PAB Allows Two Software Patents, Revealing Post-Choueifaty Approach

PAB Allows Two Software Patents, Revealing Post-Choueifaty Approach

Close up view of a green circuit board.

As reported earlier this year, monitoring decisions by Canada’s Patent Appeal Board (“PAB”) on issues surrounding patentable subject-matter is crucial to realizing the full interpretation and impact of recent developments in the Canadian Intellectual Property Office (“CIPO”).

In two recent decisions involving applications for software patents, the PAB found the claimed inventions to be directed to patentable subject-matter. In doing so, the PAB provided further guidance as to how the claims of a computer-implemented invention should be drafted in order to be considered patent eligible.


In Canada, an invention is patentable when it is new, non-obvious, useful and within the definition of “invention” as it is defined in the Patent Act. Up until recently, CIPO had adopted an approach that made it very difficult for patent applicants claiming computerized elements to fall within this meaning set out in the statute. To do so, the elements had to be deemed “essential” to solving a problem faced by the applicant and far too frequently, examiners were finding computers to be non-essential.

The Federal Court of Canada’s (“FC”) decision in Yves Choueifaty v Attorney General of Canada (“Choueifaty”) ended years of reluctance to disrupt the status quo. A decade ago, the Amazon decision (Canada (Attorney General) v., Inc., 2011 FCA 328) cited the then 30-year-old decision of Schlumberger (Schlumberger Canada Ltd. v. Commissioner of Patents, [1982] 1 F.C. 845), which stood for the proposition that the “substance” of the invention might be something other than what is written in the claims. The Choueifaty decision brings Canadian courts firmly back into the 20th century. In Choueifaty, the FC rejected CIPO’s “problem-solution” approach for determining patentable subject-matter. Importantly, the FC clarified that the correct approach to conducting purposive claim construction, i.e., identifying the essential and non-essential elements, is to consider the inventor’s invention as reflected by the claim language.

CIPO later released a Practice Notice providing patent examiners with new guidance on claim construction and patentable subject-matter. Put simply, the following three-step process must be followed:

  1. The “essential elements” of the claim must be identified;
  2. An “actual invention” of the claim must be determined; and
  3. It must be determined whether the “actual invention” of the claim has physicality.

The new guidelines further suggest that CIPO will deem a computer-implemented invention to be patentable either when the “actual invention” includes a computer, or when the “actual invention” includes a computer combined with additional physical elements.

The Practice Notice, together with the PAB’s subsequent allowance of Mr. Choueifaty’s application have paved the way for more favourable outcomes for patent applicants in the software and biotechnology field. For more detailed reporting on these decisions refer here and here.

Though CIPO’s new guidance is a welcome development, several questions remain. For example, the Practice Notice suggests that for an invention to be patent eligible the computer must co-operate with other elements of the claimed invention and the “actual invention” must have a physical existence or manifest “a discernible physical effect or change and [relate] to the manual or productive arts”. This language is reminiscent of the problem-solution approach and leaves open the opportunity for examiners to continue disregarding computer elements of claims that they deem insufficiently connected to the “actual invention”.

Decisions issued by the Commissioner of Patents following these developments are significant, as they could serve to diffuse, or further ignite lingering concerns.

Re Landmark Graphics Corporation (Re), 2021 CACP 9

This decision considers Patent Application No. 2,527,855 (“the ‘855 Application”), a computer-implemented method of calculating simulated models of petroleum wells based on a series of possible design parameters and economic inputs [3]. The models are calculated by “acquiring” a planning variable through an input device and various assembling, executing, selecting, and storing steps, all of which are based in software.

In identifying the essential elements, the PAB presumed that all of the elements of the claims were essential, including the computer implementation and computer-related components, as there was no language to suggest otherwise [31-32]. The PAB determined that the “actual invention” of claim 1 was the step of using data from the computer-based simulation engines in a well perforation and completion process [34-35]. The PAB further determined that this step improved well production results, meaning it was more than a mere intellectual exercise [36]. As such, the claims produced “discernable physical effects” and the ‘855 Application was found to be directed to patentable subject-matter [37]

Re ExxonMobil Upstream Research Company (Re), 2021 CACP 12

This decision considers Patent Application No. 2,801,386 (“the ‘386 Application”), computer-implemented methods and systems for improving the stability and efficiency of computer simulations of multiphase flow, specifically simulations of hydrocarbon reservoirs [3]. The simulations are mathematical models of the flow patterns of the underlying geology of the reservoir and are used to optimize the eventual hydrocarbon production from the reservoir.

In identifying the essential elements, the PAB again considered all of the elements to be essential as there was no language indicating otherwise. The PAB determined that the “actual invention” of claim 1 was the step that was used to cause a well to be drilled, based on the simulation [31]. The PAB found that this step cooperated with the simulation algorithm steps and was therefore sufficient for causing the claims to manifest the discernable effect or change [33]. The PAB went further and noted that though claim 15 did not recite an “active” step of causing a well to be drilled, but rather only an outputting of simulation results, it specified that the simulation results of the claimed system are “for use to cause a well to be drilled…based on the simulation” [35]. The PAB was satisfied that this constituted the same type of cooperation between the simulation algorithm steps and the physical well-drilling as in the other independent claims. As such, the ‘386 Application was found to be directed to patentable subject-matter [38].


These two decisions provide a glimpse into how best to draft claims for software patents moving forward. In their reasoning, the PAB suggests that a claim for a computer simulation is patentable if the simulation causes specific, physical results. As demonstrated by the PAB’s allowance of the two applications, claims for computer simulations should include language describing a “use” for the data output that manifests a real-world effect or change.

Though the outcomes of these two decisions are promising, how consistent the PAB will be in the future and how it will apply the new approach in other contexts will be important to explore.

For more information on obtaining software patents, please contact a professional at PCK Intellectual Property.

PCK IP is one of North America’s leading full-service intellectual property firms with offices in Canada and the United States. The firm represents large multinational companies, scaling mid-size companies, and funded innovative start-up entities. PCK IP professionals include seasoned patent and trademark agents, engineers, scientists, biochemists and IP lawyers having experience across a broad range of industries and technologies. Contact us today.

The contents of this article are provided for general information purposes only and do not constitute legal or other professional advice of any kind.