“Business Method Patents: the State of the Art after the Amazon.com Decision”

Leslie Chong is a JD candidate at Osgoode Hall Law School.

Many academics have commented on the potential impacts of the Federal Court’s decision in Amazon.com on patent law in Canada. Reshika Dhir and Nassim Nasser, 2011 JD candidates at Osgoode Hall Law School, give their insights on the court’s reasonings in a recent issue of the Intellectual Property Journal.

Their paper titled “Business Method Patents: the State of the Art after the Amazon.com Decision” does not delve into an analysis about whether business method patents ought to be permissible under law or theory. Rather, they aim to canvass five major flaws in the Federal Court’s ruling in order to demonstrate the potential “unforeseen and undesirable ramifications [it may have] such as opening the door to the patenting of dance steps and methods for training animals.”

First, the authors argued that Justice Phelan’s decision had relied “uncritically” on the three-pronged test elucidated in Progressive Games for defining ‘art’ – one of the several available definitions an invention must meet under s. 2 of the Patent Act. As a result, the authors worry that the application has simply opened the doors to “fresh ambiguities and uncertainties.” Second, this decision has effectively stripped the requirement that there is a ‘technological’ requirement for patents in Canada, contrary to what “Canadian case law, the Patent Rules, and Canada’s international obligations under NAFTA and TRIPs” seem to support. While the comments from Phelan J. were obiter, the authors found that the court may have overstepped its bounds by “articulating a test for patentability that goes beyond TRIPs and NAFTA” – a decision that ought to have been made by Parliament.

Third, Justice Phelan’s preference for Australian jurisprudence and seemingly unwarranted critical review of European and UK judgments was problematic for the authors, given that his decision had harshly criticized the Commissioner for her “heavy reliance” on the latter.  Fourth, the authors suggest that in wrongfully rejecting the use of a ‘purposive approach’ to determine whether a subject matter is patentable, the court had erroneously followed prior Supreme Court decisions that had rejected the application of the ‘purposive approach’ for determining whether there has been patent infringement. Lastly, the authors question whether the Federal Court’s critical (and at time severe) review of the Commissioner’s decision was necessary, given the recent trend of giving deference and weight to the Commissioner’s findings:  “The Patent Office does sometimes get things wrong, but it is hard to believe that it has gone as fundamentally wrong as Phelan J. claims.”

In their thoughtful analysis of the Federal Court’s decision in Amazon.com, Dhir and Nasser discuss some of the fundamental flaws in Phelan J.’s reasons. While they make convincing arguments, other commentators and academics have supported this step in Canadian patent law (see Richard Owens comment in the Globe and Mail). It will be interesting to see whether Dhir and Nasser’s predictions about an increase in frivolous claims for business method patents will ring true in the future, and whether the courts will seek to narrow the scope of the Amazon.com decision.

IP Osgoode previously reported on the Amazon.com case when the decision was rendered last October.