After Choueifaty: A New Test for Examining Software Inventions in Canada

After Choueifaty: A New Test for Examining Software Inventions in Canada

Photograph of eyeglasses focusing on a computer screen displaying software code.

By Andrew Currier and Stephen Perry[1]

Abstract

 Choueifaty[2] is the latest Canadian judicial pronouncement on software patents in Canada. Notably, the decision does not promulgate a test but merely issues guidelines for Canadian Intellectual Property Office (“CIPO”) as to how to properly construe software claims during examination. The authors review best practices for drafting software patents to global standards and propose a new legal test for examining software inventions in Canada based on existing Canadian law that also seeks harmonization with the European approach for examining software inventions.

Background

Despite the fact that programmable computers have been widespread for roughly seventy years, the patentability of computer-related inventions continues to be controversial and follows a pattern of pendulum swings between “yes” and “no” in many jurisdictions. Sometimes the Courts are in favour, while the patent offices are not, and from time-to-time their positions invert. Notwithstanding the pendulum swings, the authors have adhered to a single drafting style that generally survives pendulum swings, provided the invention is meritorious and the law is being reasonably applied, even if facing a particularly toxic pendulum swing during examination. In this post, we are taking a different approach to this section, where we will review drafting style and then discuss the case law. Our hope is that describing a single successful drafting style may translate into a basis for helping formulate a stable and predictable case law. We also propose a new test for examining computer-implemented inventions under Canadian law.

When it comes to the patentability of computer-implemented inventions, the tension lies in the spectrum between patentable “machines” and “processes”[3] at one end, and unpatentable “mere scientific theorems” or “abstract principles” [4] at the other end. In common parlance, it is the spectrum between what is “concrete” vs. “abstract”; or “practice” vs. “theory”. Reasonable people can disagree on where a given invention lies on the spectrum, which is likely a reason for the persistent controversy around software patentability.

There is also much befuddlement in the jurisprudence as to how much scope to give to the word “art” when assessing whether a given innovation qualifies as statutory subject-matter. Judicial tests that have arisen deviate significantly from common every day usage[4.1], requiring all to contort themselves into strange analyses based on a poorly defined legal term. Proper treatment of this topic requires another paper, but the authors propose here to define “quantitative arts” to refer to innovations that arise out of measurement, what is typically now referred to as “science and technology” and consider the “qualitative arts” to arise out of human qualitative experience, what is typically called “art” and encompasses painting, sculpture, film, dance, music, etc.  If jurists read “quantitative” into the definition of “art” in section 2, (i.e. section 2 refers to the “quantitative arts”) we give legislative intent to the breadth of the term by allowing new technologies to arise, without having to specifically enumerate it (indeed we can note “process” and “machine” were added to subsequent patent acts from the original). Thinking of computer-implemented inventions as a branch of “quantitative arts”, tempered by the “abstract theorem” prohibition, helps the befuddlement.

Approaches to Drafting Software Inventions

Resolving the tension in favour of patentability requires careful drafting of the software invention.   There are two important factors when conducting the inventor interview and formulating the outline for the patent claims and the accompanying disclosure: First, there must be a thorough understanding of the relevant computer hardware, so that the specification can be drafted in a manner that anchors the patent specification in the computer as a machine. Second, one must ascertain the inventive enhancement to the performance of the computer hardware as a result of the software invention and ensure that this inventive enhancement is reflected, either explicitly or implicitly, in the disclosure and claims.

As to the first factor, section 2 of the Patent Act[5] expressly contemplates that “machines” are patentable subject-matter. A person skilled in the art will find it completely self-evident that any given piece of computer-hardware is a type of machine and one must engage in legal fiction to assert otherwise. A computer is a physical structure comprised of human-made components that are the product of engineering efforts. It is an orderly assembly of wires, computer chips, transistors, resistors, capacitors and a host of other electronic components. It is a tangible, artificial construct; it is concrete and not abstract.[6] Computers do have an interesting feature in that they are “programmable”, and the programmable nature of computers means that they can be temporarily assigned to different tasks. The fact of programmability is no basis to argue that a computer is not a machine. To the contrary, a computer executing one software program is a different machine than a computer executing another software program because the computer hardware is necessarily placed in a different physical state in order to execute the program. Each software program temporarily configures various transistors and other electronic components in the computer into different states. The fact that these changes to the transistors cannot be physically sensed does not equate to the software being a “mere scientific principle or abstract theorem”. In short, a programmable computer has the possibility of being many different machines depending on the software being executed. There is no doubt that scientific principles and theorems are important to the development of computer programs, as they are important to the development of any technology. But once those scientific principles and theorems become incorporated into a computer they cease to be “mere scientific principle[s] and theorem[s]”. Thus a drafter must be fully versed in the relevant hardware for the software invention, and be prepared to provide a fully enabling description of that hardware in the specification.[7]  Properly done, a well drafted description of computer hardware should bring the patent specification squarely out of the realm of the “abstract” and into the realm of a “machine”, and, for good measure, satisfy the “tangible object” requirement from Lawson v. Commissioner of Patents.[8]  Improperly done, a perfectly patentable computer-invention may fail because the patent application does not set up the hardware and its interplay with software properly; instead focusing too heavily on the software component and thus presenting the invention as too abstract.

As to the second factor, it is important to understand exactly what aspects of the software enhance the performance of the underlying hardware. Again, the narrative of the patent specification needs to reflect those aspects, either implicitly or explicitly, as the context of the draft requires. The patent narrative should thus recite the hardware and include a description of the software as it executes on the relevant hardware, with the enhancement to the hardware being evident, inherently or expressly, from the description of the software. Note that it is important that the contents of the hardware and software section be clearly delineated, in that a description that blurs concepts of hardware and software may result in an invalidity finding based on ambiguousness, lack of enablement or lack of support for the claims.[9]

While the first factor is about satisfying the statutory subject-matter requirement, the second factor is, in the authors’ view, about satisfying the non-obviousness requirement,[10] although CIPO and other tribunals often treat this aspect as a matter of statutory subject-matter. [11] Let us use a couple of hypothetical examples.  First, let us consider an example of non-patentable computer-invention, and second, we will consider an example of a patentable computer-invention.

According to the first example of a non-patentable invention, let us consider prior art found in the family kitchen of the 1950s, complete with an old-fashioned wooden recipe box, with individual removable cards. Each card includes a title and directions for making a different recipe. To make the recipe box useful, the cards should be sorted in alphabetical order beginning with the title. The skill to sort the cards by title is prior art and within the common general knowledge of a person skilled in the art. Recipe boxes themselves predate computers and are clearly prior art. Let us now assume that computers are ubiquitous and we can consider a point in history (say, 1990) when the first individual noted that implementing a recipe box in computer software could be very advantageous and something that would benefit the marketplace. A patent specification that recites and claims a computer with a description of how to implement a recipe box in software, including an automatic sort function, should pass the “machine” requirement and take the invention into the realm of statutory subject-matter. The invention is, notably, useful and novel; it is convenient to have your recipes on a computer and no one has built recipe card software.  However, with nothing more, the patent should fail at the point of obviousness.[12] Computers are known. Recipe boxes are known. The advantages of using computers to manage data are well known, so there is plenty of inherent motivation to implement things like recipe boxes on computers. Therefore, implementing a recipe box on a computer is obvious. This software invention may be statutory subject-matter, but it is obvious and non-patentable.

According to the second example of a patentable invention, let us build on our example of the old-fashioned wooden recipe box, but more broadly consider the function of computers being used to store and automatically sort recipes alphabetically by title. For this example, the fictional prior art will be a particular computer architecture that is known and that an algorithm has been devised and is part of the recipe card software, and that algorithm is used to automatically sort the recipes by title using the computer architecture. A hypothetical empirical study shows that the computer architecture requires a certain amount of memory and time to fully sort the recipes. Along comes our inventor. Our inventor is a mathematician or engineer with a fondness for cooking, who also understands the current computer architecture being used to sort recipe cards. The inventor uses this deep appreciation and their skill to devise an algorithm, expressed in software, that, when implemented on the prior art computer architecture, reduces the memory usage and the time to sort the recipes by half. This means that the same computer architecture, once thought to be limited in how many recipes it can practically store and sort, now can be used for twice as many recipes. The result is that an existing piece of computer hardware is now transformed into a new and unobvious machine. The old machine can only handle half of the recipes as the new machine. Even if the hardware looks the same, the resulting hardware and software combination leads to a new and improved machine. The computer hardware has new life and will not be thrown out for many more years. This software invention is patentable.

Historic Approaches to Examining Software Inventions in Canada 

Overall, the authors strongly support a rigorous novelty and obviousness analysis against any invention, including computer-implemented inventions, to ensure that the function of the bargain is being fulfilled. Weak inventions can be disposed of through careful application of novelty and obviousness analyses and by limiting the patentee to claim a monopoly scope that fairly reflects what has been contributed to the public by the invention.  However, the “obviousness” approach to analyzing computer-inventions has not been used in Canadian law, even though it is fairly consistent with the European approach to computer-implemented inventions.[13]

Notably, the European approach uses a “problem-solution” approach as part of their inventive step (aka “non-obviousness”) analysis and promulgates its usage when assessing inventive step in computer-implemented inventions. As will be discussed further below, CIPO’s now-rejected guidelines[14] for examining software patents attempted to incorporate the European-style “problem-solution” approach for evaluation inventive step into a test for statutory subject-matter under section 2, creating a “problem-solution” test hybridized with the Catnic purposive construction approach promulgated by Freeworld and Whirlpool. Because CIPO’s approach differed from the principle that there is only one test for construction, it was overturned in Choueifaty.[15]

              Leading up to Choueifaty, CIPO issued the above-referenced guidelines. Choueifaty[16] directly and successfully challenged those guidelines.[17] According to those guidelines, evaluation of the subject-matter of a claim was to be made on the basis of the essential elements as determined through a purposive construction. Where a computer is found to be an essential element of a construed claim, the claimed subject-matter will generally be statutory. A good indicator is that the claim provides a technical solution to a technical problem. According to the guidelines, factors pointing towards the existence of a “computer problem” may have included:

  1. The description details a specific problem with the operation of a computer.[19]
  2. The solution to the problem involves controlling a chip, system component or technical architecture element such as through firmware (embedded software).
  3. The description emphasizes challenges or deficiencies in prior computers.
  4. A significant level of detail is devoted to describing technical details, such as the algorithm or logic performed by the computer.

Factors that suggest that the problem was not a “computer problem” included:

  1. Explicit statements in the description suggesting a problem other than a “computer problem”.
  2. The absence of any explicit indication in the application that any practical problems relating to the operation of a computer were overcome.
  3. A relative absence of technical details, despite an indication in the description that the solution be implemented on a computer.[22]

The batch of decisions from the Patent Appeal Board based on these guidelines, and just predating Choueifaty, demonstrated CIPO’s willingness to readily declare claimed elements as non-essential. This contrasted with the courts’ approach, which has been to presume that all elements present in a claim are essential.[24] These findings on essential and non-essential elements led to repeated findings of non-statutory subject-matter since, absent the computer, a program may be viewed as a mere abstract theorem. In the Third edition of Canadian Patent Law,[25] we opined that a presumption of essentiality should prevail in these situations, and this was also one of the factors that was considered in Choueifaty.[26] Thus Choueifaty[27] provided needed clarification to the approach to be used in an assessment of patent-eligible subject-matter.[28] At the writing of this post, CIPO has yet to respond to the decision.[29]

After Choueifaty: The proposed test for software inventions in Canada

To elaborate on our vision for a new test under Canadian law, we suggest that CIPO can still look to the European Patent Office (“EPO”) for guidance under the EPO’s inventive-step methodology and map that to the Canadian non-obviousness standard, rather than trying to shove the EPO’s inventive step analysis into a statutory subject-matter analysis under the definition of invention under section 2. The definition of statutory subject-matter under section 2 and its abstract-theorem exception under section 27(8) of the Canadian Patent Act have direct analogue to Article 52 of the European Patent Convention.  By the same token, the obviousness provision under section 28.3 of the Canadian Patent Act has a direct analogue to Article 52 of the European Patent Convention. Canadian patent law also has an analogue to a very notable feature of how European software patents are examined, which is that European examiners are instructed, in an obviousness analysis, to ignore non-technical features that do not contribute to the technical nature of the invention and are deemed to be incapable of contributing to the presence of an inventive step.[30] The analogous principle in Canadian cases, is that during an obviousness analysis, a properly construed claim may be “stripped of unnecessary verbiage”.[31] The authors propose that this approach may be relied upon in Canada in order to provide a means for “stripping out unnecessary” non-technical language in the claim. Such unnecessary language would include language that did not contribute to a “machine”, such as a hardware enhancement, or other technical improvement, of the computer-invention recited in the claim. In this fashion, aspects of the claim that are non-statutory can be discarded so that the remainder of the claim can be properly analyzed for obviousness. In the event that the claim recites a prior art computer architecture that executes a novel business method without any improvement to the underlying computer architecture, then the claim may be disposed of as an unpatentable mere aggregation of elements, vs. a patentable combination of elements that work synergistically to improve the overall operation of the computer.[32]

Commentary on the proposed test

The foregoing is not the approach that has been used by CIPO, but the authors contend that it is an approach to computer-inventions already available under Canadian law, and is a more accurate harmonization with European law. We shall see if the approach or something similar makes its way into Canadian law.

Whether CIPO appeals or adapts its practices in response to Choueifaty, the authors wish to reemphasize a desire to avoid creating another test inside the section 2 definition of “invention” that attempts to ignore computing elements that are recited in the claim. Patent claims are directed to the person skilled in the art, and patent claims are to be construed with a mind willing to understand and from the perspective of the person skilled in the art. Patent claims that recite computer components (e.g., processor, memory, display) can and should be taken at face value. A computer processor so recited in a claim is a computer processor; it is not a duck, it is not a horse, it is not a brain, it is not a human being. A purposive construction of a claim that recites hardware elements should be taken at face value and peering below to some sort of other purpose defies principles of claim construction. In summary, the authors wholeheartedly support a plain-meaning construction to patent claims that recite computer components, and recognize that if the claim recites those terms then purposively the patentee clearly intended that an infringer must also utilize those components in order to infringe the claim.

Another reason to avoid trying to create another test inside the section 2 definition of invention is that it creates a temptation to locate mischief in patent drafters. Both Canadian and U.S. jurisprudence allude to patent-drafter mischief, but those allusions seem to accompany a desire to create the elaborate, complex and messy subject-matter tests for software inside statutory subject-matter definitions such as section 2 in Canada and the U.S. section 101. Notably, in Canada, it has been suggested that drafters may be “… deliberately or inadvertently deceptive …” [33] when it comes to crafting software patents, and that such software patents are only statutory subject-matter in only form and not substance.  In the U.S., the Supreme Court stated it more delicately: “This Court has long “warn[ed] . . . against” interpreting §101 “in ways that make patent eligibility ‘depend simply on the draftsman’s art.” [34]  These statements appear speculative, and conclusions based on these statements have never been based on actual evidence of chicanery, so the perception is hard to test. Chicanery or no, the principle creates legal uncertainty and undermines the integrity of the patent system. The European approach, and the suggested Canadian analogue, avoid this speculation altogether.

However, until the Canadian patent system responds to Choueifaty[35], there is not much judicial guidance to work with. While decisions on the patentability of such inventions date back to at least the 1970s,[36] there is a relative dearth of caselaw. Until Choueifaty[37] and Amazon.com[38], the leading case in Canada on patentability of software had been the 1981 decision in Schlumberger Canada Ltd. v. Canada (Commissioner of Patents).[39] In Schlumberger, a patent was sought for a computer program that was helpful to geologists by aggregating and processing information obtained from several boreholes and presenting it in a useful manner.[40] In finding the invention non-statutory subject-matter, Pratte J. wrote:

In order to determine whether the application discloses a patentable invention, it is first necessary to determine what, according to the application, has been discovered. Now, it is obvious, I think, that there is nothing new in using computers to make calculations of the kind that are prescribed by the specifications. It is precisely in order to make that kind of calculation that computers were invented. What is new here is the discovery of the various calculations to be made and of the mathematical formulae to be used in making those calculations. If those calculations were not to be effected by computers but by men, the subject-matter of the application would clearly be mathematical formulae and a series of purely mental operations; as such, in my view, it would not be patentable. A mathematical formula must be assimilated to a “mere scientific principle or abstract theorem” for which s-s. 28(3) of the Act prescribes that “no patent shall issue”. As to mental operations and processes, it is clear, in my view, that they are not the kind of processes  that are referred to in the definition of invention in s. 2. However, in the present case, the specifications prescribe that the calculations be made by computers. As a result, as I understand the appellant’s contention, those calculations are not mental operations but purely mechanical ones that constitute the various steps in the process disclosed by the invention. If the appellant’s contention were correct, it would follow that the mere fact that the use of computers is prescribed to perform the calculations prescribed in the specifications, would have the effect of transforming into patentable subject-matter what would, otherwise, be clearly not patentable. The invention of the computer would then have the unexpected result of giving a new dimension to the Patent Act by rendering patentable what, under the Act as enacted, was clearly not patentable. This, in my view, is unacceptable. I am of opinion that the fact that a computer is or should be used to implement discovery does not change the nature of that discovery. What the appellant claims as an invention here is merely the discovery that by making certain calculations according to certain formulae, useful information could be extracted from certain measurements. This is not, in my view, an invention within the meaning of s. 2.   [41]

 It is noteworthy that Schlumberger disposed of the case under section 2 of the Patent Act, essentially by ignoring the computer in the claim and focusing on the fact that the computer was merely implementing a set of steps that could be performed as mental operations.  Note that there the conclusions are based on judicial notice, rather than evidence, such as “.. it is obvious, I think, that there is nothing new in using computers to make calculations of the kind that are prescribed by the specifications.”  [emphasis added] Accordingly, this approach is consistent with the now-overruled Examination guidelines,[42] so it is not a solution to simply fall back on Schlumberger, which itself did not follow the principles of claim construction from Freeworld and Whirlpool. At the same time, we simply do not know how Schlumberger would have turned out if there had been an opportunity to present evidence to rebut the Court’s conclusion. Rather than section 2, the question of whether a computer-invention is “obvious[43] can be dealt with under the legal test for obviousness. Accordingly, the authors’ new proposed test still permits the discipline of Schlumberger against improper subject-matter, but balances that discipline against an opportunity to present evidence so that any conclusion can be fully reasoned.

The next notable judicial decision after Schlumberger was Amazon.com[44] where the Federal Court Trial Division ruled that a computer system implementing the Amazon.com “one-click” ordering method constituted patentable subject-matter.

The Court finds that a purposive construction of the “system claims” (e.g. claim 44 and its associated dependant claims) clearly discloses a machine which is used to implement Amazon.com’s one-click ordering system. The described components (e.g., a computer) are essential elements in implementing an online ordering process. This is not merely “a mathematical formula” which could be carried on without a machine or simply a computer program.[45]

The Federal Court of Appeal refused to go this far and ultimately remanded the application back to the Commissioner, requiring the Commissioner to adopt judicially accepted purposive claim construction principles and to eschew the Commissioner’s previous analysis. On remand, the Commissioner ultimately issued the patent and then established the 2013 Examination guidelines.[47]

However, since Amazon.com, CIPO has rejected many computer-implemented inventions under its 2013 Examination guidelines.[48] Choueifaty is the next notable decision, which, essentially overruled the 2013 guidelines for the reasons indicated above. Neither Choueifaty[49] or Amazon.com[50] say much about the proper tests for the patentability of software, but simply hold CIPO to using the purposive construction standard from Freeworld when such analyses are undertaken. With so little judicial guidance, CIPO’s challenges are understandable.

The issues are much the same in certain other jurisdictions, [51] although at any given time, each jurisdiction may have its own tests and rigidity. In the span of a decade, the Americans swung from being wildly permissive[52] to wildly restrictive when it comes to computer-related inventions and statutory subject-matter. The U.S. approach now focuses heavily on whether an inventive concept is “abstract” and if so, does it contribute “something more” to move it from the realm of abstract and into the realm of patentable subject-matter. On the other hand, Europeans have remained fairly consistent in their approach,[54] treating the issue more as one of obviousness by notionally eliminating any non-computer elements from the analysis and seeing whether the remaining, technical elements are novel and non-obvious. From a fairness perspective, the European approach at least permits evidence because the issues are handled at the obviousness stage of the analysis, while the U.S. approach under Alice appeared to emphasize judicial notice as to what is “abstract”. However, in Berkheimer v. HP Inc., [55] the Court held that a factual inquiry was permitted under Alice which has provided some relief for the restrictiveness of Alice. Stripping away the art of the jurist, when Alice is combined with Berkheimer, the statutory subject-matter analysis under Alice also begins to look like an overly-elaborate and redundant obviousness test.

Conclusion

After nearly seventy years of commercial computers, it would seem that sufficient time should have passed to establish a stable, predictable test for patenting software inventions in Canada. While the U.S. continues in chaotic fashion on subject-matter, Canada has also whip-sawed without any clear direction. Canadian patent law needs a critical-mass of consensus amongst CIPO, the Courts and the patent bar as to the correct legal standard to apply to software patents.  The EPO has had a fairly stable test for nearly 15 years and can be mapped into existing Canadian patent law. A purposive construction, followed by a robust obviousness analysis with a surgical scalpel of stripping out unnecessary non-technical verbiage, would bring stability to Canadian patent law and achieve at least a certain degree of harmonization with our friends in the EPO.

For more information about patentable subject-matter or to or to obtain IP protection for your software inventions, please contact Andrew Currier or Stephen Perry.


[1]     This post includes an excerpt from the upcoming Fourth edition of Canadian Patent Law. Many thanks to Gillian Burrell and Marie Doyle who contributed significant amounts of research and feedback in the preparation of this paper.

[2]     Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 (F.C.).

[3]     Patent Act, R.S.C. 1985, s.2 “invention means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter;”

[4]      Patent Act, R.S.C. 1985, s.27(8); “(8) No patent shall be granted for any mere scientific principle or abstract theorem.”  Query whether “mere” modifies both “scientific principle” and “abstract theorem”, or just “scientific principle”?  And does it matter?

[4.1]  See for example Lawson [1970] Ex. C.J. No. 13, 62 C.P.R. 101 (Ex. Ct.);  Shell Oil Co. v. Commissioner of Patents, 1982 CanLII 207 (SCC), [1982] 2 SCR 536; Progressive Games, Inc. v. Canada (Commissioner of Patents), 2000 CanLII 16577 (FCA).

[5]     R.S.C. 1985, c. P-4.

[6]     If you need to be sure its not abstract, you can try dropping a computer on your foot.

[7]      Unless germane to the invention, the hardware need not be specified in terms of specific models on the market, no more than describing a hammer in a mechanical patent requires specifically identifying a given make and model of hammer.

[8]      [1970] Ex. C.J. No. 13, 62 C.P.R. 101 (Ex. Ct.).  Lawson was a case involving a patent over a novel survey layout for a subdivision.  For a case regarding copyright in survey plans, see Keatley Surveying Ltd. v. Teranet Inc., [2019] S.C.J. No. 43, 2019 SCC 43 (S.C.C.).

[9]     See discussion and case law in Manual of Patent Emanation Procedure (“MPEP”) S. 2161. https://www.uspto.gov/web/offices/pac/mpep/s2161.html

[10]   Europe and elsewhere treat this, by and large, as an issue of “inventive step” or “non-obviousness”, and not as an issue of statutory subject-matter.  See Guidelines for Examination, Part G, Chapter VII, 5.4;   In contrast, the U.S. currently treats this aspect as a branch of the statutory subject-matter requirement.  See Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014)

[11]    Examination Practice Respecting Computer-Implemented Inventions – PN 2013-03, March 8, 2013, now effectively overruled per Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 (F.C.).

[12]   This discussion about obviousness is intentionally hyper-simplified in order to focus the discussion software and computer implemented inventions.  Please see the obviousness chapter for a detailed discussion of how that test is actually implemented.

[13]   Europe and elsewhere treat this, by and large, as an issue of “inventive step” or “non-obviousness”, and not as an issue of statutory subject-matter.  See Guidelines for Examination, Part G, Chapter VII, 5.4;  In contrast, the USA currently treats this aspect as a branch of the statutory subject-matter requirement.  See Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).

[14]    Examination Practice Respecting Computer-Implemented Inventions – PN 2013-03, March 8, 2013.

[15]    Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 (F.C.).

[16]    Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 (F.C.).

[17]    Examination Practice Respecting Computer-Implemented Inventions – PN 2013-03, March 8, 2013.

[18]    Haliburton Energy Services, Inc. Patent Application No. 2,809,424 (Re), 2019 LNCPAT 30, CD 1502 at para 34 (P.A.B.).

[19]    For a finding of acceptable, statutory computer-related subject-matter see Accenture Global Services Ltd. Patent Application No. 2,507,608 (Re), 2019 LNCPAT 4, CD 1476 at paras. 30-32 (P.A.B.).

[20]    See: Kuhuro Investments AG, L.L.C. Patent Application No. 2,307,484 (Re), 2020 LNCPAT 11, CD 1520 at para. 28 (P.A.B.); Deluxe Corp. Patent Application No. 2,451,015 (Re), 2019 LNCPAT 32, CD 1504 at para. 27 (P.A.B.).

[21]   See: International Exchange Holdings, Inc. Patent Application No. 2,829,411 (Re), 2018 LNCPAT 2, CD 1439 at para. 47 (P.A.B.); Intercontinental Exchange Holdings, Inc. Patent Application No. 2,663,489 (Re), 2018 LNCPAT 21, CD 1455 at paras. 46-47 (P.A.B.); Parago Inc.. Patent Application No. 2,395,778 (Re), 2020 LNCPAT 32, CD 1541 at para. 41 (P.A.B.).

[22]    Strategic Coach Patent Application No. 2,711,875 (Re), 2020 LNCPAT 41, CD 1550 at para. 49 (P.A.B.).

[23]    The Patent Appeal Board has issued many opinions under this approach, but these opinions are now suspect in view of Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 at para 39 (F.C.). Nonetheless, here are examples, Fair Isaac Corp. Application No. 2,144,068 (Re), 2013 LNCPAT 5, 115 C.P.R. (4th) 39, CD 1339 at para. 35 (Can. Pat. Bd.). See also Target Brands, Inc. Patent Application No. 2,798,566 (Re), 2016 LNCPAT 18, CD 1407.(For examples of the Commissioner refusing to find a computer to be an essential element, see: Xerox Corp. Patent Application No. 2,409,631 (Re), 2018 LNCPAT 28, CD 1462 at paras. 32-34 (P.A.B.); Facebook Inc. Patent Application No. 2,799,325 (Re), 2018 LNCPAT 29, CD 1463 at para. 34(P.A.B.); SAP SE Patent Application No. 2,488,003 (Re), 2018 LNCPAT 38, CD 1472 at para 39 (P.A.B.); 3S Applications, Inc. Patent Application No. 2,809,500 (Re), 2019 LNCPAT 15, CD 1487 at para. 41 (P.A.B.); Cooper International Holding Company, LP Patent Application No. 2,612,654 (Re), 2019 LNCPAT 19, CD 1492 at para 29 (P.A.B.); Cooper International Holding Company, LP Patent Application No. 2,612,654 (Re), 2019 LNCPAT 19, CD 1492 at para 29 (P.A.B.); Financial and Risk Organisation Ltd. Patent Application No. 2,441,516 (Re), 2019 LNCPAT 34, CD 1506 at paras 45-46 (P.A.B.); Facebook Inc. Patent Application No. 2,858,424 (Re), 2019 LNCPAT 22, CD 1494 at para. 43 (P.A.B.); NP IP Holdings LLC. Patent Application No. 2,635,371 (Re), 2019 LNCPAT 35, CD 1507 at paras. 28-29 (P.A.B.); Bloomberg L.P. Patent Application No. 2,425,049 (Re), 2019 LNCPAT 5, CD 1477 at para. 27(P.A.B.); Financial & Risk Organisation Ltd. Patent Application No. 2,688,230 (Re), 2020 LNCPAT 33, CD 1543 at paras. 27-33 (P.A.B.); Waterleaf Ltd. Patent Application No. 2,760,112 (Re), 2020 LNCPAT 35, CD 1544 at paras. 28-29 (P.A.B.); Transcon Securities Pty Ltd. Patent Application No. 2,568,154 (Re), 2020 LNCPAT 40, CD 1549 at paras. 27-28 (P.A.B.); Manulife Investment Management Ltd. Patent Application No. 2,799,873 (Re), 2019 LNCPAT 33, CD 1505 at paras. 39-41 (P.A.B.); Sony Corp. Patent Application No. 2,342,012 (Re), 2019 LNCPAT 1, CD 1474 at para 40 (P.A.B.); Caesars Entertainment Operating Co. Patent Application No. 2,529,156 (Re), 2020 LNCPAT 1, CD 1511 at para. 46-48 (P.A.B.); Tilton Patent Application No. 2,468,872 (Re), 2020 LNCPAT 13, CD 1522 at paras. 52-53 (P.A.B.); Intercontinental Exchange Holdings Inc. Patent Application No. 2,791,397 (Re), 2020 LNCPAT 38, CD 1547 at paras. 41-45 (P.A.B.); United Parcel Service of America, Inc. Patent Application No. 2,492,638 (Re), 2020 LNCPAT 28, CD 1537 at paras. 69-71 (P.A.B.).  See, also CD 1334; CD 1336; CD 1337 contrasted with CD 1338; CD 1339.

[24]    See Distrimedic Inc. v. Dispill Inc., [2013] F.C.J. No. 1093 at para. 201, 2013 FC 1043 (F.C.).

[25]    LexisNexis, 2018.

[26]    Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 at paras 29 and 39 (F.C.)

[27]    Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 at paras 29 and 39 (F.C.).

[28]    [2020] F.C.J. No. 874, 2020 FC 837 (F.C.).

[29]    The 30-day deadline under Section 27(2)(b) of the Federal Courts Act for appealing the decision has passed.

[30]    EPO Guidelines for Examination, Part G, Chapter VII, Section 5.4.

[31]    Allergan Inc. v. Canada (Minister of Health) [2012] F.C.J. No. 906, 2012 FC 767 at para 137 (F.C.), affd [2012] F.C.J. No. 1467, 2012 FCA 308 (F.C.A.), leave to appeal refused [2013] S.C.C.A. No. 31 (S.C.C.).  citing Pozzoli SPA v. BDMO SA [2007] F.S.R. 37, [2007] EWCA Civ. 588 at paras 14 to 21.

[32]    Hershkovitz v. Tyco Safety Products Canada Ltd., [2009] F.C.J. No. 657 at para. 148, 2009 FC 256 (F.C.), affd [2010] F.C.J. No. 947, 2010 FCA 190 (F.C.A.).

[33]   [emphasis added] Amazon.com, Inc. v. Canada (Attorney General), [2011] F.C.J. No. 1621, 2011 FCA 328 at para 44 (F.C.A.), citing Schlumberger Canada Ltd. v. Canada (Commissioner of Patents), [1982] 1 F.C. 845 (C.A).

[34]    Mayo Collaborative Servs. v. Prometheus Labs., Inc. – 566 U.S. 66, 132 S. Ct. 1289 (2012) At pp 8-9.

[35]    Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 at para 39 (F.C.).

[36]    See, for example, Application No. 961,392 (Re) (1971), CD 92.

[37]    Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 at para 39 (F.C.).

[38]    Amazon.com, Inc. v. Canada (Attorney General), [2011] F.C.J. No. 1621, 2011 FCA 328 (F.C.A.).

[39]    Schlumberger Canada Ltd. v. Canada (Commissioner of Patents), [1981] F.C.J. No. 176, [1982] 1 F.C. 845 (F.C.A.), leave to appeal refused [1981] S.C.C.A. No. 56 (S.C.C.).

[40]    Schlumberger Canada Ltd. v. Canada (Commissioner of Patents), [1981] F.C.J. No. 176, [1982] 1 F.C. 845 at para. 2 (F.C.A.), leave to appeal refused [1981] S.C.C.A. No. 56 (S.C.C.):

The appellant’s application discloses a process whereby the measurements obtained in the boreholes are recorded on magnetic tapes, transmitted to a computer programmed according to the mathematical formulae set out in the specifications and converted by the computer into useful information produced in human readable form (e.g., charts, graphs or tables of figures).

[41]    Schlumberger Canada Ltd. v. Canada (Commissioner of Patents), [1981] F.C.J. No. 176, [1982] 1 F.C. 845 (F.C.A.) at para. 5, leave to appeal refused [1981] S.C.C.A. No. 56 (S.C.C.).

[42]    Examination Practice Respecting Computer-Implemented Inventions – PN 2013-03, March 8, 2013, now effectively overruled per Yves Choueifaty v. Attorney General of Canada, [2020] F.C.J. No. 874, 2020 FC 837 (F.C.).

[43]    Pratte J.’s own word in as used in Schlumberger

[44]    Amazon.com, Inc. v. Canada (Attorney General), [2011] F.C.J. No. 1621, 2011 FCA 328 (F.C.A.).

[45]    Amazon.com, Inc. v. Canada (Attorney General), [2010] F.C.J. No. 1209 at para. 73, 2010 FC 1011 (F.C.), revd [2011] F.C.J. No. 1621, 2011 FCA 328 (F.C.A.).

[46]    Canadian Patent 2,246,933. It is also interesting to note that the Federal Court in Georgetown Rail Equipment Co. v. Rail Radar Inc., [2018] F.C.J. No. 131, 2018 FC 70 (F.C.), revd Tetra Tech EBA Inc. v. Georgetown Rail Equipment Co., [2019] F.C.J. No. 789, 2019 FCA 203 (F.C.A.), leave to appeal refused, [2019] S.C.C.A. No. 385 (S.C.C.) found that a patent that is “only inventive in respect of their algorithms” [para. 129] was not a violation of s. 2 or s. 27(8) [abstract per se, and can still be found valid and infringed, although the issue does not appear to have been raised.” See Prof. Siebrasse’s, “Patentable Subject Matter when the Inventive Contribution is an Algorithm” Sufficient Description (February 16 2018)
online: http://www.sufficientdescription.com/2018/02/patentable-subject-matter-when.html.

[47]    Examination Practice Respecting Computer-Implemented Inventions – PN 2013-03, March 8, 2013.

[48]    Examination Practice Respecting Computer-Implemented Inventions – PN 2013-03, March 8, 2013.

[49]     Yves Choueifaty v. Attorney General of Canada [2020] F.C.J. No. 874, 2020 FC 837 at para 39 (F.C.).

[50]    Amazon.com, Inc. v. Canada (Attorney General), [2011] F.C.J. No. 1621, 2011 FCA 328 (F.C.A.)

[51]    See also James Bessen, “A Generation of Software Patents”: Boston University School of Law Working Paper No. 11-31 (Boston University School of Law, June 21, 2011). This paper reviews software patents in the United States and their related social benefits and costs over the period from 1996 to 2006, and could provide policy justifications supporting and against extending patent protection to software patents in Canada. Themes discussed include the appearance of minimal social benefits for the software industry, and the potential for patent-thickets, which stifle innovation and create barriers to entry for start-up firms. When computer limitations are found to be an essential element of the claims, CIPO has even allowed claims which required, expressly or implicitly, physical steps to be taken by humans: see Patent Application No. 2,195,252 (Re) (2012), CD 1332.

[52]    State Street Bank and Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), where the court held that “anything under the sun made by man” was patentable.

[53]    Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014) [Alice], which found that (i) if a claim is directed to a judicial exception, then (ii) it must be analyzed to determine whether its elements, considered both individually and as an ordered combination, are sufficient to ensure that as a whole the claim amounts to significantly more than the exception itself. See also Manual of Patent Examining Procedure, 2106 Patent Subject Matter Eligibility. Note the same claims in Alice were rejected in Canada under Canadian law. See Alice Corporation Pty Ltd. Patent Application No. 2,163,768 (Re), 2016 LNCPAT 19, 149 C.P.R. (4th) 171, CD 1408. The Alice decision has resulted in a massive number of invalidations of software patents, with Enfish, LLC v. Microsoft Corp., 2016 U.S. App. LEXIS 8699 (Fed. Cir. 2016) being a rare exception. Drafters are wise to study this case. There is also active lobbying underway to have Congress reverse the Alice decision. See also: Efforts to have Section 101 changed in view of the Alice decision, including by the American IP Lawyers Association online: www.aipla.org/resources2/reports/2017AIPLADirect/Documents/AIPLA%20Report%20on%20101%20Reform-5-19-17-Errata.pdf and by the American Bar Association online: patentdocs.typepad.com/files/letter-5.pdf. In a recent decision of the Federal Circuit Court, Athena Diagnostics, Inc. v. Mayo Collaborative Servs., 915 F.3d 743 (Fed. Cir. 2019), cert. denied 140 S. Ct. 855 (2020), Athena’s petition for a panel rehearing was denied. Four judges filed concurring opinions, holding they were bound by the SCOTUS decision in Alice. Four dissenting judges found the case to be distinguished from Alice. One of the dissenting judges expressed “that confusion and disagreements over patent eligibility have been engendered by the fact that the Supreme Court has ignored Congress’s direction to the courts.” Since the third edition, the decision in American Axle & Mfg. v. Neapco Holdings, No. 18-1762, (Fed. Cir., 2020) (petition for cert. to the USSC pending) reflects just how badly the Alice decision has confused U.S. Patent Law.  In American Axle, the court found a machine as recited in the claims to be abstract non-statutory subject-matter based on the Alice test.

[54]    See EPO Guidelines for Examination, Part G, Chapter VII, Section 5.4. The “problem-and-solution approach” employed by the EPO assesses the inventive step in an “objective and predictable manner” by (i) determining the “closest prior art”, (ii) establishing the “objective technical problem” to be solved, and finally (iii) considering whether or not the claimed invention, starting from the closest prior art and the objective technical problem, would have been obvious to the skilled person. European Patent Office online: www.epo.org/law-practice/legal-texts/html/guidelines/e/g_vii_5.htm. See also Lantana Ltd. v. The Comptroller General of Patents, Design and Trade Marks, [2014] EWCA Civ 1463 (C.A. Civ.) wherein the England and Wales Court of Appeal held, in the position of acknowledging that while a computer program may be novel and inventive, it still may lack the technical contribution necessary to escape being excluded as unpatentable subject-matter for being a computer program “as such”.

[55]    Fed. Cir. Feb. 8, 2018. Note that the Schlumberger decision has wording that suggests that if the law in Schulmberger was continued to be applied exactly, then the Berkheimer decision provides reasoning as to why evidence should be admissible under a section 2 analysis based on Schulmberger. This is another reason the authors advocate moving the analysis out of section 2 and into obviousness.


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