Newsletter Article
We Were Just One Click Away for Supreme Court of Canada Review
Published: 02/02/2012
By Stephen I. Selznick The Ongoing Discussion on the Scope of Patentable Subject Matter in Canada
We have been following with interest developments in the scope of patentable subject matter both here and in the US (see Recent Developments on the Scope of Patentable Subject Matter in the July 15, 2010 edition of The Cassels Brock Report and Revisiting Recent Developments on the Scope of Patentable Subject Matter in our November 30, 2010 issue of The Cassels Brock Report. This debate brings to the foreground the difficulty in attempts to box in the definition of what sorts of intangible methods and process, such as business methods, constitute legitimate patentable subject matter. The exercise is not purely an academic one. In an increasingly competitive and borderless global economy defined by the rapidity of technological innovation, it is imperative to understand the safe harbour of patent monopoly available to those who commit significant investment in new and novel business paradigms, and in the research and development that accompanies that endeavour. In turn, it becomes increasing important for a vibrant competitive marketplace, and ultimately for the consumer, to know where the fences are placed between the green pastures of effective competition and the barren lands of infringing activity.
As we commented in the November 30, 2010 edition of The Cassels Brock Report, on October 14, 2010 the Federal Court of Canada set aside the Commissioner of Patents refusal of the Amazon.com one-click patent application1. To recap, the Federal Court reaffirmed the requirement that there be a practical application for an invention, thus distinguishing legitimate patentable subject matter from unpatentable schemes, abstract scientific theorem or disembodied ideas. In doing so, the Court specifically rejected the Commissioner of Patents’ interpretation that an assessment of patentable “art” required an assessment of the physicality of an invention and its technological nature. The Court took an expansive approach, noting that the previous case law must not be interpreted to restrict the patentability of practical applications which might, in light of today’s technology, consist of a slightly less conventional “change in character”, or effect that change through a machine such as a computer.
The Commissioner of Patents appealed, and on November 24, 20112 the Federal Court of Appeal set aside the lower court decision, but only to amend the lower court’s direction concerning re-examination of the Amazon.com patent application in accordance with instructions set out in that lower decision. The Federal Court of Appeal substituted its own direction that the Commissioner of Patents re-examine the patent application on an expedited basis in a manner consistent with the Federal Court of Appeal’s reasons, and with a mind open to the possibility that a novel business method may be an essential element of a valid patent claim. In the view of the appellate court, it was not appropriate for the lower court to undertake its own purposive construction of the Amazon.com one-click patent claims on the basis of the available record in the case, and instead the court should have referred the construction of the patent claims back to the Commissioner of Patents.
The Federal Court of Appeal agreed with the lower court that because a patent cannot be granted for an abstract idea, it is implicit in the definition of “invention” that patentable subject matter must be something with physical existence or something that manifests a discernible effect or change. The Federal Court of Appeal also concurred in the lower court’s view that this must not be interpreted to restrict the patentability of practical applications which might, in light of today’s technology, consist of a slightly less conventional “change in character”, or effect that through a machine such as a computer. However, the Federal Court of Appeal was not prepared to interpret that a “physicality requirement” can be met merely by the fact that a claimed invention has a practical application. According to the Federal Court of Appeal, a business method that is not itself patentable subject matter because it is solely an abstract idea does not automatically become patentable subject matter merely because it has a practical embodiment or a practical application. The appellate court commented that it was arguable that on a purposive construction, the Amazon.com business method claims might not be saved by their practical application since the business method - itself an abstract idea – is realized by programming it into a computer by means of a formula or algorithm, which is also an abstract idea. Purposive clams construction by the Commissioner of Patents will, in the view of the Federal Court of Appeal, ensure that the Commissioner is alive to the possibility that a patent claim may be expressed in language that is deliberately or inadvertently deceptive and that what appears on its face to be a claim for an “art” or a “process” may, on a proper construction, be a claim for a mathematical formula, and therefore not patentable subject.
On December 23, 2011, and following expedited re-examination, the Commissioner of Patents approved the Amazon.com one-click patent application and issued a Notice of Allowance. No doubt the patent will use in short order.
The upside for Amazon.com is that after a long and hard fought battle it will ultimately receive the monopoly for the one-click invention that it has pursued so diligently since 1998. The downside for the rest of us is continued uncertainty in what looks to be an ever more subjective assessment of the boundary line between patentable subject matter and mere abstract ideas and theorem. Given the issuance of a Notice of Allowance for the Amazon.com one-click patent application, we will not have the benefit of a Supreme Court of Canada review and analysis of the business methods patentability issue any time soon. As well, the Commissioner of Patents has not published an analysis of exactly how the Commissioner came to the conclusion that the Amazon.com one-click patent claims now satisfy the “physicality” requirement on a purposive construction.
We will wait then to see how the law unfolds and places refinements on the Federal Court of Appeal’s reasoning in the Amazon.com case, one case at a time. We also look forward to any additional or amended patent examination guidelines that the Commissioner of Patents may chose to publish as a heads-up on Patent Office Practice in this regard.
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1 Amazon.com, Inc. v. The Attorney General of Canada and The Commissioner of Patents 2010 FC 1011
2 Amazon.com, Inc. v. The Attorney General of Canada and The Commissioner of Patents 2011 FCA 328
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