Canadian Lawyer InHouse

By David Heller and Jean Lee, Ridout & Maybee LLP not as clear as we would like it to be. In the U.S., business method patents T Amazon finally wins But what does the decision mean to patentable subject matter? he Amazon "one-click" pat- ent tion: are business meth- ods patentable in Canada? Unfortunately, the answer is case asked the ques- are highly controversial, but nonethe- less granted and growing in number. In Europe, the European Patent Office uses the criteria of "technical character" — an invention must relate to a technical problem and have technical features — to evaluate patent applications. In recent decisions, Canadian courts have neither embraced nor rejected business patents. Amazon's Patent Application No. 2,246,933 entitled Method and System for Placing a Purchase Order via a Communications Network, is commonly referred to as Amazon' but the invention has little to do with the number of clicks of a computer mouse. The patent covers a method of persistently storing a "client identifier" or cookie at a user' s "one-click" patent, item using recorded user information on the merchant server. The commissioner of patents rejected s computer, allowing them to buy an the patent, and Amazon brought the mat- ter before the patent appeal board and subsequently to the Federal Court. Justice Michael Phelan of the FC in Amazon.com Inc. v. Canada (Attorney General) directed the commissioner to find the claims of the patent to constitute patentable sub- ject matter, effectively directing the patent be granted. The commissioner appealed. On Nov. 24, 2011, the Federal Court of Appeal issued its decision in Canada (Attorney General) v. Amazon.com Inc., setting aside the judgment of the FC and referred the application back to the com- missioner of patents for re-examination in accordance with the analytical framework set out by the court. The FCA decision clarified a few points, but left the question of business methods as patentable subject mat- ter unanswered. The FCA did reject the "form and substance" analysis adopted by the commissioner, stating the analysis should be directed to "the subject mat- ter defined by the claim" rather than the "inventive concept." The court held the proper analysis is purposive construc- tion of Supreme Court of Canada in Free World Trust v. Électro Santé Inc., and Whirlpool Corp. v. Camco Inc. Purposive construc- tion ensures the commissioner is aware of the possibility that a patent claim may be expressed in language that is deliberately or inadvertently deceptive; such as what appears on its face to be a claim for an "art" or "process" may, on a proper con- struction, be a claim for a mathematical formula and not patentable subject matter. Secondly, on the question of patentable the claims as outlined by the construction of the claims with a mind open to the possibility that a novel busi- ness method may be an essential element of a valid patent claim. It sent the patent application back to the patent office for analysis and on Jan. 17, the commissioner issued the patent, leaving us to wonder what analysis occured. Patentable subject mattter is also an issue in other fields. Some patent applica- tions claiming diagnostic methods have started receiving objections on the basis they are not patentable subject matter. In these objections, the patent examiners break the claims down into individu- al steps, and then determine where the "inventive contribution" lies over the prior art. However, the FCA' appropriate analysis according to juris- prudence is purposive construction, not "inventive concept." On April 2, 2012, the patent office s decision states the released draft practice notices for a 30-day consultation period, including notices on patentable subject matter and claims to diagnostic methods and medical uses. Unfortunately, the Canadian Intellectual Property Office notices maintain empha- sis on the "inventive concept, subject matter, the FCA warned against relying on specific tests and agreed with Justice Phelan that there is no Canadian jurisprudence determining that business methods cannot be patentable subject matter. Of course, the opposite is also true. Third, the appeal court rejected the notion there is a "physicality" requirement or a need for a "manifestation or effect change of character. to accept that a patent should not be granted for a mere abstract idea but added there is no requirement for physicality or change of character. However, a business method does not become patentable sub- ject matter just because it has a "practical application." The FCA decided the commissioner should undertake the task of purposive " The FCA appeared ing the purposive construction analy- sis required by the court, and instead determining whether any additional steps in the claim provide an inven- tive contribution. They also state the existence of a physical step in the claim does not, on its own, render it patent- able subject matter. The courts have reaffirmed purpo- " ignor- sive construction as the proper analyti- cal framework in determining patent- able subject matter. However, there is still a divide between the court's analy- sis and that of the commissioner of patents. What practitioners can rely on is that a business method or diagnostic method is patentable as long as it is one essential element of an otherwise valid claim. IH David Heller is a partner with Ridout INHOUSE JUNE/JULY 2012 • & Maybee LLP in Toronto. Jean Lee is a student with the firm. 11

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