On June 28, 2010, the U.S. Supreme Court rendered its decision in Bilski v. Kappos on the patentability of business method claims. The Court rejected Bilski’s claims to a method of managing the competing risks of parties involved in commodity transactions. However, the Court held that while Bilski’s claims are abstract and therefore not patentable, the U.S. definition of a patentable process may include at least some methods of doing business.
The Court clarified that a business method may be patentable in the U.S. if it is not directed to an abstract idea, natural phenomena, or law of nature because a patentable process must be new and useful. The Court also commented that while the machine-or-transformation test established by the U.S. Federal Circuit was a useful clue for determining whether some claimed inventions are patentable, the test is not the sole test for determining the patent eligibility of a process.
In Canada, the case most likely to address the patentability of business method claims is Amazon.com, Inc. v. The Attorney General of Canada et al. (T-1476-09) (“Amazon.com”). Amazon.com appealed the Commissioner of Patents’ decision rejecting Amazon.com’s patent application no. 2,246,933 for one-click online purchasing. In the Commissioner’s opinion, the claims were directed to a business method, were non-technological, and did not change a character or condition of some physical object. Amazon.com’s appeal was heard on April 20, 2010, and Amazon.com filed a copy of the Bilski decision on July 9, 2010, for the Federal Court’s consideration. A decision of the Federal Court the Amazon.com case is pending.
Like the corresponding U.S. legislation, the Canadian Patent Act does not explicitly exclude business methods from patentability, but does prohibit patenting of scientific principles and abstract theorems. The Canadian Patent Act does not require an invention to be technological or change the character or condition of some physical object in order for it to be patentable. Perhaps no categorical exclusion exists in the Canadian Patent Act due to the difficulty of defining the class of processes that are business methods. The U.S. Supreme Court was also not able to provide a definition of a business method in Bilski. Accordingly, Canada may follow the U.S.’s lead and develop a test for patent eligibility of a process based on whether the process is new, useful, and not abstract. The alternative would be to uphold the Commissioner’s desire to reject claims that are deemed non-technological or that do not effect a physical transformation even when implemented by a machine.
The machine-or-transformation test has been used effectively by the USPTO to reject claims as being too abstract to patent, while allowing process claims that are tied to a machine or transform of a particular article into a different state or thing. Although the U.S. Supreme Court believes that this test is not the only way to determine patentability, it is an effective and fair way to determine whether a process is new, useful, and not abstract. Canada may very well come to a similar conclusion.