The Canadian Intellectual Property Office (CIPO) has recently revised Chapter 12 "Subject Matter and Utility" and Chapter 13 "Examination" of the Manual Of Patent Office Practice (MOPOP). With these changes, CIPO is clearly taking an aggressive stance against business method patents. Also, all indications are that prosecuting claims for software inventions will be more difficult as well.

Chapter 12 now states that, to be patentable, an invention must present a "technological solution to a practical problem…" "…in a form that can interact directly with the physical world." In addition, "business methods," which are defined as "schemes or plans for conducting commercial interactions," are prima facie held to be non-technological and are therefore excluded from patentability.

This is in sharp contrast to the previous versions of the MOPOP, which stated that there was no legal authority for precluding patentability of a claim by virtue of it being directed to a business method. Indeed, no Canadian legal authority seems to support CIPO’s new position, except for the recent Amazon 1-Click decision of the Canadian Patent Appeal Board. TheAmazon 1-Click decision is currently under appeal to the Federal Court.

Turning to examination, Chapter 13 now includes additional requirements for examination. For example, Examiners are now required to examine each claim not only in “form” (i.e., the literal words of the claim), but also in “substance,” which involves an assessment of what has actually been contributed by the inventors. This includes determining which claim elements are actually part of the invention and then assessing the patentability of the claim on that basis. Again, the only support for this change appears to be the Amazon 1-Click decision.

Chapter 13 does indicate that Examiners should "ensure that useful combinations are not inappropriately assessed by considering the novelty or ingenuity of their parts in isolation." However, there remains a real danger that an Examiner may inappropriately parse out key elements of the claim when considering patentabilty.

This is especially of concern for software inventions, where the main inventive aspect may reside in a software component and not in any specific hardware. For example, even though many software inventions are claimed with reference to physical hardware, an Examiner may determine that a particular claim is not directed to patentable subject matter simply because the hardware elements are not "contributed" by the inventor(s) (e.g., the hardware is generic and therefore not inventive) and the remaining software elements do not involve a physical object.

This may be true even if the claim itself is in the form of an “apparatus” or “system” claim. For example, in Amazon.com 1-Click decision, the Patent Appeal Board found a set of system claims to be directed to a business method and therefore were not-patentable by looking beyond the “form” of the claims and considering their “substance”.

Given the recent changes to Chapters 12 and 13, it appears that the CIPO is taking a firm stand against the patentability of business methods. It also seems that the CIPO is making software inventions more difficult to prosecute. In the current climate, merely adding hardware components to a claim or recasting a “method” claim as a “system” or “apparatus” claim seems unlikely to convince a patent Examiner that the claim is directed to patentable subject matter.

Time will tell how the courts react to this new approach. Many Canadian practitioners feel that, given the lack of explicit support in the regulatory scheme or existing case law, further refinements will be required.