Technology Business: Importance of an Idea to be Novel & Inventive to Claim Monopoly Two manufacturers of cheque fraud prevention systems conflicted over the meaning and scope of one manufacturer’s patent.
Communisis Plc (“Communisis”) was the registered holder of a patent for ‘a method of generating a payment/credit instrument’ (“Patent”).
Each cheque has an account number, a sort code and a serial number (“Cheque Details”) printed on it. The Patent encrypts the Cheque Details by converting them to a unique code (“UCN”), which is then printed at multiple places on the cheque. When the cheque is presented for payment, the clearing system decrypts the UCN and matches it with the Cheque Details. If there is any mismatch, it means that the Cheque Details have been tampered with, and the cheque is not cleared.
Communisis alleged that Tall Group of Companies Limited (“TGC”) had created a technologysimilar to the Patentwithout its consent and had thus, infringed it.
Communisis said that TGC were dealing in a technology like that of the Patent without its express consent and thus, had infringed the Patent. It relied on the expert evidence of Mr. Charles Brewer, a systems analyst/developer in the banking industry.
TGC admitted the acts complained of, but denied that its actions fell within the scope of the Patent. TGC made a counter-claim that the Patent was invalid because of its obvious similarity with three older technologies that operated in similar fields.It relied on the expert evidence of Dr. Peter Landrock, a cryptographer and mathematician.
The Court had to first decide whether the Patent was valid against the allegation of obviousness made by TGC, and if it were valid, whether TGC had infringed it.
The Court observed that an invention must be novel and innovative tobe granted a patent. For that, it must not be perceived as ‘obvious’by any person skilled in that art/science nor should the invention fall within the ‘common general knowledge’ of such person.Then, after the ‘inventive part’ of claim in question is identified, it must be shown that there are material differences between the invention andsimilar existing technologies. If an invention passes the aforesaid tests, it may be patented.
To decide who would be a person ‘skilled in the art’, the Court relied on the opinions of the expert witnesses. In relation to the Patent, a person skilled in the art would have financial/banking and cryptography expertise. As regards the skilled person’s ‘common general knowledge’, that would include knowledge of Cheque Details, encryption and decryption, working knowledge of cryptography and mathematics, types of cheque fraud etc.
The real dispute lay with identifying the ‘inventive part’ of the Patent.The Court found that Communisis was trying to magnify the scope of the Patent which, if allowed, would almost create its monopoly over the data protection systems market.
The Court compared the features of the Patent with three older American technologies, viz. Martens, Ehrat and Martin which also were designed for data protection. It found that the Patent did not offer any ‘real’ added protection over those other technologies, nor did it have any significant differences in its application.Hence, the Court declared that the Patent was invalid because it lacked a non-obvious feature to distinguish it from technologies that already existed.
As the Patent was invalidated, there was no question of TGC having infringed it.
Thus, the claim of infringement failed but the counter-claimof invalidity succeeded.
For a patent to survive, it is fundamental that it must be novel and non-obvious in comparison with any other earlier invention.
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