Monday, June 27, 2022

New Test for Patentable Subject Matter

Benjamin Moore & Co v Canada (Attorney General) 2022 FC 923 Gagné ACJ

2,695,130 / 2,695,146 (applications)

In a much anticipated decision, Gagné ACJ has endorsed a sound framework for assessing patentable subject matter pursuant to s 27(8). The appellant, Benjamin Moore, appealed decisions by the Commissioner refusing to grant the 130 and 146 Applications, on the basis that “the essential elements of each invention constituted a mere abstract theorem, falling under the statutory exception provided at section 27(8) of the Patent Act” [1]. The appeals were consolidated, and IPIC was granted leave to intervene.

Both applications were for computer-implemented inventions, relating to a method for selection of harmonious colour combinations [7]. The details of the invention and the claim don’t really matter, as the appeal turned on the ‘problem-solution’ approach used by the Commissioner to assess patentability, and not on its application to the 130 and 146 applications.

Indeed, the appeal didn’t even turn on the details of the ‘problem-solution’ approach to patentable subject matter, as everyone—including the Respondent Attorney General—agreed that it was wrong [23],[25]. As Gagné ACJ noted, in Choueifaty 2020 FC 837 (discussed here), Zinn J has held that the problem-solution approach was not correct, despite the “lip service” it paid to the jurisprudence [11],[31]. CIPO issued an updated Practice Notice after Choueifaty, which nonetheless continued to apply the problem-solution approach [12]. Thus all the parties agreed that the Commissioner erred in applying the problem-solution approach to the applications at issue in this case [17]–[21], [30].

The basic substantive problem with CIPO’s approach is that it effectively identified the inventive concept—under the guise of their interpretation of the “essential elements” or the “actual invention”—and then asked whether the inventive concept was abstract and hence prohibited under s 27(8). The problem with that approach is that the inventive concept is always abstract—it reflects the new information provided by the patent: for more discussion see here. That is why, as the SCC pointed out in Shell Oil [1982] 2 SCR 536, 554:

A disembodied idea is not per se patentable. But it will be patentable if it has a method of practical application.

Given that all parties agree that the Commissioner had applied the wrong approach, the only question was what to do about it. By the time of trial, the parties also agreed that the Court should not make its own determination, but should remit the matter to CIPO with instructions as to how to approach the issue [38]–[40]. So, the only real issue was what instructions the Court should provide to CIPO in remitting the applications back to it [41].

Gagné ACJ endorsed the framework proposed by IPIC [43]:

a) Purposively construe the claim;

b) Ask whether the construed claim as a whole consists of only a mere scientific principle or abstract theorem, or whether it comprises a practical application that employs a scientific principle or abstract theorem; and

c) If the construed claim comprises a practical application, assess the construed claim for the remaining patentability criteria: statutory categories and judicial exclusions, as well as novelty, obviousness, and utility.

I see this as a sensible framework. It won’t answer all the difficult questions, but it does provide a sound framework for doing so.*

An initial question is as to the scope of application of this framework. Gagné ACJ described the framework proposed by IPIC as being for “the assessment of the patentability of computer-implemented inventions” [43]. However, there is no obvious principled reason for restricting it to computer-implemented inventions, nor did Gagné ACJ suggest there is. She stated that the framework is consistent with Shell Oil [52], which, as she noted, “established that practical applications of scientific principles and abstract theorems, in that case a new use for existing chemical compounds, can constitute patentable inventions” [34]. Further, the appeal was taken because the Commissioner had rejected the applications on the basis that they were for “a mere abstract theorem, falling under the statutory exception provided at section 27(8) of the Patent Act” [1]. Consequently, I take this framework to be applicable to s 27(8) generally, and not just computer-implemented inventions; the reference to computer-implemented inventions is simply because that is the context where s 27(8) rejections have been most controversial recently.

Turning to the framework itself, step (a)—purposively construe the claims—is relatively anodyne; after all, a purposive construction of the claims is the first step in any validity analysis. But it does set the stage by emphasizing that the focus is on the claim, not the inventive concept.

Step (b) is the test for subject matter patentability which directly reflects both s 27(8) and Shell Oil. A “disembodied idea”— or a “scientific principle” or “abstract theorem”—is not patentable as such, but a claim to a practical application of an idea, principle, or theorem, is good subject matter. And s 27(8) provides that “No patent shall be granted for any mere scientific principle or abstract theorem.” The words “mere” and “abstract” are not superfluous. The word “mere” is not used as meaning a “trifle”—”Oh, that’s merely F=ma”—but rather in the sense of ‘pure’, or ‘nothing more than’ (apparently from Latin for “undiluted”). Similarly, there is no prohibition on patenting a theorem; the prohibition is against patenting an abstract theorem.

So, a claim to “F=ma” is not permitted; but if the claim is to a practical application, such as a new method of aiming a cannon, the fact that the inventive concept is a scientific principle is no objection. In Shell Oil, the inventive concept was the discovery that a known compound was useful as a herbicide; the claim was not to that discovery, but to the compound mixed with an adjuvant in a manner suitable for application to plants. That claim was valid, even though there was no ingenuity in adding the adjuvant once the scientific discovery had been made. The question is whether what was claimed is a practical application, not whether the inventive concept is abstract.

Step (b) reflects Shell Oil by emphasizing that the question is whether “the claim as a whole” is to a scientific principle or abstract theory; not whether the inventive concept is a scientific principle or abstract theory. The Court’s endorsement of this approach means that the Commissioner is not permitted to reject a claim simply because the inventive concept is a theorem, or a principle, or an idea; the claim can only be refused on the basis of s 27(8) if the claim as a whole is to nothing more than a theorem, principle, or idea. For further discussion, see my articles on 27(8), The Rule Against Abstract Claims, part I on History and Principles, (2011) 26 CIPR 205, and Part II on A Critical Perspective on US Jurisprudence, (2011) 27 CIPR 3.

Step (c) is mostly straightforward; after assessing the claim for patentability under s 27(8), assess it for patentability under the remaining requirements. There is one point to note. S 27(8) is not the only subject-matter exclusion. Higher life forms are not patentable under s 2, according to Harvard Mouse 2002 SCC 76. The claim at issue in Harvard Mouse was to an oncogenic mouse that was new, useful, and non-obvious [9] and would clearly pass step (b), as being a practical application of scientific knowledge. The Supreme Court, in a divided decision, nonetheless held the claim to be unpatentable under s 2. The reference to “statutory categories” in step (c), as being one of the remaining patentability criteria is evidently a nod to Harvard Mouse and the possibility of s 2 exclusions. Another example of a subject-matter exclusion that does not turn on s 27(8) is the judge-made prohibition on patenting methods of medical treatment (which stems ultimately from the dictum “I do not think so” in Tennessee Eastman [1974] SCR 111). The phrase “judicial exclusions” in step (c) evidently refers to this type of exclusion.

In my article The Structure of the Law of Patentable Subject Matter, (2011) 23 IPJ 169, I called this kind of restriction on patentability, whether based on s 2 or a judicial exception, a “field-specific exclusion” because it applies only to certain types of subject matter. This is in contrast with the rule against abstract claims, which, like novelty, obviousness and utility, applies to any kind of subject matter. I argued that to the extent that there is a good reason for excluding some forms of computer-implemented inventions, business methods, or any other controversial kinds of subject matter, this should be done by way of a field-specific exemption, not by the misuse of s 27(8).

This is not to say that CIPO, or the courts, should seek further field-specific exemptions. On the contrary, any such field-specific exemption should be implemented by the legislature. Such exemptions, as I explain in my article, are based on policy considerations. Harvard Mouse, with due respect for the majority, was an exercise in judicial policy-making with only a tenuous connection to the text of the act. (The textual hook is the view that a mouse is not a “composition of matter”.) While Harvard Mouse was largely based on moral or ethical considerations, most patent policy is based on encouraging innovation. There is little doubt that patents are more effective in some areas than in others, and it is certainly possible that patents actually impede innovation in certain fields. The problem is that it is very difficult to decide whether a particular field falls into one category or the other. There is a general consensus that patents are good for innovation in the pharmaceutical and chemical industries, but not much consensus beyond that. As one of the leading economists on this topic said in a review article on the topic of whether permitting patentability of business methods would increase or decrease business innovation, “[t]he only conclusion that is certain is that allowing business method patents will cause an increase in the patenting of business methods: Hall, “Business and Financial Method Patents, Innovation, and Policy” (2009) 56 Scot J Pol Econ 443, 459–60.

Further, even if we decide that eg business methods, should not be patentable, drawing a line between what is patentable and what is not, can be very difficult. The judicial exclusion of methods of medical treatment is a prominent illustration of how difficult this kind of line drawing is: see here and here. As another example, the Harvard Mouse prohibition on patenting higher life-forms is largely ineffective because cells of higher life forms are patentable, reflecting the difficulty of line drawing between higher and lower life forms. The common law method would be to develop such an exception one case at a time. Given the difficulty of the problem, that would create years and even decades of uncertainty, especially if the jurisprudence develops from appeals from CIPO rejections, as applicants are much less likely to spend money litigating an application for an invention that may turn out to be worthless.

The US has a much more extensive jurisprudence on patentable subject-matter, and despite numerous SCOTUS decisions, the area is a complete train-wreck, mixing exemptions that are perhaps justifiable (business methods) with those that are completely unjustifiable (diagnostic methods), in an extraordinarily confusing doctrinal framework. That is not a road we should follow. 

*I am a member of the IPIC Patent Committee which provided input to IPIC on the proposed approach. My comments in this post reflect my own views. 

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