Businesses often develop and try to protect intellectual property related to computer-based business methods, which may consist, among other things, of websites through which a business can be operated in an innovative manner.

In 2011, in the case of Canada (Attorney General) v., Inc.1, The Canadian Federal Court of Appeal invited the commissioner of patents to determine the patentability of a one-click shopping process on the Internet, keeping in mind that new business method may constitute an essential element of a valid patent claim. However, the Court repeated that a claim of this nature cannot be allowed where the only inventive aspect of the claim is an algorithm programmed in a computer.

A parallel may be drawn between the above decision and another decision issued last June by the U.S. Supreme Court in the case ofAlice Corporation PTY. Ltd. v. CLS Bank International et al.2(hereinafter, “Alice”). In this case, CLS Bank was requesting the invalidation of patents held by Alice Corporation, which were related to a method for mitigating financial risk. The claims in support of this patent application related to a method of exchanging financial obligations, as well as a computer system and a computer-readable medium containing the source code enabling an individual to implement the method.

The U.S. Supreme Court determined that the patents were invalid on the ground that they related to abstract ideas which were not patentable. The fact that the underlying business method has been declared non-patentable is in line with the prior decisions of this same court.

However, the Alice decision institutes several additional benchmarks as to the inventions implemented by computer. Among other things, the highest U.S. court is of the view that the generic computer implementation of a method does not have the effect of rendering patentable an abstract idea which would not otherwise qualify to a patent.

These decisions highlight the difficulty of obtaining valid patents for inventions implemented by computer and will henceforth have to be taken into account when drafting patent applications related to inventions of that nature. Developers often wish to obtain patents on software. However, in the light of recent case law, this is not possible for simple generic implementations of computer algorithms.

Therefore, in many cases, the best protection will no longer be afforded by the monopoly which may stem from a patent, but rather by alliances forged with major players of the industry or the notoriety acquired by a business based on the fact that it was the first to occupy a specific niche.

Furthermore, for businesses wishing to acquire rights on patents pertaining to computer-implemented inventions, it will certainly be relevant to first assess the validity of these patents. It must be noted that in the last few months, U.S. lower courts invalidated many patents granted prior to the Alice case. Acquiring rights on patents of that nature may thus reveal to be a very bad investment.

Lastly, one must not overlook the importance of carefully documenting the source code pertaining to the computer-implemented business methods since such source code is usually protected by copyright. Copyrights confer in many cases a complementary protection to that which may result from a patent.

Although it is sometimes relatively easy to circumvent copyrights by developing source code with a different structure but yielding equivalent results, it nonetheless remains that situations often occur where source codes which required extensive developing efforts from a business are simply copied by unscrupulous ex-employees or business partners. In these situations, it is crucial to be in a position to prove to the satisfaction of the courts what was developed by the business in order to enforce copyrights on the relevant source code.

In concluding, a strategy must be established in matters pertaining to the computer-related intellectual property of a business, covering commercial secrets, patents and copyrights and taking into account the recent benchmarks established by case law in the area of computer-related patents.