Every patentee must understand that each patent system has evolved a unique way in which to effectively deal with the limits of patentable subject matter. For example, both the US and Canadian patent systems currently grapple with striking the necessary balance that leaves any underlying building blocks of an invention – such as scientific principles, abstract ideas and laws of nature – accessible to all, but extends patent protection to new, useful and innovative applications of these building blocks. The advent of computers and software into mainstream technology has required courts to clarify the boundary between patentable and non-patentable subject matter as it relates to computer-implemented technologies. In large part, clarification by the courts has involved distinguishing between claims in which the “invention” merely re-constructs a known concept using a computer-executed algorithm, and those that apply a known underlying building block to achieve a new and useful end.

With respect to the US system, the recent decision of the US Supreme Court in Alice Corp v CLS Bank (“Alice”) distinguished between patentable and non-patentable computer-implemented inventions in ruling that the technology at issue constituted ineligible subject matter.[1] The claims at issue related to a computerized scheme for mitigating “settlement risk” – i.e. the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. In particular, the claims were designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary.

In ruling that the claims were directed to non-patentable subject matter, the Court applied a two-step framework developed in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (“Mayo”)[2] to distinguish claims for “the building blocks of human ingenuity” (e.g. laws of nature, natural phenomena, and abstract ideas) from those for “patent-eligible applications” of those building blocks. The general test requires the Court to determine whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea. If so, then the next step is to consider whether the claims contain “additional features” or an “inventive concept” sufficient to transform the claimed abstract idea into a patent-eligible application. In applying the first step to the facts of Alice, the Court concluded that the claims at issue were drawn to the abstract idea of intermediated settlement. Under the second step, the claims were held to not include an inventive concept sufficient to render the subject matter patentable. In particular, the Court stated: “the claims at issue amount to nothing significantly more than an instruction to apply the abstract idea of intermediated settlement using some unspecified, generic computer.” Consistent with Mayo, the Court held that the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention, and that stating an abstract idea while adding the words “apply it” is not enough for patent eligibility.

In contrast to the US framework, which positions the abstract idea in a claim at the forefront, the Supreme Court of Canada has directed that “purposive construction” of claims is always antecedent to the determination of the validity or infringement of a patent.[3] Purposive construction gives weight to the purpose of the inventor as expressed in the claims and as understood by a “person skilled in the art”. A key aspect of purposive construction is the determination of whether or not each element of the claim is “essential” to the claimed invention. An element may be non-essential if at the time the patent was published it would have been obvious to the skilled reader that a variant of the element would not make a difference to the way the invention works. Importantly, Canadian law provides that an element is more likely to be ruled essential if the inventor’s intent as explicitly exemplified in the patent specification was for the element to be essential irrespective of its practical effect.

In the context of gauging the patent-eligibility of the subject matter of computer-implemented inventions, Canadian courts will first purposively construe the claim(s) at issue to precisely define the subject matter of the invention. This process includes determining whether computer components are essential to the invention as claimed. Where a computer is found to be non-essential (e.g. the computer can be substituted by, for example, a pen and paper, without making a difference to the way the invention works, and the inventor did not intend strict compliance with respect to the claim to the computer), and the only remaining essential elements are non-patentable (e.g. an abstract theorem), then the court could decide that the claim is directed to ineligible subject matter. For example, a method of collecting, recording and analyzing seismic data using a computer programmed according to a mathematical formula was ruled non-patentable subject matter because the only essential aspect of the claimed invention was the mathematical formula (i.e. a “mere scientific principle or abstract theorem”)[4]. In contrast, where the court determines from a purposive reading of the claims that a computer is essential to the invention, the claims may define patentable subject matter.

Given the primacy of purposive construction in Canada, it is critical that patent applications for computer-implemented technologies be drafted to evoke an intent that a computer is an essential element of the invention. As courts will look to the entire specification in construing claim language, computer components should be consistently presented as essential elements of the invention throughout the description, drawings and claims. For example, even if an invention is primarily a “software invention” (i.e. there are no essential non-computer elements), as much detail as possible should be included about the computer hardware that is used to execute the software. If possible, avoid using “boiler plate” hardware description, and instead try to customize the language to describe how the hardware interacts in combination with the program code or is affected by the execution of the program code. Further, if a claim relies on computer implementation for statutory eligibility, all described embodiments should require the invention to be implemented by the computer. Finally, the Canadian Federal Court of Appeal has indicated that patentable subject matter must be something with physical existence, or something that manifests a discernible effect or change.[5] As a result, inventors should try to ensure that at least one essential step in a method causes a discernible effect or change.