While it has been suggested that the recent US case of State Street Bank and Trust Co v Signature Financial Group Inc gave rise to a flood of patent applications in the US Patent Office, there has been little discussion of its effect on patent filings in Canada.

The key issue arising from the case is whether business method patent applications corresponding to applications filed in the US Patent Office (and elsewhere) should be filed in Canada, notwithstanding the Canadian Patent Office's stance that business methods are not patentable.

Many business method patent applications being filed in Canada are classified under International Patent Classification (IPC) group G06F/17, which covers "electrical digital data processing, digital computing or data processing equipment, or methods specifically adapted for specific functions". Subgroup 60 covers "administrative, commercial, managerial, supervisory or forecasting purposes".

A search of this subgroup reveals a large number of laid-open patent applications relating to business methods. Each of these applications claims priority from an earlier filed application in the United States. The business methods described in the applications cover, for example, the marketing of products and services through a pyramid marketing scheme and the provision of multiple discounts to retail customers.

In contrast to some of the more publicized business method patents, the claims in these patent applications have nothing to do with the Internet, e-commerce or data processing. Rather, they relate to basic business methods undertaken throughout Canada.

As for the patentability of these methods, the Canadian Manual of Patent Office Practice states that:

    "Subject matter that is only a scheme or plan, system of doing business, method of accounting or providing statistics, personality or IQ test and the like is not considered to be within the scope of 'invention' as defined by Section 2 of the Patent Act."

Although there are no court decisions dealing directly with this point, Canadian jurisprudence holding that professional skills are not patentable in Canada has been cited in support of the argument that business methods are not patentable subject matter.

However, judging by the kinds of patents issued in Subgroup 60, the manual's sweeping statements do not necessarily reflect current Canadian Patent Office practice. A recent patent search revealed that 114 Canadian patents have been issued within this IPC subgroup. Arguably, many of these patents relate to business methods, though with claims that are drafted so as to be acceptable to Canadian patent examiners.

Notwithstanding the stated position of the Canadian Patent Office, it is recommended that organizations scrutinize their business procedures (regardless of whether they relate to e-commerce) for possible patentable inventions. The office's policy may change and the courts may address the issue directly in the near future. In the meantime, Canadian companies should file applications for such methods in order to ensure the priority of their claims should the law change before the applications are examined.

For further information on this topic please contact Elliott Simcoe at Smart & Biggar by telephone (+1 613 232 2486) or by fax (+1 613 232 8440) or by email ([email protected]).