So-called “Business Methods” Patentable in Canada

Oct 15 2010

In an October 14, 2010, decision, Amazon.com, Inc. v. The Commissioner of Patents, the Honourable Mr. Justice Phelan for the Federal Court overturned the Commissioner of Patents and concluded that a “business method” can be patented in appropriate circumstances.

The patent application at issue was Amazon.com’s patent application relating to “one-click” ordering on-line. The Commissioner of Patents had rejected the application as being directed to non-patentable subject-matter, despite finding that the claimed process was new and non-obvious.

The Court took issue with the Commissioner’s attempt to create new tests with respect to determining proper patentable subject matter. Specifically, the Court disagreed with the Commissioner’s approach of evaluating both the “form and substance” of the invention, in order to assess patentable subject matter. The Court was highly critical of the Commissioner’s attempt to parse the elements of the claims to try to pinpoint the “contribution” apart from the invention as a whole, and to then assess whether the “contribution” on its own was patentable subject-matter.

The Court rejected the Commissioner’s definition of “art” as being limited to an “act or series of acts performed by a physical agent on a physical object to produce some change either of character or condition” on the basis that it was overly focused on tangible physical manipulations. Phelan J. emphasized that the Patent Act must be adaptable to unforeseen technology and that an over-emphasis on physicality is inconsistent with modern technology. The definition of “art” endorsed by the Court was the broad language, used by the Supreme Court in Shell Oil and the Federal Court of Appeal in Progressive Games, that an “art” is the practical application of skill or knowledge to produce a commercially useful result.

The Court also overturned the Commissioner’s purported finding that there was an exclusion of “business methods” from patentability in Canada, and rejected the Commissioner’s creation of a “technological” requirement test, stating, “[t]here is no exclusion for “business methods” which are otherwise patentable, nor is there a ‘technological’ test in Canadian jurisprudence.”

In reaching its conclusions, the Court found that “… the Commissioner fundamentally erred in the legal principles used to determine patentability.”

Amazon.com’s patent application was ordered back to the Commissioner for expedited re-examination.

This article is for information purposes only and does not constitute legal or professional advice.

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Tags: Business Methods, Patents