Business methods get the green light in Canada

The Canadian Federal Court has decided that ‘business methods’ may be patented in Canada in appropriate circumstances.

On October 14, Justice Michael Phelan allowed Amazon.com to appeal the decision of the Commissioner of Patents in Canada, Mary Carman.

Amazon.com’s patent application concerns a method and a system for placing a purchase order via a communication network and is connected with Amazon.com’s single-click ordering system. The patent application was rejected by Carman in March 2009.

An appeal is allowed because Canadian law does not prohibit the patenting of business methods.

Justice Phelan said: “At its core, the question is whether a ‘business method’ is patentable under Canadian law. [T]he Court concludes that a ‘business method’ can be patented in appropriate circumstances.”

Ronald Faggetter, an intellectual property partner at Smart & Biggar/Fetherstonhaugh, said: “In light of the Amazon.com decision, any invention that is inextricably bound up in something physical— whether that be playing cards used in a poker game or a computer implementing one-click ordering—is proper subject matter for a patent in Canada.”

Carman’s decision to reject the patent application was based on a generalisation that contradicted her own patent office.

“There is no basis for the Commissioner’s assumption that there is a ‘tradition’ of excluding business methods from patentability in Canada,” said Justice Phelan.

He added: “The previous Manual of Patent Office Practice stated that business methods are ‘not automatically excluded from patentability’... The manual required that they be assessed like any other invention. The evidence indicates this practice was followed. The only explanation for the Patent Office’s change of heart in the newly revised manual appears to be the Commissioner’s own decision in the case at bar.”

Quashing Carman’s decision, Justice Phelan has sent the patent application back for re-examination.