Publication
In a recent decision, the Patent Appeal Board (C.D. 1290) has rejected Canadian patent application number 2,246,933 entitled "Method and System for Placing a Purchase Order Via a Communications Network" filed by Amazon.com, Inc. The application sets out a method and a system that allow a purchaser to place an order for an item over the Internet with a single-action ("one-click ordering"). The corresponding U.S. patent had been the subject of much publicized litigation in the United States between Amazon and Barnes & Noble and is currently undergoing re-examination in the United States.
The patent application had been rejected by the Canadian Patent Office based on obviousness and non-statutory subject matter.
In affirming the rejection as non-statutory subject matter, the Patent Appeal Board has articulated a new position in respect of business method patents. In line with this, on May 11, 2009, the Patent Office released for comments a draft of its chapter 12 of MOPOP concerning, inter alia, statutory subject matter.
SUMMARY
In summary, the Board determined that there were three distinct reasons for refusing the Amazon application as improper subject matter:
- The substance of the claimed invention was not an act performed by some physical agent upon some physical object and producing in such object some change either of character or condition.
- It was a business method which is in a defined class of non-statutory subject matter.
- It claimed subject matter that was in form and substance "not technological."
NO CHANGE IN CHARACTER OR CONDITION OF PHYSICAL OBJECT
The Patent Office had stated that the one-click patent was not statutory subject matter because the application did not claim an "art or process." It adopted the reasoning of Mr. Justice Cattanach in the Lawson case (1970), 62 C.P.R. 101, to the effect that an art or process must be an act or series of acts performed by some physical agent upon some physical object and producing in such object some change either of character or of condition. The Board looked at both the form and substance of the claims. A claim which was directed to a "system" was nevertheless rejected as non-patentable subject matter as the inventive substance of the claim, (i.e., the part that represented the contribution to human knowledge) did not involve a physical object or an act or series of acts performed by some physical agent upon some physical object to produce in that object some change of either character or condition.
Thus, the approach of the Board was to look at the substance of the claim. The Board cited with approval the reasoning of the UK courts in Aerotel Ltd. v. Telco Holdings Ltd., [2006] EWCA Civ 1371. According to this approach the claimed invention could not be considered as statutory subject matter if the feature or group of features that made it new and not obvious comprised excluded subject matter. Thus, non-patentable subject matter could not be transformed into patentable subject matter merely by relying on a different feature, namely a computer, which was not a part of the inventive contribution.
BUSINESS METHODS NON-STATUTORY
Secondly, the Board rejected the Amazon application on the basis that the claims in form and substance claimed a business method. The Board concluded that business methods per se were excluded subject matter. The Board based this decision on the dissent by Madam Justice Arbour in the Supreme Court of Canada decision in Monsanto v. Schmeiser, 2004 SCC 34, and referred to the recent U.S. 2008 CAFC decision In re Bilski, 88 USPQ 2d 1385.
NOT TECHNOLOGICAL
Thirdly, the Board found that subject matter that was not technological was non-statutory subject matter. The Board referred to certain European decisions, but in Canada as in Europe, the question of what is and what is not technological remains somewhat foggy. The Board cited dictionary definitions of the meaning of the word "technology". The first, from the Collins-Gage Canadian Paperback Dictionary, reads "1. applied science. 2. a process, etc., arising from applied sciences and designed esp. for dealing with a given task.", while the second, from the Canadian Oxford Dictionary, reads "1. the study or use of the mechanical arts and applied sciences. 2. the application of this to practical tasks in industry. 3. a tool, etc. used for this." Whatever else technology may mean, it is clear that the Board was of the view that "technology" did not include business methods or claims to human behaviour per se.
The Board accepted that there could be overlap between excluded subject matter and non-technological subject matter. In so doing, the Board concluded that the subject matter of the claim might be "technological" but would still be non-patentable if it fell within an excluded subject matter category such as "business methods." The Board did not expressly consider the question as to whether or not something could properly be an "art or process" and excluded for other reasons, but based on this Board decision, for subject matter to be patentable, it must satisfy all three tests, i.e., it must be an art or process, it cannot be a "business method" and it cannot be "non-technological subject matter."
STATUTORY INTERPRETATION
Finally, the Board relied on the Supreme Court decision in Harvard Mouse. The Board considered the Amazon patent to claim nothing more than "a retailing concept and some rules for ordering items." It considered that traditionally, retailing concepts or rules for carrying out retailing transactions have not been patentable in Canada. Quoting from Harvard Mouse, the Board considered that it would be highly contentious and complex to make a radical departure from the traditional patent regime and that to do so, there must be a clear and unequivocal direction from Parliament. The Board noted that there have been instances of patents issuing for business methods but considered that if this practice was inconsistent with the proper interpretation of the Patent Act, it should be corrected.
OBVIOUSNESS
Interestingly enough, the Board concluded that the Amazon patent did claim non-obvious subject matter. In this area unlike the discussion of statutory subject matter, the Board considered that the non-technical features could in some instances be considered when assessing the inventiveness of the subject matter claimed. The Board considered that such non-technical features could confer a further technical effect. The Board thought that the Examiner had simply dismissed the non-technical features from the analysis of inventiveness and that this should not have been done without a further assessment of whether or not such non-technical features contributed to a further technical effect. Since the Board was not satisfied with the Examiner's reasoning in this regard, it did not give any weight to the Examiner's analysis and considered the claims as a whole including both the technical and non-technical aspects for the purpose of assessing obviousness. The Board concluded that the concept common to all the claims was the streamlining of the traditional online ordering method by "single-action ordering." This was not clearly shown in the prior art. The Board concluded that the skilled technician would not have been led directly and without difficulty to conceive of what was claimed in claims 1-75 of the patent. In so doing, the Board applied both the "directly and without difficulty" approach of Beloit Canada Ltd. v. Valmet Oy, (1986) 8 C.P.R. (3d) 289 (F.C.A.) and the four-step test for obviousness adopted by the Supreme Court of Canada in 2008 in the Sanofi decision.
CONCLUSION
This decision represents a clear change from the position outlined in the current Patent Office (MOPOP) chapter 12, which was revised most recently in 2005. Not surprisingly, on May 11, 2009, the Patent Office issued a new draft of chapter 12 of the Manual of Patent Office Procedure to reflect in part these changes. This draft is open for public comments until August 14, 2009.
The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault LLP or any member of the firm on the points of law discussed.
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