, it is firstly necessary to verify that each coin is genuine.  According to the specification, it is usual in the prior art to use a magnetic sensor means located within the passageway to achieve that end.  If the sensor determines that the coin is not genuine the coin is rejected.  This usually involves diverting the coin to a rejection hopper from which the person playing the poker machine is able to retrieve their coin.  If the sensor determines that a coin is genuine then the coin will advance along the passageway.  The passageway has a further means to subsequently detect that coin at a point along the passageway in order to free the poker machine mechanism.  This detection function is accomplished by means of, for example, a photosensor.  The detection of a coin must take place within a predetermined period of time from its verification, or else the machine goes into an error mode.

A drawback of the prior art is that it is possible to insert a “tool” into the coin insertion passageway to fraudulently manipulate the machine.  Such a tool could be, we are told by the specification, a piece of dog-legged shaped celluloid having a coin attached to it at one end and three slots in the other.  When the tool is inserted slotted-end first into the machine, the machine is deceived into assuming that three coins instead of one have passed through the coin insertion passageway.

The solution provided by the invention is to count the verifications signalled by the first sensor and to count the detections signalled by the second sensor.  Upon the counts of the detections running ahead of or behind the verifications by a predetermined amount (two and five, respectively, are preferred), an error signal would be generated.

The specification concludes with thirty-one claims.  Aside from a couple of omnibus claims, there are just two independent claims, claims 1 and 17.  Claim 17 is basically the same as claim 1, merely substituting certain of the structural features of claim 1 with corresponding method steps.

Claim 1 reads as follows:

“A coin selector for selecting acceptable and unacceptable coins among coins as inserted into a coin passageway, comprising:
an accepting chute arranged downstream from said coin passageway for passing said acceptable coin;
a returning chute arranged downstream from said coin passageway for returning said unacceptable coin;
a first sensor arranged in said coin passageway for inspecting said coins as passed through said coin passageway in order to generate an inspecting signal;
judging means for evaluating said inspecting signal in order to generate an acceptant signal as for said acceptable coin and an unacceptant signal as for said unacceptable coin;
gate means for providing said accepting chute with said inspected coins as passed through said coin passageway when said acceptant signal is generated, and for providing said returning chute with said inspected coins when said unacceptant signal is generated;
a second sensor for detecting said acceptable coin as passed through said accepting chute in order to generate a detecting signal;
a first counter for counting said acceptant signal;
a second counter for counting said detecting signal; and
control means for processing counts of said first and second counters, for evaluating a processed result of said counts, and for generating an error signal in accordance with said evaluation of said processed result.”

EVIDENCE

The evidence in support consists of the following statutory declarations:

·a declaration by Surinder Moham Goklaney, an employee of the opponent; this declaration outlines the state of the gaming industry and gaming machine industry in Australia; it comprises several exhibits which were in the public domain before the earliest priority date of the claims in suit and which include a Service and Parts Manual for an Aristocrat gaming machine “Microstar Mark 2.5 Video” (hereafter referred to as the Mark 2.5), a copy of Queensland Government tender documents for the supply of machines to the government and a copy of Aristocrat’s response to the tender

·a declaration by Michael Ian Jones, an employee of the opponent; this declaration outlines the state of the gaming machine and gaming machine industry in Australia, with particular focus upon cheating detection measures; included in the exhibits are the same Mark 2.5 manual and Queensland Government tender documents as in Mr Goklaney’s declaration, two patent specifications - Australian patent 471333 and United States patent 4429407 - and a technical description of a device known as Coin Comparator Model CC-16.

·a declaration by Mr Owens, introducing into evidence several patent documents, including the two in Mr Jones’ evidence, and evidence as to their publication dates.

The evidence in answer consists of a single declaration which is by Toshiaki Shimizu, who is an employee of the applicant.  This declaration discusses the various items of prior art cited in the evidence in support.

The evidence in reply is a further declaration by Mr Jones.  It responds to aspects of Mr Shimizu’s declaration relating to the Mark 2.5 manual and the Queensland Government tender documents.

I will discuss the evidence in more detail, where appropriate, later in my decision.

THE HEARING

At the hearing the opponent indicated that it would only be pursuing the grounds of lack of inventive step and non-compliance with Section 40 of the Patents Act.  There appeared to be general agreement between the parties as to the state of the law regarding these two issues.  In particular, both parties seemed to accept the broad thrust of the “problem-solution” approach to determining whether or not an inventive step exists, as set down in the Australian Patent Office Manual of Practice and Procedure, Volume 2, Part 4.  The issues to be determined in this opposition then are whether the complete specification complies with Section 40 and whether as a question of fact the claimed invention has an inventive step.

At the hearing the applicant questioned whether certain documentary evidence of the opponent which had not been particularised could be admitted.  The evidence in question was to establish the state of the common general knowledge.  I ruled at the hearing that such evidence was admissible.

I will give further details of the submissions made by Mr Redfern and Mr Owens in relation to these grounds, where pertinent, later in my decision.

DECISION

Evidentiary issue

At the hearing Mr Redfern sought to have certain of the opponent’s evidence ruled inadmissible.  The evidence in question was to establish the state of the common general knowledge in the art, and consisted of several documents that had not been particularised.  Because of that fact Mr Redfern argued that on the basis of the Patent Office decision in Mobay Corp v Dow Chemical Co 24 IPR 379 that evidence should not be available to the opponent. So far as I can tell, Mobay v Dow does not really give any guidance on this point.  The issue arose in Cooper Industries Inc v Metal Manufactures, (1994) AIPC 91-051, and in that decision I found that such evidence should be admissible. I see no reason to vary that approach in the case at hand, and I ruled accordingly at the hearing.

Section 40

The opponent has drawn attention to the fact that two features shown in the drawings are apparently mis-labelled.  I am not entirely convinced that any mis-labelling has actually occurred, but even if it has it would be obvious to the addressee of the specification that this is so.

The opponent considers the claimed invention does not achieve the object of the invention, which is stated in the description to be to protect the machine from a deceit or imposture without further mechanical construction.  In my view, the addressee of the specification would understand “protect” to be not being used here in any absolute sense, but rather in the more usual sense of simply providing more protection than would otherwise be the case, without necessarily providing complete protection.

The opponent has submitted that there is no fair basis for the features in claim 1 of “a first sensor” and “a second sensor”.  However, the description clearly discloses a magnetic sensor constituting a “first sensor” and a photo sensor constituting a “second sensor”.  The fact that the description has occasion to refer to the first and second sensors as upstream and down stream sensors, respectively, is inconsequential.

Claim 8 of the specification reads:

“A coin selector as defined in claim 7, wherein said reference value is a negative value near to zero”

The “reference value” referred to is the predetermined value by which detections have to be greater than verifications before an error signal is generated.  The opponent considers that the expression “near to zero” is indefinite in scope.  I disagree.  The specification provides a quite detailed explanation of the considerations involved in setting an appropriate reference value, in light of which I consider that the addressee of the specification would have no difficulty in gauging the scope of the claim.

Claim 12 commences:

“A coin selector as defined in claim 10, wherein said control means further monitors time points of generation of said inspecting and detecting signals..........”

The “control means” is that which is defined in claim 1 (supra).  The opponent contends that “time points” is unclear and has no antecedent.  I fail to see this.  A signal has to have been “generated”, and its generation must have begun at a particular point in time.  The notion of a signal provides its own antecedent for the “time points of generation” of that signal.

In light of the foregoing I find that the complete specification in suit fully complies with the requirements of Section 40 of the Patents Act.

Inventive step

The case put forward by the opponent in support of its contention that the claimed invention lacks an inventive step has two legs.  The first leg is that all of what is defined by claim 1 is common general knowledge and there is no inventive step in light of that common general knowledge.  The second leg is that the claimed invention lacks an inventive step in light of United States Patent 4429407 combined with certain of the common general knowledge relied upon for the first leg.

A determination in relation to lack of inventive step requires as a precursor to that a determination as to the state of common general knowledge in Australia before the earliest priority date of the claims under consideration.  The essential nature of common general knowledge has been stated by Aickin J in the High Court decision 3M v Beiersdorf, 144 CLR 253 at 292 as follows:

“The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade.  It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge.”

A determination as to the state of common general knowledge will normally require evidence from suitably qualified experts in the field of what was known by the person skilled in the relevant art.  The applicant in this case has questioned the capability of the opponent’s declarants to provide evidence of any weight on the common general knowledge in this art because they are too skilled to be regarded as being “a non-inventive skilled worker in the field” (per Aickin J in 3M v Beiersdorf, supra).

Generally speaking, there is no reason why someone with a detailed knowledge of a “relevant trade” should not be able to say with authority what the hypothetical person skilled in the art in that trade would have as their common general knowledge, even if that someone does not themself qualify as a person skilled in the art.  However, such evidence may not normally warrant being given as much weight as would be the case with evidence from a person who is identifiable as being a person skilled in the art -  see Braas & Co GmbH v Humes Limited, 26 IPR 273.

In any case, I am not convinced that in the matter at hand the opponent’s declarants are greatly removed from the person skilled in the art.  Mr Jones in particular is involved in “the design, development, testing and maintenance of software for coin operated gaming machines”.  This seems to be consistent with Aickin J’s notion of the common general knowledge being that of “those in the trade”.  The fact that Mr Goklaney adverts to Aristocrat’s work force as being a “dynamic team of experienced and qualified engineers, reflecting the company’s on-going commitment to unlimited refinement and aggressive innovation” (among a number of similar examples), even putting aside the possibility of hyperbole, does not disqualify Mr Jones from being a person skilled in the art.  Moreover, I find it hardly surprising that employees of the opponent, which is the dominant gaming machine manufacturer in Australia, may be the repository of a large portion of “the background knowledge and experience which is available to all in the trade” or that manufacturing is localised in New South Wales, given the legal-historical background pertaining to gaming machines in Australia.  Certainly, I fail to see how this detracts from the evidence given by Mr Jones and Mr Goklaney.  However, as a form of quid pro quo for Aristocrat Leisure Industry Pty Limited’s dominant manufacturing position, I note that the evidence of Mr Jones and Mr Goklaney is devalued somewhat by their non-independent status as employees of the opponent.  Nevertheless, taking all these factors into account I am inclined to accord the evidence from the opponent’s declarants considerable weight, especially where some corroboration is provided.

The applicant on the other hand has not provided any evidence contraverting the evidence by the opponent on the common general knowledge (its declarant is located overseas).  While this does not mean I must accept the evidence of the opponent on its face, and it remains the case that the onus is on the opponent to make its case, the absence of any evidence from the applicant in relation to this issue weighs against the applicant.

Moving now to actually considering the common general knowledge, the opponent contends that all of what is defined in claim 1 apart from the first and second counter and the particular control means defined by the claim has been conceded by the applicant to be common general knowledge.  This is because these features are said by the present specification to be “conventional”.  The applicant denies this inference can be drawn.  I find this difficult to understand, as to my mind the word “conventional” seems to have a connotation of knowledge having a dissemination even beyond common general knowledge.  In any event the opponent’s evidence on this point does not rely on the applicant’s apparent admission in its specification alone, but there is also the declaratory evidence by Mr Jones and the Mark 2.5 manual, which each support the contention that apart from the first and second counter and the particular control means the remainder of claim 1 is common general knowledge.  In my view the weight of evidence on this point is with the opponent.

Turning now to the first leg of the opponent’s case on lack of inventive step, it seeks to establish that the provision of a first and second counter associated with the first and second sensor, respectively, and control means for evaluating the counts and generating an error signal in accordance with the evaluation was obvious.  The line of reasoning advanced by the opponent is a rather tenuous one.  The following quotes are from the written submissions provided by the opponent at the hearing:

“According to [Mr Jones], given the requirements of [the Queensland Government tender documents] (which included yo-yo detection), it was clear that a coin entry mechanism was required which relied on two separate sensors for testing a coin in order to test direction of travel.  Given this requirement it was also quite clear that there were only two ways of easily correlating the signals from the two sensors, that is, either by measuring the time elapsed between the signals from the respective sensors or by counting the number of coins at both the first and second sensor to check that the counts are the same.  If a decision is made to count coins, account has to be taken of the transit time of each coin between the two sensors.  This is because many gaming machine users are capable of rapidly inserting coins into the machine (eg 5 coins/sec) and it is possible, therefore, that a number of valid coin pulses could be registered by the second sensor.”

and

“Claim 1 in essence defines a technique for correlating signals from two sensors.  There are two obvious methods of correlating signals from two sensors.  One of these techniques is to monitor the time difference between the occurrence of the signals as in the system developed by Aristocrat and used on machines sold to the Queensland Machine Gaming Division in 1991.  The second way is to count the coins as they pass each monitoring point and to correlate the counts, as is proposed in the claims of the opposed application.”

and

“In conclusion on this point, we submit that at the priority date it would have been obvious to try the claimed method and apparatus for correlating the signals as it represents one of only two main ways to correlate the respective signals.”

It should be explained at this point that “yoyoing” is a technique for cheating poker machines by attaching a coin (or an imitation thereof) to a length of string or the like and repeatedly drawing it to and fro past the coin detection mechanism of the poker machine.  An effective countermeasure is to provide a device for detecting the direction of movement of a coin in the coin passageway.  The Mark 2.5 machine has such a device, referred to in the manual as a Coin-in Detector Module, and it is described as an infra-red module that detects the passage of a coin through the coin passageway, with any movement of the coin in the opposite direction through the module causing the machine to enter a yoyo alarm state.

I will now set out the relevant parts of the Queensland Government tender document, which are pivotal to the opponent’s case.  Quoting from page 73:

“52               COIN MECHANISMS

52.1The coin validator must be electronically based and be so designed to ensure that:-

(a)it only accepts coins of Australian legal tender by checking validity of coins inserted; and

(b)each coin inserted and accepted by the machine is registered on the appropriate meter.

52.2           The validator shall include anti  ‘Yo Yo’ device.

52.3           For the coin validator give the following details:-

(a)     permissible Australian coin denominations;
  (b)     method of adjustment to accept different coin denominations;
  (c)     method/definition of detecting “yoyo” operation;
  (d)     method/definition of detecting coin stuck events; and

(e)coin parameters checked and how (eg coin size, shape, composition, weight, etc).”

Mr Jones for the opponent asserted that it is clear from this part of the tender document that there was a requirement for two sensors in order to provide the anti-yoyoing function.  I am not entirely convinced of that even though in general that would seem an obvious way of determining direction of movement.  I note that the Coin-In Detector Module in the Mark 2.5 is not described as having two sensors, although it could well have.  Then Mr Jones states that the easiest way to correlate the signals from the two sensors would be to count the coins at each sensor, necessitating two counters.  I think that that conclusion really requires some sort of substantiation.  Admittedly the tender documents seem to require a counter - to meter the number of accepted coins - but there is no specification of what its functional relationship is to be to the other components of the machine.  Moreover, its most likely purpose is, as Mr Redfern suggested, to provide a player with feedback on available credits; or, alternatively, its purpose could be to provide a record of the total number of coins passing through the machine for maintenance or taxation purposes.  As well as these considerations, the present claims specify that one of the sensors in question is the actual coin inspection (that is, validation) device of the poker machine, whereas the tender documents would clearly permit the anti-yoyoing arrangement of the Mark 2.5, in which the anti-yoyoing device appears to be a self contained unit.

Mr Jones has postulated a series of steps leading from the prior art to the invention, and regards them as obvious.  However on the basis of the evidence before me there does not seem to be any satisfactory foundation for that conclusion.  To my mind, Mr Jones’ ex post facto dissection of the invention has led him to a result which, while convenient for the opponent, is unsupported by the facts.  Fletcher-Moulton LJ in British Westinghouse Electric and Manufacturing Co. Ltd. v Braulik (1910) 27 RPC 209 at 230 said:

“I confess that I view with suspicion arguments to the effect that a new combination, bringing with it new and important consequences in the shape of practical machines, is not an invention, because, when it has once been established, it is easy to show how it might be arrived at by starting from something known, and taking a series of apparently easy steps.  This ex post facto analysis of invention is unfair to the inventors, and in my opinion it is not countenanced by English Patent Law.”

This principle of law has been confirmed ad nauseam by the courts over the years, as for example in 3M v Beiersdorf (supra).

My finding is therefore that the claimed invention is not lacking in an inventive step in light of the proven common general knowledge alone.

The second leg of the opponent’s inventive step case relies on considering United States Patent 4429407 together with the common general knowledge constituted by the “conventional“ matter defined in the claims (that is, all of claim 1 except for the first and second counter associated with the first and second sensor, respectively, and control means for evaluating the counts and generating an error signal in accordance with the evaluation).  I have already accepted that that common general knowledge existed.

At the hearing Mr Redfern disputed whether, as required by subsection 7(3) of the Patents Act, the US patent would have been reasonably expected to have been ascertained, understood and regarded as relevant to work in the relevant art in the patent area by the person skilled in the art.  However, I am prepared to accept that US 4429407 meets these criteria.  The only substantial question mark which exists is in relation to the first point, that is, whether the citation would have been ascertained.  The possibility exists that the citation, which is of a coin counting device per se, is only ascertainable if one is already in possession of the solution to the problem the present invention addresses (that solution of course involves the use of counters).  However, and not without some hesitation, I have concluded that if, as I consider appropriate, the “problem” is cast sufficiently broadly to be “to detect a malfunction in a coin sensing mechanism” then I am satisfied that the citation would have been found.  Clearly the citation would be understood and regarded as relevant to the problem as so couched.

US 4429407 is, as I have said, a coin counting device.  It utilises a single light source and two photosensors spaced apart in the direction of travel of coins in the coin passageway of the coin counter.  The device employs two photosensors in order to ascertain the direction of travel of coins in the coin passageway, in much the same manner, I surmise, as the coin-in detector in the Mark 2.5.  Each time a coin passes the photosensors a count of + or - 1, depending on the direction of travel, is sent to a counter.  If one or other of the photosensors malfunctions, the mechanism will not be able to differentiate the direction of travel, and a false count will occur.  In order to remedy this, US 4429407 proposes some “abnormality detection” circuitry connected to the photosensors.  This circuitry in preferred form includes one counter, and in essence operates to emit an alarm signal when two (this may be varied) pulses are received from the one sensor without there being one from the other.

The opponent’s argument then is that if the teaching of this abnormality detection arrangement is translated to the environment of the common general knowledge they are relying on, one arrives at the present invention.  The applicant’s counter-argument is that the citation discloses the use of just one counter, whereas the present invention utilises two.  However, I don’t think that this statement is correct so far as the citation is concerned.  The final paragraph of the description part of US 4429407 reads as follows:

“It will be clearly understood by those skilled in that are(sic) from the teaching disclosed herein that the coin counting device is prevented from making a mis-counting operation by the provision of the abnormality detection section incorporated in the electrical counting circuit arrangement...............It should be also apparent to those skilled in the art that the construction and arrangement of the embodiment can be changed or modified without departing from the spirit and scope of the present invention.  For example, although an abnormality is sensed in response to the first and second detection signal SA and SB in the illustrated embodiment, two counters each for integrating or adding the first and second signals individually may be provided and an abnormal operation be detected by comparing the added numbers of these two counters.”

To my mind, that places the teaching of US 4429407 squarely on the present invention, when that teaching is applied to the closely related technical field of coin evaluating devices.  That is, the common general knowledge considered together with US 4429407 would at once suggest the present invention to the person skilled in the art as being a solution to the problem in question.  A coin evaluating arrangement will, of necessity, include as a sensor a coin evaluating means whose functional equivalence, for the purposes of the present problem, to one of the sensors of US 4429407 would be obvious to the person skilled in the art.

Accordingly, I find that the invention defined by claim 1 lacks an inventive step.

Of the remaining claims, claim 17 is really claim 1 defined as a method, and lacks an inventive step for the same reasons as claim 1.  The other claims do not, in my view, define any matter which could be considered to involve an inventive step in light of my findings in relation to claims 1 and 17.  The additional matter defined by these claims appears to be no more than obvious embellishments of the invention defined in claims 1 and 17, by the addition of common general knowledge or mere workshop improvements.

Therefore I also find that claims 2 to 31 are lacking an inventive step.

CONCLUSION

I have found that the ground of opposition of non-compliance with Section 40 of the Patents Act has not been established, but I have found that the opponent has been successful in its ground of opposition that the invention defined by the claims does not involve an inventive step.  Moreover, I am unable to find any inventive matter disclosed in the specification.

I refuse the application.

COSTS

In accordance with the general principle that costs follow the event, I award costs against Kabushiki Kaisha Universal.

E. J. Knock
Delegate of the Commissioner of Patents

Patent attorneys for the applicant   :  Shelston Waters, Sydney

Patent attorneys for the opponent  :  F B Rice & Co, Sydney