? A blockchain is a digital, append-only ledger which provides transactional security to disparate parties. It is a decentralized method of storing information on a ledger that can be added to in “blocks” of data, without the possibility of previous blocks in the chain being tampered with. Adding data to a blockchain requires a “consensus” of all computers in the block chain network. This makes a blockchain decentralized, in that one computer acting alone cannot control the information put into a block, which in turn acts to deter data tampering. This all adds up to create an instantaneous and easily reviewable ledger that is not based on a system of trust. Blockchain allows for digital transactions to take place even in a complete absence of trust between parties, as it displays to all other members of the blockchain if an asset or payment have been transferred in a transaction.

Putting their money where their mouths are, so to speak, spokespeople for Walmart are among the biggest proponents for replacing existing systems with blockchain technology. to allow for a greater level of secure, cooperative record-keeping between separate organizations is one of its biggest draws for companies, who are entering the digital age. As stated by Walmart’s Vice President of Food Safety, Frank Yiannas “What we hope to do with blockchain is bring all food safety system stakeholders and collaborate so that we do it one best way. We can do it very quickly and efficiently.”�� The decentralized and instantaneous nature of a blockchain ledger means that the entire supply route of an item can . At the same time, the innate security of blockchain systems and their resistance to hacking or tampering make them ideal for .

The variety of patents held by Walmart alone shows that blockchain has applications far larger than just as a base for cryptocurrencies. Blockchain can and is being used for any number of data-management activities, and, like any other software, there is potentially a lot of value in patenting blockchain’s most useful applications and variations. �� before it, once viable and efficient uses for blockchain technology find niches in the structures of major corporations, the foundation will be laid for widespread dispersion of blockchain technology into everyday life.

With blockchain patents filed worldwide in 2017, the filing rate of these patents is . Canadian jurisprudence on patenting software comes from a combination of statute and common law. Section 2 of the describes a patentable invention as “any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter”. This definition was then interpreted by Sharlow J.A. in the 2011 Federal Court of Appeals case of to state that a mathematical formula, like a computer algorithm alone, is unlikely to be a patentable invention. However, if the algorithm is “only one of a number of essential elements in a novel combination” of a valid patent claim, then a patent may be given to the algorithm. Therefore, if it is an essential part of a broader valid patent, then a blockchain-based system, such as Walmart’s food-tracking system, may be patented.

Luckily for late-to-the-game software developers, the core of blockchain technology has been , in both Canada and the United States, since the publication of the technology by the (probable pseudonym) author Satoshi Nakamoto in 2008. This gives programmers a large amount of leeway when working from the base code, as simply using the base code does not interfere with anyone’s intellectual property rights. Therefore, in Canada, patent rights can only possibly be granted for “new and inventive improvements or implementations” to blockchain, so long as the blockchain software “”.

Although blockchain is a very new technology, and software patents themselves are in a nascent stage, worldwide trends show that blockchain patents are on the horizon. With the size of the investments being made in blockchain technology and the nature of those investing corporations, Canadian patent law will have many opportunities to be developed and refined. While time will tell if these investments will bear fruit, or if we’re in the midst of a “”, one thing is for certain, patented blockchain technology is coming to a store near you.

Keenan Fast is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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Elsevier is one of the largest science and medical publishers in the world. Prestigious journals, such as and , are amongst its products. Over the years, it has been the subject of a number of criticisms, including its pricing regime (see , and ), its strong stance against academics posting their own articles on university archives (see and ) and other platforms (see and ), and the sale of open access articles (see ).

On August 30, 2016, the United States Patent and Trademark Office granted Elsevier a monopoly over the “waterfall process” of online peer review. This is a process whereby, upon rejection, a different journal (chosen through a comparison of the submitted articles of the author and the published articles of the suggested journal) is suggested to the author for resubmission. The referral occurs automatically, and upon the author’s consent, the article is immediately forwarded to the recommended journal.

Since the patent grant, much of the commentaries have been negative. Many people immediately went on social media to express their shock and discontent. One of whether there is prior art to “online peer review”. The same person also expressed his that less resourceful entities cannot legally challenge this patent. Although in response in an attempt to calm fears, it was ineffective. The Electric Frontier Foundation rated it . on Scholars Cooperative compared this move by Elsevier to be similar to that of a patent troll. (Harsh!)

In an age where academic publication is trending towards open access, coupled with the criticisms of Elsevier’s anti-open access practices, the passionate anger from the public is understandable. However, as heated emotions calm, it is important to take another look at this patent more cool-headedly with two questions in mind: (1) is the patent valid and (2) what is its point if it is valid?

On the issue of validity, the commentaries focus on novelty. It has been pointed out that the waterfall process is what others refer to as “” and has been used by others prior to Elsevier’s patent filing. However, a closer look at the patent makes it apparent that Elsevier acknowledges that there are existing journal referral practices. Elsevier notes that what is lacking is a “more flexible and convenient” system, such as referrals to non-sister journals. Reading the patent holistically, it appears that the novel aspect of Elsevier’s invention is an improved and automated system of the online cascading peer review process. Examining the broadest claims, it is evident that they contain many elements, including the novel improvements on the cascading peer review process, thus making the scope of the patent narrow. Overall, it appears that this patent satisfies the novelty requirement.

The more interesting issue is whether the invention is truly “inventive”. In my opinion, expanding the cascading peer review process to non-sister journals and automating the process through computer programs seems rather obvious. However, not being a “person having ordinary skill in the art”, I am not qualified to make any judgments. It would be interesting to hear expert opinions on this issue.

Finally, assuming the patent is valid, is there any value in it? With all the criticisms Elsevier has been under and the boycott against Elsevier, this move was immediately perceived as hostile and anti-open access. Elsevier was compared to a patent troll because people imagine the publisher would use the patent to block out journals with less resources (especially the open access ones) by suing them for using a similar cascade peer review process. So in terms of company image, this move was damaging. However, considering the claims of the patent are very specific, it should be easy for others to work around the essential elements of the claims, making it hard for Elsevier to enforce the patent. Maybe Elsevier never intended to block out other publishing entities. Maybe Elsevier wants to generate revenue by licensing its waterfall process to other entities. If so, it should not be too difficult to work around the narrowly claimed invention. With the anti-Elsevier attitude many academics have, would other publishing entities want to license from Elsevier? If not, was the cost in money and public image of getting this patent worth it? We can only wait and see.

Sue (Zhonghui) Fei is a JD Candidate at Osgoode Hall Law School.�� Sue is currently enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

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It is very important to provide adequate disclosure when using “means-plus-function” claims in a U.S. patent, particularly in the field of software. “Means-plus-function” claims include elements that are defined in a functional (as opposed to structural) manner, such as “means for tying a shoe”, and can be useful as long as they are carefully prepared. In particular, “means” claims require the disclosure of specific structural examples in the body of the patent that are used to interpret the functional elements.¹

One further issue is that this requirement is often confused with the requirement that the patent include enabling disclosure.²��Enabling disclosure generally relates to whether an individual of ordinary skill in the art (i.e., a suitable engineer or programmer) could make or use the invention. On the other hand, providing adequate disclosure of corresponding structures is important, even where such structures may be routine, since this is necessary to ensure the claim is not indefinite.

The Genesis of Means-Plus-Function Claims

Means plus function claims have an interesting history. At the turn of the 20th century, functional claiming using “means” language was widely accepted. For example, the Wright brothers’ patent for a FLYING MACHINE claimed “means for simultaneously moving the lateral portions [of a wing] into different angular relations” and “means whereby said rudder is caused to present to the wind that side thereof...”³

In 1946, however, the U.S. Supreme Court grounded functional claiming in a case called Halliburton Oil v. Walker⁴, where the invention related to locating the surface of oil in a well using echolocation. In Haliburton, the Court found the patent to be indefinite since there was no disclosure of how the patent actually performed the claimed function. Means language that related to a desired function could not be used at the point of novelty in a claim.⁵

Congress responded in 1952 with legislative changes that specifically allowed patentees to use “means” language to claim a function. These claims, however, would not cover the entire function itself, but rather only the specific structures that accomplished this function and which were discussed in the patent.��This restriction was intended to deny overbroad claim language, and leave open the possibility of competitive innovation (i.e., different structures that can accomplish the same function).

The recent case of Eon Corp v. AT&T⁶ reminds us that this requirement continues today in software patents that use means-plus function claims. In Eon, the Federal Circuit upheld a finding of invalidity related to a software patent that allowed a television to perform actions such as impulse buying, audience voting, and sorting shows by theme. The Court reviewed the requirements with respect to structure and enablement of software “means-plus-function” patents, including discussing two important earlier decisions: Katz⁷ and Aristocrat.⁸

A “general purpose computer” is not enough…

In the Aristocrat decision, the Federal Circuit had previously explained that the mere disclosure of a “general purpose computer” was insufficient to satisfy the disclosure requirements of means claims. The appellant in Aristocrat manufactured and sold gaming machines, and held a patent⁹ that disclosed a gambling game for a slot machine where players define their own winning combinations. Claim 1 recited “game control means” but the patent disclosed only a “general purpose computer” for performing this function, and in particular did not disclose the algorithm used to control play. The court held that:

“…Because general purpose computers can be programmed to perform very different tasks in very different ways, simply disclosing a computer as the structure designated to perform a particular function does not limit the scope of the claim to "the corresponding structure, material, or acts" that perform the function, as required [by the statute]...”

On the other hand, the Court explained that when an algorithm is disclosed that performs the claimed functions, even though that algorithm may be running on a general purpose computer, that computer becomes, in effect, a special purpose computer¹⁰ that will satisfy the statutory requirements for means claims.

…unless the claimed functions are “basic operations”

Following Artistocrat, the Court recognized an important exception in Katz. In this case, the appellant owned several patents that dealt with telephone processing and interactive call conferencing systems. The Court explained that a general purpose computer could provide sufficient structure to support a means-plus-function claim provided that the function is coextensive with the ordinary capabilities of the general purpose computer. In Katz, this was taken to include basic operations such as “processing”, “receiving”, and “storing”. Hence, the claims were not indefinite even though a specific algorithm was not disclosed, since a general purpose computer does not need special programming to perform these particular operations.

Eon Corp v. AT&T

In Eon, the appellant tried to argue that a general purpose computer could provide structure sufficient to satisfy the requirements for “means” claims so long as an ordinary person skilled in the art would know how to implement the invention. The Federal Circuit disagreed, explaining that the appellant had confused the requirement for enabling disclosure with the requirements related to means-plus-function claims. Whether or not a skilled programmer or engineer could understand how to build the invention was not relevant, since their knowledge could not be imported into the specification to provide structure for the means claims. Moreover, Eon’s attempt to rely on the Katz exception because the claimed functions were “simple to implement” was fruitless, as the Court explained that “…“special programming” does not denote a level of complexity.” Hence, Eon was unable to convince the Federal Circuit to “fill in the gaps” in the disclosure and overturn the finding of invalidity.

The Eon decision serves as a useful reminder about the need to be careful when using “means plus function” claims in U.S. patent applications, even in a software case where the specific functions that are claimed seem simple. With Aristocrats and Katz in mind, it is important to recall the distinction between enabling disclosure and scope-limiting disclosure. Moreover, while the narrow Katz exception does exists for functionality that is co-extensive with the “general-purpose computer”, in most cases a more detailed disclosure of an algorithm will be required for enforceable claims to exist in the United States.

Interestingly, the situation is slightly different here in Canada, as we do not have a comparable statutory requirement for “means” claims. Indeed, “means” claims are commonly used here, and our examination guidelines explain that they can be supported either by a description of the types of means contemplated, or by knowledge that would be obvious to a person skilled in the art.¹¹ Hence, Eon would likely have been much more successful in Canada with its “simple to implement” arguments.

¹��.
² Under .
³ U.S. Patent No. issued May 22, 1906.
⁴��Halliburton Oil Well Cementing Co. v. Walker (1946) 329 US 1 [Halliburton].
⁵��See In re Donaldson (16 F.3d 1189 (Fed. Cir. 1994) (en banc))
⁶��Eon Corp v. AT&T (2015) D.Del. No. 1:13-cv-00910-RGA [Eon].
⁷��In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303 (Fed. Cir. 2011) [Katz].
⁸ Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1333 (Fed. Cir. 2008) [Aristocrat].
⁹ U.S. Patent , issued July 25, 2000.
¹⁰ Citing WMS Gaming, Inc. v. International Game Technology, 184 F.3d 1339 (Fed. Cir. 1999) [WMS Gaming]
¹¹ See : “In order for a means statement to be properly supported, the description must describe what types of means are contemplated by the inventor unless this would be obvious to the person skilled in the art in view of their common general knowledge.”

��is a partner in��Bereskin & Parr's Patent Group in the Waterloo Region and is is Vice-Chair of the Intellectual Property Institute of Canada's (IPIC) Information Technology Committee. is a JD candidate at Osgoode Hall School and was a summer student in��Bereskin & Parr's��in��Toronto.��Twitter: .

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As , partner with McCarthy Tétrault in the Toronto office and a Member of the IPOsgoode Advisory Board, , “Patent law is based upon the social and economic rationale of balancing encouraging innovation and the avoidance of monopolies which can stifle competition.” In general, these principles have been extended into the realm of software as a means of rewarding and protecting the fruits of the inventor's labour in the hopes of stimulating and fostering further advances and discoveries through public disclosure mechanisms. Patents, and software patents, are, therefore key elements of the contemporary economic system.

However, while software may be generally similar to other types of inventions, the nature of software industries and software itself make the application of existing patent laws somewhat problematic. Economist and former Non-Resident Fellow at the Brookings Institute argues, in , that there are three dissimilarities that must be recognized when dealing with software: 1) detailed descriptions of a software often constitute the program itself, making it hard to distinguish between ‘ideas’ and ‘implementation’; 2) software are pieces of mathematics, which courts agree are not patentable; and, 3) software is written and produced by vast categories of users and programmers, making restrictions to competition problematic (at pp. 4-5).

These three issues entail disproportionate levels of competitive and monopolistic advantage to whoever acquires a patent right first. For example, a patent holder is able to extract burdensome rents from a competitor who wishes to build off of the works of others or create interoperable technologies based on previously existing patented discoveries.

In the SCOTUS was tasked with determining whether the patents at issue in the case, held by Alice Corps', were eligible for patent protection or whether they were simply ‘abstract ideas’.

The case centered around a computerized process for limiting “settlement risk” during financial exchanges between two parties by employing a computer system as a third-party intermediary. This 'third-party' creates and tracks digital account ledgers that mirror the balances that the exchanging parties hold in their ‘real-world’ accounts in order to determine whether or not a given transaction can be processed and supported by the parties' assets. As states, "In sum, the patents in suit claim (1) the foregoing method for exchanging obligations (the method claims), (2) a computer system configured to carry out the method for exchanging obligations (the system claims), and (3) a computer-readable medium containing program code for performing the method of exchanging obligations (the media claims)".

In 2007, CLS Bank filed suit against Alice Corps in the hopes of obtaining a declaratory judgment that the patents at issue��were invalid and, therefore, not infringed by CLS Bank’s use of a similar business practice. Following a SCOTUS decision in 2010, (561 US 593), the parties filed cross-motions for summary judgments on whether the patents were eligible under the .

Section 101 of the Patent Act defines patents as eligible for: “whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title” (). However, since 1972, the SCOTUS has held that "abstract intellectual concepts are not patentable” (, 409 U. S. 63, 67). As recently as 2011, in , the Court has upheld this principle out of concern that “patent law not inhibit further discovery by improperly tying up the future use of laws of nature” (Mayo, 566 US 16).

Using the two-part test set out in Mayo, the Court found that “because petitioner’s system and media claims add nothing of substance to the underlying abstract idea, we hold that they too are patent ineligible under §101” (Alice Corp., 573 US 17). In the concurring statement Justice Sotomayor, joined with Justices Gisburg and Breyer, agreed that “any claim that merely describes a method of doing business does not qualify as a ‘process’ under §101’” (Alice Corp., 573 US 1). The Court found that “there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of ‘abstract ideas’ as we have used that term” (Alice Corp., 573 US 10).

The decision in is careful not to extend this principle too far, which would run the risk of making all software patents ineligible. The Court recognizes that “an invention is not rendered ineligible for patent simply because it involves an abstract concept” (Alice Corp., 573 US 6). Applications of abstract ideas that are “to a new and useful end” (Alice Corp., 573 US 6) remain eligible for patent protection.

The SCOTUS decision in this case represents another step in the evolution of American intellectual property laws, in commercial contexts, in adapting to new technological and social circumstances. The Court has not defined what types of software and business practices are eligible for patent protection. Instead, it has reaffirmed long-standing principles about what types are not: those that monopolize the building blocks of human knowledge and invention, such as abstract ideas, and prevent further innovation.

In doing so, the decision in is another precedent in favour of competitive markets and the avoidance of the deleterious affects of excessive rent-seeking by patent holders that make overly broad claims on the tools necessary for human development and innovative creations.

Joseph F. Turcotte is an IPilogue Editor, a PhD Candidate and SSHRC Doctoral Fellow in the Communication & Culture Program (Politics & Policy) at 91��ɫ, and a Nathanson Graduate Fellow at the Jack & Mae Nathanson Centre on Transnational Human Rights, Crime and Security at Osgoode Hall Law School.

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And as has been common in commentary, he also draws parallels to the demise of previous research and development (R&D) powerhouse Nortel. As Yakabuski wrote,

“If Blackberry is sold – as seems likely after the board announced a strategic review and hired investment bankers – it will most likely be carved into pieces. That stands to make Canada’s innovation situation worse. The company, which benefited from government grants and loans in its early days, has given back by nurturing the countless startups for which BlackBerry is a customer or mentor. Nortel played a similar role in its day. The loss of an anchor can compromise an entire ecosystem of innovation, making it even harder for startups to make the leap to commercialization.”

The Globe and Mail has been reporting extensively on the company’s future, seen in articles like “” and “”.

Breaking Down the Issues

A quick scroll through the on any of these articles – or casual listening across our country’s proverbial water coolers – makes it clear that the future of Blackberry is a hot button issue. There are camps, there is rhetoric, and there is emotion. But using Blackberry’s current situation as either a symbol of contemporary innovation challenges or as a canary-like indicator for the future of Canadian innovation is problematic.

In unpacking the link between Blackberry’s future and its impacts on Canadian innovation, there are two distinct arguments. From the perspective of critics, the hypotheses are that Blackberry is struggling because it lacks innovation; also, the sale of Blackberry will reduce the amount of innovation in Canada. In my opinion, both are logic leaps.

Is Blackberry Struggling Because it Lacks Innovation?

Ongoing , device operating system reviews and the controversial but creative idea to – as well as the decision to – are clear signs of innovation.

There may be better reasons to explain Blackberry’s loss of market share and sinking stock price. These include that the innovations were not to maximize appeal with the , that , or that or product have faltered with growth. All of these claims seem to hold some truth to them. To say that Blackberry has lacked innovation, however, is, in my opinion, fundamentally inaccurate.

Will the Sale of Blackberry Reduce Innovation in Canada?

It’s difficult to predict whether any sale or breakup of Blackberry will result in quantitatively less innovation than if the company retains its current corporate structure. If we judge innovation by R&D investment, it would be hard to have mathematical certainty about what Blackberry would have spent over its company future in the event of a sale, and vice-versa. As a result, I would contend that outright, quantitative prediction is a mug’s game.

In my opinion, a more intelligent, nuanced response is that R&D is a blunt and sometimes indeterminate measurement of innovation. The Council of Canadian Academies recently completed an at the request of Industry Canada to assess innovation in Canada. Though it did find many benefits to industrial R&D (IR&D) investment, it’s not the same thing as innovation.

“IR&D and innovation are not synonymous. IR&D consists of any scientific research or technology development undertaken by Canadian businesses. Innovation, on the other hand, is the broader concept that can be defined as ‘new or better ways of doing valued things.’”

The panel listed four key areas of R&D strength in Canada, including:

• Aerospace products and parts manufacturing,
• Information and communication technologies,
• Oil and gas extraction, and
• Pharmaceutical and medicine manufacturing.
  
  

And here’s where the argument that a sale of Blackberry will reduce innovation in Canada begins to sound particularly weak. Even if a sale results in reduced R&D spending by the new corporate form or forms – which is difficult to prove – and even if a reduction in R&D spending guarantees a reduction in innovation (also difficult to prove), it stands to reason that a single company should never dramatically impact Canada’s overall innovation agenda. Blackberry is one company in one of the four areas of R&D strength in Canada.

The Big Picture

R&D and innovation in Canada have bigger problems than Blackberry’s future. A recent Conference Board of Canada shows that even by a broad array of 21 different indicators, Canada lags. According to their findings,

“Despite a decade or so of innovation agendas and prosperity reports, Canada remains near the bottom of its peer group on innovation, ranking 13th among the 16 peer countries / Countries that are more innovative are passing Canada on measures such as income per capita, productivity, and the quality of social programs.”

that, from a digital communications technology perspective, the temptation for entrepreneurs to sell out too early or join the brain drain to Silicon Valley is part of the problem.

“And the magnetic allure of Silicon Valley means people with qualifications are migrating en masse to the Bay Area. An estimated 350,000 Canadians live and work in the Valley – an entire lost generation. It’s no exaggeration to say that much��of the world is in the midst of a global brain drain of engineering talent.”

Eli Lilly president and CEO John Lechleiter believes that, from a pharmaceutical perspective, .

Michael Bloom, vice-president of organizational effectiveness and learning for the Conference Board of Canada, believes that companies need to.

There are many key contributing causes of and prescriptions to Canada’s innovation lag, but none of them truly involve Blackberry. At most, Blackberry is the symptom - not the diagnosis.

Conclusion and Insights

Using Blackberry’s current challenges to strike up a national debate on R&D or innovation is thorny. In rifling through the waves of press coverage, it seems like media outlets are using an innovation angle to give legs to one of its favourite corporate narratives.

The obsession with Blackberry fortunes is natural because mobile devices are deeply personal products that are highly integrated into our daily lives, whether consumer, student, or professional. Also, Blackberry’s is a reverse underdog story, and some people love watching a former market leader struggle.

Unfortunately, when we bring larger public policy debates around innovation into heated discussion around controversial companies like Blackberry, it can unnecessarily politicize or bias the national discourse. As well, I worry that such politicization may allow other Canadian companies that aren’t doing their part on the innovation front, but are in less prominent or popular industries than mobile devices, to escape the same amount of media scrutiny.

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concerned two patents: (Patent ‘607) and (Patent ‘828). Patent ‘607 is a hardware patent that discloses a capacitive sensing medium for multi-touch functionality by measuring displaced charge using an electrode grid to determine the location of the touch. This patent also discloses how to make the touch screen appear transparent using Indium Tin Oxide (ITO) electrodes and “dummy” ITO to fill in the gaps thereby making the electrode matrix uniform. Patent ‘828 discloses a method of determining whether the displaced charge is as a result of a finger touching the screen whereby the touch panel software is able to mathematically fit an ellipse around the nodes where touch had been detected and track this movement.


The majority opinion was a medley of decisions by the court: affirming in-part, reversing in-part, vacating in-part, and remanding for further proceedings. Claims 1-7 of Patent ‘607 were affirmed to have been anticipated by , which discloses a sensor matrix with two matrix-scanning algorithms��able to detect more than one finger touch at one time,��considered by the Court to be very similar to Patent ‘607,��overlying a transparent layer and an electronic display. As such, they were considered invalid.


Claim 10, which relates to the “display arrangement” was given a more rigorous analysis by the Court. In agreement with the ITC an article describing “Smartskin,” a prior touchscreen system, was determined to be unanticipatory as the system disclosed an opaque system of copper electrodes rather than the transparent system of ITO electrodes as claimed. The ITC declared, however, that the claimed system would be obvious in light of . In turn, Apple argued that the Commission incorrectly applied a “hindsight analysis” and disregarded objective evidence, including commercial success and evidence of copying, which suggested that this invention would not have been obvious to a person skilled in the art. ��The Court of Appeals��determined that although a strong prima facie case was established disclosing every limitation of Claim 10 that the ITC failed to follow precedent by allowing this to conclude the ultimate determination of obviousness. As such, the decision of the ITC was vacated. The court remanded the proceedings to allow the ITC to consider the prima facie case in conjunction with the objective evidence to determine the question of obviousness.


Finally, issue was taken with the decision of the ITC not to review the construction of the term “mathematically fitting an ellipse” in Patent ‘828. This was determined by the administrative tribunal to require a two step mathematical process whereby an ellipse is fitted to the data and after which parameters are calculated. As a result of this determination Motorola’s products were considered not to infringe on the Apple patent. Upon an assessment of the plain language of the claims, the Court of Appeals considered this term to refer to the software mathematically fitting an ellipse to the parameters, implying that there is no separate step of calculating ellipse parameters. As such, the ITC conclusion that Motorola does not infringe on Patent ’828 was vacated and remanded for further proceedings to the ITC to consider whether the products in question infringe under this construction of “mathematically fitting an ellipse”.


These types of patent infringement cases generally represent high stakes for both companies (an example of this is an ongoing dispute in Germany regarding Apple’s iCloud was cited to represent ). Although by this point the current dispute around multi-touch patents relates to "dated" technology, the release of the Motorola Xoom tablet may, upon further investigation, The Xoom angle may allow Apple the opportunity to argue that newer Motorola devices infringe on these patents and potentially have them In any event, it appears that the conflict between Apple and Motorola is far from over. The ultimate outcome should determine the functionality of��this technology��and may determine whether we will see greater similarity or evolutionary divergence in our��future smartphones.


Naomi Metcalfe is an IPilogue Editor and a JD Candidate at Western University

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These claims were rejected by the Canadian Intellectual Property Office (“CIPO”) for lacking statutory subject matter, i.e. for failing to meet the definition of “invention” as defined in s.2 of the Patent Act.�� CIPO’s Patent Appeal Board (“PAB”) in its rejection adopted a “form and substance” approach that focused on “what had been discovered”, and held that business methods were an excluded category of patentable subject matter.�� The PAB also held that inventions must meet a technological threshold and a physicality requirement wherein inventions are either a physical object or an act or series of acts performed by a physical agent which causes a change of character or condition in a physical object.

In its ruling, the Court of Appeal rejected the form and substance approach and sent the application back to CIPO for examination, with directions that the Commissioner of Patents carry out a purposive construction of the claims when considering whether the claims are statutory.�� The Court of Appeal also held that the technological test was unhelpful, that there was no categorical exclusion of business methods as statutory subject matter, and that patentable subject matter must be something with physical existence�� or something that manifests a discernible effect or change.�� CIPO completed its examination and found that the claims possessed patentable subject matter; CA 2,246,933 issued on January 17, 2012.

On March 8, 2013, CIPO released two new practice notices, namely titled “Examination Practice Respecting Purposive Construction” and “Examination Practice Respecting Computer-Implemented Inventions”.�� In these Practice Notices, CIPO recognize that the technological test is no longer to be applied in the consideration of statutory subject matter, and that the portions of its practice manual referring to “contribution”, “field of technology”, “technological solution to technological problem” are no longer applicable in view of the Amazon.com decision.�� The Practice Notices state that statutory subject matter must be based on the essential elements of the claim, as determined through purposive construction.�� Practice Notice 2013-03 also states that when a computer is found to be an essential element of a construed claim, the claimed subject matter will generally found to be statutory.

The Practice Notices also provide detailed instructions for CIPO examiners on how to conduct their purposive construction.�� Particularly, the Practice Notices state that examiners should interpret each claim: using a fair, balanced, and informed approach; having identified the problem and solution; in the context of the application as a whole; to determine which elements of the claim solve the identified problem; and by focusing on one solution at a time. ��The Practice Notices specify that guidance to identify the problem and solution is to be found in the description, and that this identification occurs when construing the promise of the invention (i.e. its utility).�� The Practice Notices explain that essential elements are those essential to the operation of the solution; however, not every element that has a material effect is necessarily essential for the operation of the invention.�� If a claim is missing any of the identified essential elements, the claim may be rejected for lacking utility; if the claim contains more than the identified essential the claim may be considered to contain “superfluous elements”.

Practice Notice PN 2013-02 acknowledges that the Supreme Court of Canada decisions and respecting purposive construction continue to guide the courts.���� However, this Practice Notice then notes that Whirlpool was an impeachment proceeding and was not directed to patent examiners in the course of examination to determine whether applications for patents should be granted, and states that CIPO “considers that the application of the principles of purposive construction discussed in Free World Trust and Whirlpool to the examination of a patent application must take into account the role of the patent examiner and the purpose and context of the examination”.�� In support of its position CIPO relies on as recognizing that the language of patent claims construed by judges in an impeachment proceeding is fixed, whereas “during examination of an application the language of the claims may change from that initially proposed by the applicant for a number of reasons”.

CIPO’s reliance on Genencor as justification to not be strictly bound to the purposive construction principles set out in Whirlpool and Free World Trust is problematic.�� While the Trial Division Court in Genencor did state that it was not appropriate to expect a Re-examination Board in conducting a re-examination to have the same burden mandated on the Courts for an impeachment proceeding, that statement was made in the context of what standard the Board should be subjected to when assessing the substantive merits of an application. The Court in Genencor pointed out that the Board would not have the same access to expert testimony and other resources, and thus the Board should be subject only to a standard of reasonableness on factual determinations related to the patent.�� However, Genencor did not state that CIPO is entitled to only be reasonable and not necessarily correct on applying the law governing patent construction. The Court of Appeal in Amazon.com clearly held that patent construction is a question of law, and the Commissioner’s patent construction is reviewable on the standard of correctness.�� It follows then that the Commissioner must correctly apply the purposive construction principles defined in Whirlpool and Free World Trust.

The Supreme Court of Canada in Whirlpool and Free World Trust held that claim language must be read in an informed and purposive way, and that the claims language will, on a purposive construction, show that some elements of the claimed invention are essential while others are non-essential.�� The Court then explained that the identification of claim elements as essential or non-essential is made according to the following principles: (i) on the basis of common knowledge of the worker skilled in the art to which the patent relates; (ii) as of the date the patent is published; (iii) having regard to whether or not it was obvious to the skilled reader that a variant of a particular element would not make a difference to the way in which the invention works; or (vi) according to the intent of the inventor that a particular element is essential irrespective of its practical effect. For an element to be considered non-essential and thus substitutable, it must be shown either (i) that on purposive construction of the words of the claim it was clearly not intended to be essential, or (ii) that at the date of publication of the patent, the skilled addressee would have appreciated that a particular element could be substituted without affecting the working of the invention.

There is no mention of the third and fourth Whirlpool and Free World Trust purposive construction principles in the Practice Notices.���� The Practice Notices’ approach to determining essential elements of a claim appear to completely disregard the inventor’s intentions about whether an element is essential, and fail to ask whether it would be obvious one skilled in the art that an element has no material effect on the way in which the invention works.�� By directing examiners to use a problem-solution approach to identify essential elements of an invention from the specification, then to determine whether those essential elements are present in the claims, the Practice Notices appear to be contrary to the principles affirmed in Free World Trust and other cases that claim language should have primacy and each of the components of a claim is presumed to be essential unless the contrary is indicated in the patent.���� The failure of the Practice Notices to direct examiners to apply all the principles of purposive construction set out in Whirlpool and Free World Trust produces an incorrect legal framework for patent construction that would not permit an examiner to reasonably apply the facts when determining whether a claimed subject matter meets the definition of invention.�� For example, it is conceivable that under the direction of the Practice Notices, an examiner may reject a claimed invention as lacking statutory subject matter by finding all statutory elements of the invention to be inessential, even though those statutory elements are expressed claimed, the application document indicates that the inventor intended the statutory elements to be essential, and even though it would not be obvious to one skilled in the art that one or more of those elements had no material effect on the way the invention worked.

Given that CIPO examiners do not have the benefit of expert witnesses, cross-examination, and other resources of a Court in an impeachment hearing, it is reasonable that CIPO be held to a standard of reasonableness when making factual determinations in a patent application.�� However, it is clear that examiners must correctly apply the law when making reasonable factual determinations. By omitting fundamental principles of purposive construction set out in Whirlpool and Free World Trust, the CIPO examination practice respecting purposive construction appear to be incorrect at law.

is a partner in , and is head of the office’s Intellectual Property Department and co-chair of the office's Technology Industry Group. Brian practices exclusively in the area of intellectual property with an emphasis on patent matters.

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In Bancorp, the Court has ruled that patents outlining a software system that administers and tracks the value of life insurance policies (, ) are invalid. The Court of Appeals ruled that the patents do not include a computer as an integral part of the patent as claimed and that the process described could be conducted, albeit less efficiently, manually. Without a foundation that includes a computer, the process claimed in the patent becomes an abstract process, which fails the criteria established by the United States Supreme Court in . With the Bancorp ruling the Court has singled out business process patent claims that misidentify a computer as being integral to the patent, otherwise known as , as probably unpatentable, potentially culling the number of software patents that will pass through the U.S. Patent and Trademark Office.

The Bancorp case highlights two interesting trends in software patents. First, the Court has maintained the distinction between software that is strictly algorithm-based, processes that are made more efficient by running on a computer, which would therefore be abstract and not patentable, and function-based, processes that build on top of the functionality provided by a computer to provide a new innovative product, which would be patentable. The Court was careful to note “that ‘inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract’ as to be ineligible for patent protection”. This opinion is consistent with judgements over the past years, as seen in and . Although consistent, these decisions do not draw a clear dividing line between algorithm and function-based software. As a result, there is no principled way to determine when software transitions from a mathematical base into a functional base. Some that it never does. This confusion could benefit from a business process patent version of test; can an average software developer recreate the patented process, or would he/she need a computer to complete the task? This test could potentially provide a practical definition to the two distinct views of software; however one would cringe at the thought of a developer trying to manually imitate the process of creating a image based on a visually pleasing guideline created by an algorithm (the patent claim in question in the Research Corporation Technologies v Microsoft Corporation case). Realistically, the Courts will probably keep the distinction undefined and allow policy to further define it.

The second trend of interest concerns the increasing limitations being placed on process patent eligibility by both the United States Court of Appeals for the Federal Circuit and the United States Supreme Court. This was not always the case. At one point the Court of Appeals had been a “”, including business patents, leading to a large number of software patent applications. This view of eligibility for business patents existed from 1994, with the decision, until 2008 and the Federal Court’s decision in . The Bilski decision signalled a change for the Court of Appeals and both courts have since supported more stringent qualifications for business process patents. The recent United State Supreme Court’s of the Ultramercial v Hulu ruling (previously by IP Osgoode) continues this trend.

This Bancorp decision is unlikely to modify the view of Canadian courts concerning software patents. The Canadian Patent Act explicitly lists abstract theorems as ineligible for patent protection. states that a patent will not be granted “for any mere scientific principle or abstract theorem”. The decoupled relationship between Canadian and U.S. views of business process patents might mitigate any effect this holding might have on Canadian law. While the U.S has a long history of case law and approved business process patents, until the recent ruling late last year there was doubt to whether software patents were legal in Canada. The lack of support from the courts south of the border should be noted however, and could indicate stricter Canadian eligibility requirements in the future.

The holding in this case could go a long way in damming the of software patents seen in the U.S. over the past 15 years. This will no doubt make who argue against granting software patents very happy, but there is still that the idea of allowing patented innovation to occur in the medium of software will “”.

Mark Bowman is a JD candidate at Osgoode Hall Law School.

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, an appeal in the form of a test case against an earlier decision by the EPO, was based on DSM’s claim that three documents were available before the filing date of the patent. The three documents, a webpage, an unencrypted email, and an encrypted email all discussing the patent, were notarized as having existed before the February 1 2000 date of filing for the disputed patent. European patent law, specifically , requires that an invention not be part of “everything made available to the public by means of a written or oral description” at the filing date of its patent application. DSM claimed that the combination of the three documents accurately described the inventive step at the core of the patent claim and, because all three documents were publically available at the time of filing, the patent was not novel.

In by DSM to the EPO targeting the public availability of web-based documents, the Boards of Appeal found that the possibility of accessing a document through a URL was not sufficient to prove public disclosure and that a “practical possibility of having access”, such as that provided by a public search engine, was required. The judgement of the parallel challenge was repeated in this test case and, because the webpage was indexed by and could be found with the Altavista search engine, the webpage document was held to be publically disclosed.

The decision on whether the emails were publically disclosed was not as simple and required thorough legal analysis. The original judgement found that the use of the two emails did not publicly disclose the patent, and the Board in the instant appeal invited DSM to provide a counter argument. DSM felt that the “balance of probabilities” standard should be applied to all published written materials including paper, internet webpages, and email, and that “an unencrypted e-mail was like a postcard viewable by all, whereas an encrypted e-mail was more like a letter in an envelope.”

DSM proposed that email data can be intercepted either illegally or legally, and once intercepted there would be no obligation to keep the contents secret. Illegal interception could occur through network eavesdropping during transmission or hacking into the sender or receiver. Legal interception could occur through the maintenance activities of an internet service provider. DSM additionally argued that a non-disclosure agreements (NDAs) that covers the communication between the two parties, as was in place in the instant case, does not affect a third party who intercepts the email data and thereby eliminates any requirement to maintain secrecy of the contents. Further, encrypted emails do not provide absolute protection against eavesdropping, and the international nature of internet traffic probably meant that the data traveled into a jurisdiction, such as the US, where at the time (in January of 2000) eavesdropping wouldn’t be illegal. Because actual proof of disclosure would be very hard to prove, especially eleven years after the alleged disclosure, the balance of probabilities should be sufficient to show that the emails were publically disclosed.

The Board of Appeals was not persuaded and to rule that proof beyond a reasonable doubt was needed. As only one person would have the information if an email was intercepted, the information would only be considered publically disclosed if the person was in a position to access the information while under no obligation to maintain secrecy. The emails in question were under an NDA, and therefore the receiver of these emails was not in a position to further disclose the information to the public in a way that upheld the NDA. In the case that they were intercepted, legally or illegally, the Board felt that the numerous legislative protections covering the transmission, such as and , would prevent a situation where the information could be disclosed without an obligation to maintain secrecy. Further, the business interest of entities who could legally intercept the data, such as ISPs, to maintain confidentiality surrounding their client’s affairs create a situation, albeit confined by the scope of the test case, where the content of the emails could not be disclosed. Because emails are “not placed in the unrestricted area of the Internet”, and cannot be found in the same manner as content on a webpage, the Board felt there was a prima facie argument against public availability of emails.

Ultimately the board found that the challenge against the patent’s inventive nature was not adequate, and the appeal was dismissed. The inventive step within the patent required the combination of all three of the documents (the website, the email, and the encrypted email), and as the court found that the email documents were not publically disclosed, the inventive step of the patent was therefore not disclosed, and the patent was still novel.

Mark Bowman is a JD candidate at Osgoode Hall Law School.

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In June 2011, appeared before the Federal Court of Appeal as respondents in an appeal of the Federal Court’s decision that Amazon’s business model was patentable subject matter. On November 24, 2011, the Federal Court of Appeal released its decision and allowed the appeal. The Court directed that the Commissioner of Patents re-examine Amazon’s application in accordance with the Court’s reasoning. The full decision may be found .

The parties framed the relevant issues very differently, illustrating a “fundamental disagreement” regarding the appropriate analytical approach for determining what is patentable subject matter and when a patent should be granted. My previous on the Federal Court of Appeal proceedings details the different arguments led by the Appellant and Respondent.

Section 27(1) of the Patent Act mandates that the Commissioner grant a patent for an invention if the application meets certain statutory requirements. Thus, the subject matter of the application must be an invention as described under section 2 of the . Considerations under section 27 include patentability of the subject matter, novelty, obviousness, and utility. The subject matter is “the subject matter defined by the claim” as opposed to “what the inventor claims to have invented.” The Commissioner, however, is directed to ask what was actually invented as this may be relevant to the section 27 concerns. Further, case law suggests that a purposive construction of the actual invention is necessary to prevent the influence of any deceptive language in the claim. A determination of patentable subject matter is made when a purposive construction describes something that is an invention, as defined as an art or process under section 2 of the Patent Act.

The Court discussed the tests applied by the Commissioner that led to the original rejection of Amazon’s patent application. Specifically, patentable subject matter The Court stated that the scientific or technological nature of the patent is subjective and should not be the sole basis of a decision. In addition, the Court found that a business method could be “an essential element of a valid patent claim.” Finally, a patent cannot be granted for an abstract idea; it must be something with physical existence or something that manifests change.

Since the Court referred the application back to the Commissioner, the ultimate result remains to be seen. Regardless, this decision represents an important step in the recognition of computer-related patents. Given the significance of this case, it is that there will be an appeal to the Supreme Court of Canada.

[Note: By January 3, 2012, the Commissioner of Patents had allowed Amazon.com’s patent application and the final fee had been paid.]

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