Canada: Post How The Canadian Patent Appeal Board Has Dealt With Patent-Eligibility Of Computer-Implemented Subject Matter

An important consideration for every patentee is that each countries' patent system has uniquely evolved to effectively deal with limits of patentable subject matter. For example, the patent systems of Canada, the United States and Europe continue to grapple with striking the necessary balance that leaves any underlying building blocks of an invention – such as scientific principles, abstract ideas and laws of nature – accessible to all, but extends patent protection to new, useful and innovative technical applications of these building blocks. The advent of computers and software into mainstream technology has required courts to clarify the boundary between patentable and non-patentable subject matter as it relates to computer-implemented technologies.

In November 2011, the Federal Court of Appeal in v. Canada (2011 FCA 328) sought to clarify Canadian law relating to the patentability of computer-implemented inventions. The Court determined that Amazon's "one click" method of Internet shopping constituted patent-eligible subject matter when claimed in a novel combination alongside other "essential elements."

The inventive technology at issue in went beyond a mere algorithm executed on a conventional computing device. In contrast, in an earlier Court of Appeal decision (Schlumberger Canada Ltd. v. Canada, [1982] 1 FC 845), the Court confirmed that the claimed invention was not patentable on the basis that its only novel aspect was a mathematical formula, which is excluded from patentability as a "mere scientific principle or abstract theorem" under subsection 27(8) of the Patent Act.

Successful technical application of the building blocks of innovation is reflected by the number of issued patents in the IPC class of G06Q pertaining to data processing in the realms of administrative, commercial, financial, managerial, supervisory or forecasting purposes. The Canadian Intellectual Property Office (CIPO) has issued over a thousand patents pertaining to computer-implemented inventions in class G06Q since the decision up to the date of this article.

The timeline below denotes each available PAB decision addressing patentability aspects of computer-implemented inventions since It is worth noting the PAB determined the claimed invention to be patent-eligible in more than half of its decisions. Moreover, while ten PAB decisions were released in 2013 applying the law laid down by, only one decision in each of 2014 and 2015 explicitly dealt with the patent-eligibility of computer-implemented subject matter, and none has been released so far in 2016. We note the recent tapering off in the number of PAB decisions dealing with patent-eligibility of computer-implemented subject matter, which may be indicative that more patentability issues are being dealt with during examination of a patent application by CIPO, but only time will tell.

Short summaries of each PAB decision, along with links to the full decision, can be viewed below.

1. Navigation Technologies Corp. Patent Application No. 2,195,252, 2012 LNCPAT 11 (Decision No. 1332).

Decision – October 29, 2012
Claims for a system and method for updating navigation systems installed in vehicles constitute statutory subject matter, but the application was refused for obviousness. The Board noted that "[t]he elements comprise technical features and physical steps sequenced to achieve the practical result of providing updated data to in-vehicle navigation systems. The computer limitations of the elements are essential, i.e., they cannot be omitted, or substituted for mental means, without having a material effect on the operation of the invention."

2. Pitney Bowes Inc. Application No. 2,306,540, 2013 LNCPAT 1 (Decision No. 1334).

Decision – January 14, 2013
Claims for a mail monitoring system constitute statutory subject matter. The Board construed the claims to include the essential element of a data center, which receives unique information scanned from mailpieces, cross-references to the corresponding information sent to the data center directly, and generates a report of errors. The Board noted that "[t]he Applicant has leveraged these technological features and capabilities to provide an improvement upon the conventional postage meter system."

3. Progressive Casualty Insurance Co. Application No. 2,344,781, 2013 LNCPAT 2 (Decision No. 1336).

Decision – February 22, 2013
Claims for a system and method for determining and communicating a cost of insurance constitute statutory subject matter, but the application was refused for obviousness. The Board construed the claims as requiring a vehicle with an onboard computer in communication with a remote computer used by an insurer for making insurance calculations, and noted that the feature of "monitoring the operating characteristics" comprises "technical features and physical steps sequenced to achieve the practical result of updating an insurance premium".

4. Pitney Bowes Inc. Patent Application No. 2,285,834, 2013 LNCPAT 8 (Decision No. 1337).

Decision – March 6, 2013
Claims for selectively replenishing a postage meter constitute statutory subject matter, but the application was refused for obviousness. The Board held that the method steps "utilize technology, and are sequenced to achieve the practical result of selectively interacting with, and replenishing, postage meters from a central computer."

5. Deroyal Business Systems, LLC Application No. 2,304,195, 2013 LNCPAT 4 (Decision No. 1338).

Decision – March 14, 2013
Claims for a method for the analysis and standardization of bills of resources were directed to non-statutory subject matter. The Board noted that "the use of a computer system to perform the method, as opposed to the steps being performed by a human, is not an essential limitation of the claimed invention...[t]he same claimed method steps, whether performed by a computer or a human being, lead to the same result, at least one standardized bill of resources."

6. Fair Isaac Corp. Application No. 2,144,068, 2013 LNCPAT 5 (Decision No. 1339).

Decision – March 28, 2013
Claims for a process for identifying and determining fraudulent transaction data were directed to non-statutory subject matter. The Board noted that "the only inventive aspect defined by the independent claims is an algorithm or mathematical formula, which is the whole invention. The claims are not saved by the fact they contemplate the use of a computer to give the mathematical formula a practical application."

7. RPX Corp. Application No. 2,222,229, 2013 LNCPAT 7 (Decision No. 1341).

Decision – March 28, 2013
Claims for a method, server and system for processing electronic transactions between a purchaser and subscribing merchant over a network constitute statutory subject matter, but the application was refused for obviousness. The Board noted that the claims are not abstract since "at the very least, having servers in communication over a network is essential to the invention."

8. Weyerhaeuser Patent Application No. 2,333,184, 2013 LNCPAT 12 (Decision No. 1345).

Decision – May 22, 2013
Claims for a method for classifying plant embryos according to their germination potential constitute statutory subject matter. The Board held that "computer-implemented data analyses are not the sole focus of the claimed invention. There also exist steps – which include digital scanning, physical data acquisition and separation of embryos – performed in combination with computerized analyses, that have 'physical existence'."

9. IGT Patent Application No. 2,237,438, 2013 LNCPAT 13 (Decision No. 1346).

Decision – June 20, 2013
Claims for a process for operating an electronic video poker machine having a video display device were directed to non-statutory subject matter. The Board noted that on a purposive construction "references to machines and manufactures appear in the claims in order to provide the operating environment of one practical manner of carrying out the invention. However, they do not materially effect the working of the invention."

10. Progressive Casualty Insurance Co. Patent Application No. 2,235,566, 2013 LNCPAT 15 (Decision No. 1349).

Decision – July 11, 2013
Claims for a system, method and apparatus for determining a cost of insurance constitute patentable subject matter, but the application was refused for obviousness. The Board found that "monitoring the vehicle operating characteristics and communicating the data to the central facility are essential features which are material to the working of the invention. They achieve the practical result of updating an insurance premium based on actual vehicle operating characteristics and driver behaviour."

11. CFPH LLC; Cantor Fitzgerald, LP, Patent Application No. 2,493,971, 2013 LNCPAT 20 (Decision No. 1355).

Decision – November 29, 2013
Claims for a method for trading a volume of an item between participants were directed to non-statutory subject matter. The Board noted that "the computer components are part of the context in which the solution operates, and by which the auction processes for a second look state is put into operation in the claimed embodiments. These features are not part of the solution to the practical problem, and thus are not essential elements of the actual invention."

12. Financial Engines, Inc Patent Application No 2,312,726, 2014 LNCPAT 16 (Decision No. 1373).

Decision – October 10, 2014
Claims for a system and method for optimizing an investment portfolio were directed to non-statutory subject matter. The Board held that "[w]hile the processors, servers, memory devices or computer implemented steps provide a convenient supporting architecture (technical environment) to efficiently calculate, communicate and disseminate the financial advisory data and information, the computer components themselves do not have a material effect on the financial concepts involving certain mathematical calculations for optimizing an investment portfolio."

13. Financial Engines, Inc Patent Application No 2,312,726 (Decision No. 1380).

Decision – May 25, 2015
Although a formal section 2 rejection was not raised by the Examiner in the final Office Action, the Board addressed the question of the patent-eligibility of claims for a computer-implemented system for automatically calculating national phase lodgement costs that would be payable in respect of a PCT application upon its national phase entry in two or more countries. The computer was found to be an essential feature of the invention, although the application was refused on the basis of obviousness. The Board concluded that "the skilled person would construe the expressions "program instructions", "automatically determine" and "automatically calculate" as including the extraction (reading) of information from a database among the technical operations required to carry out the calculation. Thus, in order for the claimed system to operate, it is essential that there are technical operations involving certain databases so that upon receiving a proper identifier, the correct data is extracted and the calculations executed."

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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