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A HISTORY of INTELLECTUAL PROPERTY in 50 OBJECTS Edited by CLAUDY OP DEN KAMP and DAN HUNTER 39 Polymer Banknote Tom Spurling

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A HISTORY of INTELLECTUAL PROPERTY in 50 OBJECTS Edited by CLAUDY OP DEN KAMP and DAN HUNTER 39 Polymer Banknote Tom Spurling A HISTORY OF INTELLECTUAL PROPERTY IN 50 OBJECTS Edited by CLAUDY OP DEN KAMP and DAN HUNTER 39 Polymer Banknote Tom Spurling N APRIL 1963 the Australian govern- by simple scanning techniques. The second Iment announced that the country would idea was to replace the paper substrate change from currency based on pounds, with one made from a polymer. A polymer shillings, and pence to decimal currency, substrate would not only facilitate the in- and set 14 February 1966 as the date for clusion of the optically variable devices and the introduction of the new currency. The other security features, but also increase Reserve Bank of Australia—the country’s durability. central bank, responsible for all banknote By 1972 CSIRO, with the help of some printing—had imported from Europe the employees of the Bank, had developed, a latest in banknote technology and printing proof-of-concept banknote, and it wanted equipment, and was astonished to discover to proceed quickly to turn it into a com- on Christmas Eve 1966 that its new state- mercial product. The Bank, on the other of-the-art banknotes were forged. The po- hand, was aware both of the risk involved lice quickly identified the forgers and the in introducing new banknote technology, ringleader was jailed for ten years. But the and of the great technical expertise resid- worry remained. ing in its international banking colleagues The Governor of the Bank, Herbert and their technology partners. They were Cole “Nugget” Coombs, decided that, since skeptical that a group of Australian scien- the usual overseas sources of technological tists working in somewhat run-down facil- innovation had failed to produce a secure ities in Melbourne could, in a few months, banknote, he would enlist the help of em- come up with an invention that was su- inent Australian scientists in the quest for perior to anything that better- funded and new technologies. Aside from the recent ev- more- experienced international teams idence of Australian forgers’ sophistication, could offer. Herbert Coombs was acutely conscious of To convince the Bank that it had the threat of color photocopiers that had invented a unique and useful product, recently come on the market. CSIRO decided to patent the invention. So in 1969, the Bank commenced a joint The Australian Provisional Specification project with the Commonwealth Scien- 73, 762/74 was filed on 26 September 1973. tific and Industrial Research Organisa- The inventors were Hamann, Solomon, tion (CSIRO) to develop a more secure and Brown, the Bank’s printing expert. banknote. David Solomon, a polymer sci- The process of drafting the patent—with entist, and Sefton Hamann, a physical its extensive demands on assessing inter- chemist, took up the challenge. national publications and prior art in the The team worked on two different, but field—eventually convinced the Bank that complementary, ideas. The first was the the project had international significance, notion of an “optically variable device.” and it agreed to go ahead to develop the Such devices contain images that change concept. The patent was accepted on 18 color or form according to the viewing November 1977. angle, and which forgers cannot duplicate The Reserve Bank did not possess the technical capability to develop the new has increased over the years to cope with technology and kept CSIRO involved for the widespread availability of color pho- the next decade or so. Robert Allen “Bob” tocopiers and scanners. The paper note Johnston became the Governor of the Bank issued by the Reserve Bank of Australia in in August 1982. He had been present at the 1966 had four primary security devices. In 1968 meetings and so was familiar with contrast, the latest Australian $5 banknote the project. Upon taking up the role as has ten: the polymer substrate, the top- head of the Bank, his view was that it had to-bottom window, a three- dimensional spent a lot of money and had been “fiddling image, two optically varying bird images, around for years.” He decided that it was a reversing number, an image in a small time either for it to adopt the technology, window, intaglio print, very detailed back- or to stop the project. He therefore built ground print, and micro-printing. A port- up the capability of the Bank to take over folio of seven Australian patent families the project from CSIRO, with the aim of protect these primary security devices. releasing the world’s first official banknote Retailers also need to recognize and made from a transparent polymer film on understand secondary security devices. 26 January 1988, the bi-centenary of the The $5 banknote issued by the Reserve landing of the First Fleet on Botany Bay. Bank of Australia in September 2016 has The decision to issue the first polymer a bird, the serial number, and the year of banknote as a commemorative note was print that fluoresce under UV light. For both wise, and brave. It was an extremely the latter security feature, Note Printing large-scale field test, in circumstances Australia purchases fluorescing ink from a where the consequences of failure would supplier, and anyone who wants to detect have been very public and very serious. it has to have access to a UV black light Fortunately, the technology worked. with a wavelength that is centered around Although they look simple, banknotes 365nm. The fluorescing ink and the detect- are sophisticated products. Until 1988, ing device may or may not be patented by Australia was completely dependent on their suppliers, and from the forger’s point imported banknote technology and the of view the presence of a secondary security Note Printing Branch of the Reserve Bank device is not a huge technical problem, but of Australia had no links with the academic it does slow them down. Although many or research community. The outcome of forgers can get access to fluorescing ink, its the polymer banknote project completely presence adds one more step in the forger’s reversed that situation. Many countries in production line. the world now use Australian technology The public is not aware of the presence for their banknotes, and Note Printing or absence of tertiary security devices. Australia has built up strong links with Central banks do not disclose the presence the research community. of such a device, and their websites and Banknotes have three levels of security material explaining security devices and devices. Primary security devices are those counterfeit detection never mention them. recognized by members of the public. These The intellectual property associated with include intaglio printing, metal strips, and tertiary security devices is highly confiden- the clear area in a polymer banknote. Sec- tial. If you come across a patent claiming ondary security devices are those that re- to cover such a device, you should doubt quire a machine to detect them. The most its value: secrecy, not patents, is how these common of these is ink that is only visible ideas are protected. under ultraviolet light. And then there are Banknote issuing authorities are nec- tertiary security devices. Only the issuing essarily very conservative. A secure, reli- authority can detect tertiary security de- able currency is essential to the function- vices, and these technologies are closely ing of a modern state. It was Johnston’s guarded secrets. They are used to detect view that the CSIRO scientists grossly undiscovered forgeries when the banknote under estimated the “enormity of getting is returned to the central bank. it wrong,” when they were proposing the The number of primary security devices technology for the polymer banknotes. The significance of banknote security to the manufacture of the substrate, the the sovereignty of the state can easily be manufacture of the security devices, and seen by the typical punishment for forgers the printing of the banknote. Each of during the medieval period: they were these activities is part of a highly complex simply executed. and competitive international business While counterfeiting the national cur- system. If issuing authorities conducted rency is no longer a capital offence in most all three activities exclusively, there would countries except China and Vietnam, it be little need for intellectual property, is still a serious criminal offence. Issuing as national criminal law systems would authorities have powerful remedies against provide adequate protection. But once forgers, primarily criminal charges fol- the private sector is involved in any of lowed by long jail terms. Aside from these these production processes, inter-firm criminal protections, modern banknote competition creates the need for intel- manufacturers also rely on conventional lectual property protection. De La Rue intellectual property protection such as plc, a major producer of banknotes and patents, trade secrets and trademarks. other secure documents, has more than Of course, counterfeiters do not care 1,000 patents covering anti- counterfeiting whether the banknotes they are simulat- measures. CCL Secure, a North Amer- ing are protected by patents or not. They ican multi national, now owns the intel- simply want to produce them as quickly lectual property rights associated with as possible, release them, and collect as the CSIRO-RBA developed polymer much real money as they can without be- substrate. Crane & Co., the company ing detected. Therefore, police forces, not that has produced the paper substrate for intellectual property laws, are the main US currency for more than 200 years, has protectors of currency. In Australia, this an extensive patent portfolio and has used forms part of the duties of the Australian the intellectual property system virtually Federal Police, along the various State since its founding. An early patent was US police forces. Similar arrangements are Patent No. 353,666, dated 7 December in place in most countries.
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