The Federal Court has criticized the Canadian Patent Office’s approach to patentable subject matter and ordered the subject patent application re-assessed under a different test. In a recent decision, Yves Choueifaty v Attorney General of Canada, 2020 FC 837, the Court said that essential elements of claims should be identified in the usual purposive manner and not using a “problem/solution” approach (as is contained in the Patent Office’s guidance to examiners). It is the essential elements identified with a purposive construction which are to be used for determining if a claim is directed to an patentable ‘invention’ as defined in the Patent Act.

Uncertainty has surrounded what types of computer implemented and ‘business method’ inventions are patentable in Canada. In 2011, the Federal Court of Appeal issued its “one-click” decision on the approach to determining patentable subject mater. In that decision, the Court stated that “the jurisprudence of the Supreme Court of Canada, in particular Free World Trust and Whirlpool, requires the Commissioner’s identification of the actual invention to be grounded in a purposive construction of the patent claims.”The Federal Court of Appeal warned the Commissioner that the “focus should remain on the principles to be derived from the jurisprudence”. After that decision, the Canadian Patent Office revised its examiner guidance and it has been examining patent applications ever since under this revised guidance.

The Patent Office guidance was issued in 2013 (see PN2013-02 and PN2013-03) and directed examiners to carry out a version of “purposive construction” of the claims of a pending patent application. The patent office guidance instructed examiners to identify a problem and the solution for the claims being examined as part of the analysis of determining if the claims weredirected to patentable subject matter in accordance with the Patent Act. Importantly, the guidance suggested some claim elements may “merely define the context or the environment” and not be part of solving a ‘computer problem’ relating to the operation of the computer itself.

The patent application subject to the Choueifaty decision (see CA2,635,393) was generally directed to a method of maximizing securities portfolios using optimization procedures all implemented on a computer. The Commissioner, acting on the recommendation of the Patent Appeal Board (PAB) had refused the claims (see CD1478). The PAB stated that, “the problem in this case is not one of computer implementation but rather is directed to financial portfolio engineering and investing” and therefore that “the recited computer-related details are not essential.”

On appeal, the Federal Court said that the Commissioner had “erred in determining the essential elements of the claimed invention by using the problem-solution approach, rather than the approach Whirlpool directs be used.” The Supreme Court in that decision had identified a two part test for determining if an element was essential:

1. Would it be obvious to a skilled reader that varying a particular element would not effect the way the invention works? If modifying or substituting the element changes the way the invention works, then that element is essential.

2. Is it the intention of the inventor, considering the express language of the claim, or inferred from it, that the element was intended to be essential? If so, then it is an essential element.

The Court described the problem/solution approach as only addressing the first part of this test and did not address the inventor’s intention as set out in the claims. The Court therefore set aside the Commissioner decision and directed a fresh assessment of the underlying patent application by the Patent Office in accordance with the Court’s reasons.

While the Federal Court decision may be appealed, the decision could have far-reaching implications if the Commissioner is required to revise the guidance to examiners for reviewing computer-implemented inventions. The Patent Office has frequently rejected patent applications after determining that computer-related features in the claims are “non-essential”. In the 29 decisions of the Patent Appeal Board released thus far in 2020 that have considered patentable subject matter, the patent application was refused in 27 decisions (93%) as not being directed to patentable subject matter using the approach criticized by the Court. In the remaining two decisions where patentable subject was raised, the patent application was refused on another basis.

We will be watching the Canadian Patent Office’s response to this decision closely and can discuss how this decision may impact pending or planned patent applications in Canada.