In a recently released decision by the Canada Patent Appeal Board and Commissioner of Patents, an application by Amazon.com for its one-click ordering system was rejected. The application contained 75 claims and was a response to the Examiner’s report from 2002, where claims 44 to 50 were directed to a physical object and the rest were directed to methods. It essentially described a method and system for allowing shoppers to make online purchases with only one click of a mouse, without having to go through the common checkout procedures. With the use of a cookie, Amazon saved address and other personal information so that users would not have to continuously log into an account to complete a purchase. The application also provided for a means of combining multiple orders into one, being given notice of a cancellation option, and of logging in to change previously stored personal information.
The two main issues that the Board looked at were whether the claims were obvious under section 28.3 of the Patent Act, and whether they fell within the ambit of statutory subject matter as defined in section 2. In considering obviousness, the Board ruled that the particular use of a cookie to obtain the specific information required for a purchase, though not mentioned in any prior art, was something that would be obvious to the skilled technician (i.e. one who is “knowledgeable in any subject matter to which the claims are directed”). However, it was also found that despite the existence of prior art that explained how to create a virtual store without a checkout review, the overall streamlining of the ordering process to a single action was deemed to be indicative of ingenuity so as to be unobvious to the skilled technician. And since “[if] any of the features are found to be unobvious, the claim is not obvious”, the first issue was resolved in favour of Amazon.
The second issue, that of acceptable subject matter, is arguably much more interesting in light of the 2008 In re Bilski case of the U.S. Court of Appeal for the Federal Circuit, which shifted the scope of patentable subject matter away from business methods. In a panel discussion organized by IP Osgoode earlier this year, a panel of experts gave their opinions on the judgment, and all seemed to agree that its effects would be felt in Canada. Interestingly, Paul Fitzner, one of the Board’s members who decided the fate of the Amazon patent, was also a part of that panel discussion. At that time he mentioned forthcoming changes to theManual of Patent Office Practices as well as a Board decision relating to business methods.
In its analysis of subject matter, the Board first noted that both the form (i.e. the claim on its face) and the substance (i.e. what has actually been discovered and added to human knowledge by the claimed invention) of the patent application must be evaluated. It was also stated that “a claim which relies on a particular feature or group of features to render it new and unobvious cannot rely on a different feature or group of features in order to qualify as statutory subject matter.”
Next, a consideration had to be done regarding whether the application fell within statutorily patentable subject matter as per section 2 of the Patent Act. The Board stated that only the interpretations of “art” and “process”, within the definition of “invention”, were relevant to Amazon’s application. The Board ruled that patentable art 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”. They also stated that “a process is similar to an art, as it involves the application of a method to a material or materials.” Though Amazon directed claims 44 to 50 to a “machine” under section 2, it was decided that they were actually method claims in substance and so had to fit within the definition of “art” or “process” along with the rest of the claims. The Board found that because there were no physical changes involved, the application did not fall within the scope of section 2.
Though Amazon’s application had already failed by this point, the Board continued its analysis with two more steps: determining whether the claimed invention fell within excluded subject matter, and determining whether the claimed invention was non-technological in nature. A dissent from the Supreme Court of Canada case of Monsanto Canada Inc. v. Schmeiser was cited to support the notion that business methods had been judicially interpreted as falling within excluded subject matter; a few cases from the U.K. and U.S., and some secondary literature was also brought up. The Board said that many subject matters were excluded as a matter of policy, and the ruling was fairly clear: “a claimed invention which in form or in substance amounts to a business method is excluded from patentability.” Again considering the substance of the claimed invention, it was found that “concepts or rules for the more efficient conduct of online ordering, are methods of doing business”, so it fell within this type of excluded subject matter.
Finally the Board considered the technological nature of the application. It argued that because “a common characteristic of the five categories of invention is that they are technological in nature”, it followed that “something that is not technological is therefore non-statutory subject matter”. Furthermore, it raised a variety of literature as support for this view, including the Patent Rules, European Patent Office decisions, and the Agreement on Trade Related Aspects of Intellectual Property Rights. In the end the Board ruled that despite involving technical features, all aspects of the new knowledge added were not technological in nature and did not realize any technical effects.
Since the invention was deemed non-patentable on multiple grounds, it might not really be proper to say that the application “got Bilski’d”. Despite this, and even though the Bilski case was only discussed once in this decision, and even though Bilskiarguably did not narrow the scope of patentable subject matter as much as this decision, one cannot help but wonder how much of an influence it had on the analysis used, and specifically with respect to the firm statements that business method patents are to be excluded. Though the Board maintains that this exclusion has always been the law of the land, and that some of the past inconsistencies regarding accepted business method patents were simply errors of application, an article by Conor McCourt and Edward Fan suggest that CIPO’s earlier position was in fact contrary, as evidenced by certain provisions in its Manual of Patent Office Practices of 2005. It is also interesting to note that the Board used Bilski to discuss the historical English practice that informed the U.S. Patent Act of 1793, and stated that this was relevant for interpreting the Canadian Patent Act, because “the Canadian statute, including the definition of invention, was modelled on that of the U.S. Patent Act, and thus indirectly has its roots in early English practice”