Quebec and Saskatchewan to legislate Patent Box Incentives

Quebec and Saskatchewan are the first provinces in Canada to announce fiscal incentives for companies commercializing intellectual property. On March 17, 2016, Quebec’s Minister of Finance announced a “patent box” that would lower tax rates on revenue attributable to patents for inventions developed in Quebec as part of the provincial budget coming into effect on January 1, 2017. Earlier in the month, on March 11, Saskatchewan’s Premier announced that, if re-elected, a similar patent box incentive will be implemented in this province.

Prepared By Leah Labib, Associate

C+BR Recognized as 2015 Patents Law Firm of the Year in Canada

Clancy P.C. + Brion Raffoul is pleased to announce its recognition in the Legal Awards 2015 as “Patents Law Firm of the Year – Canada” by Lawyer Monthly (a UK-based publication).  C+BR was one of six law firms recognized in Canada, and in the company of about one hundred law firms worldwide.  Each recipient was subject to an independent and confidential nomination and research process.

For further details, please visit the Legal Awards 2015 PDF press release  – http://www.lawyer-monthly.com/media/Releases/15/LMLA2015-PressRelease.pdf

A link to the entire Awards Edition – http://www.lawyer-monthly.com/magazine/LMLA15

FEDERAL COURT OF APPEAL RELEASES AMAZON.COM DECISION

The Federal Court of Appeal (FCA) largely approved Justice Phelan’s reasons in the lower court.  “I agree that no Canadian jurisprudence determines conclusively that a business method cannot be patentable subject matter.”  However, the FCA critized Justice Phelan’s “practical embodiment or practical application” test.

The FCA allowed Amazon.com’s appeal from the Commission and requires the Commissioner to re-examine the patent application on an expedited basis in accordance with its reasons.

Since its release on Friday, this decision has been criticized because the FCA appears to have abdicated its responsibility to decide the law on the case before it.  Instead, the FCA has passed that responsibility onto the Commissioner to formulate a decision without any clear guidance on the law.

Please follow the link for a copy of the decision: 2011-11 Amazon.com Federal Court of Appeal Decision

 

 

 

 

 

 

Canadian Federal Court decides that business methods are patentable subject matter in Canada

AMAZON.COM, INC. (Appellant)

and

THE ATTORNEY GENERAL OF CANADA, and
THE COMMISSIONER OF PATENTS (Respondents)

Yesterday, the Federal Court of Canada finally ruled on an appeal of a decision by the Commissioner of Patents to deny the Appellant’s patent for a “business method”, having found that it was not patentable subject matter under s. 2 of the Patent Act.

The Federal Court concluded that a “business method” can be patented in appropriate circumstances.

As long as a claim is not directed to an abstract idea or scheme, but rather has a practical application or embodiment, then it may be patentable.

Background:

Amazon.com is seeking a patent for an invention entitled, “Method And System For Placing A Purchase Order Via A Communication Network”.  The application was filed on September 11, 1998, and claimed priority from two U.S. patents.

The Federal Court stated that “[t]he claimed invention further enables internet shopping. The customer visits a website, enters address and payment information and is given an identifier stored in a ‘cookie’ in their computer. A ‘server’ (a computer system operating a commercial website) is able to recognize the ‘client’ (customer computer with the identifying cookie) and recall the purchasing information which is now stored in the vendor’s computer system. The customer can thus purchase an item with a ‘single click’ – the order is made without the need to ‘check out’ or enter any more information.”

Decisions and Reasoning:

The Federal Court held that the Commissioner of Patents’ rejection of Amazon.com’s patent application on the basis of non-patentable subject matter was not supported by Canadian law.   Rather, the Federal Court affirmed that the test to determine whether an art or “business method” is patentable is as set out by Progressive Games:

(i)            it must not be a disembodied idea but have a method of practical application;

(ii)          it must be a new and inventive method of applying skill and knowledge; and

(iii)         it must have a commercially useful result.

The Federal Court took a broad interpretation of “a method of practical application” saying that Amazon.com’s claims are patentable because the “‘physical effect’, transformation or change of character resides in the customer manipulating their computer and creating an order. It matters not that the ‘goods’ ordered are not physically changed.” This reasoning is generally in agreement with that of the U.S. Supreme Court in Bilski which held that a business method may be patentable as long as it is not an abstract idea, law of nature, or natural phenomena.

According to the Federal Court, we must not “restrict the patentability of practical applications which might, in light of today’s technology, consist of a slightly less conventional ‘change in character’ or effect [than] through a machine such as a computer”.  The Federal Court held that there is not a statutory exclusion for business methods in Canada: “[To] implement a business method exception would be a ‘radical departure’ from the current regime requiring parliamentary intervention”.

In addition, the Federal Court rejected the Commissioner’s “novel and unnecessary requirement for patentability” that what has been added to human knowledge must be technological in nature.  “There is no reference to such a test in the Canadian jurisprudence (or none was advanced in this Court). It was not within the Commissioner’s jurisdiction to introduce one.” “Technology is in such a state of flux that to attempt to define it would serve to defeat the flexibility which is so crucial to the Act.”

Please note that the decision has been appealed.

Please do not hesitate to contact the author should you have any further questions regarding this decision.