Software Patents in Canada – Changing Position of CIPO (3)

The Canadian Intellectual Property Office (CIPO) is the body responsible for granting patents in Canada, it also issues the Manual of Patent Office Practice (MOPOP) which is used as a guideline for examiners and applicants. Though the courts opinion regarding software patents does not signal in its favour, CIPO has made a number of recent decisions allowing software patents even though it used to also have a strict position against them in the past. The latest edition of MOPOP also has a chapter explaining the requirements for a software patent to succeed.

CIPO Software Patent Decisions

After the Schlumberger court decision, CIPO took a strict position against software patents until 1998 when the Patent Appeal Board decided in favour of two software patent applications. The first is Re Motorala Inc. Patent Application No 2, 085, 228 which involved a device and a method for evaluating exponentials. The claims in the application were originally worded in the format of method claims, later changed in the prosecution stage into apparatus claims. The ‘invention’ was made up of a special software that was coupled with a Read-Only Memory (ROM). CIPO held this to be a qualify invention because of the inclusion of the ROM as a specific part required to run the software:

[T]he Applicant has invented a device which is specifically adapted to carry out the method of solving the algorithm which the Applicant has developed. This device, while it does contain many means-plus-function statements, also includes at least one specific piece of computer hardware which is a real physical element. As a result, the Board believes that the claims of this application go beyond being directed to a mere scientific principle or abstract theorem. The Applicant is not seeking to exclude others from using the algorithm itself but is seeking to exclude others from using the specific device which is claimed.

This decision is a departure from Schlumberger as the question of where the inventiveness lies was never asked, if it were it would be clear that the inventiveness here was in the software and not the hardware nor the combination of both. While the existence of a hardware is necessary for the software to run, this piece of software is generic as any computer program will have to be stored in the ROM of a computer for it to operate, and in fact, the claims of the patent would be infringed if only the software was copied and then was used on any computer as the invention would consequently be worked that way (A5).

While this new approach might be favourable by applicants, it is a departure from case law and might as well be rejected by the court if a case was ever to reach the courts. CIPO held an identical decision also in favour of the applicant in the decision regarding the Re Motorola Inc. Patent Application No. 2,047,731 where the invention related to an apparatus for carrying out a convergence algorithm for use with selected convergence rates which gives improved efficiency on math computation of J-th roots. The software was coupled with a generic piece of hardware and consequently accepted by PAB as a qualifying subject matter that is not a “mere scientific principle or abstract theorem”. It is clear from these two decisions that ANY software could satisfy subject matter requirements by simply coupling it with a generic piece of hardware.

While the Motorala decisions show the general change at CIPO in favour of software patents, other decisions seem to also soften the impact of other cases, such as Progressive Games, which could have an impact on software patents through the exception of games, business methods, and professional skills.

The first example of these new decision is Application No. 2,298,467 which involved a system for facilitating the exchange of data between two computers for the purpose of trading diamonds. The application was rejected by the examiner of several grounds including the fact that this involved a professional skill and a business method, both of which are unpatentable subject matter. The PAB rejected both of these arguments saying that “Professional skill that falls outside the scope of patent protection involves a step in a claimed method which is carried out by a human and which relies on the intelligence and reasoning of the human to make a judgement.”

The PAB avoided discussing the issue on whether or not business methods were patentable at all but stating the the claims fell within the definition of a “machine” and not a business method. This way the other rejections made by the examiner on the grounds of business methods were rebutted.

This of course is a much narrower definition of professional skill than that described in Lawson and requires an actual participation of a human person in the process for it to be disqualified.

Another decision with a similar outcome is the one relating to patent Application No. 2,119,921 which involved an improvement to a computerised stock trading system for which one of the claims was for displaying and communicating orders to an order entry system of a stock exchange computer. The examiner rejected the application on a number of grounds and one of these was on subject matter on the basis that it was that it related to the automation of features taught by prior art. The PAB rebutted the rejections of the examiner and said that the examiner confused subject matter issues with obviousness when obviousness should not form the basis of a subject matter consideration.

The PAB has also recently showed its willingness to reject the court’s analysis in Progressive Games in the decision of Patent Application 2,220,378 in which the PAB had to decide on the patentability of an application involving systems and methods for group billing in cellular telephone plans. The examiner rejected the application on the grounds of subject matter on the basis that it did “not substantially modify the art of the billing system, nor [does it] create a new or improved billing system” and that it does not “amount to a contribution or addition to the cumulative wisdom of billing systems” – which is the same ground for refusing a process according to Progressive Games. 

The PAB rebutted the rejection of the examiner stating that subject matter should be examined on its own without taking into consideration issues of novelty, obviousness, and utility and that examination should only decide on whether or not the invention can fall within one of the patentable categories of section 2, namely an art, a process, a machine, a manufacture, or a composition of matter.

This is a very logical explanation of what should be done by CIPO, but CIPO does not have the legal authority to overrule a court decision, which in this instance was clearly disregarded.  It is clear that CIPO is now more willing that ever to allow a software patent to successfully pass on the grounds of subject matter, but that does not meant the court will have the same opinion as CIPO in matters in which the court previously held otherwise.