Canada: CIPO Examination Practice Respecting Purposive Construction: A Marked Deviation From Whirlpool And Free World Trust

Last Updated: July 23 2013
Article by Brian Y. Lee

On November 24, 2011, the Federal Court of Appeal released its decision for, Inc. v. The Commissioner of Patents, 2011 FCA 328. This case related to patent application 2,246,933 filed by, Inc. entitled "Method and System For Placing A Purchase Order Via A Communications Network". Popularly known as the "one-click shopping cart" case, this application featured method and system claims directed at a client computer sending to a server system a request to order an item along with a client identifier ("cookie") previously assigned by the client system, wherein the cookie is used to identify account information of a user of the client system such that the user does not need to log in to the server system when ordering the item.

These claims were rejected by the Canadian Intellectual Property Office ("CIPO") for lacking statutory subject matter, i.e. for failing to meet the definition of "invention" as defined in s.2 of the Patent Act. CIPO's Patent Appeal Board ("PAB") in its rejection adopted a "form and substance" approach that focused on "what had been discovered", and held that business methods were an excluded category of patentable subject matter. The PAB also held that inventions must meet a technological threshold and a physicality requirement wherein inventions are either a physical object or an act or series of acts performed by a physical agent which causes a change of character or condition in a physical object.

In its ruling, the Court of Appeal rejected the form and substance approach and sent the application back to CIPO for examination, with directions that the Commissioner of Patents carry out a purposive construction of the claims when considering whether the claims are statutory. The Court of Appeal also held that the technological test was unhelpful, that there was no categorical exclusion of business methods as statutory subject matter, and that patentable subject matter must be something with physical existence  or something that manifests a discernible effect or change. CIPO completed its examination and found that the claims possessed patentable subject matter; CA 2,246,933 issued on January 17, 2012.

On March 8, 2013, CIPO released two new practice notices, namely PN 2013-02 titled "Examination Practice Respecting Purposive Construction" and PN 2013-03 "Examination Practice Respecting Computer-Implemented Inventions". In these Practice Notices, CIPO recognize that the technological test is no longer to be applied in the consideration of statutory subject matter, and that the portions of its practice manual referring to "contribution", "field of technology", "technological solution to technological problem" are no longer applicable in view of the decision. The Practice Notices state that statutory subject matter must be based on the essential elements of the claim, as determined through purposive construction. Practice Notice 2013-03 also states that when a computer is found to be an essential element of a construed claim, the claimed subject matter will generally found to be statutory.

The Practice Notices also provide detailed instructions for CIPO examiners on how to conduct their purposive construction. Particularly, the Practice Notices state that examiners should interpret each claim: using a fair, balanced, and informed approach; having identified the problem and solution; in the context of the application as a whole; to determine which elements of the claim solve the identified problem; and by focusing on one solution at a time. The Practice Notices specify that guidance to identify the problem and solution is to be found in the description, and that this identification occurs when construing the promise of the invention (i.e. its utility). The Practice Notices explain that essential elements are those essential to the operation of the solution; however, not every element that has a material effect is necessarily essential for the operation of the invention. If a claim is missing any of the identified essential elements, the claim may be rejected for lacking utility; if the claim contains more than the identified essential the claim may be considered to contain "superfluous elements".

Practice Notice PN 2013-02 acknowledges that the Supreme Court of Canada decisions Free World Trust v. Électro Santé Inc. (2000), 9 C.P.R. (4th) 168 (S.C.C.) and Whirlpool Corp. v. Camco Inc. (2000), 9 C.P.R. (4th) 129 (S.C.C.) respecting purposive construction continue to guide the courts. However, this Practice Notice then notes that Whirlpool was an impeachment proceeding and was not directed to patent examiners in the course of examination to determine whether applications for patents should be granted, and states that CIPO "considers that the application of the principles of purposive construction discussed in Free World Trust and Whirlpool to the examination of a patent application must take into account the role of the patent examiner and the purpose and context of the examination". In support of its position CIPO relies on Genencor International, Inc. v. Commissioner of Patents, 2008 FC 608 (FCTD) as recognizing that the language of patent claims construed by judges in an impeachment proceeding is fixed, whereas "during examination of an application the language of the claims may change from that initially proposed by the applicant for a number of reasons".

CIPO's reliance on Genencor as justification to not be strictly bound to the purposive construction principles set out in Whirlpool and Free World Trust is problematic. While the Trial Division Court in Genencor did state that it was not appropriate to expect a Re-examination Board in conducting a re-examination to have the same burden mandated on the Courts for an impeachment proceeding, that statement was made in the context of what standard the Board should be subjected to when assessing the substantive merits of an application. The Court in Genencor pointed out that the Board would not have the same access to expert testimony and other resources, and thus the Board should be subject only to a standard of reasonableness on factual determinations related to the patent. However, Genencor did not state that CIPO is entitled to only be reasonable and not necessarily correct on applying the law governing patent construction. The Court of Appeal in clearly held that patent construction is a question of law, and the Commissioner's patent construction is reviewable on the standard of correctness. It follows then that the Commissioner must correctly apply the purposive construction principles defined in Whirlpool and Free World Trust.

The Supreme Court of Canada in Whirlpool and Free World Trust held that claim language must be read in an informed and purposive way, and that the claims language will, on a purposive construction, show that some elements of the claimed invention are essential while others are non-essential. The Court then explained that the identification of claim elements as essential or non-essential is made according to the following principles: (i) on the basis of common knowledge of the worker skilled in the art to which the patent relates; (ii) as of the date the patent is published; (iii) having regard to whether or not it was obvious to the skilled reader that a variant of a particular element would not make a difference to the way in which the invention works; or (vi) according to the intent of the inventor that a particular element is essential irrespective of its practical effect. For an element to be considered non-essential and thus substitutable, it must be shown either (i) that on purposive construction of the words of the claim it was clearly not intended to be essential, or (ii) that at the date of publication of the patent, the skilled addressee would have appreciated that a particular element could be substituted without affecting the working of the invention.

There is no mention of the third and fourth Whirlpool and Free World Trust purposive construction principles in the Practice Notices. The Practice Notices' approach to determining essential elements of a claim appear to completely disregard the inventor's intentions about whether an element is essential, and fail to ask whether it would be obvious one skilled in the art that an element has no material effect on the way in which the invention works. By directing examiners to use a problem-solution approach to identify essential elements of an invention from the specification, then to determine whether those essential elements are present in the claims, the Practice Notices appear to be contrary to the principles affirmed in Free World Trust and other cases that claim language should have primacy and each of the components of a claim is presumed to be essential unless the contrary is indicated in the patent. The failure of the Practice Notices to direct examiners to apply all the principles of purposive construction set out in Whirlpool and Free World Trust produces an incorrect legal framework for patent construction that would not permit an examiner to reasonably apply the facts when determining whether a claimed subject matter meets the definition of invention. For example, it is conceivable that under the direction of the Practice Notices, an examiner may reject a claimed invention as lacking statutory subject matter by finding all statutory elements of the invention to be inessential, even though those statutory elements are expressed claimed, the application document indicates that the inventor intended the statutory elements to be essential, and even though it would not be obvious to one skilled in the art that one or more of those elements had no material effect on the way the invention worked.

Given that CIPO examiners do not have the benefit of expert witnesses, cross-examination, and other resources of a Court in an impeachment hearing, it is reasonable that CIPO be held to a standard of reasonableness when making factual determinations in a patent application. However, it is clear that examiners must correctly apply the law when making reasonable factual determinations. By omitting fundamental principles of purposive construction set out in Whirlpool and Free World Trust, the CIPO examination practice respecting purposive construction appear to be incorrect at law.

This article originally appeared in IP Osgoode in July 2013 and is reprinted with permission of the publisher.

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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