bilski Archives - IPOsgoode /osgoode/iposgoode/tag/bilski/ An Authoritive Leader in IP Tue, 15 Dec 2009 10:09:48 +0000 en-CA hourly 1 https://wordpress.org/?v=6.9.10 Bilski and Software Patents /osgoode/iposgoode/2009/12/15/bilski-and-software-patents/ Tue, 15 Dec 2009 10:09:48 +0000 http://www.iposgoode.ca/?p=6825 Alex Gloor is a JD Candidate at Osgoode Hall Law School. The debate over the patentability of computer software has been well-documented, and there seems to be no end in sight. Supporters of software patents defend the right by using many of the historical rationales for patents, such as disclosure of the invention, stimulation of […]

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Alex Gloor is a JD Candidate at Osgoode Hall Law School.

The over the patentability of computer software has been well-documented, and there seems to be no end in sight. Supporters of software patents defend the right by using many of the historical rationales for patents, such as disclosure of the invention, stimulation of innovation and ones right to protection of their intellectual property. Also, it is contended that software patents provide a means for small businesses to compete with industry giants. Conversely, it is argued that patents are not an appropriate or necessary vehicle for protection of software because copyright protects the creative aspect of the software, because examination is too slow in such an evolving field and because software patents impede open-source development as well as the development of small and medium businesses without significant patent portfolios.

Sparked by the upcoming Bilski decision, two recent posts on have lent additional views. Ciarán O'Riordan, the executive director of the activist group End Software Patents, software is different from other patentable subject matters. He claims this by saying that it is unreasonable to force many developers, such as those in IT departments who are required to fix problems in a timely manner, to work within the bounds of the patent system. O'Riordan then argues that software is a unique product because it is very difficult to work around a software patent. He gives the example that there are many ways to cure rubber, but a patent on a common document format may equate to an insurmountable barrier for subsequent entry. Finally, O'Riordan revisited the open-source argument by saying that patents block collaboration and stifle competition and mass production of useful software. He noted the success of some user community projects and thinks that denying software patents will facilitate development of these projects.

In response to O'Riordan, by Martin Goetz gives what he believes to be "irrefutable" examples and analogies to say why software patents fit within current US law. He is careful to distinguish between software "ideas" and "products". Goetz states that software should be seen as a component of a machine, transforming a "general purpose computer into a special purpose computer (or machine)".

While O'Riordan explicitly wrote his article with the Bilski arguments in mind, the relevance of this decision regarding business methods was not noted in either post. In the , the majority specifically noted that software patents could not be excluded, without further mention of the subject. This was criticized in Judge Mayer's dissent, saying that the ruling should address such a pressing issue. While Mayer is correct in his evaluation that the patent system has "run amook" in this area, Bilski is likely not the appropriate vehicle to address software patents. The Bilski facts do not centre around software patents, and as such any decision should not directly address this area. Undoubtedly, the decision of the Supreme Court on whether to accept the machine or transformation test or some variation will be applicable in specific software cases, but any encompassing rule should be a result of a challenge to a specific software patent.

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Bilski Reaches the Supreme Court: A Summary of the Arguments /osgoode/iposgoode/2009/11/17/bilski-reaches-the-supreme-court-a-summary-of-the-arguments/ Tue, 17 Nov 2009 15:19:13 +0000 http://www.iposgoode.ca/?p=6507 Alex Gloor is a JD Student at Osgoode Hall Law School The next step in the well documented Bilski case took place on Nov. 9 when the United States Supreme Court heard oral arguments from both parties. As a quick reminder, the issue revolves around the patenting of business methods; in this case, the subject […]

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Alex Gloor is a JD Student at Osgoode Hall Law School

The next step in the well documented Bilski case took place on Nov. 9 when the United States Supreme Court heard from both parties. As a quick reminder, the issue revolves around the patenting of business methods; in this case, the subject matter concerned  a method of hedging risks in commodities trading. In its decision, the U.S. Court of Appeals for the Federal Circuit reverted to the "machine or transformation" test, narrowing the scope of patentable subject matter and throwing the validity of thousands of patents granted under the old State Street rule into question. This case has seen extensive attention in the blogs already; click for a more extensive look at its history and for its potential consequences in Canada.

Acting as Counsel for Bilski, Mr. Michael Jakes began in his opening statement by arguing that the machine or transformation test has no statutory basis nor common law precedent backing it. Jakes argues that should be interpreted broadly, with a presumption of patentability outside of the recognized exceptions that are covered in the decision. When Justice Scalia suggests that s. 101 and its "new and useful art" provision was always thought to deal with machines or inventions, Jakes argued that although the majority of historical patents concerned machines or manufacturing, this is simply a consequence of history and not because method patents were precluded. He followed by stating that, as a matter of policy, these methods should be patentable as they encourage disclosure of ideas and stimulate useful inventions.

The justices had multiple problems with Jakes' proposed interpretation of patentable subject matter. They proposed several hypothetical situations, inquiring into the bounds of patentability. Justice Breyer was particularly memorable in inquiring whether his novel method of teaching antitrust law that (amazingly) keeps 80% of students awake would be patentable, assuming it could be reduced to a series of steps. Jakes said that this may potentially be patentable. He advocated a return to Diehr, saying that standalone abstract ideas are not patentable, with the distinction between abstract ideas and patentable methods being the ability to break down the method into concrete steps requiring people to do actual things.

This led to a long discussion of how the Bilski patent could be reduced to physical steps. Jakes seemed unconvincing in his justification, claiming that a bunch of ordinary actions such as initiating a series of transactions via a phone call was sufficient to satisfy the physical step requirement. This caused a line of questions asking why, if these methods with incidental physical steps could be patented, that all sorts of methods of the sort were not patented hundreds of years ago. Justice Scalia gave an example of a horse whisperer who had his own method of training horses. Jakes replies that this could have been patented, but because it was an industrial based economy and because there would be enforcement problems, nobody bothered with these patents until recently.

As counsel for the respondant, Mr. Malcolm Stewart began by picking up on what he saw as a weak point of the Bilski argument by asserting that patents must be in the realm of the physical. Stewart alleges that Bilski's patent is ineligible for two reasons: first, because the method of commodities trading fails the machine or transformation test and second, because it is an abstract idea. While Stewart seemed to feel fairly certain that the court would find ineligibility based on the abstract idea proposal, he clearly stated that it would be more desirable to win on the machine or transformation test.

In doing so, Stewart argued that the test is not overly rigid. He said that all that needs to be done is to satisfy the test is to establish "some link to a machine or a transformation of matter", addressing a fear of Justice Sotomayer. Further, Stewart acknowledges that it is possible that some new technology will be invented in the future that is deserving of patentability but lies outside the bounds of the machine or transformation test. Still, Stewart makes it clear that his goal is simply establishing a return to the machine or transformation test, and that the "hard questions" of determining what constitutes a machine-implemented process or what constitutes sufficient transformation for later. This did not sit well with the court. In particular, Chief Justice Roberts took issue with an assertion Stewart made in his footnotes that although the Bilski patent is not eligible because it did not involve a machine, if a computer were involved to identify the parties then it may satisfy the test. Roberts equated this tangential proposition with a hypothetical situation where the patentability of a process hinged on the distinction of using a calculator or mental arithmetic to make a simple division. Stewart wisely backtracked, acknowledging that such fleeting use of a machine would be insufficient. In turn he said that the line of patentability would be closer in situations where a machine is programmed with new software related to the process in question.

The future looks grim for any hopes of Bilski being granted patent protection, especially in light of the Court's seeming reluctance to accept Mr. Jakes' proposal of the physical steps involved in the Bilski method. However, the adoption of the machine or transformation test seems less of a certainty. The court was not enthralled with Mr. Stewart's proposal to answer the "hard question" about the boundaries of what satisfies the test at a later date. And, as is pointed out in , it is likely that by accepting to hear this case the Supreme Court was looking to modify or set aside the test as set out in the Court of Appeal decision. Thus, although the future for Bilski looks bleak, the broader question regarding the patentability of business methods is still far from decided.

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IP Osgoode Speaks: Justice Marshall Rothstein on Business Method Patents /osgoode/iposgoode/2009/11/02/ip-osgoode-speaks-justice-marshall-rothstein-on-business-method-patents/ Tue, 03 Nov 2009 03:15:05 +0000 http://www.iposgoode.ca/?p=6377 Nirav Bhatt is an LLM Candidate at Osgoode Hall Law School. Last Friday, IP Osgoode hosted a guest lecture by Justice Marshall Rothstein of the Supreme Court of Canada as part of IP Osgoode’s speaker series.  He discussed subject matter patentability, business method patents and possible approaches that a Canadian court might take in deciding […]

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Nirav Bhatt is an LLM Candidate at Osgoode Hall Law School.

Last Friday, IP Osgoode hosted a guest lecture by Justice Marshall Rothstein of the Supreme Court of Canada as part of IP Osgoode’s speaker series.  He discussed subject matter patentability, business method patents and possible approaches that a Canadian court might take in deciding a case such as In Re Bilski.

Interim Dean Jinyan Li welcomed Justice Rothstein and highlighted his profound legal career. Justice Rothstein began his lecture by calling it a tribute to Professor David Vaver. After narrating a couple of witty anecdotes, Justice Rothstein noted that the case, which is to be heard by the US Supreme Court on November 9, would be a landmark decision and therefore made the topic of his guest lecture very timely. He briefly explained the facts of In Re Bilski, and outlined what is acceptable as patentable subject matter. He said, it is undoubtedly, a business method that involves some form of mathematical formula or algorithm.  While the algorithm itself may be an abstract idea, if it has a practical application, the result may be patentable.

Justice Rothstein then discussed the definition of “invention” in Canada, highlighting two types of exclusions. First, he outlined statutory exclusions, such as for abstract theorems, scientific principles and the obvious. Second, the common law exclusions, such as for inventions that are non-economic or unrelated to trade, industry or commerce, inventions relating to medical and surgical methods, and natural phenomena.

Justice Rothstein also referred to the case, and stated his opinion that he agreed with Justice Binnie’s dissent and the following six interpretive principles: 1) Context of the act is expansive, 2) Check is in definition and statutory exclusions, 3) Patent office has no discretion to deny patent if it meets criteria, 4) Patent cannot be denied because of social, economic or cultural impacts, 5) Patentability and regulation should not be conflated, and 6) the Patent Act does not distinguish between lower and higher life forms.

Noting that business methods have historically not been patentable in Canada, Justice Rothstein discussed Schlumberger Canada Ltd. v. Commissioner of Patents, a case in which the Federal Court of Appeal dismissed a patent application for a computer system for the analysis of soil characteristics data for the purpose of oil and gas exploration on the basis that mathematical formula are excluded. He mentioned, in a more recent case, that filed an appeal to the Federal Court in respect of the decision of the Commissioner of Patents refusing to grant a patent. The Canada Patent Appeal Board, , stating that: “even if these concepts or rules are novel, ingenious and useful, they are still not patentable because they are business methods”.

Justice Rothstein then arrived at the US case and commented that under that case, a claimed invention was eligible for protection by a patent in the US if it involved some practical application, specifically if it produces “a useful, concrete and tangible result”. With the 2008 In Re Bilski decision however, the useful-concrete-tangible test was jettisoned for the “machine or transformation” test. Since State Street, thousands of patent applications were filed for business methods and Bilski was an attempt to rein in business method patents.

While Justice Rothstein conveyed that his words should be considered with caution, he found the majority’s decision in Bilski and the machine or transformation test to be challenging.  

Justice Rothstein stated that he favoured Judge Rader’s dissenting opinion and compared it with the six principles set out by Justice Binnie in the Harvard Mouse case. Justice Rothstein also questioned the justification of the court mandated machine or transformation test, stating that the test is not contemporary. Further, he noted that Judge Mayer’s reasons appeared to be grounded in more policy based reasoning and less anchored in statute, and stated that stand alone policy reasons are for the Canadian Parliament (and the US Congress) to address.

Additionally, Justice Rothstein stated that it is necessary to look at entire process claims in the context of their practical application. A patent claim involving hedging unpredictable volume risks in selling or buying consumable commodities might be a practical application. However, if Bilski’s patent is held valid, there could be problems. For example, other industries may wish to pursue hedging volume risks and if Bilski refuses to licence, then what should be done?

Justice Rothstein also pointed out Lord Hoffman’s view (of the House of Lords), which takes a different approach to these issues and focuses on two over-riding principles for patentability. They are: 1) Practical application of the patented invention and; 2) that one cannot patent a manner of human behaviour. Business methods are unpatentable under the human behaviour principle, according to Lord Hoffman’s argument.

In the Q&A session that followed his talk, Justice Rothstein responded to an array of questions.  With respect to patents being denied because of social, economic or cultural impacts, Justice Rothstein emphasized that the statutory and existing common law limits to patentability are the pertinent factors that should be applied in the judgment analysis. One audience member asked about his opinion on the policy based reasoning for the length of the term of the patent granted, and he answered that on a policy basis, it is possible to conceive that in theory, the length of patent protection may be different for different patents and patentees.  He emphasized that investment is a very important criteria to consider, as a huge amount of money may be spent on the research and development of a patented product. So in some cases 20 years might not be enough. In other cases where the investment was minimal it might be too much. But it is simply not practical to consider different lengths for different patents or patentees. Policy makers have decided on 20 years and that is a practical and apparently generally acceptable term.

Powerpoint slides for Justice Rothstein's guest lecture may be found on IP Osgoode’s .

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Academic Perspectives on Issues Raised in the Bilski Case /osgoode/iposgoode/2009/06/15/academic-perspectives-on-issues-raised-in-the-bilski-case/ Mon, 15 Jun 2009 11:09:25 +0000 http://www.iposgoode.ca/?p=4837 On June 1st the Supreme Court of the United States granted a petition to hear the case of Bilski v. Doll. At the Court of Appeals for the Federal Circuit, the Bilski patent for a method of hedging risk in commodities trading was rejected, affirming the decision of the USPTO. The majority of the court moved away from the […]

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On June 1st the Supreme Court of the United States  to hear the case of Bilski v. Doll. At the Court of Appeals for the Federal Circuit, the Bilski patent for a method of hedging risk in commodities trading , affirming the decision of the USPTO. The majority of the court moved away from the concrete-and-tangible-results test and towards a machine-or-transformation test in considering whether claims for an invention fall within patentable subject matter. Since at this point the issues related to patentable subject matter will likely be primarily addressed with policy considerations, it might be interesting to focus on the beliefs raised by academics in this area of law. In particular, two amicus briefs filed for the Federal Circuit decision last year represented the opposing views of two groups of U.S. professors and will be looked at.

In a  supporting the USPTO decision, it was argued that recognizing the Bilski patent as eligible would be potentially unconstitutional for one or more of the reasons of not promoting progress, not falling within the useful arts (meaning not being technological in nature), and not being the discovery of an inventor. They suggest the application of the Diehr-Flook standard (based on two past Supreme Court decisions), which protects the public domain of science, nature, and ideas whose uses should not be encroached. According to this standard, an invention needs some other inventive concept beyond the mere application of public domain information in order to prevent the patent system from "either extending to scientific principles or creating odious monopolies"; simply restricting such an invention to a particular use is not enough. Additionally, according to the Diehr-Flook standard, claims must either transform matter significantly or use a machine, article, or composition for significant post-solution activity, and the concrete-and-tangible-results test should be avoided as it is potentially unconstitutional. A major underlying belief in support of categorical exclusions of certain public domain subject matter, which may exist beforehand despite being undiscovered, is a "social obligation to preserve free from private ownership and disseminate pre-existing basic information", which the professors argue also fulfills the Constitutional goal of promoting progress by not limiting use by others.

´¡²Դdzٳó±ð°ùÌý disagreed with the USPTO decision, arguing for an expansive interpretation of the patentable subject matter definitions so as to cover "anything under the sun made by human endeavor". They believe that there should not be any arbitrary limits on the scope of patent protection since courts in the past have tried to differentiate between software that involved physical transformations and those that did not, but this distinction became unworkable and resulted in absurd situations where a patent application covering the same invention could be rejected or accepted based on whether it was drafted with "magic words". Furthermore, it was argued that the exclusion of inventions based on discoveries of natural phenomena and mental steps is contrary to the patent system's goal of promoting progress. For example, pharmaceuticals and biotechnology often do not have a novel and non-obvious physical aspect as their inventive concept; rather the discovery of the new use is what is actually important. These types of arbitrary distinctions, it was said, will only reduce incentives to produce valuable inventions, so it is better to have a broad conception of patentable subject matter instead of a strict one in order for the patent system to be flexible enough to evolve with new technology. To borrow terminology popularized in another context, instead of using the axe of subject matter restrictions, the system would be better served with a scalpel to bar bad patents on other grounds, such as not being novel, being obvious, not having practical utility, or not being drafted with definite claims.

Though the professors in the second amicus brief present good arguments, my own views are more naturally in line with the first brief. My inclination is that the notion of private property is much more ingrained into the culture south of the border, perhaps stemming from the fact that property rights are protected in the U.S. Constitution but not in our Charter. I simply prefer a patent system that does not allow for protecting everything under the sun, as I believe in the idea that certain subject matter should remain as part of a commons, and determining "bad" patents (at least in terms of policy) on an individual basis could lead to even more arbitrary distinctions. Regarding arguments about the unfeasibility of delineating physical transformations that are not peripheral, inconsistent decisions could be lessened with more precise manuals for examiners. Patent agents will always use language to their advantage when trying to push their clients' applications through, as that is simply a part of the advocacy process. Making distinctions on the basis of the nature of the physical aspect of an invention is analogous to the determination in contract law of whether an act of exertion or detriment counts as consideration for an enforceable agreement or whether it is simply a mere condition of benefiting from a gratuitous promise; such distinctions are workable. On another note, I am admittedly not one with sufficient understanding of the various economic ramifications of deciding to go with the overall approach of one brief over the other.

There were two other amici curiae who are professors as well, and each submitted a separate brief on their own behalf. For links to all of the briefs for the Federal Circuit decision, see the Patently-O blog .

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Amazon’s One-Click Patent Application Gets Bilski’d /osgoode/iposgoode/2009/06/01/amazon-one-click-patent-application/ Mon, 01 Jun 2009 11:07:04 +0000 http://www.iposgoode.ca/?p=4711 In a recently released decision by the Canada Patent Appeal Board and Commissioner of Patents, an application by Amazon.com for its one-click ordering system was rejected.  The application contained 75 claims and was a response to the Examiner's report from 2002, where claims 44 to 50 were directed to a physical object and the rest were […]

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In a recently released decision by the Canada Patent Appeal Board and Commissioner of Patents, an application by Amazon.com for its one-click ordering system was rejected.  The application contained 75 claims and was a response to the Examiner's report from 2002, where claims 44 to 50 were directed to a physical object and the rest were directed to methods. It essentially described a method and system for allowing shoppers to make online purchases with only one click of a mouse, without having to go through the common checkout procedures. With the use of a cookie, Amazon saved address and other personal information so that users would not have to continuously log into an account to complete a purchase. The application also provided for a means of combining multiple orders into one, being given notice of a cancellation option, and of logging in to change previously stored personal information.

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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In re Bilski North of the Border /osgoode/iposgoode/2009/03/16/in-re-bilski-north-of-the-border/ Mon, 16 Mar 2009 11:52:36 +0000 http://www.iposgoode.ca/?p=3661 On March 13, IP Osgoode held a panel discussion entitled Business Method Patents: Bilski and Beyond. While the tagline of the event indicated it was to ‘Explore the effect in Canada of recent US business method patent jurisprudence,’ attendees got treated to a lot more. Speaking from a wide array of perspectives, the panelists provided […]

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On March 13, IP Osgoode a panel discussion entitled Business Method Patents: Bilski and Beyond. While the tagline of the event indicated it was to ‘Explore the effect in Canada of recent US business method patent jurisprudence,’ attendees got treated to a lot more. Speaking from a wide array of perspectives, the panelists provided insightful, yet accessible substance, all the while facilitating an encouraging environment for intellectual cross-pollination.

For the unacquainted, the US Court of Appeals for the Federal Circuit released their decision in In re Bilski, (warning: PDF link) in October 2008. As pointed out by panelist Bob Nakano, the case was heard en banc by the court, and no less than 39 amicus briefs were filed. Clearly, it was a highly anticipated case with far reaching implications on many stakeholders. In the end, the decision changes the decade-old test in State Street Bank v. Signature Financial Group, for the patent-eligibility of business methods. The test of a ‘useful, concrete, and tangible result’ is out, and the older ‘machine or transformation’ test is back in. Greater details about the case can be found and here.

I summarize the main points of the panelists below:

IP Owner

Appropriately starting the discussion was a representative from the stakeholder group which serves as the driver for patent law – inventors. Krishna Pathiyal, Director of IP at Research in Motion provided two key highlights: (1) a useful analytical tool for evaluating caselaw with regards to business method patents, and (2) a view into how innovative businesses view IP risk assessment.

First, the analytical tool used by Krishna employs a spectrum consisting of purely technological innovations on the one end and purely business innovations on the other. In the space filling the two extremes are hybrid innovations. Krishna observed that where the former State Street test allowed hybrid innovations that came very close to being purely business innovations, the current Bilski formulation reins back that line towards the center of the spectrum.

Second, Krishna provided a perspective of the IP risk management issues emanating from Bilski. He noted that the recalibrated test will create investment risks in the form of monies already spent on prepared or outstanding applications because the ultimate procurement of the patent may be at risk. Also, infringement risk may be created because existing patents will now be subject to a more stringent subject matter test.

Practitioners

Two partners from McCarthy Tetrault shared their views. provided the perspective of a patent agent, while gave the view of a litigator.

After taking the audience through a more detailed look at the scope of the new test in Bilski, Bob pointed to the US Patent Office’s internal memo (date Jan. 7, 09) to patent examiners on how to apply Bilski. This memo (found ) contained 3 points: (1) a reiteration of the basic machine or transformation test, (2) a statement that the machine or transformation must impose meaningful limits on the claim’s scope, and (3) an indication that insignificant extra-solution activity which recites a specific machine or a particular transformation of a specific article will be insufficient to make unpatentable subject matter patentable.

While the first 2 points took wording specifically from Bilski, there was a question raised as to what extent the USPTO had authority to implement the third point. This is especially so for the machine prong of the test where the court decided to “leave to future cases the elaboration of the precise contours of machine implementation.” (p.24)

Andrew Reddon provided some strategies on how to litigate business method patents. First, he reminded the audience that when litigating business method patents, subject matter arguments are not the only game in town. Anticipation, obviousness, and breadth are tools in the patent law toolbox that are also available, and can result in fruitful results considering that many business methods patent applications are just attempts to claim methods which have long been used in traditional commerce.

Second, he provided an analysis of Bilski, and discussed how it might be utilized in Canadian courts. Noting that the Canadian conception of ‘art’ outlined in (MoPOP) requires both “an act or series of acts performed by some physical agent” (arguably akin to a ‘machine’) and a requirement to “produc[e] in that object some change of either character or condition” (arguably akin to a ‘transformation’), he observed that the Canadian requirement is in fact narrower than the Bilski test which just required a machine or a transformation.

Additionally, he noted that the dividing line for what can and cannot be transformed as espoused in Bilski is not a meaningful distinction. That is, the court’s distinction (at p. 25-26) between acceptable transformation of data based on physical objects versus unacceptable transformation of data based on intangibles such as legal relationships, business risks, or abstractions creates vague results. If Bilski supports your case, Andrew suggests characterizing Bilski as providing a bright line test; conversely, if Bilski harms your case, Andrew suggests arguing that the distinction in what can be ‘transformed’ is not meaningful.

Last, Andrew pointed out how the recent Supreme Court of Canada case in Apotex v. Sanofi, alluded to US and UK jurisprudence in reformulating the Canadian test for obviousness. In seeking to apply Bilski, Andrew suggested citing this case as one where Canadian courts looked to foreign jurisprudence with favor. If seeking to distinguish Bilski, Andrew suggests characterizing Apotex as only looking to foreign jurisprudence when there was a convergence in foreign viewpoints, which is not the case for the patent-eligibility of business methods.

Academic

Professor Mgbeoji provided a more theoretical and historical viewpoint of the impact of US patent jurisprudence on Canadian patent law. Using the metaphor of an uneasy dialog, Mgbeoji illustrated his point by parsing several key US and Canadian patent cases. Of note, he pointed out the similarity in language and temperament between the majority decision in Diamond v. Chakrabarty, (1980), and the minority opinion in Harvard College v. Canada (Commissioner of Patents), .

Decision-Maker

Coming from the Patent Appeal Board, Paul Fitzner put a face to a government institution that could at times seem distant. After providing an overview of the thicket of procedural steps involved in how patent claims come to be litigated in court, he briefly reviewed the leading case law in Canada surrounding this topic. Observing that there has been a lack of consistency in how Canadian courts have supported their conclusions that such litigated claims were unpatentable, Paul left the audience in anticipation of revised versions of Chapters 12 and 13 of MoPOP which are to be published on April 27, 2009. In addition, he indicated that a Commission decision relating to the patentability of business methods will be handed down around the same time.

(Update: March 16, 2009, 2:50pm - The text above has been updated to correct the erroneous indication that the pending Commissioner's decision concerned claims similar to those in Bilski.  Paul made no reference to the similarities or differences between the claims in the pending decision and the claims in Bilski.)

Reflection

From a student’s perspective, the wide array of theoretical and practical points was enlightening. Specifically, the perspectives offered by Krishna and Paul concerning the business and decision-maker viewpoints respectively were a rare treat that law students seldom see. I’m sure all audience members, no matter their background, learned a lot from this event.

Powerpoint slides for some of the panelist presentations will be made available here on IP Osgoode soon.

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