Feeds

Inventor of revoked payment patent says UK system is a joke

It's not for the little guy

A patent for the handling of gratuities in card payments has been revoked by the UK Intellectual Property Office (IPO) for being a business method implemented by a computer program. The decision follows recently-revised guidance on patentability.

One of the inventors told OUT-LAW today that his company spent more than £100,000 trying to enforce and defend the patent before passing the rights to another company, which he described as a "patent troll". He believes that company will appeal this month's ruling.

payment patentAt the time the patent was filed, in 2001, the payment system used by most restaurants was "off-line", requiring an authorisation request to a customer's bank when the customer presented his or her card. The request checked whether there were sufficient funds in the account and no actual payment transaction occurred at that point. The transaction was held within the terminal and was only completed when the bank host dialled the payment terminal (usually at night) and up-lifted the transactions. That process is known as polling.

Before chip and PIN became ubiquitous, a restaurant had to remove a customer's card, swipe it at a terminal and take a signature slip to the customer. Typically, the customer then had the option to add a gratuity on the signature slip. To avoid authorising the tip as a separate transaction, the polling process tolerated a 15 per cent variation between the actual amount debited overnight and the amount authorised at the terminal. That variation presented a risk of fraud: a waiter could charge more to a card than was written on the signature slip to boost his pay. If that sum was small, say five per cent, the cardholder might never notice it or bother to report it.

The invention of Jeremy Nielsen and Hugh O'Donnell removed that risk by authorising a sum that included the tip. That also removed the need for overnight polling – a service that typically cost restaurants between £10 and £15 per month for each of their terminals.

Their patent described a process of generating and handling an electronic online authorisation and uploading request relating to a payment transaction. The customer would be offered the chance to add a gratuity and a request for authorisation of the total would be constructed. A request would then be made over a telecoms network and a receipt generated for the customer.

More from The Register

next story
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.