Patent Law

Business Method Patenting in Canada

By Dennis Crouch

Amazon.com v. Canada (Canada Fed. Ct. 2010).

The Canadian Commissioner of Patents rejected Amazon's one-click patent application — pejoratively calling the invention a 'business method.'  The Commissioner's legal hook for rejection was that business methods do not fit within the legal definition of 'invention' required by s. 2 of the Canadian Patent Act. The text that provision was derived from United States law and closely follows the language of the 35 U.S.C. 101.

'[I]nvention' means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.

On appeal, the Federal Court of Canada (J. Phelan) reversed — holding that business methods 'can be patented in appropriate circumstances.' Namely, the court indicated that a 'mere business scheme' or 'disembodied idea' are not patentable because they have no 'practical embodiment.' Although the court rejected a 'technology' test, it went on to hold that Amazon's invention qualified under s. 2 because (1) the system claims require a machine as an essential element of the invention and (2) the method claims are 'put the into action through the use of cookies, computers, the internet and the customer's own action' and results in a 'physical effect' on those elements.

Although the Court had the power to grant the patent, it decided instead to remand the decision for 'expedited re-examination' – noting that the Patent Office's decisions on other patentability doctrines may have been tainted by the Office's desire for this to serve as a test case on patentable subject matter eligibility.

Comparative International Law: Canadian courts often welcome a comparative analysis of the laws of its neighbors – especially the laws of the United Kingdom and United States. In the patent realm, the European Patent Convention (EPC) is also influential.  While those laws often help the courts in making policy decisions, the Canadian decision 'must correspond to Canadian law. . . . International jurisprudence, and certainly the policies advocated therein, is not determinative, but at most a potential guide when applied correctly and mindfully.'  Here, the Court appears to have closely followed the US Supreme Court's recent decision in Bilski v. Kappos, 130 U.S. 3218 (2010).

Full post as published by Patently Obvious on October 15, 2010 (boomark / email).