Feeds

Inventor of revoked payment patent says UK system is a joke

It's not for the little guy

Top 5 reasons to deploy VMware with Tegile

A patent for the handling of gratuities in card payments has been revoked by the UK Intellectual Property Office (IPO) for being a business method implemented by a computer program.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.

Intelligent flash storage arrays

More from The Register

next story
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.