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Alice finds Canada no Patent Wonderland

The decision of the United States Supreme Court in Alice Corp. v. CLS Bank International, 573 U.S. __ (2014) represented a downward turning point in the patentability of computer-implemented inventions. It may, therefore, come as little surprise that Canadian patent application No. 2163768, corresponding to the U.S. patents at issue in that decision, has been refused by the Commissioner of Patents in Decision No. 1408, pursuant to the recommendation of the Patent Appeal Board (PAB).

The PAB considered the subject matter claimed in the ‘768 application, and applied CIPO’s approach to purposive construction in construing the claims. In doing so, the PAB affirmed the applicability of the guidance set forth in CIPO’s practice notices PN 2013-02 and PN 2013-03 in evaluating whether the claims were directed to patentable subject matter. According to this analysis, the essential elements of the claimed invention are those that are required to provide the solution to the problem addressed by the inventors—all other elements of the claim are disregarded as non-essential. Based on its review, the PAB agreed with the examiner that a computer was not an essential element of the claims at issue. The essential elements of the claims were construed to be the steps needed for a scheme of formulating multi-party risk management contracts. As the essential elements were construed to be abstract and disembodied rules equivalent to mental steps, the PAB concluded that the claims are not directed to patentable subject matter.

In reaching its decision, the PAB was highly critical of the Applicant’s response to the examiner’s Final Action, which drew heavily on the analysis of the Federal Court in Amazon.com, Inc. v. Canada (Attorney General), 2010 FC 1011 to support the arguments presented. In the PAB’s view, the guidance set forth in PN 2013-02 and PN 2013-03 is based on the Federal Court of Appeal (FCA) decision in Amazon.com, Inc. (2011 FCA 328), which differs in important respects from the Federal Court decision. Among other differences, the PAB noted that the FCA recognized that merely including a computer in a claim may not make the computer an essential element of that claim. Based on this PAB decision, applicants challenging the correctness of CIPO’s approach to purposive claim construction as set forth in PN 2013-02 would be well advised to limit their reliance on the reasoning of the Federal Court in Amazon.com, and instead ground their arguments in other authorities such as the FCA decision in that case and the Supreme Court of Canada decision in Free World Trust v. Électro Santé Inc., 2000 SCC 66.

An interesting aspect of this PAB decision aside from the substantive patent law issues is the issue of mootness: the filing date of the ‘768 application is 28 May 1993. This means the resultant patent, if granted, would have expired on 28 May 2013. However, the PAB concluded that the ‘768 application was not abandoned: all required maintenance fees had been paid, the Applicant had timely filed a response to the Final Action, and did not withdraw the application. Having concluded that the application was still in good standing, the PAB conducted its review pursuant to paragraph 30(6)(c) of the Patent Rules, which provides that an application rejected by an examiner shall be reviewed by the Commissioner of Patents. The PAB did not expressly consider whether its decision would be moot having regard to the fact that the patent would already have expired, although a court faced with the same question might take such a circumstance into consideration.

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