One Step Forward: Canadian Software Patents

By: Liz Gray (IP Lawyer) with research assistance by Greg Parth (Summer Student)

Close to two years ago, the Canadian Federal Court ruled in Choueifaty that the “problem-solution approach”, then applied by the Canadian Patent Office (CIPO) to determine whether claims recite patentable subject matter, was incorrect in law.  In response to that decision, CIPO adopted a new test.  This new test considers essential elements of the claims and determines the “actual invention”.  For more information, see our earlier discussions of this decision and its outcome for the Choueifaty claims.

Now that the “actual invention” test has been in use for a little while, we reviewed recent outcomes at the Canadian Patent Appeal Board (“PAB”, the administrative body which hears appeals before judicial review).  We found that claims for computer-implemented inventions ARE being allowed more often under the new approach. 

Figure 1 [alt-text: pie chart showing 11% allowance rate of PAB patentable subject matter (s 2) cases before Choueifaty, 89% rejection]

By the Numbers

Of the 80 PAB cases dealing with computer-implemented inventions and subject matter rejections under section 2 between 2012 and 2020 (pre-Choueifaty), 71 were refused and only 9 were allowed (an 11% allowance rate; see Figure 1).  After Choueifaty, the allowance rate has risen to 38% (14 allowances out of a total of 37 cases heard). 

Figure 2 [alt-text: pie chart showing 38% allowance rate of PAB patentable subject matter (s 2) cases after Choueifaty, 62% rejection]

Notably, also, far more cases dealing with the question of patentable subject matter for computer-implemented inventions have come before the PAB in the past two years (see the year-by-year totals in Figure 3).  It’s unclear whether this is due to a greater focus on emerging technologies, greater confidence in the PAB after Choueifaty, the effects of the pandemic, or some combination of these three factors. So far, 2022 has been comparatively slow, but we’re keeping our eyes open for further developments.

Figure 3  [alt text: stacked bar graph showing allowed and rejected cases at the PAB by year since 2012 under section 2. More cases were heard in 2021 than any other year, and more cases were allowed in 2021 than in any other year.]

Some Specific Allowances of Interest

Under the new approach, there are several ways to structure claims for an “actual invention” that recite patentable subject matter.

For example, in Qiagen Redwood City, Inc. (Re), 2021 CACP 30, the claims cover a new database structure for genomics data.  The PAB determined that, after reassessing the essential elements in light of Choueifaty, “the organization of the database is essential to the computer in performing the recited algorithms” and “the claimed system [thus] provides a computer improved by the claimed database”.  The PAB expressly noted that, in a preliminary analysis pre-Choueifaty, they did not consider the database structure to be an essential element. 

Other allowed claims post-Choueifaty have included physical elements that do not relate to the functioning of a computer.  For instance, in Landmark Graphics Corporation (Re), 2021 CACP 51, the essential elements of some proposed claims included “completing a well field according to [a] well completion plan [generated by a computer algorithm]”.  That is, these claims included the physical execution of a computer-generated plan (i.e., drilling of an oil well field and hydrocarbon recovery) and were, therefore, considered to recite patentable subject matter under s. 2 of the Patent Act.

In another illustrative example, BIO-RAD LABORATORIES, INC. (Re), 2021 CACP 37, the allowable claims recited “an analyte measurement module” and the step of “causing the analyte measurement module to measure…”.  The PAB held that these elements are physical and/or cause a discernible physical effect.  In particular, the PAB clarified that “measurements are physically made by a physical device”.  The ‘actual invention’ in this case was found, at para. [30], to be

the analyte measurement module cooperating with the computer to take measurements [and] provid[ing] the measured results to the computer to calculate an optimum quality control interval size according to an algorithm. The actual invention… has physicality and relates to the manual and productive arts. 

It should be noted that, based on this case, taking measurements of a physical quantity confers physicality.  As such, Bio-Rad may be particularly useful in establishing patentability for various inventions.

“Essential Elements” Can Still Be Excluded from the “Actual Invention”

However, it is important to note that under the current approach, even an essential element that is physical does not necessarily overcome patentable subject matter rejections.  For instance, in Wasmund (Re), 2022 CACP 9, which covered a gaming system implemented on a computer, the PAB found that, “while computer components are essential elements of the claims, the computer components are not part of the actual invention” (para. [0023]).  In this case,

the computer is merely processing certain input according to certain rules as computers are designed to normally do, and displaying an output. There is no improvement to the functionality of the computer; that is, no discernible physical effect on the computer. Absent the computer components, there is no physical component or discernible physical effect produced. The output is of intellectual significance only and has no physicality.

This exclusion of essential elements from the ‘actual invention’ is problematic, as it does not seem to be much of an improvement on the discredited problem-solution approach.  That is, this new approach can still exclude ‘essential elements’ from a purposive construction of the claims, regardless of whether they have a material effect on the working of the invention.  This is because those elements are not considered to form part of an independently determined ‘actual invention’.  In contrast, as noted in Amazon, “the jurisprudence of the Supreme Court of Canada… requires the Commissioner’s identification of the actual invention to be grounded in a purposive construction of the patent claims” (para. [43]).  That is, essential elements of the claims, even essential elements that have a material effect on the working of the invention, should give rise to the actual invention.  It remains to be seen if the ‘actual invention’ approach will be tested in court, but we’ll be watching closely as this approach continues to be used by CIPO.

Conclusion

Approaching Choueifaty’s second anniversary, then, the prospects for protecting software inventions in Canada are brighter.  However, questions still remain.  For advice on patenting these inventions, please contact one of our experts at BRION RAFFOUL.

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