Fintech Patents - Communisis Plc v The TALL Group of Companies Ltd
Intellectual Property Enterprise Court (HH Judge Melissa Clarke) Communisis Plc v The TALL Group of Companies Ltd and others  EWHC 3089 (IPEC) (17 Nov 2020)
This was a claim for patent infringement and a counterclaim for revocation on grounds of obviousness and excluded matter. The action and counterclaim came on for trial before Judge Melissa Clarke on 14 and 15 July 2920. By her judgment of 17 Nov 2020 she found the patent to be invalid and not to have been infringed (see Communisis Plc v The TALL Group of Companies Ltd and others  EWHC 3089 (IPEC) (17 Nov 2020).
The PartiesThe claimant was Communisis Plc, the proprietor of UK patent no GB2512450 entitled "A method of generating a payment/credit instrument", the patent in suit. The defendants were The TALL Group of Companies Ltd and its wholly-owned subsidiaries, Checkprint Ltd, and DLRT Limited. Each party manufactures cheques, cheque books and cheque fraud prevention systems to major banks and financial institutions.
"Claim 1 is a method claim and Claim 6 is a product claim, but they are otherwise not materially different. It is common ground that they can be treated together for the purposes of the action. The parties have split Claim 1 into integers for ease of reference, as follows:
1.1. A method of generating a payment/credit instrument comprising:
1.2. Generating a code based on at least one string of information to be applied to the payment/credit instrument during generation thereof;
1.3. Applying at least one string of information to the payment/credit instrument; and
1.4. Applying the generated code to the payment/credit instrument in at least one location of the payment/credit instrument during generation thereof by a printing technique,
1.5. Wherein the or each string of information is converted to a code by conversion to a higher base; and
1.6. Wherein the payment/credit instrument is a cheque or credit slip, and
1.7. Wherein the at least one string of information is one or more of a bank sort code, a payment/credit instrument serial number and an account number for the payment/credit instrument."
It is important to note that the exclusions under s.1 (2) are subject to the proviso that "the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such. " That proviso has been applied in such a way as to allow many computer-implemented inventions to be patented.
"An invention shall be taken to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art by virtue only of section 2 (2) above (and disregarding section 2 (3) above)."
"It is convenient to assess inventive step using the structured approach set out by Oliver LJ in Windsurfing International Inc v Tabur Marine (Great Britain) Ltd  RPC 59 and restated by Jacob LJ in Pozzoli SPA v BDMO SA  EWCA Civ 588,  FSR 37,  BusLR D117,  Bus LR D117:
"i) (a) Identify the notional 'person skilled in the art';
(b) Identify the relevant common general knowledge of that person;
ii) Identify the inventive concept of the claim in question or, if that cannot readily be done, construe it;
iii) Identify what, if any, differences exist between the matter cited as forming part of the state of the art and the inventive concept of the claim, or the claim as construed;
iv) Ask whether, when viewed without any knowledge of the alleged invention as claimed: do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?"
"i) A patent specification is addressed to those likely to have a real and practical interest in the subject matter of the invention (which includes making it as well as putting it into practice).
ii) The skilled addressee has practical knowledge and experience of the field in which the invention is intended to be applied. He/she (hereafter "he") reads the specification with the common general knowledge of persons skilled in the relevant art, and reads it knowing that its purpose is to disclose and claim an invention.
iii) A patent may be addressed to a team of people with different skills. Each such addressee is unimaginative and has no inventive capacity.
iv) Although the skilled person/team is a hypothetical construct, its composition and mind-set is founded in reality. As Jacob LJ said in Schlumberger v Electromagnetic Geoservices  EWCA Civ 819;  RPC 33 at §42:
'… The combined skills (and mindsets) of real research teams in the art is what matters when one is constructing the notional research team to whom the invention must be obvious if the patent is to be found invalid on this ground.'"
"It is common ground that a patent specification is addressed to those likely to have a real and practical interest in the subject matter of the invention (which includes making it as well as putting it into practice); such persons are those with practical knowledge and experience of the field in which the invention is intended to be used. The skilled addressee of the Patent reads the specification with the common general knowledge of persons skilled in the relevant art at the application date of the patent (here, 1 February 2013), and knowing that its purpose is to disclose and demarcate an invention. The skilled person reads prior art documents with interest but is unimaginative and has no inventive capacity. He may be a team of persons with differing expertise or a single person with all the practical knowledge and experience needed. Although the skilled person is a hypothetical construct, his or her composition and mind-set is founded in reality."
"i) the use of various identifying data on cheques including the sort code, account number and cheque serial number;
ii) the concatenation of the above information into data strings, and the printing and display of the same on cheques;
iii) the requirement for and use of machine-readable data and symbols on cheques;
iv) that physical security measures are used on cheques;
v) the inadequacy of physical security measures for digitised systems and digitally transmitted cheque systems, and the requirement for "image-survivable" security features;
vi) some understanding of the forms of cheque fraud, specifically those relating to tampering with personalisation data;
vii) the use of cryptography in security applications;
viii) the existence, use and strength of cryptographic techniques;
ix) a basic knowledge of mathematics and implementation of mathematical methods of programming;
x) simple principles of digital security such as:
- The principles and use of digital signatures;
- Private and public key encryption including the use of commonly known protocols such as RSA;
- The use of reversible and irreversible cryptographic functions;
- The use of hashing functions including commonly known hashing functions such as SHA-1 and SHA-2 including SHA-256, message authentication codes and checksums;
- The use of different bases for the display of outputs of cryptographic functions such as encryption algorithms and hashing functions etc, including the use of hexadecimal display of the outputs of common hashing functions such as SHA-1;
Subparagraph (iii) of the Windsurfing/Pozzoili test states that if the inventive concept cannot be identified, the claim can be construed instead. That appears to have been the approach that she took in carrying out steps (iii) and (iv) of the test.
- US patent application US20020065786A1 Method and apparatus for depositing paper checks from home or office ("Martens");
- US patent 3,990,558 Method and apparatus for preparing and assessing payment documents ("Ehrat"); and
- US patent for a method of authenticating a cheque through a software program ("Martin").
"i) In relation to integer 1.2, it discloses that the code is applied to the payment/credit instrument "during generation thereof"; and
ii) In relation to integer 1.5, that the information is converted to a code "by conversion to a higher base".
"it would be obvious to the skilled person reading Ehrat at the priority date, that the crypto number could be produced by use of one of a number of common cryptographic methods such as RSA or SHA-1. Equally, it is obvious that it could be produced by conversion to a higher base, although once again it is likely that the skilled reader would consider that was poor security."
The claimant's expert also appeared to acknowledge in cross-examination that the essence of the patent and the defendants' method had been disclosed in Ehrat. For all those reasons, Judge Melissa Clarke found that the patent was obvious.
(i) properly construe the claim;
"The Defendants' product achieves the generation of a code applying quite a different, much more secure and effective cryptographic process, namely applying a standard secure hash function to the information string, in which the input numerical value and output numerical value are different. The information string is first converted to a lower base (binary), the hash function is applied, and the output in binary is then converted to a higher base for display in hexadecimal."
"i) Claims 1 and 6 of the Patent are invalid for obviousness over the Prior Art: Martens, Ehrat and Martin.
ii) Claims 1 and 6 of the Patent are invalid for excluded subject matter pursuant to section 1(2) Patents Act 1977.
iii) The claim for infringement is dismissed."
- the construction of claims;
- obviousness; and
- excluded matter.
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