On October 14, the Federal Court of Canada, in its decision in Amazon.com, Inc. v. The Commissioner of Patents, 2010 FC 1011, re-opened the door to business method patents in Canada and provided long-awaited guidance on what technology is patentable in Canada.
Importantly for patent applicants, the court unequivocally rejected the rationale underlying the novel approach that the Canadian Intellectual Property Office (CIPO) had recently been applying to determine whether subject matter of patent applications is eligible for patent protection. That approach has resulted in the rejection of patent subject matter in fields as diverse as computer systems and biotechnology.
The guidance provided by the court suggests that a wider range of high-tech businesses will now be able to protect their intellectual property in Canada using patents.
The Amazon.com decision arose from an appeal of the decision of the commissioner of patents on Canadian patent application No. 2,246,933 (the Amazon One-click application).
The Amazon One-click application contained system and method claims directed to single-action (“one-click”) on-line ordering of goods using a transmitted client identifier associated with purchaser-specific account information stored at a computer system.
The commissioner’s decision rejected the claims on grounds including that the subject matter of the claims was “non-statutory,” that is, ineligible for patent protection under the Patent Act. In rejecting the claims as non-statutory, the commissioner, in the words of the court in the Amazon.com decision, “in effect created a test for assessing patentable subject matter, outlined new exclusions and requirements for patentability and outlined her view of the scope of patentable ‘art.’”
Since the decision was released, CIPO’s patent examiners have aggressively applied the commissioner’s approach to pending patent applications, and many patent applicants have faced claim rejections based on that approach.
In its decision on the appeal, the court dismissed elements of the commissioner’s approach as “not supported by recent Canadian jurisprudence or the Patent Act,” “too restrictive” and “novel and unnecessary.” Weaving a canvas of the leading Canadian judicial authorities on patentable subject matter into a demolition of the commissioner’s approach, the court made several important points:
- there is no categorical business method exclusion in Canada;
- the determination of whether a claim is patentable subject matter looks at the invention as a whole; only where all of the essential elements of the claim, as determined by a purposive construction, are abstract will the claim be an unpatentable disembodied idea; and
- though patentable subject matter must “manifest in some way so that it is no longer simply a scheme or idea,” this is a matter of “practical application” and not a question of “merely the physicality of the invention” – it is not necessary that the physical effect be of the inventive concept itself or that a material object physically changes into another thing.
In applying the law to the Amazon One-click application, the court found that:
- the described components of the application’s online ordering system claim (e.g., a computer) are essential elements in implementing an online ordering system;
- the application’s claims are directed to a practical application of the One-click concept, put into action through the use of cookies, computers, the Internet and the customer’s own action; and
- the “physical effect” transformation or change of character resides in the customer manipulating his or her computer and creating an order. It doesn’t matter that the “goods” ordered are not physically changed.
In the result, the court remanded the Amazon One-click application to the examiner for further examination on any remaining grounds of patentability, with a direction that the claims constitute patent-eligible subject matter.
The commissioner has appealed the decision. The appeal is likely to be heard in the second half of 2011.