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Tuesday, 4 September 2007

Does DSS now have a licence to print money?

A few days ago, the German Bundespatentgericht ruled on the validity of Document Security Systems' EP(DE) patent EP0455750. The European Central Bank had applied to the court for the patent to be revoked, similarly to their attack on the EP(UK) equivalent earlier this year, which proved successful (see the IPKat's comments here).

According to DSS (from their own press release),

"• The German court dismissed the European Central Bank’s (ECB) claim to invalidate the Patent in Germany, and ordered the ECB to bear responsibility for court costs. As a result of this decision, DSS will be able to proceed with the infringement phase of its lawsuit against the ECB, despite any decisions to the contrary regarding validity of the Patent in other national courts. On August 1, 2005, DSS filed a patent infringement lawsuit in the European Court of First Instance (CFI) against the ECB alleging that the Euro banknotes produced by the ECB infringe the Patent. On October 20, 2005, the ECB challenged the venue of the lawsuit to which DSS formally responded to the court in December 2005. The parties are awaiting the ruling from the CFI on venue. Management anticipates seeking damages in the CFI case in excess of $227 million, although it should be noted that the applicable court would determine the damages that DSS would be entitled to if DSS is successful in its action.

• As a result of the German decision, DSS can now file infringement lawsuits in Germany against security printers that produce the Euro banknotes printed in Germany or used in Germany. Management believes that approximately 28% of Euro banknotes are either printed in Germany or used in Germany, which would enable DSS to seek an injunction and damages in excess of $63 million in such lawsuits against the applicable security printers.

• This ruling also enables DSS to pursue infringement claims of the Patent against security printers and software developers of the various, non-Euro banknotes printed not only in Germany, but also those banknotes printed in other European countries that enter Germany. Management believes that there are more than 75 currencies that are either printed or used in Germany that infringe upon the Patent.

• The German Court’s decision will be distributed to the French Patent Court, which has asked to review the German decision prior to issuing its decision on patent validity in France, which is anticipated on September 12, 2007.

• DSS’ attorneys will utilize portions of the German decision, which supports its appeal of the ruling of the High Court of Justice, Chancery Division, Patents Court in London, England, which found the Patent to be invalid in the United Kingdom. Oral arguments for the U.K. appeal are expected to be heard in February of 2008."

The German decision is available here. Unfortunately, the IPKat can't directly confirm the facts, as his German isn't really up to understanding the judgment. Can any of his readers help out?


Anonymous said...

Answer (however bizarre it might seem): The skilled addressee would have derived from claim 13 in the WO the subject matter of the claims of the B publication, hence, no new matter. The usual problem, when the Decision is announced in March but the reasoning isn't worked out till September. The usual German inability to distinguish novelty from obviousness. The usual German inclination to ignore EPO jurisprudence, this time on the test for added matter. In Germany, UK is constantly pilloried for being bad Europeans, on IPR matters like Doctrine of Equivalents, or failure to adhere to the Problem and Solution Approach. Reading this BPatG decision one could be firgiven for thinking that's a bit rich. On the EU stage, German lawyers can't understand how Europe could possibly condense on legal lines in IPR that differ from those laid down by its own BGH. Bit like, on the world stage, US lawyers can't understand how ROW could possibly condense on lines of IPR jurisprudence that depart from the US line. As to France, and the Decision due September 12, do you think M. Trichet has phoned the President of the court, with a quiet word in his ear, as to where his duty lies?

Anonymous said...


It would appear that the BPatG has taken a different view to Kitchin J with regard to the original disclosure of the feature of overlaying a grid pattern on the original image. Indeed, the BPAtG decision includes an express reference to the Britsh decision and explains why they have come to the opposite view. While the Brits considered that the overlaying shown in Fig. 1b was part of the copying process, the BPatG considered this not to be the case but part of the creation of the image and therefore the feature was in the original dislcosure.


Anonymous said...

....Obvious, eh, that the overlaying of the grid is part of the creation of the image? Exactly my point. BUT, that being the case, it's curious that the original WO disclosure relied upon by the BPatG (claim 13, and that part of the description corresponding to it) to vindicate the claim in suit, Applicant chose to delete during prosecution at the EPO.

Roland said...

As anonymous #1 said above (although with a fair bit of sarcasm): The BPatG sees the superimposing of invisible gridlines onto the original picture implied in claim 13 of the original application (producing a non-replicable replicant document by photographic reproduction of the original) ... so the matter was not new for an expert reader.

Anonymous said...

Quite so. But now more sarcasm. During prosecution Applicant/Inventor Wicker and his EPO representative deliberately deleted not only what was relied upon by the BPatG as the disclosure reservoir that rendered the added subject matter attack ineffective, that is, claim 13, but also the passage in the description corresponding to claim 13. You would have thought that, if Applicant were to retain anything at all in the B publication, it would have to be the very passage of the description that evidently was providing the only support for claim 1 of the B publication. For the ordinary skilled man (says the BPatG) this support was all directly and unambiguously derivable. Yet, for Applicant and his representative, and for the TBA, it wasn't even obvious. One has to conclude that, in Germany, the ordinary reader is smarter than Inventor Wicker, smarter than his patent attorney representative, and smarter than the members of the Technical Board of Appeal. No wonder the BPatG refers to the notional reader as an "Expert".

David said...

One should be careful not to read too much into what went on during prosecution of the patent. The applicant's representative probably changed tack for some reason that may or may not be evident from the file (which I haven't read, and shouldn't need to). Deletion of material from the description was probably an overreaction to a request to make it comply with the claims, but does not mean that the subject matter was abandoned, particularly since it was brought back in later. As long as the material in the granted patent was all present in (or "directly and unambiguously derivable" from) the application as-filed, there should be no problem. Fortunately, prosecution history estoppel does not (generally) apply in Europe. In the US, of course (where I suspect the last commenter hails from), the story is somewhat different.

Having read the specification, I think it is fairly clear that the grid overlaying feature was there in the application as-filed, and I am certainly not a skilled reader in the relevant field (just a patent attorney).

Anonymous said...

The "grid overlaying feature" in the application as filed is that particular "overlaying" of a "grid" that happens when a CANON color photocopier makes a copy of a banknote. Whether that is a direct and unambiguous disclosure of the "grid overlaying" feature in the manufacture of a copy-resistant banknote that claim 1 of the B publication claims is directed to is indeed the issue before the court.

Anonymous said...

But wasn't that the gist of the invention? Based on the observation that a copy of a copied bank note was distorted, the inventor had the idea of the issued bank note being the first "copy".

Anonymous said...

Well, looking back, you might be able to characterize the inventive concept all along as "issue copies instead of originals" but then it's still significant that the Applicant wiped the patent application clean of all support for his claimed inventive idea before taking his case through to issue. It's not File Wrapper Estoppal that does for the Inventor, just that his deletion during EPO prosecution of all support for the claim is evidence that the link between that original support and that claim was not apparent to the EPO representative (or the TBA) so could hardly have been directly and unambiguously derivable by the notional addressee. Had David read the English Decision, with its content about the x-examn of the DSS tech expert, before he wrote his comment about the "grid overlaying" feature of the claimed method being in there from the start. The tech expert apparently admitted in x-examn that it wasn't.

Anonymous said...

This may be a bit off topic, however, I was curious to see from anyone that was able to read the German decision, if any of the aspects to the infringement case were addressed.

I had seen in the British ruling that the judge briefly discussed the infringement case, which DSS has lodged at the CFI. In the validity case in Britain, DSS argued, and both expert witnesses as well as Justice Kitchin agreed, that their patent taught that one must measure the scanning pitch/lpi at the scanning or input stage of a copier. However, in the infringement case, the British ruling states, that DSS argues that the Euro infringes because it creates moiré patterns at lpi resolutions applicable at the output stage, and that DSS was arguing two different interpretations of the patent in the validity vs. infringement cases. It would be interesting to see if the German ruling gives any similar types of insights as to what’s going on with the infringement case.

Does anyone know that if it was found that the DSS patent taught one to measure the scanning pitch distance at the input stage, instead of the output stage, would that be enough to derail the infringement claims (Assuming the Euro uses patterns based on measurement of a copier's output/printing phase)?

Also it was just announced that the Court of First Instance rejected the jurisdiction of the infringement case. This makes sense seeing as how the CFI has never heard an infringement case, and I don't think it would even be possible to bring an invalidity defense at a central jurisdiction like that, after the 9 months allowed for opposition at the EPO has expired. DSS now states that they will pursue infringement proceedings in Germany. Does anyone have an opinion on the likelihood of the Euro being found to infringe the DSS patent in Germany? Thanks

Link to news announcing CFI decision.

Roland said...

The decision does not mention the infringement cases in any way. As to measuring the scanning pitch distance, the court only talks about measuring the scanning pitch at the scanning stage of the copier ("determining the scanning pitch distance and width of the scanning lines of the copying devices" in claim 1).

Anonymous said...

An English translation of the German decision is available at the link below.

Anonymous said...

It is worth noting that the Tribunal de Grande Instance (TGI) in Paris yesterday ruled the DSSI patent to be invalid (see The French court apparently followed the reasoning of the British judge.

It is also worth noting that the ECB apparently appealed the German decision.

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