“In my opinion the inventive concept claimed in the Patent is a system and method for making prepaid telephone calls conveniently and inexpensively from any available telephone…The system includes a special exchange which sits behind the local exchange and thus obviates the installation of specialised telephones or equipment on each telephone line.”
“Accordingly, a method of using any telephone for prepaid telephone calls is provided. A system is thus provided that benefits travellers and others having a need for the availability of telephone service from any telephone.”
“Further, toll or long distance telephone calls are used more and moreas people travel more and conduct business on a less localized basis. Presently long distance calls can be made by charging the call to a local telephone such as for example to a telephone in a hotel room. The long distance call can be made by instant payment such as for example when using a public payphone. The long distance call can be made by charging the call to the calling party's home or business telephone or by using a telephone company credit card number. The long distance call can also be made as a 'collect call' where the called party has to accept the call and is then billed the time and charges for the call. Each of these present day methods for making and paying for toll calls has significant detriments. For example when a call is charged to hotel room telephones the hotel adds its charges to the call thereby disproportionately increasing the cost of the call. It is extremely difficult to make long distance calls from public payphones since it requires large amounts of the coins – not ordinarily carried about – especially when touring or on a business trip. The use of credit card calls often results in mistaken charges billed to the telephone credit card number. Further, to obtain a telephone credit requires credit checks and the establishment of credit, often almost impossible to acquire. Salesmen similarly should be able to call their home offices from a customer's telephone without having the call charged to the customer's telephone which is inconvenient or to their home office phone with the previously mentioned difficulties and the added cost. Thus there is a long felt need for a system which enables making telephone calls including local or toll calls conveniently, inexpensively and from any telephone. Thus, if a party wants to make a call, be it a local call or a long distance national or international call, he should be able to accomplish the call from the nearest available telephone.”
“Means may be provided in the special central station for further increasing the cost effectiveness of the system by selectively routing the call over the least expensive available lines.”
“The customer, such as a regular telephone user or a traveler, acquires a special code, a credit amount and the telephone number of the special central offices by either a cash or credit card payment. The code, the credit amount and telephone numbers may be acquired, for example through the regular credit card companies and charged to the acquirer's credit card. Alternatively, the credit amount, the telephone numbers and identifying code can be purchased at sales points such as in airports, hotels, rent-a-car stations and the like. The amount paid is credited to the acquirer for use against future telephone calls. The credited amount is stored in a memory at the special central office along with the special code.”
“Subsequently thereto, the acquiring party wishes to make a telephone call which may be a local call or a toll call. He uses the nearest available telephone, removes the handset and dials a special central office as indicated at blocks 13 and 14. The telephone in this example is a private station. When he is connected to the special central office (traveler phone serves office) Sic [f]or example 14,. a special dial tone is sent from the special exchange to a calling station. When the calling party hears the special dial tone indicating that the computer at the exchange is ready for him he dials the identifying code and the called number he wants as indicated at block 17. The computer at the special exchange checks the code and registers the desired called number. If the code number is a genuine code with credit ie valid as indicated at block 18 and 19, a regular dial tone is sent to the calling party station as he is connected to the regular telephone system. The computer at the special exchange routes the call on the most economical available lines, according to prior arrangements with long distance line suppliers, if it is a toll call. The calling party’s pre-dialed numbers are transmitted as indicated at block 21. Of course the system can be arranged so that the calling party dials the called party responsive to receipt of regular dial tone.”
“ At this time as indicated by block 28, the normal time and distance computer circuit, shown as a peg counter, is put into service to provide information for timing the call against the available credit. The information form the peg counter is sent to a comparator 29 to continuously determine whether the calling party’s credit is sufficient to pay for the call. When the credit equals the used time rate the call is automatically ended by the computer as indicated by the block 31. Block 31 opens the connection between the calling and the called party, the connection to the computer however remains and an announcement is made to notify the customer to insert another code number.”
“A method as claimed in claim 1 wherein the connecting step includes special routing”
“A system as claimed in claim 9 wherein the means for connecting includes least cost routing means.” 68. During the course of the trial, it became necessary to refer to several block schematic diagrams of various operational schemes for telephone systems. In his reply evidence (6/5/26-27), Mr Brian Docherty, WaveCrest’s technical expert, prepared such a schematic drawing of how the system proposed in the Patent works. It was referred to at trial (and not crossexamined to) and I consider it to be a fair and useful synoptic lay out. I reproduce it below, the ‘inner’ path being that of the conventional telephone call. Note the position of the Special Exchange. The Expert Witnesses 69. There were four expert witnesses in all, two to give evidence in relation to the technical aspects of the case (principally in relation to common general knowledge, obviousness and insufficiency) and two forensic document examiners to deal with the ATS III/65 Users’ Guide (Version 2.0), which it was said by Aerotel, had been false or to have been doctored. 70. I found all the experts to have been of great assistance to the court and to have given frank, independent evidence with clarity. Some criticism was made by counsel concerning intermittent lapses of objectivity on the part of the technical expert witnesses. If this is indeed so, I have not found it to be a matter meriting specific comment. Though coming from different backgrounds, the technical experts were thoroughly familiar with the relevant technology. As far as I am concerned, ‘they came as teachers’. 71. That said, I must also record that neither of the technical experts professed to have any particular expertise in the business or marketing aspects of the telephone industry, in particular in the ways of charging for telephone calls. In fact, if such experts do exist, I doubt whether they could usefully have contributed much to what I have to decide. 72. Two witnesses of fact from BT were called by WaveCrest (see below). They too were sound witnesses and in so far as they touched upon the business aspects of BT (in which they had been involved) I have no reason to question the utility of their evidence. The technical experts 73. For Aerotel: Mr Richard Chandler. Mr Chandler is a consultant to the telecommunications industry. He is from Denver, CO and acted for Aerotel in the litigation in the USA to which I have referred in §10 above. His background is essentially that of an electrical and electronic engineer in which field he holds a number of academic qualifications. Mr Chandler joined Bell Laboratories as a member of its technical staff in 1977 where he was involved in a number of development projects in telephony. In 1982 he moved to AT&T and later he worked for companies in the USA involved in satellite, wireless and landline communications. He has also been involved in teaching at the University of Colorado and since 2005 has been self-employed as an independent consultant to the telecommunications industry. 74. For WaveCrestMr Brian Docherty. Mr Docherty is the founder and manager of Small Planet Technology Ltd, a company that develops and supplies innovative telecommunications equipment. After graduating from Birmingham University in 1978 with a degree in electronic and electrical engineering, Mr Docherty joined BT where he was responsible inter alia for the introduction of push-button telephones to replace dial telephones. In 1983 he became head of group and later head of section at BT Enterprises. In these positions he was responsible for the ‘conception, development manufacture and rollout’ of a number of new telephones and telephony projects to major UK customers. In 1987 he joined Tetrel Ltd (which designed and made private payphones) where he remained until in 2001, he set up his present company. The forensic document experts 75. For Aerotel: Mr Erich Speckin. Mr Speckin works in the USA as a forensic chemist. He has a degree in chemistry from Michigan State University and has worked as a forensic scientist in both the field of handwriting and inks since 1993. He has authored a number of technical papers in his subject and has given evidence in court relating to his field on a number of occasions. 76. For WaveCrest: Dr Audrey Giles. Dr Giles has a distinguished academic record and was formerly head of the Questioned Documents Section at Scotland Yard. She has had over thirty years experience in all areas relating to the scientific examination of documents and handwriting. She now leads the scientific work of the Giles Document Laboratory, an independent laboratory for forensic document examination. The skilled addressee 77. The Patent is deemed to be read and understood by the skilled addressee. The skilled addressee is a forensic construct who possesses the common general knowledge of the art. The concrete attributes of this notional and important person in patent infringement cases have frequently been commented upon and I have no need to repeat them here. In the end, I do not believe that there was much between counsel as to who was to be regarded as the appropriate skilled addressee in this case. 78. The skilled addressee would I believe be a team having both modest business and technological skills and experience. The employer of the team would be a manufacturer of telecommunications equipment having a research and development department. The team would thus include persons having a primary electrical engineering (or similar) qualification but working more at the ‘business’ end. The team would possess the ability to obtain the services of others with complementary ‘high tech’ skills as needed – in particular, with persons having appropriate computer skills. Whilst the team would be well familiar with current technical developments (e.g in switching system architectures) its orientation would certainly be more commercial than technical. It would thus be aware of what was happening in the market in response to technological change. 79. In the UK, the principal customer of the team’s employer would have been BT Docherty II,6/5/3 . Indeed, till about 1988, BT was the only entity in the UK which would have been capable of exploiting the teaching of the Patent Docherty II, 6/5/4 . Thus the skilled addressee team would in my view have made it its first business to be well aware of what BT was doing on both the technological and commercial/business fronts. 80. But one should not be confined I think, to what was happening in the UK alone since the US was not only the largest telecommunications market in the world Docherty II, 6/5/34 but was also in the vanguard of commercially exploiting market change. The skilled addressee would thus be particularly interested in technologies and equipment which were beginning to take advantage of ambient market deregulation in the US and Canada. The common general knowledge 81. The common general knowledge possessed by the skilled addressee played a most important part in this case. In the second section of this judgment ‘Some introductory facts about telephone services’, I have already recorded much of what I believe was common general knowledge at the priority date. There are however some further matters to consider, one of them being specifically pleaded under obviousness. It is called WATS reselling. First however, I will record some evidence which Mr Chandler gave in his first report which was responsive to WaveCrest’s broad insufficiency allegation that the skilled addressee would be unable to implement various features of the claimed invention at the priority date. This is an example of what Mr Purvis later called the ‘insufficiency squeeze’. USA/Canada and the UK 82. As noted, telecommunications technology throughout the world had much in common and knowledge would not therefore be subject to significant national insulation Mr Chandler T2/183 and 196-198. . As Mr Chandler said T2/197 : “…I believe that the skilled person in the UK would be well aware of the deregulatory efforts and the emergence of competition in the US and elsewhere. Competition was really sweeping the telecommunications industry worldwide at that time and was certainly headed down that path, and the skilled person would have known that.” 83. There were however some differences in practice (and terminology) between relevant systems in the UK and the US. I have mentioned for example that, unlike the position in the UK, the use of DTMF telephones was widespread in the US at the priority date. Furthermore, in this country, virtually anything, in which BT were publicly involved, soon became part of the common general knowledge. As I have said, in spite of denationalisation, BT was still the dominant force in the telecommunications industry in this country. Such differences in practice and terminology were well known and did not strike me as being material T2/183 . Insufficiency evidence: computers and PBXs 84. In his first report, Mr Chandler was strongly hostile to any suggestion that the skilled addressee would have been unable to carry out the teaching of the Patent at the priority date: see 4/1/§§ 86-91. In particular said Mr Chandler, computers capable of the verification and monitoring process (which was required as a result of the choice of pre-payment) were ‘widely available well before the priority date’. And he gave examples of commercially available models of computers. 85. Regarding PBXs and minicomputers to be used in the Special Exchange, he said this: “Stored-programme PBXs had been available since the 1970s in the UK and elsewhere. Such PBXs had enough flexibility to permit the skilled person to build a special exchange according to the teaching of the Patent. The modifications would have included the addition of various hardware and software, including for example, a separate minicomputer-based system for storing and maintaining the special codes and prepayment data as well as the hardware and software interfaces between the PBX and the database minicomputer.”
“Despite what one might think to be a considerable degree of hyperbole in the description of the difficulties facing a telephone user, it is accepted for the purposes of this application that I must treat what is said in the Patent as true.” 99. Having heard the action, I not only concur with Lewison J’s misgivings about the seriousness of the suggested ‘detriments’ but in the absence of relevant evidence, I was left with an abiding impression of their being at best minor inconveniences. This is not an irrelevant observation since Aerotel pleaded and led evidence in support of the commercial success as an antidote to the attack based on obviousness. Commercial success is of course, the necessary obverse of long felt want and I shall return to this topic below. 100. Computers and processors. Since the experts were in minor dispute over whether enhanced or more sophisticated computer processing capability might (or might not) be required to adapt certain prior art proposals to a prepay or even a dual pay mode, I should again mention that as a matter of construction, the Patent is in fact quite unconcerned with any technical detail regarding the computers which are used. They are proposed as mere structural ‘blocks’ in the system which are required to perform certain functions as Mr Chandler said See §§ 84-86 above. . The computer ‘whizz’ in the team would understand this and is assumed to be able (for example) to achieve correct functional programming as required without undue effort. That, I think, is how this aspect of the patent would be understood by the skilled reader. 101. ‘Any available telephone’ This requirement is of course one of the salient features of the invention and in spite of the apparently straightforward nature of the phrase, it gave rise to dispute. One has I think, to have a practical approach to understanding the scope of this integer. 102. ‘Available’ is synonymous with ‘available for use’ in the sense that the telephone is ready to be used to make a call; in other words, it works. However, ‘any available telephone’ would not I think, mean ‘every working telephone in the jurisdiction without qualification’; neither would it cover a single apparatus since the Patent addresses a system. The skilled worker would be aware for example that at the priority date there were two types of apparatus in use: the old pulse dial telephones and the DTMF telephones which were being introduced (see above). If the proposal worked with the latter but not the former, that would still include ‘any telephone’. Moreover, the phrase is also not to be understood as implicitly carrying a compulsory, universal national availability. One has only to test a non-infringement argument based on the mere regional (as opposed to national) availability of the system subject of the claims, to reject any other construction. 103.‘Special Exchange’ The meaning of this term (which is used both in the narrative and in the claims), is I believe, of fundamental importance to the resolution of all the important issues in this case. It is common ground that ‘Special Exchange’ is not a term of art. Surprisingly therefore, the term is not defined as such in the Patent. So one must look to context in the specification itself and at the drawings, particularly I think, at Figure 3 (reproduced above). I would add that the use of this term seems to be synonymous with two other undefined terms also used in the narrative: ‘special central station’ and ‘special central office’ Pages 3 and 7 respectively. . 104.Before examining this topic I should just mention that in their admissions, WaveCrest seem to have had no difficulty in ascribing a meaning to the term since they admitted that their allegedly infringing system operates using a Special Exchange: 2/9/1(iii) and 3 (v)-(viii). 105.In spite of this, the lack of a definition in the Patent has led the experts to disagree about what the skilled reader would understood this term to mean, particularly in relation to whether the prior art citations possess a ‘Special Exchange’. But even then I detected some inconsistency in their evidence; and in the hands of the experts the phrase from time to time developed an elastic quality. Having listened to a good deal of argument about what this phrase means, I suspect that it may be a portmanteau phrase which is intended to introduce some ‘flexibility’ into the scope of the claims How then would the skilled addressee have understood it? 106.In my view, the key is to be found in the adjective ‘special’ which was used by the draftsman both in this and other respects, in contrast to ‘regular’ Or in English usage, ‘local’. . It must therefore be an exchange which works apart from and in a different way to the ‘local’ exchange – which (see above) is a term of art well known to the skilled addressee and, I would guess, to the public as well. It is an item of functional hardware comprising computers and switches which was not to be found within in a ‘regular’ telephone network at the priority date and which is capable of certain functions which a local exchange would not have been capable to cope with at the priority date See T4/627, for example . 107.A Special Exchange is evidently hardware not otherwise found in a conventional telephone network; it functions as an independent exchange introduced into a telephone network. Both Mr Chandler and Mr Docherty have in my view rightly approached the matter of construction by seeking to determine the function of the Special Exchange. Mr Chandler says this Witness statement 4/1/46 : “ The discussions of the special exchange at pages 11 to 21 of the Patent describe a system comprising a telephone call router (which may be a switch), computers and memory. The special exchange is capable of being dialled by customers, prompting for PIN numbers and desired destination numbers, and routing approved calls into a telephone network for connection to the ultimate destination.” [Emphasis added]
“ …the description ‘special exchange’ refers simply to the fact that the system described by the Patent requires an exchange with special functions to work. These special functions include the validation of special codes, storage of account information, monitoring the cost of call and automatic termination of calls on expiry of credit” 72. Routing 109.The experts’ principal difference in defining this term thus concerned the need for a router within the Special Exchange after a call is approved. Mr Chandler said that routing was essential; Mr Docherty did not subscribe to this. In this connection, reference was made to Fig 3 of the Patent (reproduced above) which it was said by Mr Chandler, illustrated the Special Exchange and within it, the router. 110.Looking at Fig 3 (read with the descriptive passage bridging pages 13-14), Mr Carr submitted that everything to the right of item 82 (‘regular telephone system’) was indeed the Special Exchange. Mr Carr pointed out that this included the router (or switch) 91 which has a routing function, being able to selectively connect incoming and outgoing lines. Claim 9 he said cannot be construed so as to exclude Fig 3. He further submitted that in practice, some routing function must always be present in any exchange since exchanges have to cater for long distance and international calls. In this connection he referred to the ‘Dictionary of Telecommunications’ New York, 1983 [X13] entry for ‘exchange’ :and ‘exchange hierarchy’ ‘An exchange is the element in a telecommunications system which controls the traffic to and from destinations. It allows any user to communicate with any other within a large distributed population of users. There are many possible routes for a particular call and the combination of trunks and exchanges to make a call is known as routing’. 111. Therefore, said Mr Carr, claims 1 and 9 require there to be a routing function within the Special Exchange as an essential feature. However, the claims are not for the Special Exchange per se. They are directed to a method of making a prepaid call and to a telephone system for making such a call, both making use of the Special Exchange as a part thereof. The claims are not concerned with how users of the system are connected Though perhaps merely by way of explanation, I noticed that both experts from time to time illustrated how the system in the Patent worked by reference to ‘one line in, one line out’ without even mentioning routing. . 112.The only purpose of the router which is mentioned in the Patent is to save cost, and then, only in relation to long distance calls Pages 4, 8 and 14 respectively. : ‘Means may be provided in the special central station for further increasing the cost effectiveness of the system by selectively routing the call over the least expensive available lines. …….. The computer at the special exchange routes the call on the most economical available lines, according to prior arrangements with long distance line suppliers, if it is a toll call……. . The router selects the best possible route cost-wise for the particular call if it is a toll call.’ [Emphasis added] 113.I have said that this Patent was obviously written with a US/Canadian readership in mind and when I first read the above passages, I was at once reminded that in the US/Canada (unlike in the UK), local calls are free. On the other hand, the Patent does not require that the called party be any particular distance from the Special Exchange and the making of both local and long-distance calls are within the claims. This ties in with the claim structure where only claims 2 and 10 add ‘special’ routing and ‘least cost routing means’ respectively, as the features which distinguish them from claims 1 and 9. Thus, I then thought that claims 1 and 9 covered a Special Exchange wherein a router could be present – or not. I am still of that view and in spite of counsel’s argument, that is still how I think the item would be understood by the skilled addressee. 114.This is an important issue however and I should, perhaps. venture a little further. Mr Purvis submitted that no routing function is required to enable the invention to work since the Special Exchange is on the line side of the local exchange and he pointed to Mr Chandler’s drawing X6 to illustrate the point. In such an arrangement, it is in fact the local exchange (and not the Special Exchange) which will do the routing. 115.Furthermore, though ‘block’ 91 is indeed drawn within Fig 3, it is optional – just as certain other items drawn in Fig 3 are optional, such as the ‘redialler’ 89 and the ‘announce’ 87. 116.I am therefore of the view that properly construed, claims 1 and 9 do not require a router to be an essential feature of the ‘Special Exchange, whereas claims 2 and 10 do. 117.‘Making a pre-payment’ and ‘Pre-payment information’. The use of pre-payment to pay for telephone calls wove its way in and out of many of the arguments in this case, the argument being at times mercantile in character whilst at other times it seemed to assume a metaphysical quality. In truth, the debate always came down to credit before a call, however the call is to be paid for. Credit and payment, as every shopkeeper knows, are not the same thing 118.Mr Carr’s first and basic riposte to all the prior art citations, was: “But that is a post- payment method”
‘The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.’ 73.
“(1) (a) Identify the notional “person skilled in the art” (b) Identify the relevant common general knowledge of that person; (b) Identify the relevant common general knowledge of that person; (2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it; (3) Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed; (4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?”
“a system comprising a telephone call router (which may be a switch) computers and memory. The special exchange is capable of being dialled by customers, prompting for PIN numbers and routing approved calls into a telephone network for connection to the ultimate destination.”
“I would not have phoned up Mercury of this development, you are correct”