European Central Bank v Document Security Systems Inc.

JurisdictionEngland & Wales
JudgeTHE HONOURABLE MR JUSTICE KITCHIN
Judgment Date26 March 2007
Neutral Citation[2007] EWHC 600 (Pat)
Docket NumberCase No: HC06C01151
CourtChancery Division (Patents Court)
Date26 March 2007
Between
European Central Bank
Claimant
and
Document Security Systems Incorporated (a company incorporated under the laws of the State of New York, USA)
Defendant

[2007] EWHC 600 (Pat)

Before

the Honourable Mr Justice Kitchin

Case No: HC06C01151

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

PATENTS COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Simon Thorley QC and Miles Copeland (instructed by Bird & Bird) for the Claimant

Henry Carr QC and Piers Acland (instructed by McDermott Will & Emery) for the Defendant

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Hearing dates: 23 – 26 January, 29 – 30 January 2007

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Approved Judgment

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I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HONOURABLE MR JUSTICE KITCHIN Mr Justice Kitchin
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Mr Justice Kitchin:

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Introduction

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1. This is a claim for revocation of European Patent (UK) 0 455 750 (“the Patent”) which is directed to a method of making a document which cannot be replicated by a scanning type copying device. It has particular relevance to security documents such as banknotes, travellers’ cheques and the like. The defendant (“DSS”) has brought a claim for infringement of the Patent against the claimant (the “ECB”) in the European Court of First Instance (“CFI”) in which it alleges that Euro banknotes are made by an infringing process. The ECB disputes that the CFI has jurisdiction to hear an infringement claim and that issue is currently before the CFI.

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2. In the meantime the ECB has issued claims for revocation of the Patent in various European jurisdictions. This case is the first to be heard. Accordingly this court is not concerned with issues of infringement, but only validity.

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3. The application for the Patent was filed on 16 January 1990 and claims priority from a US application dated 18 January 1989. The Patent had a long prosecution and the claims were amended on a number of occasions. On 18 July 1995, the claims, as then proposed, were refused by the Examining Division as being obvious in the light of a number of pieces of prior art, including two of those cited in this action. The applicant appealed. The hearing took place before the Board of Appeal on 5 February 1999. During the course of the hearing the applicant proposed the claims as now granted. The Board of Appeal considered they overcame the obviousness objection and were otherwise acceptable. The appeal was therefore allowed (T0933/95).

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4. The Patent is now alleged to be invalid on the following grounds:

i) Added matter arising out of limitations added to claim 1 by the amendment proposed on 5 February 1999.

ii) Obviousness in the light of

a) the prior publication of GB 1,138,011 (“011”);

b) the prior publication of DE 602,563 (“Kurowski”); and

c) the common general knowledge.

iii) Anticipation in the light of the prior circulation of two series of banknotes:

a) the UK 1987 Series D £10 note;

b) the Swiss Sixth series 20 Franc note.

iv) Insufficiency on the basis that there is no sufficient teaching of how to determine the width of the scanning lines of the copying devices.

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Technical background

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5. Much of the technical background was not in dispute although the parties were unable to agree a primer. So the following is largely a composite of the relevant and non contentious parts of the primers each side produced.

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Security printing

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6. Security printing is the field of the printing industry that deals with the printing of items of value such as banknotes, travellers’ cheques, passports, stock certificates, postage stamps and identity cards. The goal of security printing is to ensure that original documents can be authenticated, the production of counterfeits is made as difficult as possible and that counterfeits are readily detectable. A number of techniques and materials have been developed over the years to try to ensure that the security printing industry remains ahead of counterfeiters as copying technology has evolved. By 1989, common and well known techniques and materials included the following:

i) Specialised substrate materials. Banknotes were generally made of good quality paper. Sometimes high quality 100% rag paper was used which is dull when seen under ultra violet light. Coloured fibres and threads were embedded to give the paper added individuality.

ii) Specialised inks such as magnetic and fluorescent inks which were difficult and expensive to obtain.

iii) Watermarks which were first introduced in Bologna, Italy in 1282 and have been commonly used in security printing ever since. Watermarks are made either by varying the thickness of the paper in a mould while it is being made, or by impressing a water coated metal stamp or ‘dandy roll’ onto the paper during manufacturing.

iv) Printed patterns made using sophisticated and expensive printing techniques such as intaglio printing, which I explain later in this section. These could print with an extremely accurate register and in fine detail.

v) Iridescent foils and structures such as holograms which display a colour or image change when viewed from different angles.

vi) Unique serial numbers which make counterfeiting more time consuming and counterfeit notes easier to identify and track.

vii) Banknotes printed with fine alignment between the printing on each side of the note. Accurate imitation was difficult without printing machinery and technology not readily available to the counterfeiter.

viii) Screen traps designed to create a moiré pattern when a note is reproduced, as I shall explain.

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Printing techniques

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7. Letterpress printing. This is a printing technique which has been used since the 13 th century. The figures or digits to be printed are raised up from the surface of the printing plate, rather than engraved into it. The plate is then inked and pressed against the printing substrate to obtain the image. It is still used today for printing serial numbers on banknotes.

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8. Intaglio printing. Intaglio is a printing technique in which the image to be printed is incised into the surface of a metal plate, typically made from copper or zinc. The incisions may be engraved into the plate by hand or laser or may be etched by the action of an acid.

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9. To print from an intaglio plate, the surface is covered in ink and the excess is wiped away leaving it only in the incisions. The substrate is then brought into contact with the plate and both are run through a printing press under very high pressure. The press ‘draws’ the ink from the incisions by a combination of pressure, osmosis, and electrostatic pull, thus transferring the ink from the plate onto the substrate to form the print. Intaglio printing is commonly used in the production of banknotes, often in combination with other printing methods. It creates a unique texture on the printed copy that is difficult to replicate.

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10. Offset lithography. Lithography is based upon the repulsion of oil and water, with the image drawn onto a surface and treated in such a way as to retain ink, whilst the non image areas are chemically treated to accept water and repel ink. In offset lithography the inked image is transferred (“offset”) from the printing plate to a rubber cylinder and then to the printing substrate. A number of separate plates with different colours can be superimposed to create the final image. The technique is illustrated in the figure below:

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11. Banknote printing often uses a variation of the technique called dry offset printing. This is similar to offset lithography in that a rubber blanket is used to carry the image from the printing plate to the printing substrate. The image areas on the printing plate are raised above the surface of the plate, much like letterpress printing. Ink is distributed through a series of rollers and onto the raised surface of the plate. The plate transfers the image to the blanket, which then prints the image on the substrate. In banknote technology, offset printing is exploited to print security inks that do not easily emulsify, such as UV fluorescent inks.

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12. All the techniques I have described are very expensive to operate. Other printing techniques have therefore been developed to allow printing on smaller commercial and domestic scales. Two have been particularly successful, namely inkjet and laser printing.

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13. Inkjet printing involves spraying tiny droplets of ink under high pressure onto the printing substrate. There are different ways of depositing a droplet of ink but they all suffer from the problem of “fixing” the ink on the page. Most inks are aqueous and therefore smudge very easily.

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14. Laser printing is another method of non-impact printing. It is a digital process that relies on a chip within the printer to convert the image data it receives into a series of pixels called a raster image.

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15. Within the laser printer is a rotating electrostatic drum that can be either negatively or positively charged, and the laser unit itself. Once the chip has converted the image to a raster image, the laser is directed by the chip to “draw” the image onto the charged drum as a series of lines of dots, on the same principles of halftoning which I explain below. The rotation of the drum corresponds to the y direction of the image plane, and the switching on and off of the laser (thereby creating the dots) corresponds to the x direction of the image plane, together making up the resolution of the printer.

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16. When the laser hits the drum, the charge on the drum is reversed in a small area. The drum is then exposed to very fine particles of toner which are attracted to the charged sections of the drum which were “drawn” by the laser. The image is then transferred to the substrate by rolling the drum over it. Finally, the toner is fused to the substrate by passing it through two heated rollers.

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