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Federal Court of Appeal clears the way for Business Methods in Canada

Amazon.com’s Canadian Patent application for its “one-click” ordering invention issued on 17 January 2012 as Patent No. 2,246,933.   This application’s somewhat tortuous path through the Canadian Intellectual Property Office (CIPO) and the courts has been closely followed by Canadian patent practitioners and legal scholars, and has provided some increased clarity to the law of statutory (i.e., patent-eligible) subject matter in Canada.

Although the Canadian Patent Act does not exclude them, and no Canadian court has ever ruled that they are per se unpatentable, for the past several years patent applications for business methods have been subject to increased scrutiny, delay and unsupported policy-based rejections at the CIPO.  However, the decision of the Canadian Federal Court of Appeal (FCA) on 24 November 2011 regarding Amaon.com’s one-click patent application, and that application’s subsequent allowance and issue seem to indicate a smoother path to grant for Canadian business method patents.

The FCA mostly upheld a previous ruling of the Federal Court Trial Division that the CIPO’s reasoning in rejecting Amazon.com’s application as lacking statutory subject matter was improper, but would not go as far as to allow the application outright.  The Court instead sent the one-click application back for further examination with the direction that “a novel business method may be an essential element of a valid patent claim.” However, the Court also left open the possibility of further rejections by the CIPO, noting that although “the Commissioner adopted an analysis that is incorrect in law … , it does not necessarily follow that the Commissioner was wrong in the result.”

In the wake of the FCA decision, there was wide speculation that leave to appeal to the Supreme Court of Canada would be requested, either by the Applicant because the FCA did not order allowance of the application (whose claims had previously been found novel and non-obvious by the CIPO), or by the Commissioner of Patents because the FCA overruled the CIPO’s approach to examination.  Somewhat surprisingly, the one-click application was allowed just a month after the FCA decision, without any further rejections.

As discussed in a previous post, the reasoning used by the CIPO in rejecting the one-click application appeared to be part of an overall shift in policy to examining applications.  Since 2009, a number of sections of the CIPO’s Manual of Patent Office Practice have been amended to reflect aspects of the approach to examination now rejected by both the Federal Court Trial Division and the FCA.  However, the CIPO is under new management since this policy shift.  In April 2011, a new Commissioner of Patents and CEO of the CIPO (Sylvain LaPorte, a former Chief Informatics Officer of Industry Canada with degrees in both computer science and computer engineering) was appointed.

The one-click patent application may have a unique story, but there are many other pending Canadian patent applications which have been subject to similar statutory subject matter rejections.  Accordingly, we may be seeing a surge in allowances of Canadian patent applications for new and inventive business methods and other computer-implemented inventions in the near future.

Needless to say, patents for business methods, just like any other types of inventions, must still meet the rigorous standards of novelty, non-obviousness, and usefulness required for a patent in Canada.  Examiners will still be scrutinizing business method patent applications just like they do for applications directed to other technologies.  The difference is now Examiners and Applicants alike have further guidance regarding the boundaries of statutory subject matter.


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