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Currency developers have patent headaches, too

March 6, 2014 by Brendan Burge

There are three intimidating words any developer of currency solutions can hear regarding a competitor's solution: "currency patent(s) pending."

Today, every component of the currency cycle — from design through creation, distribution, processing accounting, forecasting and ultimately destruction — is influenced by an intellectual property domination strategy known as currency patent pending.

[Counting on Currency] readership has voiced their opinion in favor of having access to a banknote and (physical) currency patent resource page. With more than 280 votes cast, 89 percent of respondents said they wanted access to such a filtered library.

What is the fascination with patents? Are they a badge of honor or are they so market domineering as to exclude all competition? 

Fortunately, different countries have different patent laws. It is not possible at this time to register a single, global patent. However, some countries allow patents for solutions that would either seem common to all developers, or that are so broad that they create a monopoly.

In no way am I saying that patents are bad. They protect the rights of the inventor for a variable and limited period of time. At one time, the intellectual property protected by a patent would be licensed to other contributors, thereby allowing industry standardization, which in turn allows for the stability upon which innovation is built.

Whether innovative or protectionist in nature, all patents need to be respected, defended and hopefully shared for the greater growth of any industry, be it currency or cosmetics.

Wikipedia's definition shows both the refined and broad natures of todays patent laws:

A patent … is a set of exclusive rights granted by a sovereign state to an inventor or assignee for a limited period of time in exchange for detailed public disclosure of an invention. An invention is a solution to a specific technological problem and is a product or a process. Patents are a form of intellectual property.

For reference purposes, I offer two very recent examples. One involves a patent granted to Cummins Allison Corp. on Feb. 14 for the operation of a currency-scanning device.

In one sense this could be viewed as a broad-based patent of common functionality. I fully expect that the company would vigorously defend the filing and award, as they should, given the current regional patent system (i.e., the U.S. Patent Office, of which Cummins Allison makes considerable and successful use). 

The second is a patent application by a relatively small player in the global industry. Namsys Inc. has been involved in currency software and (for a shorter time) retail cash and coin hardware solutions.

Most recently the company has been venturing into the transaction fee-based integrated cloud solution arena with the Cirreon solution. It would seem to me that Cirreon would benefit from the patent and is therefore poised to become a standard across the remote deposit management industry.

I would leave it to you to draw your own conclusions from these two examples. There are many more. From currency authentication features to printing components and methods, processing, accounting, forecasting and more — many aspects of our industry and business operations are becoming increasing influenced by patents. 

For myself, I am not convinced this is necessarily a good thing, as the scales seemed to be tipped in favor of individuals and companies that (perhaps unwittingly) create markets of stagnation, including inflationary investment scenarios and competitor empathy.

I encourage you to follow the links below to examine each of these entries, asking whether they serve or segregate the market. Hopefully a little debate and dialogue will result. I, for one, am all in favor of the market-serving patent. Not so much for the other variety.

No. 1 — Cummins Allison Corp.

System and Method for Processing a Deposit Transaction

U.S. Patent Number: 8655045

Abstract: A system for tracking currency bills comprises a currency-scanning device. The scanning device includes a sensor that retrieves currency identification characteristic information of each bill processed. The currency identification characteristic information permits the unique identification of each bill processed. The system further comprises a customer identification means and means for associating each processed bill with the customer depositing the bill. Means for identifying the customer (or customer account) associated with a particular processed bill after the deposit transaction has been completed is also included in the system.

No. 2 — Namsys Inc.

Method and System for Servicing a Drop Safe

US Patent Application Number: 20130346135

Abstract: A method of servicing a drop safe. Actual timing and amounts of deposits made to the drop safe are tracked over a predetermined number of historical days. Based on the tracked deposits, the timing and amounts of deposits to the drop safe are predicted for a predetermined number of future days. An optimal day for a carrier to pickup currency held in the drop safe is estimated from the predetermined number of future days. The optimal pickup day is based on: a) the predicted deposits spanning at least some of the predetermined number of future days; b) a currency holding capacity of said drop safe; c) a currency holding cost; d) a currency-in-transit cost; and e) a drop safe service cost. A pickup is arranged with the carrier on at least the one optimal pickup day. A system, and a computer readable medium carrying computer readable instructions for carrying out the method are also disclosed.

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