First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd and Another Appeal

JurisdictionSingapore
JudgeBelinda Ang Saw Ean J
Judgment Date31 October 2007
Neutral Citation[2007] SGCA 50
Date31 October 2007
Subject MatterWhether proprietor's patent invalid on grounds of obviousness and insufficiency,Infringement,Applicable principles,Patents and Inventions,Plea of innocent infringement,Degree of knowledge imputed to alleged infringer upon publication,Defence,Publication of patent specification,Validity,Whether alleged infringers' product infringing proprietor's patent
Docket NumberCivil Appeals Nos 4 and 5 of 2007
Published date13 November 2007
Defendant CounselWong Siew Hong (instructed) and G Radakrishnan (Rada & Associates)
CourtCourt of Appeal (Singapore)
Plaintiff CounselAlban Kang Choon Hwee, Koh Chia Ling and Arthur Yap (Alban Tay Mahtani & de Silva),Ang Wee Tiong (Tan Kok Quan Partnership)

31 October 2007

Judgment reserved.

V K Rajah JA (delivering the judgment of the court):

Introduction

1 A recent article published in The Economist Technology Quarterly (8 September 2007) at 23–24, “A patent improvement”, provides an excellent conspectus of the congenital difficulties in regulating a patent system as follows:

An efficient patent system is essential for the promotion of innovation. Patents give inventors a temporary monopoly on a new idea in return for disclosing how it works, so that others can subsequently build upon it. But if a patent is granted for something that is not novel (people are already doing it), or is obvious (any Tom, Dick, or Harry in the field could think it up), it can hamper innovation by turning a widely used invention or process into one person’s monopoly. The trouble is that examiners cannot always tell when a patent is unwarranted.

To prove that an invention is not novel, the patent examiner must find evidence that others have already done everything claimed in the patent, a quest known as a “prior art” search. Prior art is also the basis for determining whether some new step claimed in the invention is obvious – and therefore not worthy of a patent. But prior art can be elusive. It might be buried in an obscure technical journal, in conference slides, or in a doctoral thesis tucked away in a university library. It could even be embodied in a machine taken off the market years earlier. Finding prior art is hardest in fields where patenting is fairly new, such as software, biotechnology, financial services and business methods.

These insightful observations neatly encapsulate the pragmatic rationale underpinning as well as the intrinsic tensions in the modern approach towards administering a patent protection scheme – namely, striking the right balance between stimulating the creative energies of inventors, while promoting the free flow of ideas and encouraging entrepreneurship. Striking the appropriate balance is certainly not a prosaic task. Even experts in the state of prior art often differ enormously on whether a particular claim is predicated on an inventive step, let alone whether a claim is made with sufficiency. The courts often have the unenviable task of choosing between seemingly intractable opposing views. That said, often, apparently complex technical issues when properly understood and assessed, do yield to common-sense and relatively straightforward answers.

2 The present legal skirmish between the principal parties is but part of a wider legal feud now taking place in a number of different jurisdictions. This is not unusual in today’s “flat” world, where businesses have similar interests and rights to protect in several different jurisdictions. A “flat” world is, however, far from being an “ideal” world, where the outcome would be similar regardless of where the legal jousting takes place. In a “flat” world, the outcomes of the parties’ legal differences may not, eventually, be the same in each jurisdiction because of varying statutory matrices and prevailing administrative practices. Ultimately, it must also be acknowledged that an adjudication on patent rights is predicated upon not only the applicable regulatory framework and practices, but also the evidence presented as well as the submissions made to the tribunal concerned. Care must therefore be taken by counsel when referring to and/or relying on another apparently similar decision on the “same” issue from another jurisdiction. With this brief preface, we now turn to the facts.

3 The present appeals were brought by United Overseas Bank Limited (“UOB”), the appellant in Civil Appeal No 5 of 2007, and First Currency Choice Pte Ltd (“FCC”), the appellant in Civil Appeal No 4 of 2007, collectively known as “the appellants”, against the decision of the trial judge in Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2007] 1 SLR 1021 (“the Judgment”). Briefly, the learned trial judge, after an 18-day trial, found in favour of Main-Line Corporate Holdings Limited (“the respondent”) and granted an injunction against further infringement of the respondent’s Singapore Patent No 86037 (WO 01/04846 A1) titled “Dynamic Currency Conversion for Card Payment Systems” (“the Patent”) by the appellants. He also ordered an inquiry before a registrar on damages or an account of profits, and dismissed the appellants’ counterclaim for invalidation of the Patent.

4 There were three main grounds of appeal:

(a) whether, on a proper construction of the claims in the specification of the Patent (“the Patent Specification”), the Patent involved an inventive step and was therefore valid;

(b) if ground (a) was answered in the affirmative, whether the Patent Specification sufficiently disclosed the invention in the Patent (“the Invention”) for it to be performed by a skilled person and was therefore valid; and

(c) if both grounds (a) and (b) were answered in the affirmative, whether the appellants had in fact infringed the Patent.

The facts

5 The facts of this case were uncomplicated. FCC is a Singapore-registered company, with its main business being the provision of dynamic currency conversion payment services to retailers. It was registered in Singapore on 9 June 2001. It is the creator and proprietor of the “First Currency Choice System” (“the FCC system”), which was made available in Singapore around 2001. UOB, a leading local bank incorporated under Singapore law, has employed the FCC system provided by FCC since 11 October 2001.

6 The respondent, a company incorporated in Ireland, is one of the corporate vehicles used for holding the intellectual property assets of a group of Irish companies called the “Fintrax Group”. A major portion of the group’s business is in multiple-currency credit card payment systems. The respondent is the proprietor of the Patent. The Patent was granted in Singapore on 30 June 2003, with its priority date being 12 July 1999 (“the priority date”). The respondent also holds a similar patent in Europe (“the European Patent”), which was granted by the European Patent Office on 5 December 2001, although it is currently facing post-grant opposition there.

7 Between July 1999 and June 2000, UOB entered into negotiations with the respondent for a licence to use the Invention. A non-disclosure agreement was signed between the parties, and the respondent disclosed considerable confidential technical and proprietary information about the patented system as well as demonstrated how the system worked. However, these negotiations came to naught. Slightly over a year later, on 11 October 2001, UOB entered into an agreement with FCC, under which the latter would offer the then newly-available FCC system for use at various merchant outlets linked with UOB. The FCC system was first offered for use at these merchant outlets in December 2001.

The respondent’s objections to the FCC system

8 Before proceeding, it would be helpful to set out the known currency conversion systems available at the material time for use at points of sale. According to the respondent, automatic currency detection was unknown in Asia until the introduction of the Invention, which eliminated the need for action by the merchant. Prior to that, the system of currency conversion practised in Singapore was entirely manual in nature. The merchant would have to know that the payment card (ie, a credit, charge or debit card) presented was a foreign one and then manually determine the operating currency of that card.

9 The Patent covered a method and system of determining the operating currency of a payment card at the point of sale between the merchant and the cardholder by automatically extracting a series of digits known as the “identifier code” from the payment card number (which is also known as the “Primary Account Number” (“the PAN”)) and comparing the identifier code with a table known as the “Bank Reference Table” (“BRT”) so as to ascertain the relevant currency. The BRT, a table specially constructed by the respondent, stored a portion of the PAN (ie, the “issuer code”) of and an associated currency code for each bank listed in the table. The identity of the bank as well as the operating currency of the card would be determined through a “look up-and-associate” process. The Invention provided an accurate means of automatically determining the preferred currency for a card transaction between a local merchant and a foreign cardholder. It also eliminated the frailty of operator error that was inherent in the manual system of currency conversion.

10 The Invention was thus designed to identify the payment card’s currency denomination, and not just the issuer’s identity. It was undisputed that identification of the issuer was already possible at the priority date by deciphering the “Bank Identification Number” (“BIN”), which is made up of the first six digits of the PAN. At that point in time, the BIN was generally used to identify the issuing bank (but not the operating currency) of the card for the purposes of authorisation and settlement.

11 The respondent alleged that the appellants had infringed the Patent by offering for use in Singapore the FCC system, a card currency recognition system said to perform the same function as the Invention. In particular, the respondent alleged that the appellants had infringed claims 1 and 14 of the Patent Specification. Claim 1 attested that the Invention was:

A data processing method for determining a preferred currency for association with [a] charge, debit or credit card transaction between a merchant and a charge, debit or credit card cardholder comprising the steps of[:]

obtaining the card number of the card from the cardholder, characterised [sic] in that the method further comprises the steps of[:]

identifying an identifier code from [the] said card number[;]

determining the operating currency for [the] said identifier code, by comparing [the] said identifier...

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