Software/High Technology Practice Group Newsletter
Fall 2005
The Latest Word on Software and Business Method Patents in Canada
Earlier this year, the Canadian Intellectual Property Office (CIPO) amended two key chapters in its Manual of Patent Office Practice (MOPOP), which constitutes Canada's patent practice guidelines. The amended chapters, entitled "Utility and Subject Matter" and "Computer Implemented Inventions" were unveiled after many months of lively debate and discussion in the Canadian patent community. While these new MOPOP amendments do not have the force of law, they provide insight into how CIPO will treat software and business method inventions in Canada.
These MOPOP amendments have been eagerly anticipated. Prior to their release, the patent protection available in Canada for software and business method inventions (e.g. methods that relate to financial, marketing and other activities in business) was uncertain due to extremely limited case law. However, the uncertainty surrounding the patentability of software and business method inventions has not stopped many companies, notably foreign companies, from filing patent applications in Canada for software and business methods inventions. Some estimates put the number of pending business method patent applications in Canada in the thousands.
In Canada, there has been only one court decision on the patentability of software. In Schlumberger Canada Ltd. v. Canada (Commissioner of Patents), a decision from 1981, the invention at issue was a method of printing and analyzing measurement data. The Federal Court trial division held that this method was not patentable on the basis that the invention was directed to mere calculations. One of the main principles to emerge from Schlumberger was that the use of a computer to implement a discovery does not change the nature of that discovery.
Under the MOPOP amendments, CIPO will apply a two-part test to determine whether a software or business method invention can be considered a “patentable art” as required under the Canadian Patent Act. For a method to be considered an art, it must be 1) 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 condition”, and 2) it must produce an “essentially economic result relating to trade, industry or commerce”. An “essentially economic result in relation to trade, industry or commerce” is considered to exist when the method at issue relates to a method for making a vendible product, operating or using an invention, or making a diagnosis.
The new MOPOP amendments establish that software and business method inventions that have an “essentially economic result in relation to trade, industry or commerce,” when claimed appropriately, may be considered patentable subject matter in Canada. Accordingly, such inventions can be protected by patent as long as they meet the other standard tests for patentability (e.g. novelty, non-obviousness and utility).
Stated another way, the fact that an invention is a business method does not automatically exclude it from being eligible for patent protection in Canada. The same test applied to other subject matter for determining whether an invention is patentable subject matter, will now automatically apply to business method inventions. However, it should be kept in mind that CIPO still does not consider pure business method inventions, which deal with schemes, plans, speculations or ideas such as rules for doing business or methods of accounting, to be patentable subject matter.
While the MOPOP amendments have somewhat clarified CIPO's position on the patentability of software and business method inventions, it remains to be seen how CIPO will apply the economic result test, how Canadian courts will treat and enforce issued business method patents and the impact such patents will have on the Canadian marketplace.
We are very pleased to announce the newest members of the Software/High Technology Practice Group.
Peter Bormann B.Eng., M.Eng. (Mech.), MBA, J.D.
Peter articled with Bereskin & Parr and joined the firm in the Toronto office as an associate after being called to the Ontario Bar. Peter is a Professional Engineer and holds a Masters in both mechanical engineering and business administration. Peter will practice patent law as a member of the firm's software/high technology, mechanical/industrial, and automotive practice groups.
Danny Higgins B.Eng., M.Eng. (Aero.)
Danny joins the firm as a technical consultant in the Montréal office after having worked in industrial engineering for a global transportation solutions company. He holds a Masters in aerospace engineering and worked on the mechanical design of watercrafts as a design engineer. As a member of Bereskin & Parr's automotive, mechanical/industrial and software/high technology practice groups, Danny assists with patent procurement and prosecution.
Ahmad Saleh B.Eng., M.A.Sc. (Elec. Eng.), LL.B.
Ahmad joins Bereskin & Parr as a technical consultant in the Montréal office. Prior to joining the firm, Ahmad earned his M.A.Sc. in electrical engineering while concurrently working towards his law degree. As a member of the firm's software/high technology practice group, Ahmad assists with patent procurement and prosecution.
V-chip Licensing in Canada
We are pleased to announce that Richard Parr, a founding partner of our firm, has been responsible for helping to secure Canadian licenses for a V-chip technology patent, with 25 television manufacturers awarded licenses for the Canadian patent in the last four years.
With Richard's guidance, licensing of the V-chip patent in Canada now covers almost 100 percent of televisions sold in this country, and the Canadian licensing is recognized as a forerunner to digital television licensing that will come into effect in the United States market in 2006.
The V-chip Canadian patent that has been licensed, is the only known patented technology capable of accepting new or modified television rating systems.
Speaking of IP ...
Isis Caulder will be speaking at a continuing education seminar hosted by Osgoode Hall Law School on Monday, October 17th, entitled “Intellectual Property Due Diligence”. For more information go to www.law.yorku.ca/pdp/cle.
Bereskin & Parr is the proud sponsor of the Canadian IT Law Association (IT.CAN) Annual Meeting registration breakfast on Thursday, October 27th, in Montréal, Québec. James Anglehart, Victor Krichker, Ebad Rahman and Ahmad Saleh of Bereskin & Parr will be attending and James will be participating in the Annual Information Technology Update Panel on Thursday, October 27th. For more information go to www.it-can.ca.
The American Intellectual Property Law Association (AIPLA) annual meeting takes place October 27th to 29th, in Washington, DC. Isis Caulder, Neil Henderson, Jay Millman and Tony Orsi of Bereskin & Parr will be attending. For more information go to www.aipla.org.
AUTM has created a Canadian group called the Alliance for Commercialization of Canadian Technology (ACCT). The group will be hosting its first annual conference November 6th to 9th, in Ottawa. Bereskin & Parr is proud to sponsor lunch on November 6th. Luc Bérubé of Bereskin & Parr will be attending. For more information go to www.acctcanada.ca.
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