In an important decision for patent applicants who are concerned about subject matter eligibility, the Federal Court of Canada held in Yves Choueifaty v. Attorney General of Canada that the problem-solution approach applied by the Canadian Intellectual Property Office ("CIPO") since 2013 to construe patent claims is inconsistent with Canadian law. The Federal Court's order accordingly requires CIPO to properly construe claims during examination in a manner consistent with Canadian jurisprudence, effective immediately. Practically, this decision should make it easier for patent applicants in the business method, computer-implemented invention, and diagnostic method fields to avoid or overcome subject matter eligibility rejections during prosecution.
How prosecution unfolded before the appeal
In Choueifaty, the Appellant had applied to patent a computer-implemented method for providing an anti-benchmark portfolio. Claim 1 of the Appellant's application, which was representative of the claims at issue for the purposes of subject matter eligibility, follows:
A computer-implemented method for providing an anti-benchmark portfolio, the method comprising: acquiring, using a computer system, data regarding a first group of securities in a first portfolio, wherein the computer system comprises a computer processor and memory coupled to said processor, identifying, using a computer system, a second group of securities to be included in a second portfolio based on said data and on risk characteristics of said second group of securities, and providing, using a computer system, the individual weightings for each of the securities in said second portfolio according to one or more portfolio optimization procedures that maximizes the anti-benchmark ratio for the second portfolio wherein the anti-benchmark ratio is represented by the quotient of: a numerator comprising an inner product of a row vector of holdings in said second portfolio and a column vector of a risk characteristic of return associated with said holdings in said second portfolio; and a denominator comprising the square root of a scalar formed by an inner product of said row vector of said holdings in said second portfolio and a product of a covariance matrix and a column vector of said holdings of said second portfolio.
The examiner and the Patent Appeal Board both refused to allow the application, asserting the claims were directed at patent ineligible subject matter. More particularly, the Patent Appeal Board applied the problem-solution approach to conclude that
- the problem the Appellant was trying to solve was a "financial portfolio engineering and investing problem";
- the Appellant's solution was to construct an anti-benchmark portfolio with particular securities weightings;
- in view of the Appellant's solution, the essential elements of the Appellant's claimed invention were "directed to a scheme or rules involving mere calculations"; and
- the Appellant's claimed invention was in essence an abstract algorithm and therefore patent ineligible.
The Appellant appealed this subject matter rejection to the Federal Court.
The problem with CIPO's approach
CIPO's analysis in this case was typical of business method and computer-implemented invention applications that are rejected for purportedly lacking eligibility. Despite the claims explicitly reciting computer equipment and a problem and solution advanced by a patent applicant requiring computer equipment, a patent examiner and the Patent Appeal Board would sometimes adopt a broader problem and solution that permitted them to find that an invention's essential elements were abstract and disembodied. This led to subject matter rejections.
In its leading decisions on claims construction, the Supreme Court held that determining a claim's essential elements requires answering whether "the intention of the inventor, considering the express language of the claim, or inferred from it, that the element was intended to be essential?" CIPO did not do this when applying its problem-solution approach. CIPO asserted that it did not have to consider an inventor's intention during prosecution since the Supreme Court's construction rules applied during litigation when claim language is fixed, as opposed to during prosecution when claim language may change.
The Federal Court's solution
The Federal Court was not persuaded by CIPO's arguments, and held that CIPO improperly applied the Supreme Court's precedents by not considering the inventor's intention during claims construction. The Federal Court commented that "notwithstanding stating that the patent claims are to be construed in a purposive manner, the Commissioner [of Patents] does not intend or direct patent examiners to follow the teachings of [Supreme Court precedent]." The fact that patent applicants can amend claims during prosecution did not justify a departure from Supreme Court precedent that is applied during litigation.
The Federal Court accordingly set aside CIPO's decision to refuse to grant a patent. CIPO was ordered to reconsider the eligibility of the Appellant's invention by properly applying Supreme Court precedent and taking into account the inventor's intention when determining a claim's essential elements and eligibility.
Choueifaty is the first decision in seven years to address CIPO's subject matter eligibility practices. While only time will tell how CIPO will assess subject matter eligibility going forward, requiring CIPO to consider an inventor's intention when assessing eligibility is likely to help patent applicants. An element not required to solve the problem CIPO identified through problem-solution may nonetheless be essential by virtue of the inventor's intent and render a claim eligible. In this regard, clear indications of an inventor's intent, such as a statement in the description that explicitly recited pieces of computer equipment in the claims are meant to be essential, may be helpful to applicants. Similarly, claims to diagnostic methods that recite specific analytical steps should now be examined in accordance with the jurisprudential principles that had long established subject matter eligibility for methods based upon newly discovered diagnostic correlations. Regardless, Choueifaty reinforces that it is the claims, properly construed in accordance with Canadian jurisprudence, that define an invention. This approach promotes adherence to the rule of law and provides certainty, which is good news for patent applicants.
 2020 FC 837 ("Choueifaty"), released August 21, 2020.
 The Patent Appeal Board is the administrative board within CIPO that reviews final rejections by patent examiners. In this regard it is analogous, for example, to the USPTO's Patent Trial and Appeal Board.
 Choueifaty at paras. -.
 Free World Trust v Électro Santé Inc, 2000 SCC 66 and Whirlpool Corp v Camco Inc, 2000 SCC 67.
 Choueifaty at para. .