Thursday, December 15, 2011 meets the Canadian Federal Court of Appeal

On 24 November 2011 the Canadian Federal Court of Appeal handed down its decision involving and its 'one-click' patent application.  Like all judgments that are eagerly awaited, it doesn't quite clarify the law to the extent expected, and leaves ample room for interpretation.  The parties have 60 days from the date of the decision to seek leave to appeal to the Supreme Court of Canada.

Click here for a copy of Canada (Attorney General) v., Inc. et al., 2011 FCA 328 (F.C.A.).

Background applied for Canadian patent application 2,246,933 back on 11 September 1998.  The title of the application is "Method and system for placing a purchase order via a communication network".  As noted by Sharlow J.A. at [16], succeeded in obtaining patents of similar scope in the United States, Australia and New Zealand, but not Europe.

I have covered Australia and New Zealand in earlier blog posts.

During examination, the Canadian Commissioner of Patents refused to grant the patent to  The applicant appealed the Commissioner's decision to the Federal Court.  Justice Phelan allowed's appeal, quashed the Commissioner's decision, and essentially told the Commissioner to grant the patent.  The Commissioner did not and instead appealed the judgment to the Federal Court of Appeal.

Purposive construction

The Court observed at [43] that the Commissioner needs to identify the actual invention from a purposive construction of the patent claims.  Not a literal reading of the claims.  Not a determination of the "substance of the invention".

A purposive construction, said the Court at [44], will address patent claims that:
'may be expressed in language that is deliberately or inadvertently deceptive.  Thus, for example, what appears on its face to be a claim for an "art" or a "process" may, on a proper construction, be a claim for a mathematical formula and therefore not patentable subject matter'.
Business methods can be patented

The Court at [60] agreed with Justice Phelan when he observed that there is "no basis for the Commissioner's assumption that there is a 'tradition' of excluding business methods from patentability in Canada."

It observed that "no Canadian jurisprudence determines conclusively that a business method cannot be patentable subject matter".

There are some limits.  The Court noted that:
" does not necessarily follow ... that a business method that is not itself patentable subject matter because it is an abstract idea becomes patentable subject matter merely because is has a practical embodiment or a practical application".
Practical application

Justice Phelan in the lower Court said that a "practical application" requirement ensures that something which is a mere idea or discovery is not patented - it must be concrete and tangible.  This requires some sort of manifestation or effect or change in character.

The Court at [66] agreed with Justice Phelan when he acknowledged that:
"because a patent cannot be granted for an abstract idea, it is implicit in the definition of 'invention' that patentable subject matter must be something with physical existence, or something that manifests a discernible effect or change".
It is true that the nature of the "physicality requirement" may change because of advances in knowledge.  However, the Court noted that the "physicality requirement" cannot be met merely by the fact that the claimed invention has a practical application.  The Court referred to Schlumberger Canada Ltd. v. Canada (Commissioner of Patents), [1982] 1 F.C. 845 (C.A.).  In Schumberger the claims were not saved by the fact the claims "contemplated the use of a physical tool, a computer, to give the novel mathematical formula a practical application".

Further steps

The Commissioner is now directed at [63] to undertake a further purposive construction of the claims, "with a mind open to the possibility that a novel business method may be an essential element of a valid patent claim", rather than the whole invention.

We will wait and see if the Commissioner appeals this one.

Photo courtesy of author ambert under Creative Commons licence.

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