1 January 2015

Elimination patent for audio card reader

‘You have to be able to switch quickly from thinking like a lawyer to thinking like an engineer’

Being a patent attorney is no different from being a lawyer.Attorneys often have to defend a patent, but it is sometimes also necessary to challenge one. That Arnold & Siedsma does not shrink from using the sword as well as the shield has been demonstrated in the case against XIRING. This French company wrongfully obtained a patent for an audio card reader. On behalf of their client, Arnold & Siedsma succeeded in having this patent declared invalid. They did this by making the best possible use of their technical and legal expertise. The other party went to appeal twice - right up to the highest authority at the European Patent Office.

What was the dispute?

In 2006 the client of Arnold & Siedsma instituted proceedings against a patent of XIRING. This French company filed a patent for a card reader which reads information from a smart card (e.g. a bank card) and communicates this information to the user by audio means. This is done through synthetic speech. Arnold + Siedsma’s client was already at the production stage with such a device, although without speech computer. They had already obtained patent for this.

In the view of this client the audio card reader of XIRING was not a real invention. The existing card readers had been modified by replacing the LCD screen by a speech chip and a loudspeaker.

Three years on and the pleadings were completed. Both parties were invited to the opposition hearing in The Hague. The client then handed the matter over to Nele D’Halleweyn and Michaël Beck of Arnold & Siedsma. Both are European patent attorneys and have wide knowledge and experience in the field of digital authentication and security.

What was the right strategy?

D’Halleweyn and Beck took no chances in their choice of strategy. They approached the case from both the technical and legal angle. Was the subject-matter of the patent inventive or not? An answer to this question would form the basis for the technical aspect.Documents supplied by the client were studied carefully to find this answer. Beck: “We wanted to find out what precisely was the ‘prior art’ in relation to (audio) card readers.”

He explains: “Suppose a skilled person were commissioned to modify an existing card reader for use by the blind. Would he then also have added a speech chip and loudspeaker as proposed by XIRING? Our argument was that, yes, he would. The idea was therefore not inventive. The underlying idea here is that no-one may acquire a monopoly on things which form part of normal day-to-day technical advance. With some further refinement of the arguments against the patent, we had an excellent starting point for the opposition hearing in The Hague.”

Before the hearing could even take place a number of difficult procedural issues cropped up. Several relevant documents had only been submitted by the client at a late stage, so the Arnold + Siedsma duo first had to defend against XIRING’s request that these documents be excluded from the case. Beck and D’Halleweyn managed to parry this argument skilfully.   “The attorney of the patent owner was also too late in filing the alternative versions of the patent, which he would defend at the hearing. We did not hesitate to make use of the same rules against him”, explains D’Halleweyn. The appeal court then decided to consider all the relevant documents during the first hearing.

The course of the proceedings

Opposition hearing

The first hearing of the Opposition Division was a great success for the duo Beck and D’Halleweyn. The contested patent was wholly revoked. The court in The Hague ruled that the ‘invention’ was not inventive. It was an obvious combination of existing card readers and existing synthetic speech technology.

Board of Appeal 

Patent holder XIRING did not accept this ruling and lodged appeal. However, the case was never heard by the Board of Appeal. In the interim period the division of XIRING was taken over by Gemalto. The appeal documents gave the name of Gemalto as patent owner. The transfer of the patent had however not yet been registered in valid manner at the European Patent Office. The appeal should have been brought in the name of XIRING. Beck and D’Halleweyn twigged on to this pretty quickly and entered a protest. The Board of Appeal agreed with their viewpoint. The appeal was dismissed as inadmissible.

Enlarged Board of Appeal

This was sufficient reason for XIRING to challenge the decision at the very highest level of the European Patent Office, the Enlarged Board of Appeal. The other party did not appeal against the decision on facts made by the Board of Appeal, but against possible fundamental errors in procedure. Such procedures are relatively uncommon since  they can only be instituted on the basis of a limited number of strictly legal grounds. However, the Enlarged Board of Appeal saw no grounds whatever for setting aside the previous decisions. The Arnold + Siedsma twosome had handled the prior proceedings correctly. Nor had the EPO made any questionable decisions.

What was the basis of this success?

Because the other party XIRING was playing for high stakes, the case was fought in three successive actions. Beck and D’Halleweyn emerged as winners in all three cases. Pondering the secret of their success, D’Halleweyn believes that their substantive knowledge of the case was their most important weapon. “In a technical sense we knew everything about the case. That's how we were able to repudiate all the arguments of the other party during the first hearing.”

Beck adds: “The patent owner argued for instance that for particular reasons a skilled person would never have combined the knowledge about existing card readers with the documents we produced on synthetic speech technology. Nor would such a combination, according to XIRING, ever result in the claimed invention. It does then of course help if you are really familiar with the technical field of the invention, so that you can distinguish the relevant technical arguments (of the other party) from the smoke-screens.”

This also ensured that the Arnold + Siedsma duo were not taken aback when XIRING introduced surprise arguments which had not been considered earlier in the pleadings. “During the hearing the patent owner interpreted specific terms in our document in a way which made it appear that the technology described would not be compatible with the architecture of existing card readers. Because we were well acquainted with our documents we could point immediately to specific passages in the text which make it clear that the interpretation of the patent holder could not be correct.”

The importance of good preparation

In addition to their technical knowhow, Beck and D’Halleweyn’s legal knowledge played at least as important a part in avoiding an upset. “You have to take apparently unimportant details into account. Not doing so can have serious legal consequences”, says D’Halleweyn. This conviction helped the Arnold + Siedsma duo to maintain their advantage following the first hearing at the Opposition Division.

“Knowing the pattern of a hearing is essential. This prepares you better for the next step in the process. Thorough legal research also helps to make use of legal issues to the advantage of your client”, adds Beck. According to the patent specialist, in a case like this you have to be able to switch quickly from thinking like an engineer (how did this invention come about and is the invention inventive?) to thinking like a lawyer (how do I make use of the proceedings to win the case as efficiently as possible?).

Although the appeal did not get to the substance of the case,  the two patent attorneys had already made sure that they would not be taken by surprise here. “Before the appeal hearing we prepared the whole case thoroughly again. We even came up with even stronger arguments on the case than we had at first instance. This turned out to be unnecessary in the end. But you can never be too well prepared”, concludes Beck.