On November 24 2011 the Federal Court of Appeal held 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".
In A-G of Canada v Amazon.com,(1) the court agreed with an earlier decision of the trial judge that the Patent Office's framework for analysis in rejecting Amazon.com's one-click ordering process as non-statutory subject matter was deficient. The court held that a determination of whether an invention constitutes statutory subject matter must be based on a purposive construction of the claims. The court referred the matter back to the Patent Office to undertake a purposive construction of the claims, as the court considered it was not in a position to construe the claims since it did not have the benefit of expert testimony.
Section 2 of the Patent Act defines an 'invention' as including any new and useful art or process. Section 27(8) states that no patent shall be granted for any mere scientific principle or abstract theorem. The court stated that earlier decisions of the Supreme Court of Canada required identification of the invention to be grounded in a purposive construction of the patent claims.
The court noted that the Patent Office had refused Amazon's application on the basis that the invention failed three tests that the office considered were implicit in the meaning of 'art' in Section 2 of the Patent Act:
- It did not add to human knowledge anything that is technological in nature;
- It was merely a business method and a business method is not patentable; and
- It did not cause a change in the character or condition of a physical object.
The court then stated:
"in my respectful view, the [Patent Office] should be wary of devising or relying on tests of [this] kind... The focus should remain on the principles to be derived from the jurisprudence. Catch phrases, tag words and generalizations can take on a life of their own, diverting attention away from the governing principles."
With regard to business methods, the court noted that "no Canadian jurisprudence determines conclusively that a business method cannot be patentable subject matter". Moreover, the court stated:
"in my view the task of purposive construction of the claims in this case should be undertaken anew... with a mind open to the possibility that a novel business method may be an essential element of a valid patent claim."
The court stated that anyone who undertakes a purposive construction of a patent must do so on the basis of a foundation of knowledge about the relevant art. Courts generally require the expert evidence of persons skilled in the art to undertake this, but the court did not have the benefit of expert evidence. On the other hand, the Patent Office could undertake this task with the assistance of submissions of the patent applicant and from staff at the office with appropriate experience. Accordingly, the court allowed the appeal and referred the matter back to the Patent Office to undertake this analysis.
For further information on this topic please contact Ronald D Faggetter at Smart & Biggar/Fetherstonhaugh by telephone (+1 416 593 5514), fax (+1 416 591 1690) or email ([email protected]).