Say your company has just developed an innovative new way of conducting its business — your accounting department has developed a new and more efficient method of managing client accounts, your tax department has come up with a new way to ensure compliance with the latest tax code provisions, or your sales department has created a new approach for marketing your products or services over the Internet. You are confident that the new developments will benefit your business, and they could have value for others as well. But can this type of innovation be patented in Canada?
The answer is yes, under certain circumstances a business method can be patented in Canada.
Background. Under Canadian law, it is certainly possible to patent a process. However, patented processes have traditionally been rooted in the domain of tangible or physical inventions. For example, it has long been possible to patent a method of manufacturing a physical article on an assembly line or a method of operating a mechanical or electronic device. However, business methods often entail elements that are not mechanical, electrical or even clearly physical, such as client accounts, tax code provisions, or consumer purchases for example. In the past, the Canadian Intellectual Patent Office (CIPO) has been reluctant to grant patents for such subject matter, perhaps in part because the Canadian Patent Act specifically precludes patenting certain types of abstractions, namely "any mere scientific principle or abstract theorem."
Recent case law. The patentability of business methods recently came to a head in a series of decisions referred to as the Amazon decisions (Amazon.com, Inc v Commissioner of Patents, 2010 FC 1011, 2011 FCA 328). Amazon’s invention allowed customers shopping online to make purchases with one click of a mouse button. This is in contrast with traditional shopping cart approaches of online shopping in which customers must perform additional steps such as checking out and entering shipping and billing information. The invention included tangible aspects such as a client system (i.e. computer) for executing the method. A key issue in the case was whether the claimed invention was merely a business method and therefore unpatentable.
The Amazon decisions confirmed that “no Canadian jurisprudence determines conclusively that a business method cannot be patentable subject matter and that the Patent Office should be "open to the possibility that a novel business method may be an essential element of a valid patent claim." These bold statements by the Court are welcome developments.
On the Court’s direction, CIPO re-examined Amazon’s patent application, and the invention was found to be patentable. A patent on Amazon’s one-click shopping cart invention issued under Canadian Patent No. 2,246,933 in January, 2013.
It is now clear that the door to patenting business methods in Canada is open.
CIPO practice notices. From time to time, CIPO supplies its Examiners with practice notices to provide guidance in examining patent applications. Such practice notices may be issued, for example, to clarify office practice after important court decisions are issued. Patent practitioners typically pay close attention to practice notices as they may provide valuable insight regarding the manner in which pending patent applications are likely to be examined.
In the wake of the Amazon decisions, CIPO has issued two practice notices on March 8, 2013: PN 2013-02, entitled “Examination Practice Respecting Purposive Construction,” and PN 2013-03, entitled “Examination Practice Respecting Computer-Implemented Inventions.” Although it may not be apparent from their titles, these practice notices bear upon the manner in which business method inventions are examined given that patent applications pertaining to business method inventions are often presented as computer-implemented systems.
The first practice notice describes a technique, referred to as “purposive construction,” that Examiners should apply to “construe” a patent claim, i.e. to determine what the claimed invention necessarily includes. This may be a welcome development to applicants for computer-related inventions in Canada, as it replaces CIPO’s controversial former policy of assessing patentability based on a so-called "inventive concept." The second practice notice provides a greater focus on computer-implemented inventions, and confirms that “where a computer is found to be an essential element of a construed claim, the claimed subject-matter will generally be statutory.” Thus, for example, if a business method requires a computer, then the business method may be patentable.
Conclusion. It is clear that the door to patenting business methods in Canada is open. Moreover, CIPO’s new practices may result in a greater number of patents related to business methods, especially business methods that require a computer.
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.