The Canadian Patent Appeal Board recently rejected Amazon.com
Inc.'s patent application relating to its
"one-click" online order-processing method. The decision
provides guidance as to how the Patent Office views the scope of
the term "invention" as provided in Section 2 of the
To provide some history: Amazon filed a Canadian patent
application in 1998 for its single-action order-processing method.
The application described a method and system that allows customers
to complete an order over the Internet with only one click of their
mouse. A unique identifier is stored on the customer's
computer, which is associated with customer-specific account
information already stored on the vendor's servers from a
previous visit. When the customer clicks on the button to purchase
an item, the vendor's servers receive the request, retrieve
the customer's account information using the identifier,
and combine the retrieved information to generate the order. This
way, the customer avoids having to re-enter information for
additional orders and can skip some of the usual steps in the
In completing the prosecution phase, in 2004, the Patent Office
Examiner rejected all claims of the application for being obvious
and for not falling within the requirements of an
"invention" as defined in Section 2 of the Patent
On appeal of the Examiner's final rejection to the
Patent Appeal Board, the Board found that the claims were not
obvious, but affirmed that the claims did not fall within the
definition of an "invention." As such, the Board
determined that the order-processing system could not be
A key point in the Board's analysis was the tests it
applied to assess whether the claims of an application are an
"invention." The Board considered the form and substance
of the claims and applied three legal conditions:
The subject matter of the claim needs to fit the definition of
"invention" of Section 2 (namely it must fall within one
of the defined categories of invention: art, process, machine,
manufacture or composition of matter).
The subject matter could not be excluded subject matter.
The subject matter must be "technological."
Regarding form, the Board found that some claims of
Amazon's application were business method claims, while the
others were machine claims. The Board considered Canadian and
foreign jurisprudence and found that "business method"
claims do not fall within the subject matter of an
"invention" ― so are not patentable in Canada.
As such, the Board determined that the application's
business method claims were not an "invention,"
while the machine claims passed this first condition.
However, when considering the substance of the claims, the Board
found none of the claims were an "invention." In its
lengthy analysis, the Board found that all claims were the same in
substance, namely a set of rules for executing an online order. In
assessing the substance of the claims, the Board indicated that a
claim could not be an "invention" if it did not provide
any technological innovation. The Board found that the claims did
not present any technological innovation, and affirmed the
Examiner's rejection of the claims on that basis.
As such, all claims of Amazon's "one-click"
patent are currently rejected. The decision of the Board may be
appealed to the Federal Court.
McCarthy Tétrault Notes:
This decision is noteworthy because the Board's stance
on business method patents is likely a reflection of current
internal views of the Patent Office on such patent
The reasoning appears to regress from statements in the current
CIPO Manual of Patent Office Practice. The Manual
currently states that "Business methods are not automatically
excluded from patentability, since there is no authority in the
Patent Act or Rules or in the jurisprudence to sanction or
preclude patentability based on their inclusion in this
category." The Canadian Intellectual Property Office (CIPO)
may be revising this section in an updated Manual.
It has been generally regarded that Canadian jurisprudence does
not expressly exclude business methods from being an
"invention." Notably, the decisions in Shell
Oil, Progressive Games and Calgon Carbon
appear to provide a broad interpretation on the statutory term
"art," which arguably capture new and useful business
methods so long as they have a practical application and are
The decision establishes a new and lower watermark for how
business method patents will likely be treated by the Patent Office
in Canada. If the Board's decision is appealed to the
Federal Court, judicial guidance as to the correctness and
boundaries of this decision will likely be provided.
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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