Date: 20110408
Docket: A-435-10
Citation: 2011 FCA 127
Present: TRUDEL
J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA and
THE COMMISSIONER OF PATENTS
Appellants
and
AMAZON.COM, INC.
Respondent
REASONS FOR ORDER
TRUDEL J.A.
[1]
This is a motion by the Canadian Life and Health
Insurance Association Inc. and the Canadian Bankers Association seeking leave
to intervene in the appeal by the Attorney General of Canada and the
Commissioner of Patents from a decision of Phelan J., cited as 2010 FC 1011.
The proposed Interveners seek leave to file written submissions and participate
briefly in the oral argument. They do not seek leave to file evidence.
[2]
In the Court below, the Judge summarized the
matter at bar as follows:
[1]
This is an appeal of a
decision by the Commissioner of Patents to deny the Appellant’s patent for a
“business method”, having found that it was not patentable subject matter under
s. 2 of the Patent Act, R.S.C. 1985, c. P-4 (Patent Act).
[2]
In coming to the conclusion
she did, the Commissioner in effect created a test for assessing patentable
subject matter, outlined new exclusions and requirements for patentability and
outlined her view of the scope of patentable ‘art’. Her decision not only
raises significant questions of law and interpretation, but extends into
policy-making which stands to fundamentally affect the Canadian patent regime.
This appeal is thus of consequence not only to the Appellant, but to many who
navigate our patent system. It also revisits the powers given – and not given –
to the Commissioner under the Patent Act and the limitations which the
statutory regime and jurisprudence impose upon her.
[3]
At its core, the question
is whether a “business method” is patentable under Canadian law. For the
reasons which follow, the Court concludes that a “business method” can be
patented in appropriate circumstances.
[3]
Amazon sought a patent
for an invention entitled “Method and System for Placing a Purchase Order via a
Communication Network”, referred to as the “one-click patent application".
As mentioned by Phelan J., the claimed invention enables internet shopping with
a ‘single click’, without the need for the purchaser to ‘check-out’ or enter
any further information. There are 75 claims in the patent. Claims 1 (the
method claim) and 44 (the system claim) were at issue. The Commissioner had
rejected the claims on the basis that they did not conform to section 2 of the Patent
Act, R.S.C. 1985, c. P-4, and were therefore non-patentable subject matter.
[4]
By his decision, Phelan J.
allowed the appeal as follows:
[78]
The absolute lack of authority in Canada for a “business
method exclusion” and the questionable interpretation of legal authorities in
support of the Commissioner’s approach to assessing subject matters underline
the policy driven nature of her decision. It appears as if this was a “test
case” by which to assess this policy, rather than an application of the law to
the patent at issue.
[79]
There may be (and the Court is not suggesting
that there are) other reasons why the Commissioner might have rejected this
patent. One might question the sufficiency of disclosure in the system claims
but no one has claimed that it was insufficient. That matter was not considered
by the Commissioner. The Examiner’s principal finding was in relation to
obviousness. In both the United States and Europe there have also been concerns as to whether the
claimed invention was obvious. The obviousness analysis, however, should not
occur at the “patentable subject matter” stage of the analysis. A finding that
there has been new learning or knowledge which has contributed to the state of
the art does not entail, nor should it pre-empt, an obviousness analysis. It is
a separate test which asks whether one would be led to the “new knowledge”
easily and without difficulty, not whether it adds to the state of the art.
[80]
Although clearly not determinative of this
decision, the Court notes that this invention has been found to be patentable
subject matter in several other jurisdictions, including in the United States and in Europe. In
the latter, despite an explicit exclusion for “business methods”, the claims
were not found to be such.
[81]
The misapprehension of the Commissioner and
the Examiner as to the patentability of the subject-matter in these claims is a
fundamental error of law, one which may have tainted the entire analysis. No
evidence was given to this Court as to the validity of the claims in other
respects. As such, the Court cannot evaluate them in any regard beyond the issues
argued on this appeal and will not grant the Patent as requested by the
Appellant.
[82]
The Court allows the appeal with respect to
the Commissioner’s findings on statutory subject-matter. The Commissioner’s
decision is quashed and is to be sent back for expedited re‑examination
with the direction that the claims constitute patentable subject matter to be
assessed in a manner consistent with these Reasons.
[5]
In this Court, the appellants
take the position that the Federal Court’s Judge erred in law in finding that
the claims were caught by section 2 of the Patent Act. Their appeal
focuses on the interpretation of that section of the Patent Act and on
the Judge’s decision to reject the ‘form and substance’ approach taken by the
Commissioner for the purpose of determining whether the invention fell within
the statutory definition.
[6]
The proposed Interveners are
representative bodies with public mandates whose members represent important
stakeholders in the financial services industry.
[7]
Their concerns can be
summarized as follows (see their Motion Record, at paragraphs 2 and f.):
·
The underlying appeal is
widely recognized to be the test case on the question of the patentability of
business methods in Canada
·
The questions to be decided
on the appeal extend far beyond the interests of Amazon.com. Because this
Court will examine questions relating to the subject matter of patentability in
Canada and the legal approach that should be taken in determining questions of
subject matter of patentability, the fate of many of the applications that are
commonly referred to as "business method patents" will be decided at
the same time.
·
The net result of the
decision to issue on appeal could be to allow the patenting of ideas, or mental
steps, such as many of the methods and steps involved in the creation, use and
analysis of financial date, methods for managing financial portfolios and
investments, methods for creating and managing insurance contracts, methods
used to calculate risk or to analyze actuarial, mortgage or underwriting date,
financial models and investment strategies and methods for conducting online
banking, with the result that their members would be directly impacted.
[8]
While the proposed
Interveners generally support the position of the appellants on this appeal,
they argue that they have a relevant and useful perspective on the potential
effect that the Court’s decision could have on industries such as theirs. Depending
on the result of the appeal, they could potentially be directly affected by the
outcome. The appellants consent to their motion for leave to intervene.
[9]
The respondent Amazon.com
opposes the motion. It submits that the proposed Interveners seek to introduce
new issues and broaden the existing issues before this Court. In particular, it
argues that the proposed Interveners seek to put forward arguments related to
the policy of granting patents on so-called ‘business methods’ when these
questions are not at issue. Hence, the proposed Interveners’ interest in the
outcome of this appeal is merely speculative and jurisprudential and therefore
insufficient to warrant intervention.
Decision
[10]
Having considered the six
factors for consideration in a motion for Intervener status, as listed in Rothmans,
Benson & Hedges Inc. v. Canada (Attorney General), [1990] 1 F.C. 74 (at
paragraph 12), I am satisfied that the proposed Interveners have a direct
interest in the outcome of the proceedings before this Court. I am also
satisfied that their contribution to the debate could assist the members of the
panel hearing the appeal given that their decision may affect the rights of
members of the insurance and banking industries who consistently use methods
and processes that would be directly affected by the test to be articulated by
this Court.
[11]
In their reply to the
appellant’s motion record, the proposed Interveners have suggested the scope of
their intervention, which I will adopt in my order. As a requisition for
hearing has already been filed, I will grant the motion for leave to intervene
and set a strict timetable.
[12]
An order is issued
accordingly.
“Johanne
Trudel”
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