Heated debate over the future of business-related patents in
North America continues. North of the border, innovative businesses
await the outcome of argument recently heard by Canada's
Federal Court of Appeal in the Amazon.com appeal, with a decision (and likely an
appeal to the Supreme Court of Canada) expected within weeks. To
the South, a panel of the United States Court of Appeal for the
Federal Circuit, which oversees US patent cases, virtually begged
guidance from their colleagues – and potentially the US
Supreme Court - in determining what is patentable following the US
Supreme Court decision in America's celebrated Bilski case.
In CyberSource Corporation v. Retail Decisions, Inc.,
No 2009-1358 (August 16, 2011), the US Federal Circuit considered
the validity of a pair of claims for fraud monitoring in credit
card transactions. One of the claims baldly recited a method for
monitoring fraud, without tying the method to a computer or any
other means of automation. The other claim explicitly recited a
physical computer memory (a "computer-readable medium")
configured for execution by a computer processor in order to
implement such a method. Despite what many observers had long seen
as an accepted, well-established distinction between the two types
of claims, the Court rejected CyberSource's argument that the
second claim was clearly patentable because it was drawn to a
tangible, human-made article of manufacture.
"Regardless of what statutory category ('process,
machine, manufacture, or composition of matter,'...) a
claim's language is literally crafted to invoke," the
Court explained, "we look to the underlying invention for
patent-eligibility purposes. Here, it is clear that the invention
underlying both claims... is a method for detecting credit card
fraud, not a manufacture for storing computer-readable
information." In doing so, the Court countered what many
observers had considered black-letter American law regarding both
patentable subject matter and claim interpretation.
The question has been boldly framed: do the plain terms of a
claim determine its subject matter, or must the courts look past
the plain language of the claim to discern an "underlying
invention"? The Federal Circuit appears to be pushing for
broader judicial consideration and consensus in the wake of
Bilski, either by means of an en banc decision by
the Court as a whole, or further clarification by the Supreme
It is not yet clear how this case will proceed.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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