Article by Brett Slaney © 2007, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Intellectual Property, December 2007

With the proliferation of information technology and most notably Internet-based activity, it is becoming increasingly difficult in the field of electromagnetic and acoustic signals (signals) to enforce patent rights, particularly when there are several entities in different jurisdictions performing the patented method or each providing only a piece of a patented system.

This can lead to situations where the only way to enforce a patent in a given jurisdiction is to pursue many individuals, such as consumers, who download patent-infringing software over the Internet. It is therefore desirable to protect the invention embodied in a transient signal or carrier wave since that may be the only tangible form of the invention that exists in a particular jurisdiction.

On August 14, 2007 the Canadian Patent Office (the Office) published an Office Practice Notice (the Notice) to formally express its position regarding the patentability of signals. Pursuant to the Notice, the Office deems signals to be forms of energy and thus, "do not contain matter even though the signal may be transmitted through a physical medium." Consequently, any claims to signals per se do not constitute statutory subject matter within the meaning of the definition of "invention" in section 2 of the Patent Act.

Section 2 of the Patent Act defines "invention" as being any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter. In the Notice, the Office attempts to clarify its position that signals do not fall within any of these categories as follows:

More particularly, an electromagnetic or acoustic signal is interpreted to be neither an "art" nor a "process" because it is not an act or series of acts or method of operation by which a result or effect is produced by physical or chemical action. Neither is an electromagnetic or acoustic signal a "machine" as it is not the mechanical embodiment of any function or mode of operation, designed to accomplish a particular effect, or a "composition of matter", as it is not a chemical compound, composition or substance. An electromagnetic or acoustic signal is taken not to be itself a material product and, therefore, not a "manufacture".

The Office explains its position only pertains to signals per se and does not apply to methods, processes, machines or manufactures involved in the generation, transmission, reception or processing of signals. The Notice was effective immediately (i.e., as of August 14, 2007) and superseded any previously communicated practices related to the patentability of signals.

The Office’s analysis does not appear to be consistent with the Supreme Court of Canada’s interpretation of "art" as set out in Shell Oil Co. v. The Commissioner of Patents. In Shell Oil, the Supreme Court reviewed the criteria for patentable subject matter, reviewed its earlier decision of Tennessee Eastman and Lawson v. The Commissioner of Patents and provided a broad interpretation of the term "art". Also, in Tennessee Eastman, the Court affirmed that "art" was a word of very wide connotation and was not to be confined to new processes or products or manufacturing techniques, but should be extended to new methods of applying skill or knowledge provided that they produce effects or results commercially useful to the public. It would seem that this reasoning should extend to including a signal as patentable subject matter since the use of a signal with particular characteristics produces a commercially useful effect.

What Does The Notice Mean To Applicants And Practitioners?

The Notice is only a guideline for examiners, applicants and practitioners, and neither the Patent Act nor the Patent Rules have been amended to exclude claims to signals per se. Therefore, there is still an opportunity to argue in favour of a signal claim that is rejected by an examiner during substantive examination, especially given the inconsistencies between the Notice and the established case law. Meanwhile, however, we can expect the examiners to follow the Notice and issue rejections accordingly. This will affect not only cases filed after August 14, 2007, but also pending applications filed prior to that date that have not yet been examined.

The Office’s position appears to essentially echo the United States Patent and Trademark Office’s (USPTO) position in In re Nuijten, which was recently affirmed on appeal. Nuijten was attempting to patent claims covering the introduction of "watermarks" into signals. The claim in question was directed to: "A signal with embedded supplemental data, the signal being encoded in accordance with a given encoding process...", i.e., there was some context and specific claim language to consider. The USPTO and the Court of Appeals for the Federal Circuit provided a detailed analysis as to whether a signal was a "manufacture", ultimately deciding that a signal is not a "manufacture" under U.S. law. Rather than address this issue within a specific context, the Office seems to have instead imported the USPTO’s position into Canadian practice without any such specific context, let alone a careful analysis of all the issues resulting from the exclusion of these types of claims. Moreover, as noted above, the brief analysis provided in the Notice appears to be inconsistent with established Canadian case law.

The Office is clearly against granting patent protection for an invention embodied as a signal but it has not clarified whether or not (or how) what is carried by the signal would be protected by another type of claim. There is no indication that a claim for a signal carrying a set of instructions or a data structure, that would otherwise be patentable in a different form, e.g., by a computer-readable medium claim, would be allowed. This could be an issue where an infringer facilitates the transmission of the set of patentable instructions or data structure carried by the signal, but does not actually store all of the instructions or data structure together at the same time. Would a patentee be able to stop an infringer in Canada that does not store such patentable instructions together at the same time but merely relays them in portions carried by a signal to another entity outside of Canada? The Notice does not give us any clarification on the practical implications of such a widereaching exclusion.

Unfortunately, in the end, the Office has made it clear that it believes signals per se should not be patentable without providing any context and very little explanation. For now, an applicant filing a patent application in Canada should be aware that signal claims per se will surely be rejected by the examiner as being non-statutory subject matter. However, as has been observed in the software context, the Patent Appeal Board often overturns examiners’ decisions involving an overly conservative approach to determining patentable subject matter.

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.