Sally Yoon is an IPilogue Writer, IP Innovation Clinic Fellow, and a 3L JD Candidate at Osgoode Hall Law School.

This past summer, Amazon made headlines when it announced an update that would make Alexa capable of , just after hearing under a minute of audio. While people are still unsure as to whether this is heartwarming or just plain creepy, AI continues to evolve, with recent developments showing its ability to not only mimic human speech but also singing.

AI-based audio technologies have been making waves worldwide. Last month, Google announced “”, which proposes “a new framework for audio generation that learns to generate realistic speech and piano music by listening to audio only”. More recently, , China’s leading music entertainment platform, demonstrated the influence of AI in music. According to Music Business Worldwide, the company has released over - one of the tracks surpassing 100 M streams. TME utilized a “patented voice synthesis technology” called “Lingyin Engine”, which the company claims can “quickly and vividly replicate singers’ voices to produce original songs of any style and language.” South Korea has been a strong player, with its most prominent AI-based audio start-up, . The company claims that its voice synthesis and real-time voice enhancement technology can create a hyper-realistic voice that is indistinguishable from real humans.

So far, these AI voice technologies have largely been publicized as an innovative way of and preserving the memories of lost loved ones. Nevertheless, companies will likely aggressively pursue these technologies for profit. In fact, according to NME, (record label of globally recognized boy band, BTS), which equates to about $44.6 million Canadian Dollars. last month, HYBE’s CEO confirmed that the company plans to “unveil new content and services to [its] fans by combining our content-creation capabilities with Supertone’s AI-based speaking and singing vocal synthesis technology.”

HYBE’s huge investment in Supertone starts to make a little more sense once we discover that the company’s “” in Q3 2022 was its Artist ‘Indirect-involvement’ revenues. BTS’s success suggests how more entertainment companies will follow HYBE’s footsteps to increase profits without the headache of coordinating any physical appearances of its artists.

The development of voice AI opens a plethora of legal questions to consider. These issues were highlighted more recently by the recent - who is given permission to use it and does the artist hold any rights to license their voice to third parties for use in other films? More specifically for , how do we determine who owns the copyright to the work? Does it make sense to look at the creators of the voice AI technologies themselves or at the source of the vocal data (the artist)? These questions clarify that the development of voice AI places our artists in a very vulnerable position — suggesting a much-needed intermission for this chaotic programme.

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On October 12, 2021, the County Court at Oxford (the Court) released its decision in��Fairhurst v, Woodward��(), holding that the Defendant, Jon Woodard, breached the United Kingdom’s Data Protection Act 2018 (the DPA) and the European Union’s General Data Protection Regulation (the Regulations) in his use of surveillance equipment around his property. The surveillance equipment was purchased from the Amazon-owned company, Ring, and included security cameras and a doorbell with audio and video recording capabilities.

To prevent crime around his property and the shared neighbourhood private parking lot, the Defendant installed surveillance equipment that captured audio and video recordings of these areas. The equipment could be remotely accessed by the Defendant via a mobile app with footage sent directly to his mobile phone or smartwatch. The presence of the surveillance equipment and its ability to capture information beyond the Defendant’s property alarmed the Defendant’s neighbor, Mary Fairhurst (the Claimant). The equipment captured aspects of the Claimant’s property, including her side gate, garden and car parking spaces. After the parties failed to informally resolve the matter, the Claimant brought a case before the Court claiming numerous causes of action, including the Defendant’s breach of applicable privacy laws.

Under Section 2 of the DPA, the privacy of individuals is protected by the Regulations. The Court found that the matter fit within Article 4 of the Regulations, with the images and audio captured from the surveillance equipment constituting personal data; the transmission of recordings to the Defendant’s mobile devices and onwards considered the processing of personal data; and the Defendant’s involvement in the surveillance making him a data controller. Given that the Defendant was collecting data outside his property, he had to demonstrate that his data processing was necessary for achieving the purpose of crime prevention and sufficient to override the Claimant’s right to privacy under the Regulations.

Although the Court found that the limited video data collected from the doorbell struck the correct balance between the Defendant’s interest and the Claimant’s right to privacy, the Court objected to the use of a security camera that was positioned to collect data outside the Defendant’s property, including images of the Claimant’s residence. The Court also found that the audio data collected from the Ring surveillance equipment was offside the Regulation’s data minimization principle because the range at which the devices capture audio is far greater than is necessary for the purpose of crime prevention. Instead, the Court noted that the Defendant could still achieve his objective by restricting the collection of audio data or not capturing it at all.

For these reasons, the Court found that the Defendant’s use of his Ring surveillance equipment breached the DPA and the Regulations.

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Meena Alnajar is an��IPilogue��Writer, IP Innovation Clinic Fellow,��and a 2L JD Candidate at��Osgoode��Hall Law School.

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On July 26, 2021, the fashion brand . The complainant alleges that websites are to sell counterfeit products infringing on the ‘Fear of God’ trademark. With all things moving virtually, we are starting to see new strategies for the counterfeit market. Electronic-commerce, or ‘e-commerce’, is an expedient way for businesses to establish themselves online and create a fruitful marketplace, but it could also act as new vehicle for concealing the counterfeit industry.

Counterfeiting with the intent of using them as valid trademarked items, such as fake merchandise from a well-known brand like, in this case, Fear of God. Online retailers have noted an uncontrollable surge in counterfeit products, with some sources stating that sold online are fakes. In Canada, the punishment for someone or imprisonment for up to five years. However, e-commerce makes conviction trickier in the case of Fear of God’s suit. Web designers can effectively imitate popular online retailers or claim to be resale sites authorized to sell the trademarked items, promoting uncertainty as to which sites are counterfeiters. Fear of God’s claim is driven by the fact that the defendants have concealed their identity and constructed a “counterfeit network” with fake seller profiles. Fear of God’s complaint states that the matter can be amended, if�� “defendants regarding their identities.”

While launching lawsuits may be an effective long-term approach, they may not act fast enough to resolve online counterfeit. Counterfeiters can continue to create e-commerce sites selling counterfeit goods under different addresses and owners. By 2017, major e-commerce site its products sold by marketplace listings of outside sellers, some of which may be counterfeiters. counterfeit craze, stating in their ‘Risk Factors’ section: “Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise… we also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated or stolen goods” and accepts possible criminal liability for counterfeit sales. Although Canada has a in place, legal experts have outlined that the crime requires extensive evidence to warrant a conviction. Federal agents also perform of alleged counterfeit crimes. In the time it takes to obtain evidence and wrap up an investigation, the seller has probably transformed into another web address or online persona.

If the law cannot act fast enough against e-commerce counterfeit, what can? Two avenues may tackle e-commerce counterfeit more expediently. The first is requiring a person behind the e-commerce. India is significantly changing its e-commerce policy to require ’ This nodal person of contact denotes an alternate authority or legal department that can assure proper implementation of all the country’s consumer regulations and e-commerce policy. With a legal source to verify the platform’s content, it may be easier to flag illegitimate or counterfeit sellers in the future. Another avenue is fighting e-commerce with what feeds it: technology and big data. E-commerce giant Alibaba announced the in 2017 and harnesses artificial intelligence (AI) and big data to keep the platform free of fake sellers. The company disclosed that the Alliance’s technological strategy successfully seized of fake goods in 2016. Perhaps fighting e-crime with e-stop-and-seizure is optimal to limit counterfeit products in the online space.

Counterfeit can deteriorate brands as consumers cannot be certain what they are purchasing, but the fight against counterfeit may never stop. Regardless of how counterfeit is combatted, be it through legal action or AI, creating new online businesses, even for unethical purposes, has never been easier.

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Tiffany Wang is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

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In July, the European Union delivered an unprecedented fine against Amazon—a record $887 million USD. Luxembourg’s National Commission for Data Protection (CNPD) penalized Amazon for their . The $887 million fine is almost triple the amount of General Data Protection Regulation .

. La Quadrature du Net claims to represent the .

Amazon refuses to remain idle. The multinational firm has already declared it will initiate the to refute this penalty. Amazon voiced that there has been and continues to promise that . The irony here, however, rests in the reality that

The EU’s penalty against Amazon . Legislation still has teeth despite Luxembourg’s historically friendly stance toward Amazon .

The unprecedented fine also underscores the EU’s of Amazon. Amazon has . Even though Amazon claims that collecting data helps to foster a better online retail environment, regulators and lawmakers. In fact, growing suspicion clouds the correlation between data and Amazon’s . The 2018 privacy investigation only fuels the . .

Amazon’s slogan is “Work hard. Have fun. Make history”. Indeed, Amazon has made history with its $887 million penalty. But is this the “history” that Jeff Bezos envisioned?

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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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Background: “Google France checked in at Bermuda”

The ��is the latest volley in an between France and internet behemoths such as and . Essentially, it has become common practice for these companies to operate with expenses (such as labour) concentrated in high-tax countries in the European Union, such as France and the UK, while routing most of their revenues through “tax havens” such as , the , and Bermuda, thereby avoiding an estimated average of 500 million euros per year in corporate tax, in France alone. The data-mining tax is one of several proposed solutions, following an attempted and controversial .

The Rationale: “User added a new job at Facebook, Google, Amazon, and Apple”

The rationale behind the tax recommendation, elaborated upon in Forbes by one of the , is as follows: Data plays such an that it may now be considered the “raw material” of the digital economy. Users provide what may soon be literally lifetimes of data in various forms online, whether collected through behaviour-tracking cookies, submitted through tweets and searches, or inferred through analytics. This allows online companies and applications to laser-target users through features and ads, monetizing the collated data. Thus, users themselves provide data that feeds back into the supply-production-distribution-consumption chain, and according to the report's authors, this turns users into employees whose unpaid labour of providing data produces value for these companies. This user-created value is unaccounted for, and should be taxed.

Implementation: “Facebook added 1 billion friends. Auditor poked Facebook.”

Since international tax law currently fails to account for the geography-heedless nature of user data-based business models, the data-mining tax (which the French government has yet to endorse), is meant as a step towards the report's proposed . The tax would apply to both international and domestic businesses that regularly and systematically monitor online user behaviours of those in France. Tax rates would depend on various factors: how many users are tracked, the type of data collected, ethical issues, and level of respect for user privacy and control, among others.

Analysis: “@User tweets about #Privacy #ConflictofInterest #Competition and #PublicUtilities”

The idea of taxing data-mining immediately brings a number of issues to mind, the first of which is suggestively indicated by other names for the proposal: some call it a or a “” policy. It may be problematic to create monetary incentives for corporations to respect user privacy, as it essentially commoditizes privacy (or the lack thereof) and may erode higher ideals of respecting privacy for its own sake; perhaps those who warrant the term “predator” should not be made to pay, but should restrain from undue preying altogether. From a practical perspective, the act itself of auditing companies' practices may involve questionably invasive technological practices, such as .

Second, tying government revenue to companies' privacy practices the way this tax would (where less user control means the government levies higher taxes) creates a potential conflict of interest, if the government is supposed to have citizens' best privacy interests at heart. Moreover, since the data belongs to the user, the labour model underlying the report's recommendation raises the thought that perhaps users themselves should be paid for it.

Third, the data-mining proposal prompts interesting connections between . As demonstrated by cases against , (), and , such companies walk a fine line between maintaining a healthy monopoly and engaging in anti-competitive practices. Incentivizing better privacy policies through taxes may put a damper on the endless reach for data to sell to advertisers, while creating room for smaller competitors who more effectively prioritize user privacy and control.

Fourth, turning data-mining into a source of taxation evokes questions about the role of privately owned technological platforms in the public sphere. Whether with or , such websites at times seem to approach the of . The problem is that regardless of sociological status, economically and structurally these companies are wholly private. This unique yet rising combination means that attempts to regulate the driving business model warrant particularly careful scrutiny, and perhaps a conversation about what such sites' status ought to be.

Finally, it bears remembering, first, that the companies in question are offering free services whose on a voluntary basis (though see the public utility debate linked above). Second, whether or not data-mining becomes taxable, Google, Facebook, et al. already and will continue to monitor and benefit from users' data regardless. One could then argue that the public may as well take advantage of that fact, in this case via taxation. As the old adage goes, after all, you are what you tweet.

Cynthia Khoo is a JD Candidate at the University of Victoria.

*Term coined for this post, based on the notion that the collected “property” is intangible (unlike real or personal property), yet not necessarily created or thought up (unlike intellectual property), but simply gleaned from users' data trails as they go about their daily lives on the internet.

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One of the most important recent decisions in Canadian patents law is that of ,¹ released on October 14, 2010, where the court granted a patent for a business method. IP Osgoode has already commented on this decision .�� As the authors of the post explain, in their assessment, they “critique only the court’s reasoning and do not take a position on the ultimate correctness of the decision or on whether business methods should or should not be patentable in Canada.” In this post, I will discuss the policy implications of this decision.

In the Amazon.com Inc. case, Amazon was hoping to patent its “1-Click” ordering system, which allowed customers to place their orders using a single click of the mouse. Amazon’s application was at first rejected by the Examiner on two grounds: obviousness and non-statutory subject matter. However, this decision was appealed and Justice Phelan reversed the previous decision, declaring Amazon.com’s system to be patentable. He classified the rejection of such a patent as “a fundamental error of law.”

This judgment has now been appealed and various parties have been given leave to participate as interveners. One of the reasons Justice Trudel at the Federal Court of Appeal identified for allowing the involvement of the interveners was:

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 data, financial models and investment strategies and methods for conducting online banking, with the result that their members would be directly impacted.

The fear identified by Justice Trudel is precisely one of the reasons why this issue is surrounded by controversy. It is in line with the general debate concerning patents and their impact on innovation. Granting a patent at the same time acts as an incentive for inventors and creates a temporary monopoly, potentially dissuading others from adding to this invention.²

As for business method patents in particular, the only certain implication of allowing business method patents is that there will be an immediate increase in patents for business methods. This will in turn lead to an increase in litigation, and be very costly.

It is more difficult to assess the impact of business method patents on innovation. It appears as though business method patents are less an incentive for innovation and are used more after the fact. However, it is not clear whether “there would have been as much entry into internet businesses” were it not for the patent system in the first place.³

Another implication is that in industries that require patents for cross-licensing purposes, business method patents could raise the cost of doing business. Banking or financial services industry, which depend on different institutions communicating with each other, are examples of such industries. Business method patents could also “make it harder for new firms to enter without access to the requisite intellectual property.”⁴ This is the main problem with business method patenting. By nature, they are for incremental inventions and many different ones must be combined to make a useful product. This makes things costly for subsequent users.

Another problem identified with business method patents is their low quality.⁵ A high-quality patent is one for an invention that is completely new. Business method patents, for the most part, relate to a reformulation of an already-existing method. The Amazon.com case is an example of such a situation, where Amazon used previous methods to create a one-click method.

On the positive end, some have suggested that software patenting may be beneficial since, as a result of the patent publication, it would lead to the reuse of software in newer invention.�� In other words, patenting encourages publication, and therefore, allows for the perpetuation of the business method.

As with any issue, there are both positive and negative implications arising from the granting of business method patents. One thing that is for sure: the coming decision of the Federal Court of Appeal will have major ramification on patent law in Canada.

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An ugly patent troll has reared its head again, this time targeting Amazon.�� With only a few weeks remaining before the release of its much-anticipated Kindle Fire, Amazon has been targeted by a patent troll.�� On October 7, 2011, Smartphone Technologies against Amazon in a Texas court claiming the Kindle Fire infringes several of its patents.�� While patent infringement suits are common occurrences in the high tech field, what makes this particular case troubling is that an infamous patent troll is lurking behind the scenes.

, a firm that actively buys and licenses patents through its subsidiaries, owns Smartphone Technologies.�� Acacia’s reputation as a patent troll appears to be well deserved as Smartphone Technologies has pursued patent infringement cases against both Apple and Research in Motion in recent years.

The problem with is that these companies acquire vast arsenals of patents, which are used to make money by licensing to other companies or pursuing patent infringement claims.�� What distinguishes patent trolls from other companies is that patent trolls often have no intent to develop and commercialize the technology covered by the patent.�� To make matters worse, patent trolls frequently rely on patents that are frivolous and lacking merit.�� Patent trolling is a booming business and companies have adopted elaborate strategies to take advantage.�� For example, some corporations disguise their trolling practices in order to avoid public scrutiny.�� This is accomplished by confining their trolling practices to non-performing entities while at the same time having other performing entities.

In the action against Amazon, Smartphone Technologies makes claims to several technologies that appear to be commonly used in smartphones and tablets. For example, one of the patents () supposedly infringed by Amazon’s Kindle Fire makes the following rather broad claim to what appears to be a touch screen:

“A method for software control, comprising: displaying a graphic representing a set of one or more computer functions on a portion of a touch-sensitive screen, wherein the touch-sensitive screen is coupled to at least one processor to detect and interpret contact with the screen; …”

Another apparent infringement relates to a patent, originally owned by Palm, for displaying multiple calendars on a personal digital assistant. The activities of patent trolls can have serious economic consequences on companies such as Research In Motion, which had to pay out a in a case against another patent troll, NTP.

In light of the damage they cause one is left to wonder if anything can be done to stop patent trolls.�� While government intervention would seem like the most plausible solution this is unlikely to occur any time soon given the slow nature of legislative reform.�� Companies confronted by patent trolls are often left with the option of settling out of court and paying a licensing fee or slugging it out in court.�� Apple has taken a firm stance against Acacia and is prepared for a costly court battle.�� It remains to be seen whether Amazon will yield or take up arms against the patent troll that is Acacia.

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On October 14th, 2010, the Federal Court that Amazon.com should be permitted to patent its one-click order process on its Web sales systemⁱ, following a nearly 12-year battle for a Canadian patentⁱⁱ and the Commissioner of Patents’ denial to grant the patent due to the method’s “obviousness” (an important test for granting applications for patents in patent law).

The one-click method “allows users to pay with one click by using information previously stored in the system” through the system’s server. Justice Michael Phelan of the Federal Court found that the method is novel and the online ordering system which facilitates the one click method adds to the state of knowledge in the area of online ordering systemsⁱⁱⁱ.

The central issue in this case revolved around the definition of “invention” in Section 2 of the Canadian Patent Act, namely “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”, and whether the one-click method fit in this definition. In our era of ever-changing information technology, it has become increasingly difficult to apply patent law concepts that were first developed in the 19th century industrial world, an epoch focused more on machines made of iron or steel^iv. Justice Phelan stated in his ruling that there needs to be a ‘practical application’ for the method or process in question, and thus abstract ideas or theorems are not patentable subject-matter^v. Where a claimed invention is described simply as a plan, scheme or disembodied idea that has not yet been put into action, it is not to be considered patentable subject matter. In the case of the one-click ordering system, the court found that the practicality of Amazon.com’s ordering system being able to recall the personal and payment information of a customer for the purpose of internet shopping on its site made it a business method that is worthy of patent protection^vi.

Many leading legal experts in Canada have hailed the decision as one that has clarified “an important element of Canadian intellectual property law”^vii. Intellectual property lawyer Richard Owens at Stikeman Elliott LLP has deemed the case as “one of the most important in Canadian patent law since the Supreme Court of Canada battles over Harvard University’s genetically modified mouse and Monsanto’s biotech crops”^viii. In addition, the case has paved the way for businesses in other distinctive industries to apply for patent protection, allowing for “computer-implemented and business-method inventions” to now be “assessed against the same standards as more conventional industrial inventions”, as denoted by Anne Kinsman, partner at Borden Ladner Gervais LLP in Ottawa^ix. This can lead to the growth of Canadian businesses as they are encouraged to innovate, knowing that their inventions can be protected. However, with this case now bringing Canada on par with the United States when it comes to business methods being patentable (see: Bilski v. Kappos^x), there is, according to Michael Geist, intellectual property professor at the University of Ottawa, a risk of increase in litigation for “frivolous patents” on business methods, as seen in the last ten years in the United States^xi.

On August 1st, 2011, the Commissioner of Patents issued a Practice Notice further to the Federal Court’s October 2010 decision, revising its “patent examination guidelines to patent examiners for determining whether a patent claim is directed to patentable subject matter”^xii. Despite the Amazon.com decision, the Patent Office maintained its position “that only the claim elements that contribute to solve a technical problem are to be considered for patentability, while all other claim elements are to be ignored”^xiii. Specifically, patentable subject matter or practical utility cannot be deduced if the identified claim elements do not contribute to solve a technical problem, one involving the application of scientific knowledge for practical purposes^xiv. Lawyers Michael Ladanyi and Rob Graham at Heenan Blaikie presented the following example based on the Office’s guideline: “a computer does not become patentable because it has been programmed to do something new, but may be patentable where a computer program causes the computer to become a new solution to a technical problem”^xv. By instructing examiners to selectively ignore claim elements and only focus on those that solve a technical problem, it is clear that “the Commissioner has provided patent examiners with the continued power to reject pending business method claims through a subjectively narrow view of what is technical”^xvi. A ruling took place on June 21st, 2011 on the appeal of Amazon.com and it is expected that the issuance of the ruling will determine the scope of the Commissioner’s authority to enforce a technological requirement for patentability.

It is important to note that on April 8th, 2011, a motion was set forth by the Canadian Life and Health Insurance Association Inc. and the Canadian Bankers Association seeking a leave to intervene in the appeal by the Attorney General and the Commissioner of Patents from Justice Phelan’s decision^xvii. The two organizations summarized their concerns as three-fold: 1) that the Amazon.com case would become the test case in Canada on the issue of the patentability of business methods; 2) that the decision of the case would extend beyond the interests of Amazon.com and affect the fate of other applications that concern “business method patents”; and 3) that the “net result of the decision […] could be to allow the patenting of ideas or mental steps [in the financial services industry], with the result that their members would be directly impacted [by the decision]”^xviii. The proposed Interveners argued that they had “a relevant and useful perspective on the potential effect that the Court’s decision could have on industries such as theirs”^xix. Amazon.com opposed the motion, claiming that the proposed Interveners’ interest was merely speculative and jurisprudential and insufficient to warrant intervention^xx. The court found that the proposed Interveners did in fact have a direct interest in the outcome of the appeal and that “their contribution to 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 [business methods and processes].^xxi” This motion is yet another example of how revolutionary the Amazon.com case has become in patent law and the potential number of patent applications that may come about in the future with the recognition of “business method” as an invention as per the Section 2 definition of the Patent Act.

i Amazon.com Inc. v. Canada (Attorney General), 2010 FC 1011 [Amazon.com].

ii Gray, Jeff, “Amazon.com wins patent fight” Globe and Mail (14 October 2010), online: Globe and Mail <> [Gray].

iii Ibid.

iv Gray, supra note ii.

v Ibid.

vi Amazon.com, supra note i at para 2-5.

vii Balla, supra note iii.

viii Gray, supra note ii.

ix Balla, supra note iii.

x Bilski v. Kappos, 130 S. Ct. 3218, 561 US.

xi Gray, supra note ii.

xii Landanyi, Michael, Graham, Rob, “CIPO Examination Practice Update Subsequent to Amazon.com” Heenan Blaikie LLP (18 August 2011), online: Heenan Blaikie LLP <>.

xiii Ibid.

xiv Ibid.

xv Ibid.

xvi Ibid.

xvii Canada (Attorney General) v. Amazon.com, Inc., 2011 FCA 127 at para 1.

xviii Ibid., at para 7.

xix Ibid., at para 8.

xx Ibid., at para 9.

xxi Ibid., at para 10.

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The two main issues that the Board looked at were whether the claims were obvious under section 28.3 of the��, 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����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����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 the��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����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��, European Patent Office decisions, and the��. 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����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.��, 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"

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