Amazon.com, Inc. v. Canada (Attorney General)

Amazon.com, Inc. v. Canada (Attorney General)
Court (s) Database
Federal Court Decisions
Date
2010-10-14
Neutral citation
2010 FC 1011
File numbers
T-1476-09
Notes
Reported Decision
Decision Content
Federal Court
Cour fédérale
Date: 20101014
Docket: T-1476-09
Citation: 2010 FC 1011
Ottawa, Ontario, October 14, 2010
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
AMAZON.COM, INC.
Appellant
and
THE ATTORNEY GENERAL OF CANADA, and
THE COMMISSIONER OF PATENTS
Respondents
REASONS FOR JUDGMENT AND JUDGMENT
I. INTRODUCTION
[1] This is 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, R.S.C. 1985, c. P-4 (Patent Act).
[2] In coming to the conclusion she did, the Commissioner in effect created a test for assessing patentable subject matter, outlined new exclusions and requirements for patentability and outlined her view of the scope of patentable ‘art’. Her decision not only raises significant questions of law and interpretation, but extends into policy-making which stands to fundamentally affect the Canadian patent regime. This appeal is thus of consequence not only to the Appellant, but to many who navigate our patent system. It also revisits the powers given – and not given – to the Commissioner under the Patent Act and the limitations which the statutory regime and jurisprudence impose upon her.
[3] At its core, the question is whether a “business method” is patentable under Canadian law. For the reasons which follow, the Court concludes that a “business method” can be patented in appropriate circumstances.
II. BACKGROUND
[4] Amazon.com seeks a patent for an invention entitled “Method And System For Placing A Purchase Order Via A Communication Network” (claimed invention). The application was filed on September 11, 1998 and claimed priority from two American patents.
[5] The 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.
[6] There are 75 claims in the patent; some relate to the “method” whereas the others relate to the “system” (i.e. the machine enabling this process). For the purposes of this appeal the parties have agreed that two independent claims, Claim 1 and Claim 44, are at issue:
Claim 1
1. A method in a client system for ordering an item, the method comprising: receiving from a server system a client identifier of the client system; persistently storing the client identifier at the client system; where an item is to be ordered,
displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and
in response to the single action being performed, sending to the server system a request to order the identified item along with the client identifier, the client identifier identifying account information previously supplied by a user of the client system wherein the user does not need to log in to the server system when ordering the item and
when account information is to be changed,
coordinating the log in of the user to the server system;
receiving updated account information; and
sending the updated account information to the server system
whereby the user does not need to log in to the server system when ordering the item, but needs to log in to the server system when changing previously supplied account information.
Claim 44
44. A client system for ordering an item, comprising:
a component that receives from a server system a client identifier of the client system and that stores the client identifier persistently;
a component that orders an item by displaying information identifying the item along with an indication of a single action that is to be performed to order the identified item and by sending to the server system a request to order the identified item along with the client identifier, the client identifier identifying account information previously supplied by a user wherein the user does not need to log in to the server system when ordering the item; and
a component that updates account information by coordinating the log in of the user to the server system receiving updated account information for the user, and sending the updated account information to the server system.
[7] The remainder of the claims are variations on the above theme and describe, inter alia, what information is stored, order cancellations and how multiple ‘single actions’ are consolidated.
[8] The patent application process was lengthy and involved multiple amendments to the claims. On June 1, 2004, the Examiner rejected the patent on the basis of obviousness and non-patentable subject matter. The Appellant appealed the decision and appeared before a Patent Review Panel (Panel). This process was delayed due to the retirement of two members, requiring a second hearing before a new Panel. A decision was finally rendered on March 4, 2009. The Commissioner accepted the finding of the Panel, making their report the reasons for her decision. The Panel’s Reasons are referred to here as the Commissioner’s Reasons.
III. COMMISSIONER’S DECISION
[9] The Commissioner overturned the Examiner’s finding on obviousness. Although the use of a “cookie” to track information is not new, she found the inventive concept – a simplified “one-step” process in ordering – to be novel and non-obvious. The decision rejected the idea that an invention is obvious on account of a non-technical ‘distinguishing feature’ (here, the one step process). This finding is not at issue in this appeal; it is agreed that the invention is novel.
[10] The claims were rejected, however, on the basis that they did not conform to section 2 of the Patent Act and accordingly were non-patentable subject matter.
2. In this Act, except as otherwise provided,
…
“invention”
« invention »
“invention” means 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;
2. Sauf disposition contraire, les définitions qui suivent s’appliquent à la présente loi.
…
« invention »
“invention”
« invention » Toute réalisation, tout procédé, toute machine, fabrication ou composition de matières, ainsi que tout perfectionnement de l’un d’eux, présentant le caractère de la nouveauté et de l’utilité.
[11] The Commissioner’s logic in coming to this conclusion is fundamental to this appeal. It is based on a “four step” approach which the Appellant submits has no basis in Canadian jurisprudence. Further, they submit that the assumptions and legal ‘principles’ enunciated constitute misinterpretation and misapplication of foreign and domestic law. The Respondent, on the other hand, submits that the Commissioner’s approach is supported by fundamental principles of patent law, dating to the origins of the patent system and drawn from both Canada and abroad.
[12] Even the Commissioner acknowledged the novel path down which the analysis ventured. The Panel Report stated that there was considerable debate as to the proper approach to assessing patentable subject matter and it was incumbent on the Commissioner to set out the correct approach (Panel Report at para. 20).
A. Form and Substance of the Claims
[13] According to the Commissioner, an important starting point is analysis of both the form and the substance of the claims. An invention must, on its face, relate to an art, process, machine, manufacture or composition of matter (it must fit the ‘form’ requirement). This is not, however, sufficient; one must then look to what has been “invented” or “discovered” in order to determine the substance of the invention. The Commissioner found support for this approach in Lawson v. Commissioner of Patents (1970), 62 C.P.R. 101 (Lawson), Shell Oil Co. of Canada v. Canada (Commissioner of Patents), [1982] 2 S.C.R. 536 (Shell Oil), Tennessee Eastman Co. et al v. Commissioner of Patents, [1974] S.C.R. 111 (Tennessee Eastman) and Schlumberger Canada Ltd. v. Commissioner of Patents, [1982] 1 F.C. 845 (C.A.) (Schlumberger). She also cited a more recent case from the United Kingdom in support of this practice and the “four step approach” (Aerotel Ltd. v. Telco Holdings Ltd & Others, [2006] EWCA Civ 1371 (Aerotel)).
[14] In what seemed like an aside, the Commissioner made a further comment which would become important in her later analysis, and hotly debated in this appeal. She stated that a claimed invention is not patentable if what makes it new and unobvious comprises non-statutory subject matter. In view of this, a claim cannot rely on a particular group of features which are not new but which together are new and patentable in order to make it so. This conclusion seems to flow from the decision in Schlumberger, where the Federal Court of Appeal found that use of a computer did not make a mathematical formula patentable. Again, she referred to elaboration in more recent case law from the United Kingdom.
[15] As will be addressed in greater detail later in this judgment, the Commissioner’s “aside” leads to a further separation of the enquiry. On this approach, an analysis of the patentability of what is new, apart from the invention as a whole, is required.
B. Definition of the Relevant Categories
[16] The Commissioner’s statement that the claims must fit into one of the five categories listed in the Patent Act is not challenged. However, nearly every aspect of her subsequent discussion on this issue is. On determining that the relevant categories are “art” and “process” she launched into a consideration of the meaning of art. Her definition, which the Appellant has submitted is “restrictive”, stressed the physical nature of inventions. Inventions are either a physical object (such as a machine) or a change of character or condition of a physical object. The Commissioner relies on Lawson, as cited in by Wilson J. in Shell Oil at page 555:
An art or operation is 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 condition…It is concrete in that it consists in the application of physical agents to physical objects and then is apparent to the senses in connection with some tangible object or instrument.
[17] The Commissioner also references Wilson J’s discussion of art as “learning or knowledge”, understood in the context of terms such as “the state of the art” or “the prior art”. It must also have a practical application. In the mind of the Commissioner this knowledge must also be scientific or technological. She concluded that where a claimed invention is neither physical in nature nor producing an act or series of acts performed by a physical agent on a physical object to produce some change or effect, it is not patentable.
C. Excluded Subject Matter
[18] The third step in the Commissioner’s approach was a consideration of what is excluded either explicitly by the Patent Act or by jurisprudence. She came to the immediate conclusion that business methods have “traditionally” been excluded in Canada based in part on the dissent in Monsanto Canada Inc. v. Schmeiser, 2004 SCC 34 (Schmeiser). There, Arbour J. listed ‘business methods’ as an example of how the Patent Act has been interpreted to exclude certain subject matter from patentability. In including it she relies on State Street Bank & Trust Co. v. Signature Financial Group Inc., 149 F.3d 1368 (Fed. Cir. 1998) (State Street), an American decision. However, the Commissioner appears to have recognized that State Street actually strongly endorsed the patentability of business methods and so states that she accepts Arbour J’s statement “notwithstanding the reference to State Street Bank” (Commissioner’s Decision at paragraph 142).
[19] In addition to the above justification, the Commissioner reasoned that the exclusion carries through from subject matter exclusions in the United Kingdom, citing a case from 1901 and Fox’s 1957 Digest of Canadian Patent Law. Both these authorities are clear that one cannot have a patent for a “mere scheme or plan”, including for the conduct of a business. She also quoted at length from a more recent case, CFPH LLC’s Application, [2005] EWHC 1589 (Pat.) (CFPH), where the British Court discussed the policy reasons behind the business methods exclusion.
[20] Finally, the Commissioner referred to the concurring decision of Justice Dyk in In re Bilski, 88 USPQ 2d 1385 (2008) (Bilski/USCA), a more recent U.S. Court of Appeals’ decision which re-examined the business methods exclusion, in order to illustrate the bearing the English system has on the American system and the rationale of limiting patents to inventions related to “manufacture”. It should be noted that the Supreme Court affirmation of this case, Bilski v. Kappos, 130 U.S. 3218 (2010) (Bilski/USSC), was released after the Commissioner’s decision and indeed after this appeal was heard.
D. Technological Requirement
[21] The final step in the Commissioner’s analysis is dependent on her assumption that in order to be patentable an invention must be technological in nature. This conclusion is justified by reference to the patent scheme, jurisprudence and the dictionary meaning of technology. The Commissioner’s Reasons refer to the “technological” nature of all five categories of invention, the requirement in the Patent Rules that a description refer to a “technical problem” and the language in the Agreement on Trade Related aspects of Intellectual Property Rights (TRIPS). Further, according to Bastarache J. in Harvard College v. Canada (Commissioner of Patents), 2002 SCC 76 (Harvard Mouse), the Patent Act was designed to protect advances in technology.
[22] Again, the Commissioner referred at length to the English consideration of this issue, returning to the decision in Aerotel as it relates to the “technical contribution” approach to assessing patentable subject matter. The Commissioner’s Reasons acknowledge that there has been a divergence between the European Patent Office (EPO) and the English courts; the EPO has determined the technical nature of the invention is best left to the obviousness analysis given the problems with the contribution approach. Notwithstanding this, the Commissioner found this to indicate that the EPO did consider both technical and non-technical features, albeit in relation to the inventive step.
[23] On the basis of this analysis, the Commissioner concluded that subject matter that was “non-technological” in nature is also non-statutory.
E. Commissioner’s Assessment of the Patent
[24] The Commissioner’s assessment of the Appellant’s patent faithfully followed her four step approach. In considering the first step she refused to be limited by only the “grammatical sense” of the claims, as this would prefer form over substance. She found that the method claims were in form related to a process and the system claims in form directed to a machine. However, in substance the claims were the same: both described a method. What was “added” or “discovered” was limited to streamlining the ordering method and the benefits that flowed from this. In order to be statutory, the invention had to “fit” into the definition of an art or a process.
[25] Applying Lawson, the Commissioner found no change in physical condition of the goods ordered, only in how the order was placed. Consequently, the claimed invention was not statutory subject matter.
[26] Although she had already determined that the claimed invention did not meet the requirements of the Patent Act, the Commissioner went on to consider the final two “steps” of her test. She found that the claims were also excluded as a business method. They added nothing to human knowledge other than retailing concepts or rules for ordering – regardless of the concepts’ novelty, to patent them would represent a “radical departure” from the current regime and require parliamentary approval. Somewhat oddly, in light of her discussion of the exclusionary “tradition”, the Commissioner went on to emphasize that although patents may have been issued for business methods in the past, if this is inconsistent with the Patent Act, that practice should be corrected.
[27] Finally, the Commissioner considered each of the features identified in the patent in order to assess whether they were technological, had a technological effect or were cumulatively such. She found that most did not, with the exception of the use of cookies, which might potentially be technological. However, their technological use was already known – no “technical effect” had been added to human knowledge.
IV. STANDARD OF REVIEW
[28] The central issues in this appeal go to the scope and definition of “art” and “method”, as well as judicially interpreted excluded subject matter. The interpretation of s. 2 of the Patent Act is a question of law which attracts a correctness standard: Harvard Mouse, above, at para. 150.
[29] The second issue, the method used by the Commissioner to assess the claims and the invention, is also a question of law. The Patent Office has essentially charted a legal test for determining patentability. The approach also engages questions of claim construction, an analysis which warrants no discretion.
[30] Nevertheless, if the relevant legal tests were applied and the Commissioner was correct in determining business methods and non-technological inventions are not patentable, the application of the tests and the question of whether the invention was a business method would be subject to a reasonableness standard: Harvard Mouse, above at para. 151.
[31] Finally, in the event there was a fundamental error of law which prevented the Commissioner from coming to the right decision, it is within this Court’s discretion to decide the issue de novo pursuant to s. 41 of the Patent Act: CertainTeed Corp. v. Canada (Attorney General), 2006 FC 436 at para. 27; Canada Packers Inc. v. Canada (Minister of Agriculture), [1989] 1 F.C. 47, 26, C.P.R. 3d 407 (C.A.) at 417.
V. ANALYSIS OF THE LAW
A. Adoption of International Principles
[32] This case highlights the challenges in looking to international legal principles to interpret the Canadian patent regime. In an area of the law where advancing human ingenuity often creates novel legal questions to which there may be no immediate answer in Canadian jurisprudence, it can be useful to look to other regimes. However, this must be done mindfully. Despite the international conventions and principles of reciprocity, regimes can be fundamentally different. Something which may be patentable in one country, will not be here, or vice-versa. Also, it may be patentable for an entirely different reason. While international jurisprudence can provide guidance, these cases and the particular Canadian context of the question before the Court (i.e. what is patentable subject matter) must correspond to Canadian law. Some jurisdictions will be more applicable than others given the history, language and prior interpretation of their patent legislation.
[33] The Commissioner relied heavily on foreign jurisprudence throughout her decision, particularly on that of the United Kingdom, Europe and the United States. This becomes troubling and even problematic when she ignores fundamental differences between the foreign and the domestic regimes, or ignores Canadian legal principles altogether. Specifically, her reliance on English and European systems does not take into account that both, in implementing the European Patent Convention (EPC), have fundamentally different legislation than Canada for determining patentable subject matter. Under those systems, there is no definition of “invention”, but a series of exclusions. Jurisprudence in those systems thus often interprets claims not to see whether they disclose an “invention” within the meaning of a statute, but whether they should be classified as excluded subject matter under Article 52. The Convention states:
(1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step.
(2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
(a) discoveries, scientific theories and mathematical methods;
(b) aesthetic creations;
(c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
(d) presentations of information.
(3) The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.
Article 52, European Patent Convention
[34] The United Kingdom’s current Patent Act is worded to be in conformity with the EPC. Even before the Convention, the language used to describe an “invention” in their statutory regime differed from the Canadian Patent Act. It has long been acknowledged that our pre-confederation Patent Act is derived not from the British statute, which post-dates ours, but from that of our American neighbours: “The principles underlying Canadian patent law both before and since Confederation accordingly approximate rather to those of the United States than to those of British patent law”: O.M. Biggar, Canadian Patent Law and Practice, Toronto: Burroughs & Company (Eastern) Limited, 1927 at p. 2; see also Harvard Mouse, above at para. 3. It is not surprising that the language used in the American and Canadian Acts to describe patentable subject-matter is almost identical.
[35] Despite the fact that the American and Canadian patents systems understandably have roots in the British common law, the above shows that the regimes have evolved in different ways and thus English law cannot be adopted unthinkingly. Further, courts in this country have warned against the British authorities when evaluating patentable subject matter: Tennessee Eastman, above, at 120-121. Equally, decisions from the United Kingdom have noted the inapplicability of the American regime to their legislation. The Court in Aerotel, a decision cited more than once by the Commissioner, made it clear that the position in the USA, in both the absence of an equivalent to s. 52 of the EPC and the “wide scope” given to patentable inventions, was very dissimilar to the position in Europe:
The “exceptions” referred to in the US cases, e.g laws of nature, have some equivalents in Art.52(2). But that is really, as we have pointed out, because they are by their very nature incapable of being the subject of a legal monopoly. The fact that there are some parallels between what is declared by the judges to be unpatentable in the US and what is declared by Art. 52(2) to be an excluded category of invention is no guide as to the interpretation of Art. 52.
Aerotel, above at para. 13.
[36] A reading of Aerotel and CFPH also reveals that the exclusions in the UK and European regime are largely concerned with policy. In CFPH the British Court entitles part of the discussion “The Items Were Excluded for Policy Reasons” and speaks at length to the “hard” and “soft” nature of exclusions and the principles behind them: CFPH, above at para. 30. While this discussion may be interesting, adoption of these policy rationales by the Patent Office is inappropriate and wrong in law. Any doubt as to whether the Commissioner may consider policy when granting a patent was firmly settled by Bastarache, J, speaking for the majority in Harvard Mouse:
I disagree that s. 40 of the Patent Act gives the Commissioner discretion to refuse a patent on the basis of public policy considerations independent of any express provision in the Act. The non-discretionary nature of the Commissioner's duty was explained in Monsanto, supra, a case cited by Rothstein J.A. At pages 1119-20, after citing s. 40 (then s. 42) of the Patent Act, Pigeon J., speaking for the majority, stated:
I have underlined by law [in s. 42] to stress that this is not a matter of discretion: the Commissioner has to justify any refusal. As Duff C.J. said in Vanity Fair Silk Mills v. Commissioner of Patents (at p. 246):
No doubt the Commissioner of Patents ought not to refuse an application for a patent unless it is clearly without substantial foundation....
Some commentators remark that the Canadian courts have in the past excluded certain subject matter from patentability on moral, ethical or policy grounds… While it is true that certain categories of invention were excluded from patentability with these policy concerns in mind, these exclusions were justified by reference to explicit provisions of the Patent Act….
Harvard Mouse, above, at paras. 144-145
[37] The Commissioner is thus bound by Canadian patent regime and its interpretation by the Courts. On this she has no discretion. International jurisprudence, and certainly the policies advocated therein, is not determinative, but at most a potential guide when applied correctly and mindfully. As becomes evident, many of the Commissioner’s errors stem from her adoption of a policy role and the importation of policies not concordant with Canadian law.
B. Form and Substance Approach
[38] Over the past ten years, the Supreme Court has made it clear that an invention is defined by the claims, and that these are to be interpreted in a “purposive manner”: Free World Trust v. Électro Santé Inc., [2000] 2 S.C.R. 1024 (Free World Trust). In so doing they explicitly rejected the “form and substance approach” from previous years. In Whirlpool Corp. v. Camco Inc., [2000] 2 S.C.R. 1067 the Court confirmed that purposive construction is to be used in assessing validity and infringement. The rationale given by the Court included not only a desire for consistency, but also recognition that the intention of the author of the patent – determined with a mind willing to understand – is integral to the operation of the patent regime. A subjective examination of the “substance” of the claims leads to uncertainty. As stated in Free World Trust at paragraph 46:
Once the inquiry is no longer anchored in the language of the claims, the court may be heading into unknown waters without a chart. The one-step approach has to build flexibility and common sense into the initial claims construction because there is no second step.
[39] Instead of relying on these, now basic, principles of claim construction, the Commissioner returns to language such as “form and substance” and “what has been discovered” as articulated in earlier case law. Although the Commissioner attempts to confine this analysis to patentable subject matter, a return to ‘form and substance’ language, no matter what the context, is confusing and unnecessary. Further, it represents a departure from the clear direction of the Supreme Court to apply purposive construction universally.
[40] Section 2 of the Patent Act requires an invention to be “new and useful”. Speaking for the Court in Calgon Carbon Corp. v. North Bay (City), 2005 FCA 410, Rothstein JA (as he then was) gave a simple interpretation of this requirement: “Useful points to practicality as opposed to theory. New means that there is a contribution to knowledge, something that was not known before” (at paragraph 10). It is thus not wrong to speak of “what has been invented” so long as this is determined with reference to the essential elements as disclosed through purposive construction of the claims, rather than through a subjective, secondary consideration by the Patent Office as to the “substance of the invention”.
[41] The stated goal of the Commissioner, to avoid raising form over substance, is secured through a purposive construction of the claims. Reading the claims with a “mind willing to understand” does not translate into wilful blindness. Purposive construction captures the substance of the claims in determining their essential elements. If the inventor is simply claiming an idea, or a theory, the means of implementation (i.e. a human mind or a computer) could be replaced and the invention would remain in essence the same. Thus, the decision in Schlumberger, notwithstanding the fact that it was decided close to twenty years before Free World Trust, would suggest that where a computer is not an “essential element” it does not constitute the substance of the invention.
[42] The rejection of purposive construction, and in essence a holistic consideration of the claims, also allowed the Commissioner to parse the claims into their novel and non-novel components in order to evaluate patentability. As discussed above, it is problematic to suggest that “what has been discovered” stands apart from the claims as a whole. This is particularly so where the Commissioner has found that what is claimed is novel (although certain elements were old) and not obvious.
[43] Principally, the Commissioner’s conclusions are not supported by Canadian law. Although Shell Oil defines “art” as adding something to human knowledge, there is no suggestion that this ‘contribution’ be assessed apart from the invention as a whole. It is conceivable, and indeed expected, that some elements of the invention are not new. In fact, in Shell Oil the compounds at issue were old. The Court, however, did not leave the compounds out of the analysis of the subject matter; they were clearly part of the invention. It is contrary to settled law to purport to look at ‘what has been invented’ and ‘substance’ by failing to look at the invention as a whole.
[44] The decision in Progressive Games is also illustrative. The trial judge found that the physical manipulation of cards met the application aspect of the test in Shell Oil, a finding upheld on appeal. Of course, the use of cards is not novel. The rules in and of themselves are just an idea; but they require the use of cards in order to constitute the whole “invention” or even “inventive concept”. The patent was found non-statutory because nothing of substance had been added, not because the rules, which were claimed to be new, were excluded matter. Schlumberger, the case relied on by the Commissioner, and its unique circumstances were discussed above: the Court did not appear to consider the computer an ‘essential element’ in the invention.
[45] Finally, to the extent the Commissioner relies on jurisprudence from the United Kingdom to show the “actual contribution” of the invention and the extent to which it is statutory must be assessed; her discussion is incomplete and pointed in the wrong direction. Both CFPH and Aerotel, the two cases cited, concern the interpretation of Article 52 of the EPC and thus, as discussed above, have little application in the Canadian context. The attempt to articulate this test seems to be in part a function of the “as such” clause in article 52(3); subject-matter is excluded “only to the extent” that a patent relates to it “as such”. No such provision exists in Canada. The decisions also make it clear that this is an unsettled area and there has been little consistency in the “approach” which should be adopted in undertaking this analysis. Indeed, the Commissioner herself recognizes that Europe and the UK have different ideas as to when the novelty of a contribution should be assessed. Finally, the decision in CFPH actually suggests that, unlike some “hard exclusions”, discoveries – which are excluded but as a “soft” exclusion – should not be assessed apart from the invention as a whole:
The detractors of your patent are not allowed to say: the discovery does not count and the rest was obvious. They are not allowed to dissect your invention in that way. The discovery is an integral and all-important part of your invention. The law does not object to that. It only objects when you try to monopolize your discovery for all purposes […]
CFPH, above, at para. 34.
[46] American courts have also rejected the idea that the claims be separated on the basis of what is new and what is not. For the reasons discussed above, I find this jurisprudence more applicable and the reasoning employed more persuasive but not determinative. As stated by the majority of the Court of Appeals for the Federal Circuit in Bilski/USCA at 1394:
(T)he Court has made clear that it is inappropriate to determine the patent-eligibility of a claim as a whole based on whether selected limitations constitute patent-eligible subject matter…Diehr, 450 U.S. at 188 (“It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis.”) After all, even though a fundamental principle itself is not patent-eligible, processes incorporating a fundamental principle may be patent-eligible. Thus, it is irrelevant that any individual step or limitation of such processes by itself would be unpatentable under § 101…
[47] The Commissioner has simply adopted a novel legal test by which to assess patentable subject-matter. It is not supported by recent Canadian jurisprudence or the Patent Act. This is an error of law and far outside the Commissioner’s jurisdiction.
C. Definition of Art/Change of Character or Condition
[48] On a preliminary note, it is immaterial that the Commissioner discussed the definition of “art” only and more generally and did not consider “process” separately. It is generally accepted that “method” and “process” are the same thing and that ‘art’ may include either: see Lawson, above, at para. 34 citing to Refrigerating Equipment Ltd. v. Drummond & Waltham System Inc., [1930] 4 D.L.R. 926 at 937. Indeed, many of the principal cases dealing with what is an art have in fact concerned processes, Shell Oil being a prime example. The issue is whether in her discussion of “art” the Commissioner adopted the correct legal definition, encompassing the courts’ interpretation of patentable processes.
[49] The Appellant alleges that the Commissioner has adopted too restrictive a definition of ‘art’ by ignoring Shell Oil and returning to the “physical manipulation” test outlined in Lawson. I note, however, that the Commissioner explicitly discusses Shell Oil; the reference to Lawson is within the context of that decision. The crux of the debate is her interpretation of Shell Oil to mean that “practical application” necessarily includes the change of character or condition in a physical object. I also note that she has injected a requirement that the “new learning or knowledge” outlined in Shell Oil be technological or scientific in nature.
[50] Shell Oil is unequivocally the starting point for the definition of a patentable ‘art’. It focuses the inquiry on whether there is a practical application of the discovery or idea:
What then is the "invention" under s. 2? I believe it is the application of this new knowledge to effect a desired result which has an undisputed commercial value and that it falls within the words "any new and useful art". I think the word "art" in the context of the definition must be given its general connotation of "learning" or "knowledge" as commonly used in expressions such as "the state of the art" or "the prior art". The appellant's discovery in this case has added to the cumulative wisdom on the subject of these compounds by a recognition of their hitherto unrecognized properties and it has established the method whereby these properties may be realized through practical application. In my view, this constitutes a "new and useful art" and the compositions are the practical embodiment of the new knowledge.
At 549
[51] The decision in Lawson is forty years old and was a useful starting point in Shell Oil for Wilson J to discuss a “more expansive” definition of art. However, it is not the authoritative guide for what constitutes patentable art. Although Wilson J did not reject the decision, she referred to it as part of the ongoing effort to create a wider definition which explicitly stepped beyond manufacture of goods and even manufacturing techniques:
In Tennessee Eastman Co. v. Commissioner of Patents … (t)he Court, however, affirmed that “art” was a word of very wide connotation and was not to be confined to new processes or products or manufacturing techniques but extended as well to new and innovative methods of applying skill or knowledge provided they produced effects or results commercially useful to the public.
An effort to articulate this broader concept of the term "art" was made by Cattanach J. in Lawson v. Commissioner of Patents (1970), 62 C.P.R. 101. In that case a patent was being sought on a new method of describing the boundaries of a plot of land. The application was rejected, again not because the subject-matter of the application was not an "art" within the meaning of the definition in the Act but because, like the new use for the adhesive in Tennessee Eastman, it related to professional skills rather than to trade, industry or commerce. In the course of his reasons Mr. Justice Cattanach said at pp. 109-10;
An art or operation is 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. It is abstract in that, it is capable of contemplation of the mind. It is concrete in that it consists in the application of physical agents to physical objects and is then apparent to the senses in connection with some tangible object or instrument.
In the earlier development of patent law, it was considered that an invention must be a vendible substance and that unless a new mode of operation created a new substance the invention was not entitled to a patent, but if a new operation created a new substance the patentable invention was the substance and not the operation by which it was produced. This was the confusion of the idea of the end with that of means. However, it is now accepted that if the invention is the means and not the end, the inventor is entitled to a patent on the means.
At 554-555
[52] There are thus three important elements in the test for art as articulated by Wilson J.: 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: Progressive Games, Inc. v. Canada (Commissioner of Patents), 177 F.T.R. 241 (T.D.) at para. 16, aff’d (2000), 9 C.P.R. (4th) 479 (F.C.A.).
[53] The practical application requirement ensures that something which is a mere idea or discovery is not patented – it must be concrete and tangible. This requires some sort of manifestation or effect or change of character. However, it is important to remain focused on the requirement for practical application rather than merely the physicality of the invention. The language in Lawson must not be interpreted to 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 that through a machine such as a computer.
[54] As the Supreme Court reminded us in Harvard Mouse, not everything under the sun is patentable but the definition of invention in the Patent Act is broad and encompasses “unforeseen and unanticipated technology” (at paragraph 158). The Patent Act is not static; it must be applied in ways that r