This past year was truly an important year for Canadian
decisions on business method patents, both from the Court and the
Commissioner of Patents, and these decisions are receiving rapid
attention. On November 24, 2011, the Federal Court of Appeal ruled
the Commissioner of Patents' practice of excluding business
methods from patentability was "incorrect in law". The
Court sent Amazon's one-click Internet shopping patent
application back to the Commissioner for expedited further
examination based on the Court's reasoning. On December 23,
2011, barely a month after the Court's ruling, the Commissioner
himself approved Amazon's application and a Notice of Allowance
was sent out. On December 28, 2011, Amazon's patent agents
submitted the required issue fee and the Canadian Intellectual
Property Office (CIPO) then promptly processed the fee as paid.
Given the recent speed at which CIPO processed allowance of
Amazon's application, we expect the Canadian
"one-click" patent to issue shortly.
The next question to ask is: what does all the flurry of
activity at the end of 2011 mean for CIPO in 2012?
It appears the Commissioner took the Court's reasoning to
heart, that the continued examination "should be taken anew
with a mind open to the possibility that a novel business method
may be an essential element of a valid patent claim." Taking
industrial usefulness and patentable subject matter as satisfied,
the Commissioner decided Amazon's claimed invention, an example
of a business method, also satisfied the standard statutory
provisions of novelty and inventiveness over state-of-the-art
teachings and therefore sent out the Notice of Allowance.
This is clearly a victory for Amazon, who will soon obtain an
issued Canadian patent for its one-click innovation and a
corresponding monopoly in Canada. It now remains to be seen how
soon the volume of currently pending patent applications involving
other examples of business methods will be processed by CIPO, using
the recent Amazon patent examination as an example. We also expect
that CIPO's August 1, 2011 amended examination guidelines,
which assessed patentability based on "what the inventors
actually invented," will no doubt be replaced by subsequent
guidance in line with the Court's reasoning.
However, there is little information on the public record
regarding the Commissioner's rationale on the manner in which
Amazon's claimed invention would have satisfied the Court's
stated "physicality" requirement, a patentability hurdle
that Amazon successfully surmounted. Given that CIPO appears to
have followed the Court's guidance, one must remember the Court
reasoned that in order for a methodology to be deemed patentable
subject matter, practical application of the methodology 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, the Court stated that
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."
At this stage it is not clear how the Commissioner will, in
general, treat the physicality of a business methodology during the
course of examination of business method patent applications. This
is something that may have been more clearly outlined if the Amazon
case had gone to the Supreme Court. Therefore, care needs to be
taken with currently pending and new patent applications to ensure
a claimed invention is something more than just a programmed
mathematical formula or algorithm that is implemented by a
computer. For now, we must look to the Amazon allowed claims as an
example of what is meant by discernable effects or changes produced
by an invention, and we look forward to CIPO's revised
examination guidelines and further decisions in 2012 on this
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