This past year was truly an important year for Canadian decisions on business method patents, both from the Court and the Commissioner of Patents, and these decisions are receiving rapid attention. On November 24, 2011, the Federal Court of Appeal ruled the Commissioner of Patents’ practice of excluding business methods from patentability was “incorrect in law”. The Court sent Amazon’s one-click Internet shopping patent application back to the Commissioner for expedited further examination based on the Court’s reasoning. On December 23, 2011, barely a month after the Court’s ruling, the Commissioner himself approved Amazon’s application and a Notice of Allowance was sent out. On December 28, 2011, Amazon’s patent agents submitted the required issue fee and the Canadian Intellectual Property Office (CIPO) then promptly processed the fee as paid. Given the recent speed at which CIPO processed allowance of Amazon’s application, we expect the Canadian “one-click” patent to issue shortly.
The next question to ask is: what does all the flurry of activity at the end of 2011 mean for CIPO in 2012?
It appears the Commissioner took the Court’s reasoning to heart, that the continued examination "should be taken anew with a mind open to the possibility that a novel business method may be an essential element of a valid patent claim." Taking industrial usefulness and patentable subject matter as satisfied, the Commissioner decided Amazon’s claimed invention, an example of a business method, also satisfied the standard statutory provisions of novelty and inventiveness over state-of-the-art teachings and therefore sent out the Notice of Allowance.
This is clearly a victory for Amazon, who will soon obtain an issued Canadian patent for its one-click innovation and a corresponding monopoly in Canada. It now remains to be seen how soon the volume of currently pending patent applications involving other examples of business methods will be processed by CIPO, using the recent Amazon patent examination as an example. We also expect that CIPO’s August 1, 2011 amended examination guidelines, which assessed patentability based on “what the inventors actually invented,” will no doubt be replaced by subsequent guidance in line with the Court’s reasoning.
However, there is little information on the public record regarding the Commissioner’s rationale on the manner in which Amazon’s claimed invention would have satisfied the Court’s stated “physicality” requirement, a patentability hurdle that Amazon successfully surmounted. Given that CIPO appears to have followed the Court’s guidance, one must remember the Court reasoned that in order for a methodology to be deemed patentable subject matter, practical application of the methodology needs to be accompanied by something with “physical existence” or otherwise “manifests a discernable effect or change.” The Court stated that this physical existence may not be satisfied by the mere presence of a computer as an essential element of the patent claims. In particular, the Court stated that consideration needs to be given to operation of the computer in conjunction with the methodology and “the manner in which computers are used to put an abstract idea to use.”
At this stage it is not clear how the Commissioner will, in general, treat the physicality of a business methodology during the course of examination of business method patent applications. This is something that may have been more clearly outlined if the Amazon case had gone to the Supreme Court. Therefore, care needs to be taken with currently pending and new patent applications to ensure a claimed invention is something more than just a programmed mathematical formula or algorithm that is implemented by a computer. For now, we must look to the Amazon allowed claims as an example of what is meant by discernable effects or changes produced by an invention, and we look forward to CIPO’s revised examination guidelines and further decisions in 2012 on this issue.