Canada’s Intellectual Property Firm


UPDATE: In June 2022 the Federal Court released a decision establishing a new three-step legal framework for assessing patentable subject matter, particularly as it relates to the patentability of computer-implemented inventions, in Benjamin Moore & Co v Canada (Attorney General), 2022 FC 923. The decision rebukes several aspects of the Canadian Intellectual Property Office’s (CIPO) current “actual invention approach” outlined in the article below, and instructs CIPO to use the new three-step framework instead. Read more in our recent IP update here.



In an apparent conclusion to the patent at the heart of the Federal Court of Canada’s decision in Yves Choueifaty v Attorney General of Canada, 2020 FC 837 [Choueifaty], Canadian patent application no. 2635393 (CA ‘393) was allowed by the Canadian Commissioner of Patents in Commissioner’s Decision #1556, 2021 CACP 3 [CD1556] on January 11, 2021.

CD1556 provides insight on how the Canadian Patent Office (CIPO) will approach patentable subject matter in the future, and particularly on how new guidelines on patentable subject matter (see below) released in response to Choueifaty will be applied by CIPO.


As previously reported, the Federal Court rejected the CIPO’s “problem-solution approach” for determining patentable subject matter in Choueifaty. The Federal Court found that this previous approach disregarded the intention of the inventor contrary to purposive claims construction required by the Supreme Court of Canada in Free World Trust v Électro Santé Inc, 2000 SCC 66 [Free World Trust] and Whirlpool Corp v Camco Inc, 2000 SCC 67 [Whirlpool].

The Federal Court set aside the decision of the Commissioner rejecting CA ‘393 and directed the Commissioner to consider CA ‘393 afresh.

The Commissioner opted not to appeal Choueifaty. Instead, CIPO released new guidelines on patentable subject matter and provided a set of examples demonstrating the application of the new guidelines.

As also previously reported, these new guidelines appear to outline a three-step process for determining patentable subject matter:

  1. Identify “essential elements” of a claim using purposive construction in accordance with the principles set out in Free World Trust and Whirlpool.
  2. Determine an “actual invention” of the claim, where this “actual invention” “may consist of […] a combination of elements that cooperate together to provide a solution to a problem”. The “actual invention” does not necessarily include every element identified to be essential at step (1) above.
  3. Determine if the “actual invention” of the claim has physical existence or discernible physical effect or change.

Commissioner’s Decision #1556

The Commissioner’s found the subject matter of CA ‘393 to be allowable in CD1556 when applying the new guidelines above.

With respect to step (1), the Commissioner very readily found that all claimed elements were “essential elements” of the claims:

[28] There is no claim language indicating any of the elements to be optional, preferred embodiments or one of a list of alternatives. Nor is there any indication in the record before us that would lead to a determination of any claimed elements being non-essential. We therefore presume all the claimed elements to be essential.

With respect to step (2), the Commissioner accepted the Applicant’s submissions that one purpose of the invention is “to provide ‘an improvement in computer technology’ by improving computer processing” (para. [30]). The Commissioner also accepted affidavit evidence that an algorithm of the claimed inventions transformed a concave function requiring maximization into a convex function that can be minimized, and using the latter meant that significantly less computer processing power and speed was required to perform a subsequent portfolio optimization. The claimed algorithm thus “improves the functioning of the computer used to run it”, which led the Commissioner to find that the computer and the algorithm together form a single “actual invention” that solves a problem related to the manual or productive arts (para. [34]).

The Commissioner distinguished CA’ 393 from the patent application that was the subject of Schlumberger Canada Ltd v Commissioner of Patents, [1982] 1 FC 845 (FCA) [Schlumberger] as follows:

  • the computerized calculations recited in the claims at issue in Schlumberger was merely computerization of the mental process of making calculations according to certain mathematical formulae, with no indication that “the invention lay in the computer calculating its results with less processing or greater speed”, whereas
  • the computerized calculations recited in the claims of in CA ‘393 was not merely for yielding information, but was for permitting the computer to carry out portfolio optimization procedures with significantly less processing and greater speed (para. [35]).

With respect to step (3), the computer which forms the “single ‘actual invention’” noted above provides the claims with the necessary physical existence.

Conclusions and Future Implications

Of significance, in CD1556, the Commissioner subsumed steps (2) and (3) into a determination of “patentable subject matter” which was entirely separate from the determination of the essential elements of the claims under step (1). This suggests that future points of contention between applicants and CIPO will likely revolve around delineating the “actual invention” of a claim and whether this “actual invention” renders the claim “patentable subject matter”, rather than around what are the essential elements of the claim.

CD1556 also suggests that CIPO will deem a computer-implemented invention to be patentable when CIPO accepts that the “actual invention” is directed to solving a problem with the functionality of the computer, such as by improving the computer’s processing speed and/or reducing the amount of computing resources required. As in CD1556, an algorithm which improves the functioning of the computer used to run it will be considered patentable. However, an algorithm which is merely the computerization of a mental process of making calculations (with no effect on the functioning of the underlying computer) will not be considered patentable.

Moving forward, if applicable, Canadian applicants seeking patent protection for computer-implemented inventions should consider emphasizing how such inventions improve functioning of the computer or solves a problem with the operation of the computer, both at the drafting and prosecution stages.

For more information, please reach out to a member of our Patents team.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.