In the case of Main-Line Corporate Holdings Ltd. v DBS Bank Ltd, the High Court of Singapore upheld the validity of the Main-Line Corporate Holdings Ltd. patent and found that it had been infringed by DBS Bank Ltd.
Main-Line Corporate Holdings Ltd. (hereinafter referred to as ‘the Plaintiff’) owns Singapore Patent No. 86037, filed in 1999 and granted in 2003. The patent, entitled ‘Dynamic Currency Conversion For Card Payment Systems’, claims a system that automatically determines the currency in which to process a transaction for a payment card, thus allowing a card holder to make payments in the card’s billing currency when the card’s billing currency is different from the currency of the merchant. This is achieved by automatically extracting a series of digits, known as the ‘identifier code’ from the 16-digit card number, known as the Primary Account Number (‘the PAN’). The identifier code is then compared against a table known as the Bank Reference Table (‘BRT’) to identify a currency code and set an operating currency for the card transaction.
The Plaintiff commenced the present action in 2010 against the DBS Bank Ltd. (hereinafter known as ‘the Defendant’) after Declan Barry, a director of the Plaintiff, noticed the dynamic currency conversion offering as he was paying for tea. The receipt for the transaction indicated that the Defendant was the facilitator of the transaction and a system known as the Monex system, provided by E-Clearing Singapore Ptd Ltd. (‘ECS’) had been employed for the transaction. The Defendant had entered into a Multi-Currency Conversion Service Agreement (‘MCCS Agreement’) with ECS whereby the Defendant engaged ECS automatic currency conversion service using the Monex system.
The Plaintiff had previously asserted the patent against the United Overseas Bank Ltd. (UOB) and First Currency Choice (‘FCC’) alleging infringement where UOB used FCC’s system at its merchant outlet. The High Court, in the case held that the patent was valid as it was both novel and involved an inventive step and that FCC system infringed the patent. The Court of Appeal dismissed the subsequent appeal of UOB and FCC and upheld the High Court’s finding that there had been an infringement.
However, it must be noted that a corresponding patent application by the Plaintiff had been revoked by the European Patent Office (EPO) on the grounds of added subject matter and lack of an inventive step.
The High Court, in the present action, first sought to ascertain the validity of the patent and then shift the focus towards the alleged infringement.
On the issue of validity, the Plaintiff had argued that the patent was valid as it was novel, involved an inventive step and had no added subject matter. The Defendant, citing the EPO decision, pointed out that the patent contained added subject matter, thereby challenging its validity despite the High Court and Court of Appeal decisions in the UOB case. The High Court pointed out that the mere fact that the EPO had come to a different conclusion from the Court of Appeal did not mean that the High Court should regard itself free to depart from the Court of Appeal decision. The High Court stated that, due to different jurisdictions and the fact that Singapore is not a party to the European Patent Convention, the EPO decision may only be said to be of persuasive value.
The Defendant challenged the novelty requirement when it argued that the Monex system had been commercially exploited in Europe prior to the priority date of the patent. However, the High Court, in addition to citing the decisions in the UOB case, dismissed the Defendant’s argument as the Defendant had failed to provide any witness to testify the prior use of the Monex system.
Further, the High Court completely relied on the Court of Appeal decision in the UOB case in adjudging that the patent involved an inventive step and neglected any influence of the EPO decision.
On the grounds whether the patent involved added subject matter, the Defendant argued that the ‘issuer code’ or the ‘identifier code’ as described in the patent denominated the issuer of the card and not the PAN. The High Court stated that such argument had already been discussed at length and dismissed by the Court of Appeal in the UOB case. The High Court also stated that the Defendant had not pleaded that the patent ought to be invalidated on the grounds of insufficient disclosure and thus such arguments fell outside the High Court’s remit.
The Defendant claimed that the use of the terms ‘issuer code’ and ‘identifier code’ interchangeably amounts to added subject matter. Based on the cross-examination of Dr.Christina Gates, the Plaintiff’s expert witness, the High Court noted that a notionally skilled person, when looking at the patent specification as a whole and not just an isolated word here and there, would understand the term ‘identifier code’ as a code that is extracted from the PAN and the term ‘issuer code’ that is embedded in the BRT.
The Defendant also pointed out that the amendment to the words ‘payment card’ to ‘charge, debit or credit cards’ in the patent claims amounts to added subject matter. However, the High Court dismissed this claim on the grounds that the amendments narrowed the subject matter instead as ‘charge, debit or credit cards’ is actually of subset of ‘payment cards’.
On the issue of infringement the Plaintiff argued that the Monex system infringed the patent, that the Defendant had used or offered to use the Monex system and that the Defendant knew how the Monex System worked. The Defendant argued that as the Plaintiff had failed to provide evidence to show in detail how the Monex system worked, it cannot be said that the Monex system infringed the patent. On the account of Declan Barry’s transaction, the High Court concluded that the Monex system infringed the patent as it performed currency detection and conversion automatically. The High Court noted that, as per the MCCS Agreement, the Defendant provided Bank Identification Number (‘BIN’) tables, which corresponds to the BRT as disclosed in the patent, to ECS.
Subsequently, the Defendant argued that the Plaintiff had failed to show that the Defendant used or offered to use the Monex system and instead, it was ECS who used the Monex system. The High Court dismissed this argument pointing out that the Defendant stood directly to benefit from all transactions which use automatic currency detection and conversion. Also, based on the appearance of the Defendant’s name on the receipt corresponding to Declan Barry’s transaction, the High Court adjudged that the automatic currency detection and conversion was performed on the behalf of the Defendant and that ECS was merely a service provider.
Further, the High Court sided with the Plaintiff when it pointed out that the Defendant had known about the patent prior to the infringing act. Benjamin Tan Eng Huat (‘Tan’), the Defendant’s witness and vice-president of the Card Merchant Business of the Defendant, admitted that he was aware of the existence of the patent but did not look at the patent. Tan also admitted that the MCCS Agreement provided for the Defendant to furnish ECS with BIN tables. The High Court noted that even after the Court of Appeal decision in the UOB case, the Defendant did not take any steps to investigate and verify that there was no infringement. The High Court, consequently, adjudged that the Defendant had the requisite knowledge of the patent and a corresponding lack of action amounted to wilful blindness on the Defendant’s part.
Finally, the High Court sternly pointed towards the voluminous written submissions of the Defendant which ran to over 400 pages as compared to the Plaintiff’s 78 page report. Citing the Court of Appeal’s caution against excessively voluminous written cases which do little to illuminate the key issues, the High Court added that the arguments must be presented clearly and briskly and not to be iterated many times over.