Acupay’s Patent

Acupay Patent Summary

The Acupay System is patented. The patented infrastructure is the foundation and modus operandi of the Acupay System. It defines the closed-system and processes by which Acupay operates.  

The patented Acupay System is an innovative, hi-volume processing system which organizes government-issued tax certificates and other documents (including Know-Your-Customer (KYC) and self-certification forms) related to hi-volume tax relief processing in a Certificate-Of-Residence “CORE” Library using bar-coding methods and other innovations. The System electronically matches tax certificates to statements of account and other documents which are lodged by custodial intermediaries.

The Acupay System is clearly documented in the Patent as a back-office tax certificate processing system.

Employees of Acupay implement the System to ensure that in the event any documents don’t reconcile with the application, that they liaise with an extensive network of custodian banks and brokers who are also registered in the System.

The Patent is an example of a business methods patent related to financial services. The idea to patent the System was rooted in U.S. court case called Paine Webber v. Merrill Lynch. At the center of it were questions around the patenting of a method for running a cash management account. In that decision, it was affirmed that a method for doing business was patentable, if the method “passed through” a digital computer system. In 1998, in State Street, v. Signature Financial, it was ruled that a computer system was no longer needed.

THE ACUPAY SYSTEM: ITS U.S. PATENT & KEY ELEMENTS

The Acupay System is patented under U.S. Patent No. No. 8577773 B2. This patent was granted by the United States Patent and Trademark Office on November 5, 2013.  Acupay had applied for the patent on October 2, 2007.

Below we set out brief portions of the text of the Acupay System patent which describe its key elements. 

a.          Patent Page 4: lines 55-63 ‘The invention relates to a novel system for, e.g., investor tax status information collection and tax certification processing, and an associated method of efficiently generating and processing underlying documents (such as tax certifications for tax-exempt investors of interest-bearing and preferred equity securities) which when combined together with information for end beneficiaries (e.g. investors), enables such end beneficiaries to avail themselves of certain benefits for which they are eligible’.

b.          Patent page 9 lines 61 to page 10 line 7 ‘The present invention can, for example, be implemented in a computer system and communications infrastructure and a set of procedures and methods relating to how various involved parties can utilize such computer system and communications infrastructure to transmit, collect, process and review investor tax status information and tax certificates allowing for instant, real-time and intelligent production, organization and transmission of the elements involved. For ease of illustration the system described will sometimes be referred to herein as "Acupay" or "the Acupay System." Acupay is a trade name contemplated to be used in connection with an exemplary embodiment of the present invention. The use of the term Acupay is in no way meant to be limiting and is only used for convenience in describing the invention’.

c.           Patent Page 28 lines 7-14 ‘Also provided is a database component of the larger relational database that is designed to capture and store Beneficial Investor Data introduced into the system (the "Tax Certificate Submission Database"). A further database component of the larger relational database is designed to capture and store Tax Certificate data and meta­ data introduced into the system (the "Tax Certificate Generation Database")’.

d.         Patent Page 30 lines 6-49 ‘With regard to exemplary embodiments of the Acupay system where, for example, the system would be used to facilitate requests by, for example, holders of common stock (which outside of the USA is called ordinary  shares) or   receipts issued with respect thereto and representing interests therein (i.e., stockholders) for reduced rates of withholding tax, and in which case Acupay submissions would be used in the collection and organization of the requisite government  issued certificates of tax residence, and where for example such government issued certificates of tax residence would be collected and organized using similar methods and technology as described herein for the collection and organization of tax certificates, such as, for example, employing tracking elements such as barcodes to electronically match physical scans or faxes of the government issued certificates of tax residence to the corresponding data submitted into and/or stored within the Acupay system, such government issued certificates of tax residence would be stored in a subsection of the Processing and Storage Facet. This subsection may be referred to, for example, as the Government-Issued Certificate Library System. The Government-Issued Certificate Library System would allow for the efficient organization and tracking of government issued certificates of tax residence and would allow for the maintenance and continuous upkeep of the government issued certificates of tax residence submitted on behalf of the relevant stockholder community. Immediate real-time access to those government-issued certificates maintained within the library by Issuers or other parties can be provided as needed. The process of scheduling and automating renewal of the government issued certificates when they expire (e.g., on an annual basis) can also be accommodated by the system. This Government-Issued Certificate Library System would allow for requests for reductions in withholding rates to, for example, treaty-reduced levels to be accomplished semi-automatically and without the need to transmit and refresh the government issued certificated of tax residency required to secure the acceptance of such a request upon each request, and would therefore streamline and semi-automate the periodic process of requesting such withholding rate reductions on behalf of relevant stockholders. A more detailed description of a Government-Issued Certificate Library System which would be used in the case of stockholders or certain other investors is provided hereinafter’.

e.         Patent page 46 lines 32-54. ‘It is foreseen that one alternative exemplary embodiment of the Government-Issued Certificate Library System would arise from the substitution of a purely electronic or crypto graphically represented government-issued certificate issued and/or recognized by the governments involved. In such an exemplary embodiment, when an investor does not have an existing valid government-issued certificate on file in the Acupay Government-Issued Certificate Library System, upon submission of the investor information, rather than the transmission of an existing government-issued certificate using a Barcoded Transmission Cover page the Acupay system would electronically interface directly with the government agency empowered to grant such certificates and negotiate an instantaneous generation and transmission of such a certificate on behalf of the investor from the government agency to Acupay. This would allow the investor, assuming they are qualified according to the records of the government agency, to immediately avail themselves of the benefit (e.g.the reduced rate of tax withholding). Such an electronically negotiated, generated and transmitted certificate of tax residency could, for example, be validated through a suitable trust scheme using cryptographic techniques, timestamps, codes and/or other secure method well known in the art’.