Xero Limited
[2016] APO 23
•28 April 2016
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Xero Limited [2016] APO 23
Patents:2015100164, 2015100166
Title:Systems and methods of direct bank transfer
Patentee: Xero Limited
Hearing Officer: P M Spann – Deputy Commissioner of Patents
Decision Date: 28 April 2016
Hearing Date: 8 March 2016
Catchwords: PATENTS – Examiner’s Objections – novelty – innovative step – no clear and unmistakeable directions in relation to a key feature of the claims – objection not upheld – further examination of the patent directed.
Representation: Patentee: Freehills Patent Attorneys
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patents:2015100164, 2015100166
Title:Systems and methods of direct bank transfer
Patentee: Xero Limited
Date of Decision: 28 April 2016
DECISION
The inventions claimed in the patents do not lack novelty or an innovative step over citation D5.
I direct that the patent be subject to further examination taking into account my findings on the construction of the patent in the following reasons.
Pursuant to subregulation 9A.4(f) the period for examination of the patent expires 3 months from the date of this decision.
REASONS FOR DECISION
Innovation patents 2015100164 (‘164) and 2015100166 (‘166) were granted to Xero Limited (the patentee) on 26 March 2015. They relate to similar subject matter and were filed as divisionals of PCT application PCT/US2014/049247 which entered the national phase in Australia on 29 February 2016 as application 2014296104. This application in turn claims priority from US application 61/860771 filed on 31 July 2013.
Requests for examination of the innovation patents were filed on 13 February 2015. Several adverse examination reports have issued objecting inter alia on the grounds of lack of novelty and lack of innovative step. A request for hearing was filed after the third adverse examination reports issued. However fourth examination reports issued on the patents on 12 February 2016.
Several proposed amendments were filed and ultimately both patents are objected to on the basis that the invention claimed in all claims is not novel and lacks an innovative step over published US patent US 8,145,189 B2 (POWER et al) 27 March 2012 (referred to by the examiner as D5). ‘164 was further objected to on the basis that claim 4 is not clear because of a lack of antecedent for the ‘server’. The patentee has however admitted that this issue also affects the ‘166 patent and has filed further statements of proposed amendments for both patents to address this.
The matter was heard by written submissions filed on 8 March 2016.
The specifications
The subject matter of the specifications relates to monetary transfers and particularly systems and methods for facilitating direct bank transfers. As background the specifications state:
“[0004] Merchants send invoices to customers with information regarding money owed by a customer to a merchant. A customer pays an invoice by writing a check, using a credit card, transferring money via a third party, or transferring money from a customer bank account to a merchant bank account. Money transfers between banks may be performed using the Automated Clearing House (ACH).
[0005] To make an ACH transfer, a customer connects to a server associated with his or her bank, enters the transaction details, and submits the transfer request. The money is transferred directly to the merchant account from the customer account via ACH.
[0006] To transfer money via a third party, the customer connects to a server associated with the third party, enters the transaction details, and submits the transfer request. The money is transferred from the customer account to an account of the third party and then from the third-party account to the merchant account.”
The detail descriptions set out preferred features of an accounting software package that inter alia facilitates direct bank transfers, for example, for the payment of invoices by customers. Invoices are presented to a customer interface and the customer can make payments by the transmission of secure information to a bank.
The claims of the ‘164 patent as proposed to be amended are as follows:
“1. A computer implemented method comprising:
receiving, by a server and from a client device, encrypted data including
information for an invoice in an accounting system, the encrypted
data being generated by the accounting system and sent from the
accounting system to the server via the client device;
decrypting, by the server, the encrypted data to access the invoice
information;
based on the invoice information, transferring funds from a first account to a
second account; and
sending, to the accounting system, an indication that the funds were
transferred.2. The computer implemented method of claim 1, wherein the encrypted data
includes at least one of the following:
data identifying the first account, an amount of funds to be transferred, a
description associated with the invoice, and data identifying the
second account.3. The computer implemented method of claim 1, wherein the transfer of the funds
from the first account to the second account does not transfer the funds through an
intermediate account.4. A financial institution system comprising:
a memory; and
one or more modules coupled to the memory and configured to:
receive, from a client device, encrypted data including information
for an invoice in an accounting system, the encrypted data
being generated by the accounting system and sent from the
accounting system to the financial institution system via the
client device;
decrypt the encrypted data to access the invoice information;
based on the invoice information, transfer funds from a first account
to a second account; and
send, to the accounting system, an indication that the funds were
transferred.5. The system of claim 4, wherein the encrypted data includes at least one of the
following:
data identifying the first account, an amount of funds to be transferred, a
description associated with the invoice, and data identifying the
second account.”
The claims of the ‘166 patent as proposed to be amended are as follows:
1. A method comprising:
sending, to an accounting system, a public encryption key;
receiving, by a server and from a client device, encrypted data including
information for an invoice in the accounting system, the encrypted
data being generated by the accounting system and encrypted using
the public encryption key and sent from the accounting system to the
server via the client device;
decrypting, using a private encryption key corresponding to the public
encryption key, the encrypted data to access the invoice information;
based on the invoice information, transferring funds from a first account to a
second account; and
sending, to the accounting system, an indication that the funds were
transferred.2. The method of claim 1, wherein the encrypted data is signed using a private key
of the accounting system.3. The method of claim 2, further comprising receiving, from the accounting system,
a public key corresponding to the private key of the accounting system.4. A financial institution system comprising:
a memory; and
one or more modules coupled to the memory and configured to:
send, to an accounting system, a public encryption key;
receive, by the financial institution system and from a client device,
encrypted data including information for an invoice in the
accounting system, the encrypted data being generated by the
accounting system, encrypted using the public encryption key
and sent from the accounting system to the financial
institution system via the client device;
decrypt, using a private encryption key corresponding to the public
encryption key, the encrypted data to access the invoice
information;
based on the invoice information, transfer funds from a first account
to a second account; and
send, to the accounting system, an indication that the funds were
transferred.5. The system of claim 4, wherein the encrypted data is signed using a private key of
the accounting system.
In relation to the construction of the claims the applicant’s submissions appear to some degree to confuse what is claimed with the preferred embodiments disclosed in the specification and in that respect are not of assistance in resolving the substance of this matter. The correct approach to the construction of claims was discussed by Bennett J in H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70, 81 IPR 228 at [118] – [120]:
“the words in a claim should be read through the eyes of the skilled addressee in the context in which they appear ... while the claims define the monopoly claimed in the words of the patentee's choosing, the specification should be read as a whole ... it is not permissible to read into a claim an additional integer or limitation to vary or qualify the claim by reference to the body of the specification ... terms in the claim which are unclear may be defined or clarified by reference to the body of the specification.”
10. A significant issue is the meaning of the terms “accounting system” and “client device”. In context I consider “accounting system” to be a computerised system that carries out one or more accounting functions. There seems to be no basis to assume more than this other than it is a system which can accesses information about invoices that may be payable by a client. The claims do not specify that the accounting system is operated by a vendor business as opposed to the client nor does it appear precluded that the system is operated by a third party.
11. A “client device” appears to encompass a computing device associated with the client, for example a mid-range or personal computer or tablet or smartphone. It will operate according to its programming and it appears within the scope of the claims that it may perform the operations of the accounting system. Equally the claims do not exclude the accounting system being operated in a separate device.
12. The claims do not specify the scope of “information for an invoice”. This clearly does not mean an invoice or all the information making up an invoice but information relating to an invoice that is sufficient to allow the transfer of funds. It appears that it must include at least an amount payable and potentially details of the first and second account. However, presumably there may be circumstances where the server permits only payment from a first to a second account in which case identifying the accounts would not be necessary.
13. A key feature of the claims is that encrypted account information is forwarded from the accounting system to a server or to a financial institution system via the user device. In relation to the meaning of “a server” it seems necessary to conclude that this is a server associated with a means or system for the decryption of the invoice information and the transfer of funds (for example operated by a financial institution). In my view forwarding information from the accounting system to the server or financial information via the client device define a one way communication path. Communication to the client device then back to the accounting system and then forwarded to the server or financial system does not satisfy that limitation and would make it essentially meaningless.
Applicable Law
14. The present patent is subject to the Patents Act as amended by the Intellectual Property Legislation Amendment ( Raising the Bar) Act 2012. I note that section 101E for the issuing of a certificate of examination does not apply unless the Commissioner is satisfied on the balance of probabilities that the requirements of the Act specified in subsection (1) are complied with. These include compliance with relevant requirements of section 40 and section 18.
Novelty
15. It is well established that the general test for lack of novelty is the reverse infringement test. The classic formulation of this test is that given by Aickin J in Meyers Taylor Pty Ltd v Vicarr Industries Ltd, [1977] HCA 19 at [20]; [1977] HCA 19; 137 CLR 228 at 235:
“The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement”.
16. For lack of novelty to be established, the prior art must contain “clear and unmistakable directions” to produce the invention as claimed (Pfizer Overseas Pharmaceuticals v Eli Lilley and Company [2005] FCAFC 224; 68 IPR 1 at [314]). However, if the prior publication contains a direction which is capable of being carried out in a manner which would infringe the claimed invention, but would at least as likely be carried out in such a way that would not do so, the invention as claimed will not be anticipated (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-486; 1A IPR 121 at 138, Novozymes A/S v Danisco A/S [2013] FCAFC 6; 99 IPR 417 at [177]).
17. The examiner states in relation to the ‘164 patent:
“Regarding claim 1, document D5 discloses a computer implemented method (Abstract; Fig. 1A-B; column 1, lines 56-64; column 2, lines 44-47; column 4, lines 35-39) comprising:
receiving, by a server (the server of the financial institution 118) and from a client device (item 110), encrypted data (column 4, lines 62-66; column 5, lines 33-36. The document is encrypted) including information for an invoice (column 1, lines 51-53; column 4, lines 53-57) in an accounting system, the encrypted data being generated by the accounting system (column 4, lines 53-57, 62-66. The commercial establishment 116 has an accounting system that generates the invoice sent to the client device 110),
and sent from the accounting system to the server via the client device (column 4, lines 53-57; column 4, line 66 – column 5, line 7; column 5, lines 26-27, 37-39; The encrypted document is first sent by the accounting system of the commercial establishment 116 to the client device 110 via item 112, then the client device sends the document to the server of the financial institution 118 via items 112 and 116. It is noted that “receiving, by a server and from a client device” only requires that the encrypted data received by the server have been sent (or re-sent) from the client device without excluding the existence of any intermediate systems or network components between the client device and the server. Similarly, “sent from the accounting system to the server via the client device” only means that the encrypted data generated and sent by the accounting system reach the server after passing through the client device. These arrangements are considered disclosed in document D5 as discussed);
decrypting, by the server, the encrypted data to access the invoice information (column 5, lines 33-36);
based on the invoice information, transferring funds from a first account to a second account (column 5, lines 56-63. Approving the transaction by the financial institution is considered to include transferring funds from a first to a second account, see also Abstract: “the document is associated with a financial transaction being conducted with a commercial establishment”); and
sending, to the accounting system, an indication that the funds were transferred (column 5, lines 56-63).
Similar considerations apply, mutatis mutandis, to the corresponding system claim 4 (see also figures 3 and 4).
Regarding claims 2 and 5, the additional features defined in these claims are clearly disclosed at column 5, lines 46-51.
Regarding claim 3, the transfer of the funds is disclosed at column 5, lines 56-63. Since no intermediate account is mentioned, it is considered that the person skilled in the art reading the whole disclosure of document D5, and in particular column 5, lines 18-22, 49-51 – “customer identifiers (such as an account number)”, will inevitably conclude that the funds are not transferred through an intermediate account.”
In relation to ‘166 the examiner states:
“Regarding claim 1, document D5 discloses a method (Abstract; Fig. 1A-B) comprising:
sending, to an accounting system, a public encryption key (column 4, lines 22-29, 33-39. The commercial establishment 116 has an accounting system that receives the public encryption key through item 112 in order to encrypt before sending the data including the information for the invoice);
receiving, by a server (the server of the financial institution 118) and from a client device (item 110), encrypted data (column 4, lines 62-66; column 5, lines 33-36. The document is encrypted) including information for an invoice (column 1, lines 51-53; column 4, lines 53-57) in the accounting system,
the encrypted data being generated by the accounting system and encrypted using the public encryption key and sent from the accounting system to the server via the client device (column 4, lines 53-57; column 4, line 62 – column 5, line 7; column 5, lines 26-27, 37-39. The document is inherently encrypted using the public encryption key, then first sent by the accounting system of the commercial establishment 116 to the client device 110 via item 112, and then the client device sends the document to the server of the financial institution 118 via items 112 and 116. It is noted that “receiving, by a server and from a client device” only requires that the encrypted data received by the server have been sent (or re-sent) from the client device without excluding the existence of any intermediate systems or network components between the client device and the server. Similarly, “sent from the accounting system to the server via the client device” only means that the encrypted data generated and sent by the accounting system reach the server after passing through the client device. These arrangements are considered disclosed in document D5 as discussed);
decrypting, using a private encryption key corresponding to the public encryption key, the encrypted data to access the invoice information (column 5, lines 33-36. The use of a private encryption key corresponding to the public encryption key is considered inherent to the disclosure);
based on the invoice information, transferring funds from a first account to a second account (column 5, lines 56-63. Approving the transaction by the financial institution is considered to include transferring funds from a first to a second account, see also Abstract: “the document is associated with a financial transaction being conducted with a commercial establishment”); and
sending, to the accounting system, an indication that the funds were transferred (column 5, lines 56-63).
Similar considerations apply, mutatis mutandis, to the corresponding system claim 4 (see also figures 3 and 4).
Regarding claims 2-3 and 5, see column 4, line 62 – column 5, line 11; column 5, lines 39-45.”
18. Having considered the citation D5, I consider it falls well short of disclosing “clear and unmistakable directions” that encrypted account information is forwarded from the accounting system to a server or to a financial institution system via the user device as I have construed that term. More likely than not, the skilled addressee would be instructed to construct a system whereby the client device communicates with the accounting system of the “commercial establishment” and that system communicates with the server or financial system.
Innovative step
19. The principles to be considered in determining whether the claimed invention is taken to involve an innovative step and, in particular, does not only vary from the prior art in ways that make no substantial contribution to the working of the invention, were considered by the Full Federal Court in Product Management Group Pty Ltd v Blue Gentian LLC [2015] FCAFC 179.
20. However it is not necessary to consider those principles in detail. I have identified a key feature not present in the cited prior art that in my view clearly makes a substantial contribution to the working of the claimed invention. Therefore I must also find that the claims do not fail for lack of an innovative step.
Other grounds of objection
21. The terminology of the claims appears to have created some difficulty in the examination of the present patent and potentially in the identification of relevant prior art. I have adopted a construction of the claims that appears to differ from that adopted previously and accordingly it appears that further consideration is required before the Commissioner can be satisfied, on the balance of probabilities, that all the relevant requirements of the Act have been met.
22. However I do not consider in the circumstances that I should engage in an examination of the patent myself (aside from the matter that was referred to me for hearing). Rather, noting that subregulation 9A.4(f) provides for a further period of three months from the date of this decision for completion of examination, I will direct that a further examination report be issued promptly taking into account my reasons above. This will provide the patentee the opportunity to respond to any further grounds of objection that are raised.
Conclusion
23. I find that, contrary to the examination report, the claims of the patents do not lack novelty or an innovative step over citation D5.
24. It appears however that further consideration is required of whether, in light of my reasons, all the relevant requirements of the Act have been met. I will therefore direct that the patent be subject to further examination taking into account my findings on the construction of the patent above.
P M Spann
Deputy Commissioner of Patents
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