Computer Security and Cryptography

19.7 U.S. PATENT 3,543,904 [CONSTABLE, 1970]

As described in Chapter 18, a successful ATM transaction involves two ingredients:

1. The account number read from the ATM banking card, and
2. The Personal Identification Number (PIN) entered at the ATM's keyboard.

In the 1980s, the National Cash Register Corporation (NCR) and Chubb Integrated Systems were involved in litigation regarding a claim of patent infringement.

Chubb had purchased Smith Industries Limited whose only asset was the ‘904 patent (Fig. 19.1). Chubb claimed that NCR's ATM system infringed on its invention of the protocol to validate an ATM-user. Clain 1 in the ‘904 reads:

1. Access-control equipment for selectively enabling access to a facility, comprising first means⁴ for receiving a coded token presented to the equipment and for reading from the token⁵ a plurality⁶ of numbers encoded thereon, second means⁷ for entering separately into the equipment a further number⁸ third means that is selectively operable for enabling access to said facility, and fourth means for comparing effectively the numerical result of a predetermined arithmetical operation involving said-numbers read from the token, and the said further number entered into the equipment … and means to operate⁹ said third means as aforesaid in dependence upon whether a predetermined correspondence exists¹⁰ between said number result and said further number.

There were two trials: The first was to determine if infringement occurred, the second to determine monetary ...