On November 24, 2011, the Federal Court of Appeal issued its decision in Canada (Attorney General) v. Amazon.com, Inc. (2011 FCA 338) (Amazon). The Court agreed with Justice Phelan of the Federal Court that the Commissioner of Patents' "analytical framework" for determining whether to issue a patent was flawed. However, the Court also held that the Federal Court was not in a position to properly construe the patent application claims, and thus could not direct the Commissioner to follow its construction. Accordingly, the application was referred back to the Commissioner for re-examination in accordance with the Federal Court of Appeal's reasons.
While Amazon is concerned with patentable subject matter in the context of prosecution, patent litigators will be interested in noteworthy aspects of the judgment including findings on the correct approach to patent construction. Any guidance is particularly welcome since there has yet to be a software patent or business method patent infringement trial decision in Canada.
No Prima Facie Prohibition on Business Method Patents
The Court of Appeal agreed with Justice Phelan that there is no Canadian jurisprudence rejecting business method patents. However, the Court added that a business method invention that is merely an abstract idea does not become patentable subject matter "merely because it has a practical embodiment or a practical application." The Court offered that, "a novel business method may be an essential element of a valid patent claim." Accordingly, determining the proper approach to claims construction to identify the essential elements of a claim is critical when considering patentable subject matter.
"Form vs. Substance" is Rejected: Patent Claims to be Construed Purposively
The Commissioner argued that the proper approach to determining patentability was to first consider the "substance" of the invention and the "form" of the claims. In other words, the Commissioner sought to determine, "independently of the construction of the patent claims, what the inventor has claimed to have invented — the 'actual invention' —and to determine whether the actual invention falls within one of the categories enumerated in the statutory definition of invention."
The Court rejected the Commissioner's approach as an improper "analytical framework," and found that purposive construction continues to be the accepted approach to Canadian patent law. The Court held that identification of the invention must be grounded in a purposive construction of the patent claims; it cannot be determined solely on the basis of a literal reading of the patent claims or by parsing the substance of the invention. In so finding, the Court reaffirmed Canadian law holding that the invention is defined by the claims.
Deference to the Commissioner on Issues of Construction
Also of interest to litigators, the Court of Appeal's decision appears to signal greater deference to the Commissioner on questions of patent construction. Clearly, the Court reiterated that patent construction is a question of law, reviewable on the standard of correctness. The Court also found that factual determinations made by the Commissioner in connection with the construction of the patent should be reviewed on the standard of reasonableness.
However, the Court went on in its reasons to reject the lower Court's construction as lacking a foundation of knowledge of the relevant art. The Court of Appeal held that, during prosecution, the Commissioner obtains that knowledge from the applicant and "from staff at the patent office with appropriate experience." However, during litigation, the Court is more restricted, and generally requires expert evidence of persons skilled in the art. Because the lower court lacked such evidence, the Court of Appeal held that it was necessarily limited to a literal interpretation of the claims and thus could not perform a proper construction.
Foreign Patent Experience
Patent litigators, from time to time, point to the record of patentability of certain inventions in other jurisdictions. However, noting that every jurisdiction has patent laws and administrative practices which may be inconsistent in important respects, the Court held that the fact that a patent has been granted in other jurisdictions "cannot determine whether it constitutes patentable subject matter in Canada."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.