In a decision released November 24, 2011, Canada's Federal
Court of Appeal (FCA) held that the Patent Office should be
"open to the possibility that a novel business method may be
an essential element of a valid patent claim."
In the decision (A-G of Canada v. Amazon.com, 2011 FCA 328), the Court agreed with an earlier
decision of the Trial Judge that the framework for analysis of the
Patent Office in rejecting Amazon.com's one-click ordering
process as non-statutory subject-matter was deficient. The FCA held
that a determination of whether or not an invention constitutes
statutory subject matter must be based on a purposive construction
of the claims. The Court referred the matter back to the Patent
Office to undertake a purposive construction of the claims as the
Court considered it was not in a position to construe the claims
since it did not have the benefit of expert testimony.
Section 2 of Canada's Patent Act defines an
invention as including any new and useful art or process. Section
27(8) states that no patent shall be granted for any mere
scientific principle or abstract theorem. The Court stated that
earlier decisions of the Supreme Court of Canada required
identification of the invention to be grounded in a purposive
construction of the patent claims.
The Court noted the Patent Office had refused Amazon's
application on the basis that the invention failed three tests the
Office considered were implicit in the meaning of "art"
in section 2 of the Patent Act: (1) it does not add to
human knowledge anything that is technological in nature; (2) it is
merely a business method and a business method is not patentable;
and (3) it does not cause a change in the character or condition of
a physical object. The Court then stated "[i]n my respectful
view, the [Patent Office] should be wary of devising or relying on
tests of [this] kind... The focus should remain on the principles
to be derived from the jurisprudence. Catch phrases, tag words and
generalizations can take on a life of their own, diverting
attention away from the governing principles."
Specifically with regard to business methods, the Court noted
that "no Canadian jurisprudence determines conclusively that a
business method cannot be patentable subject matter."
Moreover, the Court stated that "[i]n my view the task of
purposive construction of the claims in this case should be
undertaken anew... with a mind open to the possibility that a novel
business method may be an essential element of a valid patent
The Court stated that anyone who undertakes a purposive
construction of a patent must do so on the basis of a foundation of
knowledge about the relevant art. Courts generally require the
expert evidence of persons skilled in the art to undertake this and
the Court did not have the benefit of expert evidence. On the other
hand, the Patent Office could undertake this task with the
assistance of submissions of the patent applicant and from staff at
the Office with the appropriate experience. Accordingly, the Court
allowed the appeal and referred the matter back to the Patent
Office to undertake this analysis.
John R. Morrissey, Steven B. Garland and Colin B. Ingram of
Smart & Biggar represented Amazon.com on the appeal.
The preceding is intended as a timely update on Canadian
intellectual property and technology law. The content is
informational only and does not constitute legal or professional
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