On November 24, 2011, the Canadian Federal Court of Appeal
released a vital decision quashing the Commissioner of Patents'
stated "tradition" of excluding business methods from
patentability. In the appeal of Commissioner of Patents v.
Amazon.com Inc., the Court kept the door open to the
patentability of business method patents in Canada, but refrained
from ruling on whether the "one-click" patent at issue
was patentable. The Court sent the matter back to the Commissioner
to expedite further examination of Amazon's patent application
based on the Court's reasoning.
The Court confirmed there is no conclusive Canadian
jurisprudence dictating that a business method cannot be patentable
subject matter. The Court also ruled that identification of the
actual invention must be grounded in a purposive construction of
the patent claims, in accordance with Free World Trust and
Whirlpool cases, and therefore the Commissioner's
adoption of a separate "form" and "substance"
analysis of the invention represented an impermissible attempt to
follow a discredited analytical approach.
Given that the door to Canadian business method patents is open,
companies need to proactively consider the role business methods
play in their technology in order to take advantage of this
decision. However, careful attention must be paid to the form and
content of how technology related to business methods is described
and claimed in Canadian patent applications.
The Court's reasoning provides guidance on what aspects of a
business method may be emphasized in a patent application in order
to best position the methodology as patentable subject matter. For
example, a business method runs the risk of being deemed an
abstract idea or theorem, and therefore non-patentable, in the
absence of proper practical application. In particular, it is
inadvisable to rely solely upon the presence of a computer program
to implement the methodology, however useful, in order to provide
the necessary practical application. Instead, one may consider the
methodology "not as a disembodied idea but [having] a method
of practical application" and therefore "not the whole
invention but only one of a number of essential elements in a novel
combination." Accordingly, aspects on how the methodology
affects or otherwise interacts with its environment need to be
considered as well, including leveraging of methodology advantages
The Court also reasoned that in order for a methodology to be
deemed patentable subject matter, the practical application needs
to be accompanied by something with "physical existence"
or otherwise "manifests a discernable effect or change."
The Court stated that this physical existence may not be
satisfied by the mere presence of a computer as an essential
element of the patent claims. In particular, consideration needs to
be given to operation of the computer in conjunction with the
methodology and "the manner in which computers are used to put
an abstract idea to use."
Another consideration for business methods is that a Canadian
patent application seeking protection for a deemed professional
skill (e.g., those personal skills reflecting learned behaviour
that can be improved with practice and refinement through personal
experience), business method or not, runs a significant risk of
being rejected by the patent office. The professional skill
distinction can provide important ramifications on the
patentability of a company's business method, including
third-party patent applications. In seeking patent protection for a
business method in Canada, careful attention must also be paid to
the form and content of the patent application in order to avoid it
being deemed a professional skill. Further, where a company is
investigating the relevancy of a competitor's patent
application, consideration can be given to professional skill as
part of a valid defence strategy.
While the final outcome of the Amazon patent application remains
undecided, it is recognized that examination of pending patent
applications will be affected by this decision and companies need
to revise their patent strategy accordingly.
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.
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