Sycurio Ltd v PCI-PAL Plc

JurisdictionEngland & Wales
JudgeLord Justice Arnold,Lord Justice Nugee,Lord Justice Singh
Judgment Date04 June 2024
Neutral Citation[2024] EWCA Civ 606
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: CA-2024-000006
Between:
Sycurio Limited
Claimant/Appellant
and
(1) PCI-PAL Plc
(2) PCI-PAL (UK) Limited
Defendants/Respondents

[2024] EWCA Civ 606

Before:

Lord Justice Singh

Lord Justice Arnold

and

Lord Justice Nugee

Case No: CA-2024-000006

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY

COURTS OF ENGLAND AND WALES, INTELLECTUAL PROPERTY LIST (ChD),

PATENTS COURT

Mrs Justice Bacon

[2023] EWHC 2361 (Pat)

Royal Courts of Justice

Strand, London, WC2A 2LL

Michael Silverleaf KC and Kyra Nezami (instructed by Michelmores LLP) for the Appellant

Richard Davis KC, Edward Cronan and Laura Adde (instructed by Shepherd & Wedderburn LLP) for the Respondents

Hearing date: 21 May 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on 4 June 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Lord Justice Arnold

Introduction

1

This is an appeal from an order made by Bacon J on 18 December 2023 revoking United Kingdom Patent No. 2 473 376 (“the Patent”) for the reasons given in her judgment dated 25 September 2023 [2023] EWHC 2361 (Pat). The Patent is entitled “Signal detection and blocking for voice processing equipment”. It discloses and claims apparatus for, and a method of, reducing fraud by call centre agents and others, by blocking dual-tone multi-frequency (DTMF) tones entered by a caller from being transmitted to the agent when the caller is using their telephone keypad to provide sensitive information required for a transaction, such as their payment card details. The invention has the advantage that voice communication between the caller and the agent is not interrupted. There is no challenge to the earliest claimed priority date of the Patent, which is 9 May 2008.

2

The judge held that, on the proper construction of claim 9 of the Patent, claim 9 was invalid since the claimed invention was obvious over each of two items of prior art referred to as Van Volkenburgh and Shaffer. It was and remains common ground that, if claim 9 is invalid, none of the other claims are independently valid. The judge also held that, even if claim 9 was valid, the Defendants (“PCI-PAL”) had not infringed it. The Claimant (“Sycurio”), which is the proprietor of the Patent, appealed with permission granted by myself on five grounds. Ground 1 was that the judge had wrongly construed claim 9, and therefore had approached her assessment of obviousness on an erroneous basis. Sycurio did not challenge the judge's assessment if she had correctly construed claim 9. Sycurio's other grounds were directed to the issue of infringement. Having heard argument on ground 1, the Court announced that the appeal on that ground would be dismissed for reasons to be given later. That made it unnecessary to hear argument on the other grounds. This judgment sets out my reasons for reaching that conclusion.

Applicable legal principles

3

There was no dispute before either the judge or this Court as to the principles applicable to the construction of patent claims. It is therefore sufficient for the purposes of this appeal to set out the following well-established propositions. First, the claim must be interpreted through the eyes of the person, or team of persons, skilled in the art to whom the patent is addressed. Secondly, it must be interpreted taking into account the skilled person's or team's common general knowledge. Thirdly, the claim must be interpreted in the light of the description and drawings in the patent, that is to say, in context. Fourthly, the claim must be interpreted purposively, that is to say, having regard to the inventor's purpose as disclosed by the specification. Fifthly, the specification may disclose more than is claimed. Sixthly, where the language of the claim has a clear meaning, it is normally not legitimate either to extend or to cut down that meaning by reference to the description.

4

It follows from these principles that, as Sir Christopher Floyd recently said, with the agreement of Nugee LJ and myself, in Philip Morris Products SA v Nicoventures Trading Ltd [2022] EWCA Civ 1638, [2023] ECC 13 at [46]:

“Whilst it is conceivable that a claim will fail to cover something described as an embodiment of the invention, the skilled person is likely to arrive at an understanding which does not have that result if the language is reasonably capable of bearing the wider meaning. The exclusionary language relied on to achieve the result of excluding from the claim something described as an embodiment of the invention would normally have to be clear.”

The skilled team

5

The judge found that the Patent was addressed to a skilled team consisting of a person with expertise in telephony technology and a person with expertise in payments processing and the handling of payment information. There is no challenge by Sycurio to that finding.

Common general knowledge

6

At the end of the trial the parties agreed a statement of the skilled team's common general knowledge assuming that the team was composed as the judge found. The judge set out a summary at [42]–[68] which I reproduce below in slightly abbreviated form.

Call centre telephony systems

7

Prior to the priority date of the Patent, call centres used private telephone systems called private branch exchanges (PBXs), which comprised telephone lines (trunks) connected to the public switched telephone network (PSTN), and extensions to each telephone handset used by a call centre agent. During the 1980s, analogue PBX systems were replaced by digital PBXs, and by the priority date digital PBXs accounted for 90% of the market. The remaining systems used the Voice over Internet Protocol (VoIP) technology explained below, which businesses were starting to use by the priority date.

8

Both analogue and digital PBX systems used the traditional circuit switched network. By contrast, the more recent VoIP technology used (and continues to use) packet switched networks. The differences between these are discussed further below.

DTMF technology

9

DTMF technology is legacy technology which was widely used in the UK by the late 1970s. A DTMF tone is an audible sound created when two pure frequencies (one high, and one low) are combined. Each button on a telephone keypad generates a different DTMF tone when pressed, and DTMF tones can therefore be used to input information via telephone instead of providing information verbally.

10

At the priority date DTMF tones were commonly used by call centres to provide information (including payment information) to Interactive Voice Response (IVR) systems. An IVR system is an automated system with which a caller can interact on a telephone call through either voice or with DTMF tones, a typical use being in an automated welcome menu (e.g. press “1” for “sales”, “2” for “accounts”, etc). IVR systems can play announcements and prompt callers to enter each piece of information, and can read information back to customers (such as a customer's credit card number) and ask them to confirm it. At the end of an interaction with an IVR, the system may transfer the caller to an appropriate member of staff (automatically or by asking the caller to press a button) or end the call.

11

At the priority date, it was common for call centre technology (including DTMF functionality and IVR systems) to be based on telephony cards which were inserted into computers, and which could manage multiple calls at a time. Because the telephony card fitted into a standard computer expansion slot, the manufacturer only needed to develop the hardware and software for the specific functions of the card; everything else could be written by the user on the computer as standard software code or configuration. Typical functionality on telephony cards included a “silent monitor” function whereby a supervisor or trainer could listen in on an agent's call for training or quality-control purposes, and a “whisper mode” whereby the supervisor could listen in to the call and speak to the agent, unheard by the caller.

12

Telephony card functionality also included DTMF blocking functionality (sometimes referred to as DTMF “clamping”), enabling DTMF tones to be blocked from one person on the call, such that the DTMF tones would not be heard by that person but the rest of the conversation would be heard. This functionality could be configured using the telephony card software. For example, when an agent pressed a DTMF button to transfer a customer to another agent, DTMF blocking could be used to prevent the customer from hearing the DTMF tone. DTMF blocking could be done in any direction (e.g. agent to caller or caller to agent), although there was no common general knowledge application at the priority date which required DTMF blocking in the caller to agent direction.

Card payment processing

13

Card payments are divided into two general categories: card present, or face-to-face payments, and card not present, or remote payments. The present case is concerned with remote payments, and specifically card payments processed over the telephone in a call centre environment.

14

There are four key parties to a credit or debit card payment transaction: (i) the cardholder, namely the customer who is paying by card; (ii) the merchant, namely the vendor that sells to the customer, and which accepts credit or debit card payments for the goods or services; (iii) the card acquirer, who acquires transactions from merchants and processes them; and (iv) the card issuer, which is the financial institution that has issued the credit or debit card to the cardholder on behalf of a particular card payment network (such as Visa or Mastercard).

15

Three steps are required to complete a card transaction:

i) Validation involves checking that the card details provided by the customer are valid, e.g. checking that...

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