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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