Toll Reader Patent Application Considered Business Method in Israel, and Refused


Raytheon filed Israel patent application number 179203 titled “Licensed Driver application for High Occupancy Toll Lane Qualification” back in November 2006. The application is a national stage entry of PCT/US2005/052162. The corresponding patent issued in the United States as US 7,091,880, and, on 22 January 2007, the applicant brought the claim set of the Israel application into conformance with that of the issued US Patent, and requested allowance in Israel under section 17c.

The claims

The claim set of the corresponding US patent includes 17 claims, of which three, claims 1, 9 and 15 are independent. Claim 1 relates to the method, claim 9 to the system as a whole, and claim 15 to the specific apparatus:

Claim 1 is as follows:

A method of collecting tolls on a high occupancy toll lane comprising: Detecting a count of driver’s licenses inserted into a card reader located in a vehicle using the high occupancy toll lane; and transmitting the count of driver’s licenses to a roadside transceiver for a determination of a toll amount for the vehicle based on the count of the driver’s licenses.

The various dependent claims relate to (claim 2) extracting information concerning the driver’s license from the card reader, (claim 3) using a bar-code or magnetic swipe line on drivers’ license, (claim 4) to determine if the driver’s license is currently in force or not, such that only valid drivers’ licenses are considered. Claim 5 adds other parameters to determine the toll to be collected. Claim 6 uses the number of drivers’ licenses associated with the vehicle as an indicator of the number of passengers for the purpose of determining the toll charge. Claims 8 and 9 add a facility under which if there are no detected registered drivers licenses associated with the vehicle on which to base a toll charge, the lane is illuminated so that a toll may be manually collected

Claim 9, which relates to the system, is as follows:

A toll collection system comprising: a transceiver positioned adjacent to a lane and including a receiver for receiving radio frequency signals; and a transponder positioned on a vehicle using the lane comprising a card reader for reading information from one or more driver’s license inserted into the card reader and a processor operative to generate a licensed driver count related to a count of the driver’s licenses inserted into the card reader, where in the transponder further comprises a transmitter for transmitting a radio frequency signal indicative of the licensed driver count to the transceiver.

Claims 10 to 14 correspond, more or less, to claims 2-8.

 Claim 15 relates to the transponder, and is reproduced below:

 A transponder located on a vehicle and adapted for use on a high occupancy toll lane, comprising a card reader for reading information from one or more driver’s licensed inserted into the card reader, wherein the transponder includes a processor operative to generate a licensed driver count indicative of a count a driver’s licenses inserted into the card reader.

 Claims 16 and 17 depend on claim 15 and relate to the transponder being able to transmit a number of driving licenses to a roadside receiver via radio waves, and to the receiver that can process and determine that the licenses are in force and accordingly adjust the counting.

 The Examination

The Examiner refused to allow the patent under Section 17c, on the grounds that it was directed to a business method, and not to a technical problem, and thus contravened Section 3. Furthermore, he cited prior art that allegedly rendered the claimed invention known / obvious and thus in contravention of Sections 4 and 5. The Examiner relied on the Decision of former Commissioner, Dr Meir Noam concerning Application 131,733 to Tamir which (according to Ms Shoshani-Caspi) codified the 23/94 Jerusalem Court Decision concerning United Technologies vs. Patent Office (District Court Vol. 28(8) 729.  The Examiner essentially considered the method as being a business method, addressing the issue of collecting tolls, but also the components and system standard, and their use as obvious to people of the art.  Furthermore, citing US 5,493,304 to Cunningham et al. and WO 2004038663, as lacking novelty and/or inventive step.

The Chief Examiner upheld the Examiner’s position, and the application was refused. However, the applicant was invited to appeal the decision to the commissioner – hence this hearing.

The Applicant’s position

The applicant had two issues:

  1. Where Section 17c is invoked, the Applicant considered the Examiner was prohibited from raising novelty and inventive step issues.
  2. As far as patentable subject matter was concerned, the Applicant considered that the subject invention is not a business method per se. but rather a technical solution to a problem that although it had financial aspects, was, nevertheless, essentially technical. The solution required a system of elements that worked together and were all essential. Consequently, the patent application could not be dismissed on the grounds that the elements themselves were known, or on the grounds that the this was merely a business method.

The ruling

The adjudicator cited Section 17c and noted that if the application fulfilled all other requirements, the Examiner need not consider Sections 4, 5, 8 ,12 and 13. However, based on the IL 136482 Bromium Formulations LTD. vs Albermarle decision, the Examiner was entitled to reject a Section 17c request based on prior art that he considered rendered the Application non-patentable. Furthermore, since the Examiner considered the application as not fulfilling Section 3, it was legitimate for him/her to do an independent search and cite prior art. See IL 168734 to Anna and Reuven Berman (a decision relating to paying car parking fees).

Ms Shoshani Caspi summarized her position that the Examiners were responsible for ensuring that patents that should not issue didn’t, even if corresponding patents had issued in other jurisdictions having competent Examining authorities.  

As far as the system claim is concerned, there is no argument that the components are known and are not being used in an inventive manner, apart from the application, which is a business method. Based on the Berman decision, and also on IL 171773 to Teicher, the system is essentially a computer based business system and the invention is thus fundamentally related to software and business methods, even though there are hardware elements included. The Adjudicator considers that the system has to be considered in its entirety and not as a collection of elements, and the issue is whether there is an inventive technological solution.

The adjudicator noted that in the background, the applicant himself acknowledged that there such systems were known:

“Automated toll collection systems are known. Typically, these systems comprise a reader transponder or transceiver and at least one vehicle transponder. The reader transceiver includes either laneside, overhead or in-pavement antennas in each traffic lane. The reader transceiver senses the presence of the vehicle transponder by employing a vehicle sensor or by transmitting an RF signal to which the vehicle transponder responds with an identification message.

High occupancy toll (HOT) lanes are in use in many states in an effort to reduce highway demand. In specially designated HOT lanes, vehicles having at least a predetermined number of occupants, such as two or three, (i.e., high occupancy vehicles, or HOVs) are given a discounted toll rate or are not required to pay a toll at all. Single occupancy vehicles (SOVs) may be permitted to use the HOT lanes, but are required to pay a higher toll.

Enforcement of HOT lane qualification is typically performed by having a police officer monitor passing vehicles to ensure that the threshold number of occupants are present in cars using the HOT lanes or benefiting from the reduced or eliminated tolls. Such enforcement is only effective when a police officer is present and is a costly enforcement approach.”

Thus, the inventiveness for which a patent was sought was that defined in the Summary of Invention as follows:

“….by determining a toll amount for the vehicle based on the number of licensed driver occupants, the intent of HOT lanes, of reducing highway demand, is served.”    

The Adjudicator went on to note that “A physical technological process is an expression of a physical thing or a characteristic of a process” and referenced EPO ruling G0003/08.

Furthermore, she ruled that to be patentable, a software invention is required to be more than merely computerizing something that can be done manually. Since the cited references included the same components, she could not see that this invention was anything more than a computerized system for doing something known, and rejected the application.  


Re Section 17c – Essentially, Ms Shoshani-Caspi’s position is that Section 17c establishes that where a patent has issued from a reputable patent office there is a presumption of validity that is rebuttable. The Examiner may rely on the issued patent not to do further searching or on the conclusion of the foreign Examiner that prior art is not identical or a combination of prior art does not render the invention obvious, but is not obliged to. Furthermore, since the standards of obviousness in each jurisdiction are determined by the relevant case-law, it does vary from country to country. Some combination may be considered non-obvious in the US, Australia or Europe, but may still be obvious by Israeli standards

I think this analysis is correct, but it is a change from the previous practice of the patent office. In consequence of the Israel Patent Office being an International search Authority, there are now some 100 examiners. There are more resources available for examining and we see not relying blindly on Section 17c as a positive development. What will, however, now happen, is that some patent attorneys will refrain from invoking Section 17c and will simply inform the patent office that corresponding patents with corresponding claims have issued elsewhere, providing details. This will probably slow down examination and increase costs to Applicants.

Re the Patentability of Computerized systems – IL 68409 to United Technologies Corporation, dealt with computerizing a system for the energy-efficient flying of a helicopter. The patent office rejected this, but on appeal, the Jerusalem District Court, C.A. 23/94 (Jerusalem) United Technologies Corporation v. The Registrar of Patents, Designs and Trademarks, District Court Decisions, Vol. 26 (8), 729. It would appear that where a system is computerised, to save fuel, the invention is not merely a business method but is technological. I accept that toll collection is more obviously a business method, but both really deal with efficient usage of resources, one case being a road and the other fuel for a helicopter. I can’t see any real philosophical justification to consider the two cases differently. I actually think the District Court was wrong, but the patent office didn’t appeal the ruling and it is thus good legal precedent. Dr Noam did not codify the ruling. He over-ruled it, and, despite the fact that I agree with him substantively, this was beyond his authority. Still, if this is the way the Israel Patent Office sees things, this is how they will rule, unless there is another appeal to the courts.

Categories: Business Method, Intellectual Property, inventive step, IPO, Israel IP, Israel Patent Agency, Israel Patent Office, patentable subject matter, Patents

1 reply

  1. Supposedly the mention of Meir Noam’s ruling refers to the decision in the matter of Eli Tamir (Patent App. 131733 if i remember correctly) –
    Well, to put it more accurately, UTC was not over-ruled but rather construed narrowly, as requiring an actual “physical process” to be performed.
    I agree that with this type of mixed inventions the categorization as “not in a technological field” (section 3) rather than merely “obvious” (section 5) is not doubt free; however as the analysis of Aerotel was basically embraced in the more recent Examination Guidelines (published 15.3.2012 in the ILPTO site), according to which, the alleged or actual contribution of the invention is assessed and whether it falls solely under excluded subject-matter – there is no real contradiction here with UTC or otherwise.

    Also, the refusal of 17c petitions is hardly a new trend, as indicated both by the Berman decision and the mention of the Bromides Composition decision on which i wrote expansively here:
    and here:
    (apologies for the hebrew-impaired)

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: