| Subject: Granting of Patent to CAT reported in the AFR 8/2/2002.(impotant dates 14th of Feb and 25/Feb 2002.) |
Author:
Steve Bonkers
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Date Posted: 22:37:23 02/10/02 Sun
AFR Article patent. 11/2/2002.
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The smartcard operations of ERG, including its yet-to-be built Sydney ticketing system and its ANZ Bank and American Express systems, may be put in jeopardy by the granting of a broad smartcard system patent to rival player Catuity.
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Catuity, a loyalty software systems provider listed on Nasdaq and the Australian Stock Exchange, is expected to announce this morning that the US Patent and Trademark Office has granted it an expansive smartcard system
patent that will last 17 years.
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It is understood the patent will cover systems for manipulating data on several devices - including smartcards - used in multiple terminals to conduct programs such as electronic payments, ticketing and loyalty
programs.
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Catuity chief executive Mr Mike Howe said the patent may mean other operators would find their smartcard and loyalty systems trespassed on Catuity's territory.
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"A number of existing and proposed smartcard system implementations could fall within the scope of the Catuity patent claim," he said.
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"Catuity has two other patents pending in the US which would broaden its patent protection in the multiprogram and smartcard areas."
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It is understood similar patents will now be granted to Catuity in markets
including Australia, New Zealand, Europe, Canada, Brazil and Japan.
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The company's chairman, Mr David MacSmith, said although Catuity had no plans to pursue its rivals for patent infringement, "having a patent with this scope will cause questions to be asked".
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"We've got no plans to take aggressive action and get into a patent fight -we have 17 years to do that. When we've got all the ammunition and all the facts, we'll evaluate," Mr MacSmith said.
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However, receiving licensing fees from other smartcard operators using technology covered by its patent could become a new and significant revenue stream for Catuity, he said.
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Mr MacSmith said Catuity, whose technology is used by Visa and Target in America, had been able to secure such a broad patent because it applied in 1995, when smartcard systems were still in their infancy.
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Should Catuity begin requesting royalties from companies deemed to infringe its patent, the group would be making others take the medicine French smartcard rival Welcome Real Time forced it to swallow last year.
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Last July, a Melbourne court ruled that Catuity had infringed WRT's patent.
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The ruling forced Catuity to ditch its Sydney-based Transcard smartcard project.
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Mr MacSmith said Catuity had appealed and the matter would be heard on February 25.
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"We believe we are outside the WRT patent. They're not going to get any significant amount of money from us," he said.
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A spokesman for American Express said it believed Catuity's patent would have no impact on its Amex Blue card, which uses a loyalty and smartcard system to provide discounts to card holders at 14 merchants.
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ERG also said it believed it would not be in breach of the patent.
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"Our business is not to develop loyalty systems - we buy them. We don't see Catuity as a competitor but as a supplier," an ERG spokesman said.
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