Patent for software 'didn't exist'

A patent attorney could not find any portfolios relating to a Richmond businessman or his company, in New Zealand, Australia or the United States, regarding the revolutionary data compression technology he was seeking money from investors to develop.

Julie Balance was giving expert evidence at the fraud trial of Philip Whitley, 48, in the Nelson District Court yesterday.

In 2009, Ms Balance, who works for Wellington firm Baldwins Intellectual Property, had one of her firm's patent searchers search the databases of the New Zealand, Australian and US patent offices for any application in the name of Whitley, Richard Cohen – who worked with Whitley on the technology – and NearZero.

In New Zealand, one patent application was found naming Whitley and Cohen and co-applicants and co-inventors.

It was filed in December 2003 under the title data manipulation system, but Ms Ballance said its status was voided pre-acceptance, meaning the application was not completed. More searches in New Zealand and Australia failed to find any patent applications, and the same was found in the US.

Searches of specialist non-patent office websites and the World Intellectual Property Organisation yielded no results.

"All searching has been conducted in a thorough manner and I am confident that no patent has been granted to Philip (or Phillip) James Whitely and or Richard Lester Cohen and or Near Zero and or NearZero in New Zealand, the United States or elsewhere," she said.

The only other document found was a "Notice of Customer Number Assignment" issued by the United States Patent and Trademark Office in the name of Whitley, which simply recorded customer details.

Whitley has denied two charges laid by the Serious Fraud Office (SFO) of making false statements to get people to invest in his United States-based company NearZero.

The SFO says that 490 people invested $5.3 million in NearZero between August 2006 and May 2007 on the basis that Whitley claimed to have invented a revolutionary data compression technology and he had patent protection for it.

Based on claims made by Whitley about having patents pending, Ms Ballance said she would have expected to have found a substantial patent portfolio. "My searching has revealed no such portfolio."

In response to questioning by SFO prosecutor John Upton, QC, Ms Ballance said it was "bizarre" that Whitley had said he did not give out patent numbers as it was a "road map" to a "pot of gold".

It was standard practice for those numbers to be provided, and the information would have been protected, before eventually entering the public domain, as was the process with patents. "It seems in this case that the reason why the numbers haven't been given is that they didn't actually exist."

Wellington IT worker Matthew Oliver, who invested $45,000 in NearZero, said the patent was "absolutely critical" in his decision to invest.

- © Fairfax NZ News