The Banktech Group Pty Ltd - [2023] APO 22

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
The Banktech Group Pty Ltd [2023] APO 22
Innovation Patent: 2021107597

Title:CASH TRANSACTION SYSTEM AND METHOD

Patentee:The Banktech Group Pty Ltd

Delegate:Felix White

Decision Date: 27 April 2023

Hearing Date: 18 November 2022, by video conference

Catchwords: PATENTS – innovation patent – examiner’s objection under s101B – manner of manufacture – method or system for conducting cash transactions – invention in substance directed to a regulatory innovation – alleged invention not a manner of manufacture – no patentable subject matter in specification - innovation patent revoked

Representation: Patent attorney for the Patentee: Daniel McKinley of Gestalt Law

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE

Innovation Patent: 2021107597

Title:CASH TRANSACTION SYSTEM AND METHOD

Patentee:The Banktech Group Pty Ltd
Date of Decision: 27 April 2023
DECISION

The claims of the Innovation Patent, as proposed to be amended, do not define a manner of manufacture. As I see no subject matter in the specification that would change this finding, I revoke the Innovation Patent.
REASONS FOR DECISION

This matter relates to innovation patent 2021107597 (the Innovation Patent) in the name of The Banktech Group Pty Ltd (the Patentee). The application for the Innovation Patent was filed on 29 October 2021 as a divisional application to 2021200770 having a priority date of 5 February 2021. The Innovation Patent was granted on 15 December 2021.
The Patentee requested examination under s101B on 24 December 2021. A first examination report issued on 28 February 2022, objecting on the grounds of lack of manner of manufacture, novelty and innovative step. A response without amendment was filed on 9 June 2022, which was followed by a second report maintaining all objections and issued on 8 July 2022. Following a statement of proposed amendments filed by the Patentee on 17 August 2022, a third report issued on 24 August 2022 which maintained the manner of manufacture objection. The Patentee requested to be heard in relation to the outstanding objection on 26 August 2022. This decision is directed to the specification as proposed to be amended on 17 August 2022.
Pursuant to Regulation 9A.4(a), the final date for certification was 28 August 2022. Pursuant to Regulation 9A.4(f), when the Commissioner gives a patentee an opportunity to be heard in relation to an examiner’s objection and issues a written decision, the period for gaining certification of the innovation patent would be extended until three months from the date the decision is issued.
The Patentee filed submissions on 11 November 2022, accompanied by a declaration[1] by Lukan Schwigtenberg (“LS”) also dated 11 November 2022. The matter was heard by video conference on 18 November 2022.
[1] A number of paragraphs of that declaration were redacted under Regulation 4.3(2)(b) as relating to commercial in confidence information.
As a preliminary matter, I would like to extend my thanks to the Patentee and their representative for an engaging discussion. I commend the Patentee for taking the time to appear in person, as I found the oral hearing helpful in this case.
Standard of proof
The examination of the present Innovation Patent is governed by the Patents Act 1990 (the Act)[2] as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (the Raising the Bar Act). The standard of proof that applies to the examination of the present Innovation Patent is therefore the balance of probabilities.
[2] All legislative references are to this Act or the accompanying Patents Regulations 1991
I must certify the present Innovation Patent pursuant to Section 101E if satisfied on the balance of probabilities that it complies with the requirements set forth in that section (these include, inter alia, the requirements of subsection 18(1A)). Pursuant to Section 101F, if I am not so satisfied then I must revoke the Innovation Patent, but not until the Patentee has had an opportunity to be heard and not before giving the Patentee a reasonable opportunity to amend if appropriate.
The invention as described
The Innovation Patent deals with methods that broadly allow for conducting a cash deposit or withdrawal transaction through cash handling machines, such as an automated teller machine (ATM), with either a financial institution or a vendor as chosen by the user. In this regard, the background section of the Innovation Patent discusses “traditional” ATMs operated by financial institutions, using a card and a personal identification number as a means to identify the user and verify the requested transaction.[3]
[3] Description at [003]-[006]
The background section then ends with the following:[4]
Because ATM's [sic] are located in many venues including retail stores, shopping centres, pubs, clubs and a variety of other physical locations it is desirable to expand the range of transactions that can be conducted using ATMs and thereby create new income streams for the ATM operator or for the venue in which the ATM is located.
[4] Description at [007]
The described invention is centred on an ATM configured to provide cash deposit and withdrawal functions from a variety of sources using the one machine, namely through accounts maintained in a vendor server, such as a wagering service, utilities service or a digital wallet service, as well as financial institutions.[5] The ATM includes terminal software that is adapted to drive ordinary financial account functions and vendor transaction system software adapted to support the vendor transaction system functions.[6]
[5] Description at [0048]-[0049]
[6] Description at [0072]
The ATM device itself is described as:[7]
The ATM device 20 is a specific purpose, standalone electronic and mechanical device comprising a card reader, a display screen, a keypad, a printer, a barcode scanning device, a banknote dispenser, a banknote accepter and a repository of banknotes within a vault or safe, all of which are contained within a housing. The card reader, display screen, keypad, printer, barcode scanning device, banknote dispenser and the banknote accepter of the ATM 20 are controlled by an on-board processor which is configured via an interface to be linked to a wired communications network (e.g. PSTN, ISDN, ADSL) or an optical link or through a wireless link (WAN or mobile telecommunications network) through which the ATM device 20 is connected to the ATM network 30, including the ATM transaction switch server 32 and the vendor transaction server 34.
…
In accordance with embodiments of the present invention, the ATM system 10 additionally or alternatively comprises a vendor transaction system 40 that includes a vendor transaction server 34. Such embodiments provide a network of ATM devices 20 configured to enable a user to deposit cash at the ATM device 20 which is then credited to an account of the user maintained by a vendor of a good or a service, that may then be used as payment for a good or a service supplied by the vendor, or to withdraw cash from the ATM device 20 which is debited from the account of the user maintained by a vendor of a good or a service. In exemplary embodiments, the ATM system 10 enables a user to deposit into or withdraw cash from an account or a digital wallet with a vendor of goods and/or services such as a wagering services provider, a utilities service provider or a digital wallet service provider for traditional currency or cryptocurrency.
[7] Description at [0056] [0062]
The ATM transaction switch server is configured to communicate with the vendor transaction system, as well as the ATM network of financial institutions.[8] The ATM transaction switch server receives information from the ATM in relation to the proposed transaction, communicates with the required transaction server to effect the transaction, log transactions and create files which are used as part of the settlement process.[9] The routing of messages may be conducted in accordance with any existing security protocol such as ISO8583, AS2805 or other proprietary message protocols.[10]
[8] Description at [0064]
[9] Description at [0066]-[0067]
[10] Description at [0067]
Each of the user interactions with the ATM for cash deposit and withdrawal with financial institutions and vendor transactions are described independently of one another but are intended to be offered by a single ATM unit.[11] The ATM offers prompts for the user to select whether they wish to transact with a financial institution or with a vendor and whether they wish to deposit or withdraw cash, then communicates with required servers to authenticate the user and their request before operating the banknote acceptor or dispenser as appropriate and recording the transaction on the relevant server.[12]
[11] Description at [0071]-[0095]
[12] Description at [0096]-[00100]
The claims
Before construing the claims, I note the comments of Middleton J in Eli Lilly and Company Limited v Apotex Pty Ltd 2013 FCA 214:
It is well settled that the Court should, from the outset, approach the task of patent construction with a generous measure of common sense. The Court must place itself in the position of a person skilled in the relevant art, being the subject matter of the patent. From this perspective, the patent is to be read as a whole, in the context of the specification and in light of the prevailing common general knowledge and state of the relevant art at the priority date.
Although there is no evidence on file as to the relevant person skilled in the art, given the field of the invention, the hypothetical person skilled in the art would be someone or a team who designs ATMs, both in their physical and electronic functionalities.
The specification as proposed to be amended concludes with five claims. These claims as proposed to be amended filed with the response of 17 August 2022 are reproduced here in their entirety:
1.A method of operating an automated teller machine (ATM) for a user to conduct a cash deposit or withdrawal transaction through an ATM transaction network in relation to an account of a user maintained with a financial institution and to conduct a cash deposit or withdrawal transaction through a vendor transaction system in relation to an account of a user maintained with a vendor of a wagering service, a utilities service or a digital wallet service, the method including:
displaying a prompt for the user to make a selection to conduct a cash transaction through an ATM transaction network in relation to an account of the user maintained in a server of a financial institution or to conduct a cash transaction through a vendor transaction system in relation to an account of the user maintained in a server of a vendor of a wagering service, a utilities service or a digital wallet service;

receiving in a selection interface of the ATM a user selection to make a cash transaction in relation to an account of the user maintained in a server of a vendor of a wagering service, a utilities service or a digital wallet service;

displaying a prompt for the user to scan a machine readable code using a barcode scanning device of the ATM;

scanning by a scanning device of the ATM a machine readable code provided by a user device in response to executing an application in the user device to cause a machine readable code to be displayed in the user device encoding data identifying the account of the user maintained with the vendor of a wagering service, a utilities service or a digital wallet service;

decoding in a processor in the ATM the machine readable code and deriving data identifying the account of the user maintained in the vendor server;

operating a banknote accepter or a banknote dispenser of the ATM to receive or to dispense cash to the user to thereby complete the cash transaction in response to receiving in the ATM authorisation to complete the cash transaction; and

causing the vendor server to update the account of the user when the cash transaction is completed.
2.The method of claim 1, including authenticating the derived data to confirm that the machine readable code is encoding data indicative of a user account maintained in the vendor server.
3.The method of claim 2, wherein authenticating the derived data includes comparing the derived data with user account data maintained in the vendor server.
4.The method of any one of the preceding claims, including receiving in the selection interface a user selection to make a cash deposit transaction and operating a banknote accepter to accept an amount of cash from the user if the cash deposit transaction is authorised.
5.An automated teller machine (ATM) system adapted for a user to conduct a cash deposit or withdrawal transaction through an ATM transaction network in relation to an account of a user maintained with a financial institution and to conduct a cash deposit or withdrawal transaction through a vendor transaction system in relation to an account of a user maintained with a vendor of a wagering service, a utilities service or a digital wallet service, the system including:

an ATM including a display, a selection interface, a machine readable code scanner, a banknote dispenser, a banknote accepter, a communications interface and one or more processors for controlling at least in part the operation of the ATM;

a server of a vendor of a wagering service, a utilities service or a digital wallet service for maintaining accounts of one or more users with which to purchase a good or a service from the vendor;

wherein the ATM displays a prompt for the user to make a selection to conduct a cash transaction through an ATM transaction network in relation to an account of the user maintained in a server of a financial institution or to conduct a cash deposit or withdrawal transaction through a vendor transaction system in relation to an account of a user maintained in a server of a vendor of a wagering service, a utilities service or a digital wallet service;

wherein in response to a user selection in the selection interface to make a cash transaction in relation to an account of the user maintained in the server of the vendor of a wagering service, a utilities service or a digital wallet service, the ATM displays a prompt for the user to scan a machine readable code using a barcode scanning device of the ATM and the scanning device scans a machine readable code provided by a user device in response to the user executing an application in a user device to cause a machine readable code to be displayed in the user device encoding data identifying the account of the user maintained with the vendor of a wagering service, a utilities service or a digital wallet service,

wherein data is derived from the machine readable code by decoding at least in part the machine readable code in a processer in the ATM identifying the account of the user maintained in the vendor server;

wherein a banknote accepter or a banknote dispenser of the ATM receives or dispenses cash to the user to thereby complete the cash transaction in the ATM in response to receiving authorisation; and

causing the vendor server to update the account of the user when the cash transaction is completed.
There is nothing to indicate that these amendments do not comply with the requirements of Section 102.
Claim 1 is directed to a method of operating an ATM for a user to conduct a cash deposit or withdrawal transaction and claim 5 is directed to an ATM system, comprising an ATM machine and servers, adapted for conducting said transaction.
I understand a key feature of the claimed invention to involve the presentation of a choice of conducting the transaction through ATM networks for financial institutions or a vendor transaction system: the user’s choice triggering subsequent functions. When a transaction with financial institutions is chosen, the ATM operates in the usual manner. When a transaction with a vendor is chosen, additional prompts are offered, and a scanner is used to enable a transaction without the need for an account-specific card and PIN. The vendor server is updated accordingly when the cash transaction is complete. The dependent claims add features such as authenticating the user’s account with the vendor’s server and operating a banknote acceptor if the transaction is authorised.
The distinction between financial institutions and vendors, more specifically vendors of wagering services, utilities services or digital wallet services, is important to the present case. The claimed invention is directed to methods and systems enabling direct transaction with both types of entities in cash.
During examination, prior art documents relating to “traditional” ATMs for conducting cash transactions with financial institutions were raised in the first and second examination reports, prior to the filing of the proposed amended claims. These documents covered various workings of ATMs, including remote operation of an ATM from a personal device, contactless ATM cash transactions, transaction selection prompting authentication using a machine-readable code displayed on a mobile device and an additional authentication system for using ATMs. However, these prior art documents were limited to their use with ATM networks operated by financial institutions. After the proposed amendment introduced the distinction between financial institutions and other vendors, the third examination report appeared to acknowledge this distinction between the prior art documents and the amended claims by withdrawing the objections for lack of novelty and innovative step.
Examiner’s objection
The only objection outstanding in the last examination report is that claims 1-5 are not for a manner of manufacture. This objection had been pursued throughout all three examination reports. The reasoning provided by the Examiner may be summarised as alleging that the claimed invention is nothing more than a scheme for conducting a transaction at an ATM using a machine-readable code because there is no technical problem being solved, technical features present in the claims were generic in the art at the priority date, and the claimed invention does not result in an improvement in the functioning of a computer. This is perhaps best illustrated by the following passages from the third examination report:
I have carefully considered applicant's [sic] submissions filed on 17 August 2022 but I did not find them to be persuasive. Applicant [sic] submits that the steps of “selection”, “scanning” and “decoding” along with “user device” are essential to the working of the invention. And the combination of these technical integers and interactions results in improvement in ATM technology. I respectfully disagree that there is any such thing as "ATM technology". ATM's are simply devices that exploit computer technology to perform a financial transaction, i.e. computer processor and internet connection.
The present application uses these well known devices such as a scanner and mobile device to carry out the invention. The alleged invention does not solve a technical problem nor involve any ingenuity in the computer implementation of the invention. The ingenuity of the claimed invention lies in using a different kind of user account (an account of the user maintained in a server of a vendor of a wagering service, a utilities service or a digital wallet service.) to facilitate the transaction. I don't see any technical difficulty in implementing this solution. An ATM that can use the internet to connect to the server of a financial organisation can readily connect to another server of wagering service or utilities service. I therefore conclude that as a matter of substance rather than form, the claimed invention is not a suitable subject matter for a patent.
The Examiner concludes that the technical features of the claimed invention were generic in the art at the priority date without resulting in an improvement in the functioning of a computer. The Examiner characterised the substance of the claimed invention to be a scheme for conducting a transaction at an ATM using a machine-readable code.
Relevant law

The definition of patentable inventions for the purposes of an innovation patent are found at Section 18 paragraph (1A)(a):
Subject to subsections (2) and (3), an invention is a patentable invention for the purposes of an innovation 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;
I note that paragraph 18(1A)(a) for innovation patents is the same as paragraph 18(1)(a) for standard patents and invokes the same legal test.
The classic definition of “manner of manufacture” is set out in National Research Development Corporation v Commissioner of Patents (NRDC), where the High Court provided a statement of the law in respect to manner of manufacture:[13]
The right question is: “Is this a proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies?”
[13] [1959] HCA 67, (1959) 102 CLR 252 at page 275
In NRDC, the High Court expressed the law regarding manner of manufacture at pages 275-276:
a process, to fall within the limits of patentability which the context of the Statute of Monopolies has supplied, must be one that offers some advantage which is material, in the sense that the process belongs to a useful art as distinct from a fine art … that its value to the country is in the field of economic endeavour…
… sufficient authority has been cited to show that the ‘something’ need not be a ‘thing"’ in the sense of an article; it may be any physical phenomenon in which the effect, be it creation or merely alteration, may be observed…
The High Court, though, was not laying down a precise formulation that can be applied unthinkingly. In D’Arcy v Myriad Genetics Inc (Myriad)[14] it stated:
This Court in NRDC did not prescribe a well-defined pathway for the development of the concept of ‘manner of manufacture’ in its application to unimagined technologies with unimagined characteristics and implications. Rather, it authorised a case-by-case methodology.
[14] [2015] HCA 35, at 23
That case-by-case approach must have regard to the substance of the claimed invention, not simply the form of the claim.[15] The point is made most succinctly by Gageler and Nettle JJ in Myriad: [16]
Whatever words have been used, the matter must be looked at as one of substance and effect must be given to the true nature of the claim.
[15] Myriad at 6 and 88
[16] Myriad at 144
Therefore, the assessment as to patentable subject matter in this context requires a consideration of the substance of the invention. This is an assessment of substance rather than form. The substance or true nature of the claim may not be the same to the subject matter that is explicitly claimed.
To further guide the determination of patentable subject matter in the context of computer implemented inventions, a range of principles have been developed by the Full Federal Court. Recently, consideration has been given to these principles in the High Court decision in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents [2022] HCA 29 (Aristocrat) where the Court was evenly split regarding a finding of patentability. While split, the High Court affirmed the correctness of Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 (RPL Central), Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 (Research Affiliates), Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2019] FCAFC 161 (Encompass), and Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 (Rokt), while also appearing to confirm that an advance in computer technology is not a useful test for patentability.
The Patentee’s written submissions (“PS”) provided an overview of the law on manner of manufacture, identified the substance of the invention[17] and whether this was technical in nature. The Patentee then provided submissions as to whether the substance of the invention was patentable according to the principles set out in Research Affiliates.[18] The Patentee stressed that their invention produces a practical and useful result.[19] In particular, the Patentee sought to draw parallels between the present Innovation Patent and Welcome, and distinguish the present Innovation Patent from RPL Central, Research Affiliates, Encompass and Rokt.[20]
[17] PS at 68-88
[18] PS at 91-120
[19] PS at 33: “While commercial and financial schemes have never been considered patentable, there may still be patentable subject matter where a particular practical and useful result is produced” Welcome Real-Time SA v Catuity Inc [2001] FCA 445 (Welcome) at [117] cited in Grant v Commissioner of Patents [2006] FCAFC 120 (Grant)
[20] PS at 96
The Patentee concluded their written submissions with a critique of the manner of manufacture objections in the three examination reports. While I am somewhat sympathetic to the Patentee’s sentiment that statements in the Examiner’s reports, such as “there is no such thing as ATM technology”, were unhelpful and dismissive, the fact remains that according to Section 101E subparagraph (1)(a)(ii) the Commissioner must be satisfied, on the balance of probabilities, that the claimed invention meets the requirements for being a manner of manufacture.
At the oral hearing, the Patentee was firmly of the view that this was the sort of invention that ought to be patented, and posed a threshold question: as this is an ATM-related invention with clear system components, should an analysis along the lines of Research Affiliates even be done? The Patentee pointed out that most of the above authorities dealt with the question of what is “generic computer implementation” whereas an ATM is a special purpose device - an electromechanical machine.
I agree that some of the tests in Research Affiliates such as

·Whether the invention solves a “technical” problem within the computer or outside the computer, or whether it results in an improvement in the functioning of the computer, irrespective of the data being processed;
·Does the claimed method merely require generic computer implementation? and
·Is the computer merely the intermediary, configured to carry out the method using a computer readable medium containing program code for performing the method, but adding nothing to the substance of the idea?

are not directly apposite to the present situation. On the other hand, the concept of “a device of particular construction” developed by Burley J in the first instance Aristocrat decision[21] stands overruled by the Full Bench of the Federal Court, and both sides of the split High Court decision in Aristocrat agreed that the focus on “an advance in computer technology” per se, as part of the 2-step analysis proposed by Middleton & Perra JJ in Aristocrat ‘21[22] was not particularly helpful.
[21] Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778
[22] Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202
I note that the delegate in Amsted Rail Company, Inc. [2021] APO 25 considered[23] a similar situation where an invention comprises technical and non-technical features, and was
.. of the view that, where a claimed invention comprises aspects that are both technical and non-technical in nature, the principles that have been established for assessing the substance of computer implemented inventions, as summarised in Rokt Pte Ltd above, may be appropriately generalised to non-computerised technical features, namely:
·     Is the contribution to the claimed invention technical in nature?
·     Does the invention solve a technical problem with respect to the technical features?
·     Is there an improvement in the functioning or abilities of the technical features?
·     Are the technical features merely used for their generic functions or abilities or are there steps foreign to the normal use of the technical features?
·     Are the technical features concerned merely an intermediary or provides a context for carrying out a method but adds nothing to the substance of the idea concerned?
[23] At [46]
I consider that this generalised framework can be of assistance, but as also noted in the Amsted Rail decision,[24] it does create a secondary question of what is technical vs what is non-technical. This does not lend itself to definitive solutions but should nevertheless be assessed based on available authorities and traditional principles, such as whether something is practical in nature as opposed to mere schemes, plans, ideas or intellectual information.
[24] At [47]
I therefore will use the approach adopted by Myriad of first determining the substance of the invention and then determining whether that is the proper subject of a letters patent.
In doing so I will have regard to the principles set out in Amsted Rail above, which are also consistent with the principles listed the original delegate’s decision in Aristocrat ’16.[25]^,[26]

[25] Aristocrat Technologies Australia Pty Ltd [2016] APO 49 at [35] – accepted at PS 42
[26] I note that this is consistent with the approach set out in the Patentee’s submissions at 91, bearing in mind that Amsted Rail is a generalisation of the Research Affiliates principles.
·there must be more than an abstract idea, mere scheme or mere intellectual information;
·is the contribution of the claimed invention technical in nature;
·does the invention solve a technical problem within the computer or outside the computer;
·does the invention result in improvement in the functioning of the computer, irrespective of the data being processed;
·does the application of the method produce a practical and useful result;
·can it be broadly described as an improvement in computer technology;
·does the method merely require generic computer implementation;
·is the computer merely an intermediary or tool for performing the method while adding nothing of substance to the idea;
·is there ingenuity in the way in which the computer is utilised;
·does the invention involve steps that are foreign to the normal use of computers; and
·does the invention lie in the generation, presentation or arrangement of intellectual information.
Substance of the invention
The Patentee characterised the substance of the invention as being a “dual channel” system, through which the ATM can not only communicate with the usual interbank networks (“primary channel”) but also with non-bank vendors who are not on the interbank networks (“secondary channel”).[27]

[27] PS at 16 and 69. Examples of interbank networks, although not mentioned in the specification, are listed at paragraph 40 of the Schwigtenberg declaration and I am satisfied that these would be part of the common general knowledge.
I agree with this characterisation. Although the elements of the claims are primarily focussed on the secondary channel (communication with a non-bank vendor) I agree with the Patentee that it is implicit that the ATM is also capable of communicating via the primary channel, and that the selection interface allows a customer to choose between the primary and secondary channel.
Patentee’s submissions
The Patentee’s written submissions were structured along the lines of the Research Affiliates analysis. The Patentee first submitted that the dual channel functionality is not an abstract idea, mere scheme or mere intellectual information, in particular by analogy to Welcome.[28] The Patentee then submitted that this functionality provides a technical contribution[29] and proves a practical and useful result and does not involve generic computer implementation, noting that just because an invention may have value in an economic field, that does not necessarily mean that the substance of the invention is a business method.[30] I will address these themes in turn.
Abstract idea, mere scheme or mere intellectual information: Welcome
[28] PS at 92-99
[29] PS at 100-104
[30] PS at 105-120
At the oral hearing, as well as in their written submissions, the Patentee stressed that the “invention bears more similarities to the invention considered in Welcome than the inventions considered in the authorities of Grant, Research Affiliates, RPL and Encompass”.[31]

[31] PS at 96
Welcome has the potential to be pertinent in that it was also directed to a method for carrying out transactions (in the case of loyalty cards) and was found to be patentable subject matter. However I will note that the facts in Welcome were assessed against the background of common general knowledge some 20 years before the instant priority date. Therefore the mere assertion that the present situation is like Welcome is not particularly helpful because the common general knowledge has moved on, and the present innovation patent is being assessed against a more developed technological background.
Furthermore, the present invention is to be considered against principles that were not incorporated into the decision making in Welcome. Notwithstanding the above differences between the precedential environments of Welcome and the present case, I still consider that the substance of the present invention can be distinguished from the situation in Welcome for the reasons set out below.
Welcome was directed to a method of processing data on coded loyalty cards. As explained at paragraphs 6-18, Heery J accepted that there were practical limitations relating to the amount and structure of the memory in the chip that limited the number of merchants that could use a single chip card. Welcome’s solution was to change the way the information on the chip card was structured (into a “behaviour file”) to store loyalty programs as and when required in a card and to increase the number of loyalty programs that could be hosted on a single chip. I understand that Welcome’s solution represented a dynamic data storage system for loyalty cards as opposed to the static data structures previously used in the art.
In his consideration of manner of manufacture, Heery J held:
127 In my opinion the Patent does produce an artificial state of affairs in that cards can be issued making available to consumers many different loyalty programs of different traders as well as different programs offered by the same trader. All this can be done instantaneously at each retail outlet. So what is involved here is not just an abstract idea or method of calculation. Moreover this result is beneficial in a field of economic endeavour – namely retail trading – because it enables many traders (including small traders) to use loyalty programs and thereby compete more effectively for business. Such competition is in turn beneficial to consumers, both in the general sense that competition is good and in the sense that they can obtain benefits in the form of discounts and free goods and services.

128 What is disclosed by the Patent is not a business method, in the sense of a particular method or scheme for carrying on a business – for example a manufacturer appointing wholesalers to deal with particular categories of retailers rather than all retailers in particular geographical areas, or Henry Ford’s idea of stipulating that suppliers deliver goods in packing cases with timbers of particular dimensions which could then be used for floorboards in the Model T. Rather, the Patent is for a method and a device, involving components such as smart cards and POS terminals, in a business; and not just one business but an infinite range of retail businesses. …
Heery J was clearly taken by the ability of the method to enable small businesses to use loyalty programs without the need to set up their own individual loyalty cards.
The present invention also provides the ability for some businesses to do something they had not been able to do before, which is to carry out direct cash transactions with customers at ATMs.
But what was stopping them from doing that before? Unlike in Welcome where it had previously not been possible to dynamically encode sufficient numbers of loyalty systems on the card technology available at the time, in the present situation the blocking factor was simply the unwillingness of interbank networks to transact with those companies, due to their lack of regulatory status as banks.
So while this invention is certainly the solution to a problem, I see the nature of that problem, and also its solution, to be regulatory rather than technical or even economic. That problem seems to me to be that previously banks had a monopoly on cash deposits and withdrawals due to their status as banks. The solution is simply to end that privileged status and allow ATMs to transact directly with other businesses. However, in so doing, they appear are transacting in exactly the same way that they had done previously with the banks.
As elegantly summarised by the Delegate in BaVelPay S.L.U. (B-67506527) [2022] APO 78, there is a distinction between enabling a computer or system to do something it could not do previously and simply tasking a computer to do something it had not done previously.
In this case the ATM operator is effectively just choosing who to do business with, which is much more analogous to “a manufacturer appointing wholesalers to deal with particular categories of retailers rather than all retailers in particular geographical areas” which was accepted by Heery J as being unpatentable.
Asserted technical contributions
At the oral hearing, the Patentee submitted that there were three[32] technical contributions provided by the present Innovation Patent in order to effect the dual channel system.

·Firstly, the Innovation Patent provides a selection interface to allow the customer to select between channels;
·Secondly, the Innovation Patent provides a means of authenticating the customer to the non-bank vendor; and
·Thirdly, the Innovation Patent provides a way of updating an account of the non-bank vendor.

[32] The written submissions addressed two asserted technical problems: how to configure an ATM to perform the dual channel functionality (PS at 78 (a) – expanded at 80-83) and how to identify and authenticate the user’s account with the vendor server at the second channel (PS at 78(b) – expanded at 84-88). In the oral hearing, the Patentee split the second problem into separate aspects of authenticating and updating. I also note that PS 101 c) enumerated another feature of receiving or depositing bank notes, but not much was made of this at the oral hearing and this feature appears to be rather conventional in the ATM field, so I will not consider it further.
First, in terms of the contribution of the selection interface, I note that the nature of the selection interface is undefined. It could be a touchscreen or buttons conventionally found next to ATM screens. In this sense it is analogous to conventional ATM interfaces which allow the customer to select what transaction type they want. Repurposing the selection interface to be able to select a non-bank vendor “channel” merely changes the information content of the selection interface, not the way the selection interface works.
I therefore consider that the nature of the selection interface does not constitute a technical contribution in the traditional sense, but rather constitutes mere intellectual information.
Second, in terms of the contribution of the means of authentication to a non-bank vendor, the Patentee’s oral and written submissions focused on the feature of providing a QR code to the barcode reader of the ATM. The Patentee’s representative pointed out in the oral hearing that non-bank vendors typically did not issue plastic cards that are typically read by conventional ATMs, and hence the barcode reader allows identification information to be sent to a wide range of non-bank vendors.
In terms of the actual feature of authentication, however, the claims and even the specification[33] are silent as to how authentication (as opposed to mere identification) is carried out. The specification refers to “communicat[ing] 120 the identification information derived from the QR code and any other additional authentication data to the transaction switch server 32.” (emphasis added).

[33] Paragraph [0075] quoted at PS 85

It therefore seems to me that this alleged technical contribution lies in the identification rather than the authentication. Be that as it may, the present innovation patent is not the first disclosure of an ATM using a barcode reader (see e.g. the abstract of US 8,146,802 B1[34]) and the use of QR codes are also well known as a type of barcode. The point of difference (as apparently acknowledged by the examiner) is simply that the QR code is used to identify the customer to a non-bank vendor.

[34] Cited as D2 in the first examination report
Once again I consider that this use of QR codes is characterised by the intellectual content of the information (referring to the regulatory status of the vendor) and as such is not technical in the traditional sense.
Third, as for the feature of updating the account of the non-bank vendor, I would note that the claim merely states that this is done, and the specification does not give any significant information as to how this is done. Paragraph [0092] (cited at PS 81) does not provide any more detail beyond “communicat[ing]”.
Therefore I consider that this aspect can be characterised as a “mere scheme” or “abstract idea” rather than being technical in the traditional sense.
Therefore each of these alleged contributions again seem to me to relate to the identity and regulatory status of the entity being transacted with. At best, each of these could only be said to be “technical” insofar as they require some software to effect. That, however, would fall squarely in the realm of generic computer implementation.
Practical and useful result
At the conclusion of the hearing I put it to the Patentee that my understanding of the advantages of the invention were a) to allow a customer of a non-bank vendor to transact directly with the vendor at an ATM rather than conventionally requiring two transactions (in the case of a withdrawal a first transaction between the vendor and a bank and a second transaction between the bank and the user – in reverse order for a deposit) and b) to allow ATM owners another revenue stream by enabling them to carry out a new set of transactions.
In response, the Patentee’s representative explained, with reference to the Schwigtenberg declaration, that conventional ATM transactions are governed by ISO-8583[35] and that the ATM network is required to operate on a secure Payment Card Industry (PCI) standard with a large amount of compliance requirements.[36] Mr Schwigtenberg’s declaration stated that the Patentee had developed a novel ATM transaction switch and novel vendor network module that allows it to either operate inside or outside the PCI environment.[37] The Patentee’s representative stated that the interbank networks constituted a specialised and technical ecosystem, and explained that the benefit of operating outside the PCI environment was reduced compliance requirements and consequent reduced costs to non-bank vendors to access the ATM. This is consistent with my understanding of the benefits of allowing customers to interact directly with non-bank vendors rather than having to use a bank as a middle man, and also enables the ATM operator to obtain more business.
[35] LS at 42-43
[36] LS at 47-48
[37] LS at 55
Whilst I can accept these (based on the current evidence) to be innovative advantages, this innovation exists entirely in the regulatory space. The only difference between the present Innovation Patent and existing ATMs is the regulatory status of the entities it is communicating with. The so-called technical requirements of the interbank network are nothing more than agreed standards. The solutions used to effect these advantages, again, while apparently innovative in view of the available prior art, are innovative only in the sense of being new methods and systems characterised by the regulatory status of the recipient of the communication and an apparent choice to bypass industry standards.
As per my consideration above, to the extent that any software implementation is involved, this appears to be generic. The specification does not describe any particular technical difference between communicating with the banks and communicating with the other business. It is perhaps telling that the parts of the Schwigtenberg declaration that touched on the actual implementation of the two channel system were redacted under Regulation 4.3(2)(b) for confidentiality reasons – that information was not presented to the public as part of the patent bargain and most certainly cannot be used in assessing the substance of the invention.
Conclusion
Taking all factors into consideration, the substance of the invention is not technical in nature but rather a transaction scheme, characterised only by the regulatory status of the entities being transacted with.
Consequently, the patentable subject matter requirement of Section 18(1A)(a) is not satisfied.
Furthermore, in view of the lack of technical disclosure in the specification of how the communication with non-bank vendors is actually carried out, there is no apparent prospect of this issue being overcome by amendment.
The Patentee’s right to be heard has been exercised. I must therefore revoke the Innovation Patent under Section 101F.
Felix White
Delegate of the Commissioner of Patents