On October 14, 2010, the Canadian Federal Court released a decision allowing an appeal by Amazon.com, Inc. of a decision of the Commissioner of Patents that rejected Amazon.com’s patent application directed to "Single-action/One-click" ordering. In rendering its decision, the Court concluded that a "business method" may be patented in Canada in appropriate circumstances.
The Court overturns the Commissioner on many aspects of her decision. Notable findings of the Court include the following:
- The Commissioner incorrectly adopted foreign legal principles stated by the European and U.K. Courts having regard to important differences between the European and English statutes and the Canadian Patent Act.
- The Commissioner was not correct to apply a "form and substance" analysis of the claims for the purpose of assessing patentable subject matter. Based on this analysis, the Commissioner had assessed whether a claim was directed to patentable subject matter by considering only the elements of the claim that were new. The Court finds that the principles of "purposive construction," as stated by the Supreme Court of Canada, are to be applied.
- The Commissioner had adopted an overly restrictive definition of patentable "art" (based on the 1970 decision in Lawson v. Commissioner of Patents (1970), 62 C.P.R. 101), which the Commissioner found to require "an act or series of acts performed by some physical agent upon some physical object and producing in such object some change either of character or of condition."
Following the decision of the Supreme Court of Canada in Shell Oil Co. of Canada v. Canada (Commissioner of Patents), [1982] 2 S.C.R. 536, and the subsequent decision of the Federal Court in Progressive Games Inc. v. Canada (Commissioner of Patents) 177 FTR 241 aff'd (2000), 9 C.P.R. (4th) 479 (F.C.A.), the Court finds the following broader test for a patentable art: i) it must not be a disembodied idea but have a method of practical application; ii) it must be a new and inventive method of applying skill and knowledge; and iii) it must have a commercially useful result.
- The Court also rejects the per se prohibition on business methods and the requirement that patentable subject matter must be "technical" or "technological" that had been adopted by the Commissioner.
Applying these principles to Amazon.com’s application, the Court found that the system claims disclosed a machine (e.g., a computer), the described components of which are essential elements in implementing an online ordering process. Therefore, the Court was of the view the claims were not directed to merely a mathematical formula that could be carried on without a machine or to simply a computer program.
Regarding the method claims in Amazon.com’s application, the Court considered a method to be an "art" and that it therefore must not be a disembodied idea but have a method of practical application. The Court found illustrative the aforenoted Progressive Games decision, which involved new rules for a game of poker. The Court noted that while the rules in and of themselves were just an idea, they required the use of cards to constitute the whole invention: manipulation of the cards was enough to constitute a practical application of the idea.
The Court further considered that the new knowledge reflected in Amazon.com's method claims was not simply a scheme, plan or disembodied idea but was instead 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.
Thus, both the system claims and method claims in the application were held to constitute statutory subject matter.
It is not known if the Commissioner will appeal this decision. Any appeal must be filed within 30 days of the decision.
John R. Morrissey, Steven B. Garland and Colin B. Ingram of Smart & Biggar represented Amazon.com on the appeal.