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A patent for the handling of gratuities in card payments has been revoked by the UK Intellectual Property Office (IPO) for being a business method implemented by a computer program.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


Other stories you might like

  • Warehouse belonging to Chinese payment terminal manufacturer raided by FBI

    PAX Technology devices allegedly infected with malware

    US feds were spotted raiding a warehouse belonging to Chinese payment terminal manufacturer PAX Technology in Jacksonville, Florida, on Tuesday, with speculation abounding that the machines contained preinstalled malware.

    PAX Technology is headquartered in Shenzhen, China, and is one of the largest electronic payment providers in the world. It operates around 60 million point-of-sale (PoS) payment terminals in more than 120 countries.

    Local Jacksonville news anchor Courtney Cole tweeted photos of the scene.

    Continue reading
  • Everything you wanted to know about modern network congestion control but were perhaps too afraid to ask

    In which a little unfairness can be quite beneficial

    Systems Approach It’s hard not to be amazed by the amount of active research on congestion control over the past 30-plus years. From theory to practice, and with more than its fair share of flame wars, the question of how to manage congestion in the network is a technical challenge that resists an optimal solution while offering countless options for incremental improvement.

    This seems like a good time to take stock of where we are, and ask ourselves what might happen next.

    Congestion control is fundamentally an issue of resource allocation — trying to meet the competing demands that applications have for resources (in a network, these are primarily link bandwidth and router buffers), which ultimately reduces to deciding when to say no and to whom. The best framing of the problem I know traces back to a paper [PDF] by Frank Kelly in 1997, when he characterized congestion control as “a distributed algorithm to share network resources among competing sources, where the goal is to choose source rate so as to maximize aggregate source utility subject to capacity constraints.”

    Continue reading
  • How business makes streaming faster and cheaper with CDN and HESP support

    Ensure a high video streaming transmission rate

    Paid Post Here is everything about how the HESP integration helps CDN and the streaming platform by G-Core Labs ensure a high video streaming transmission rate for e-sports and gaming, efficient scalability for e-learning and telemedicine and high quality and minimum latencies for online streams, media and TV broadcasters.

    HESP (High Efficiency Stream Protocol) is a brand new adaptive video streaming protocol. It allows delivery of content with latencies of up to 2 seconds without compromising video quality and broadcasting stability. Unlike comparable solutions, this protocol requires less bandwidth for streaming, which allows businesses to save a lot of money on delivery of content to a large audience.

    Since HESP is based on HTTP, it is suitable for video transmission over CDNs. G-Core Labs was among the world’s first companies to have embedded this protocol in its CDN. With 120 points of presence across 5 continents and over 6,000 peer-to-peer partners, this allows a service provider to deliver videos to millions of viewers, to any devices, anywhere in the world without compromising even 8K video quality. And all this comes at a minimum streaming cost.

    Continue reading

Biting the hand that feeds IT © 1998–2021