Patentability of computer-implemented inventions: Four commissioner’s decisions since Benjamin Moore FCA

Introduction

The Federal Court of Appeal’s 2023 decision in Canada (Attorney General) v Benjamin Moore & Co [Benjamin Moore FCA] overturned the Federal Court’s decision in Benjamin Moore & Co. v. Canada (Attorney General) [Benjamin Moore FC] that had previously established a new test for patentable subject matter in computer-implemented inventions.

The new test was deleted and the test for determination of patentable subject matter was thus reverted to the most current version of the Manual of Patent Office Practice (MOPOP), as amended by the Canadian Intellectual Property Office (CIPO)’s PN2020-04, which sets out how to determine what constitutes patentable subject matter where a patent application concerns a computer-implemented invention, among others.

Subsequent to Benjamin Moore FCA, PN2020-04 has been applied in the reasonings of four recent Commissioner of Patents decisions: Senior, Rodney (Re), Landmark Graphics Corporation (Re), Creditex Group, Inc (Re), and Brink’s Network, Inc (Re).

The four selected decisions are helpful examples of applications directed to computer-implemented inventions found to include patentable subject matter under section 2 of the Patent Act. While some saw minimal changes to the claims as filed, others faced extended rounds of claim amendments, illustrating a variety of tactical options for success in argumentation.

Each decision provides a set of useful guideposts in a variety of applied scenarios that can be incorporated into both the patent drafting process and the examination process to improve the overall chances of a finding of patentable subject matter (similar to patent subject matter eligibility in other jurisdictions) in Canada by establishing analogies to the example claims and supporting specification sections as described below.

Latest CIPO Guidance for Computer-Implemented Inventions--- PN2020-04

PN2020-04 amends MOPOP and sets out CIPO’s approach to determining if a computer-related invention is patentable subject matter, noting CIPO’s understanding as to how Free World Trust and Whirlpool were to be applied when determining the essential elements of claims, and ensuring the references to the “technological solution to a technical problem” found at various chapters of the MOPOP would no longer be applied (PN2020-04 supersedes those sections).

PN2020-04 comments on whether the computer cooperates together with other elements of the claimed invention and thus is part of a single “actual invention,” stating that if “a computer is merely used in a well-known manner, the use of the computer will not be sufficient to render the disembodied idea, scientific principle or abstract theorem patentable subject-matter.”

It is important to note that the specific “actual invention” approach taken during construction of the claims was criticized in Benjamin Moore FC at paras. 36 and 37.

The patentable subject matter considerations regarding using a computer to process an algorithm are expressed in the factors set out in PN2020-04:

• the mere fact that a computer is among the essential elements of the claimed invention does not necessarily mean that the claimed invention is patentable subject matter;
• an algorithm itself is abstract, unpatentable subject matter and prohibited by subsection 27(8) of the Patent Act;
• a computer programmed to merely process an abstract algorithm in a well-known manner without more will not make it patentable subject matter; and
• if processing an algorithm improves the functionality of the computer, then the computer and the algorithm would together form a single actual invention that would be considered patentable subject-matter and thus not prohibited under subsection 27(8) of the Patent Act.

Referencing Canada (Attorney General) v Amazon.com Inc, PN2020-04 additionally states, “The subject-matter defined by a claim must be limited to or narrower than an actual invention that either has physical existence or manifests a discernible physical effect or change and that relates to the manual or productive arts.”

Specifically, the guidance states: (emphasis added) “If running the algorithm on the computer improves the functioning of the computer, then the computer and the algorithm would together form a single actual invention that solves a problem related to the manual or productive arts and the subject-matter defined by the claim would be patentable subject-matter and not be prohibited under subsection 27(8) of the Patent Act.”

In practical application, PN2020-04’s effect on the applications can often hinge upon nuanced wording choices in the claim language and the strength of the supporting description, which is evident in the presented claims and amendment strategies in the Commissioner of Patents decisions examined below. Additionally, the importance of carefully drafting descriptions and figures with ample technical explanation and practical use cases cannot be overstated, as these factors were also considered in the decisions.

An important aspect not to be overlooked in the examples below are the incremental strategies used successfully to propose different variations of the claims and to actively engage CIPO in considering the merits of the proposed claim sets.

Senior, Rodney (Re)--- "By Pumping Action"

The application in issue, Canadian patent application number 2,634,266 entitled “ELECTRONIC QUANTITY PURCHASING SYSTEM,” relates to a purchasing system that allows a user to purchase motor fuel at a locked-in price and redeem the fuel in whole or in part later. The application was rejected by the examiner in a final action and was forwarded to the Patent Appeal Board (Board).

In a preliminary review letter, the Board rejected the application for, among other reasons, having claims 1-7 directed to non-patentable subject matter. In response, the applicant argued in favour of patentability and submitted an amended claim set-1. The Board rejected claim set-1 and the applicant submitted an amended claim set-2 after the hearing. An excerpt of the independent claim of claim set-2 recites (relevant changes between set-1 and set-2 are underlined):

A computer-based system comprising:

a database computer which stores in memory executable by a computer a database including a prepaid account with a balance denominated in quantity units of motor fuel purchased in a purchase zone at a posted current-time locked-in purchase zone price, wherein the purchase zone is also a redemption zone; and

a web server computer for interacting with the database computer and also for interacting with at least one client computer configured to be used by a purchaser of a quantity of units of motor fuel and at least one retail service station with electronic point of sale equipment that allows the original purchaser or an authorized person, as a user, to:

(…)

redeem, by pumping action, at least a portion of a quantity of units of physical motor fuel at the retail service station from a quantity balance available for redemption in the at least one other zone of redemption for a quantity of units of physical motor fuel at the retail service station located in the at least one other zone of redemption (…)

During the hearing, the Board found the only novel aspect of the claimed invention in claim set-1 was the mathematical formula, the claiming of which is prohibited by subsection 27(8) of the Patent Act. The Board additionally found a lack of physicality as the claimed components represent only the typical components of a computer and “the skilled person” would not construe the claims to include a physical step. The mere fact that the claims contemplate a potential physical use is not enough to satisfy the physicality requirement.

However, after reviewing the amended claim set-2, the Board noted the changes made would satisfy the physicality requirement and provide the application with a patentable subject matter.

Practical Notes

This decision highlights the fine line separating patentable and non-patentable subject matter. While the original claim set-1 already possessed much of the necessary language to contemplate a possible physical transfer of fuel, it took the explicit and literal claiming of the physical action in the form of the words “by pumping action” to satisfy the physicality requirement.

For computer-implemented inventions, it may be helpful to amend the claims to explicitly attach computer steps to a physical action taken in the real world.

Landmark Graphics Corporation (Re)--- "Performing Drilling"

The second application, numbered 2,939,218 and entitled “MODELING GEOLOGIC SURFACES USING UNILATERAL NON-NODE CONSTRAINTS FROM NEIGHBORING SURFACES IN THE STRATIGRAPHIC SEQUENCE,” is related to a method and system for modelling three-dimensional surfaces that do not intersect or overlap. The application of this method and system is for prospecting, drilling, or developing an oil field. Following a final action and unsuccessful arguments by the applicant, the application was forwarded to the Board for review.

The application contains 20 claims. Claim 1 can be taken to represent claims 1-10, and claims 10 can be taken to represent claims 10-20. Claim 1 as considered recites (excerpt, relevant portions underlined):

A method for prospecting, drilling, or developing an oil field comprising:

a) performing drilling in a region and collecting data during the drilling, the data representing points on stratigraphic surfaces below ground.

b) inputting the data into a computer comprising a processor.

c) approximating from the data, one of the constraining surfaces and the constraining surface and the constrained surface using the processor, each approximated surface representing a respective solution grid with at least four nodes, each node having an initialized value.

(…)

Claim 10 as considered recites (excerpt):

A non-transitory program carrier device tangibly carrying computer-executable instructions for modeling geologic surfaces using a constraining surface and a constrained surface, the instructions being executable by a computer processor to implement:

a) approximating, from data collected during drilling in a region and representing points on stratigraphic surfaces below ground, one of the constraining surface and the constraining surface and the constrained surface, each approximated surface representing a respective solution grid with at least four nodes, each node having an initialized value.

b) determining simultaneous linear equations for solving the initialized values for the nodes on each respective solution grid using only three-dimensional data points for the respective one of the constraining surface and the constraining surface and the constrained surface;

(…)

The Board held that claims 1-9 were directed toward patentable subject matter because the steps of “performing drilling” and “collecting data during the drilling” satisfy the physicality requirement in PN2020-04. Although there were computer processing steps included in such claims, the steps of drilling and collecting data “cooperates” with the algorithm contemplated in the computer processing steps to improve the results produced by that algorithm.

The Board held that claims 10-20 as presented were not directed toward patentable subject matter. Regarding independent claim 10, the Board decided that “The actual invention is the algorithm for creating a geological model,” which is an abstract idea.

The application of this algorithm by computer-related elements was not sufficient to satisfy the PN2020-04 requirement of physicality because the application of the algorithm by the computer-related elements constituted the use of “generic computer components” in a “well-known manner.”

The only other independent claim, Claim 19, was similarly held to be directed to a set of abstract data manipulations and calculations. The Board found it was directed toward the same method as described in claim 10 with the addition of “an iterative process to approximate new and adjusted values.”

In response to the preliminary review letter, the applicant proposed cancelling claims 10-20 and other amendments to claims 1 and 3 to remedy other defects (unrelated to the topic of patentable subject matter). These amendments were subsequently recommended by the Board.

Practical Notes

This decision reaffirms the importance of incorporating elements of physicality into patent claims for computer-implemented inventions, as set out in PN2020-04. It may be helpful to amend claims to recite physical elements. The distinction between claims 1-9 and claims 10-20 is notable as it shows the benefit of explicitly mentioning a practical application in the claims themselves, similar to the decision in Senior, Rodney (Re).

Furthermore, this decision indicates that including active language such as (emphasis added) “drilling and collecting data during the drilling” may help impart a sufficient degree of physicality required for patentable subject matter.

Extrapolating to computer-implemented inventions, perhaps it may be helpful to emphasize when something is being done, and how that impacts computer functionality (e.g., during compile-time or run-time).

Creditex Group, Inc (Re)--- Downstream Computing Efficiency, Multi-Party Computing

The third application in issue, Canadian application number 2,678,924 entitled "SYSTEM AND METHOD FOR AFFIRMING OVER THE COUNTER DERIVATIVE TRADES," is directed to a post-trade affirmation and messaging service for affirming trades with counterparties prior to processing. During examination, there were five rounds of Examiner’s Reports (with the fifth Examiner’s Report being the final action) and a number of different iterations of claim amendments made in response. After the final action, the applicant submitted proposed claim set-1, which was rejected again for having non-patentable subject matter.

The applicant then submitted proposed claim set-2, and the parties had a hearing focused on whether the invention provided an efficiency gain to the functioning of the computer system used for implementing the trading platform. After the hearing, the applicant then submitted proposed claim set-3 and arguments. The Board conferred with the applicant and then proposed claim set-4 was submitted.

Proposed claim set 4 recites the following independent claim (key changes from claim set-1 are underlined, other relevant portions are noted in italics):

A computer-implemented post-transactional affirmation method for confirming details related to credit derivative trades comprising:

receiving, via an electronic processing platform, directly from a first party trade capture system associated with a first party, trade details comprising a credit derivative trade agreed upon between the first party and a second party outside of the electronic processing platform, said electronic processing platform comprising a connectivity and electronic messaging system that is independent of and upstream relative to a downstream trade processing system, said connectivity comprising system-to-system links between said electronic processing platform and each of the first party trade capture system and a second party trade capture system;

automatically routing and transmitting in real-time, via the system-to-system links, the trade details to the second party trade capture system associated with the second party;

receiving, by the electronic processing platform, directly from the second party trade capture system via the system-to-system links, an affirmation or a rejection of the trade details, wherein the affirmation indicates the transmitted trade details represent the agreed upon trade and the rejection indicates the transmitted trade details contain an error;

automatically notifying, via the electronic processing platform via an electronic message, the first party trade capture system of the affirmation or the rejection;

creating, via the electronic processing platform, at least one trade ticket for each of the first party and the second party comprising the trade details only when the electronic processing platform receives the affirmation from the second party trade capture system; and

submitting, by the electronic processing platform, the at least one trade ticket of the first party and the at least one trade ticket of the second party to a separate trade confirmation process in accordance with the credit derivative trade, said trade confirmation process being embodied in and executed by the downstream trade processing system.

In its decision, the Board noted the claimed system would provide an efficiency improvement to a downstream trade processing system by pre-reconciling data so that only reconciled trade information reaches the downstream system.

By specifying the specific parties involved, the new independent claim limited the claimed method to avoid possible embodiments where the efficiency improvement is not engaged. The system as claimed would provide a physical improvement to computer efficiency of the downstream system. Therefore, the computer system would be part of the “actual invention” and be patentable subject matter according to section 2 and subsection 27(8) of the Patent Act.

Practical Notes

This decision provides a practical amendment path for computer-messaging-related applications where interoperation by two computer systems can be claimed as part of the innovation, especially if arguments can be made for improving efficiency, more specifically the computing efficiency of a downstream system.

Brink’s Network, Inc (Re)--- Specialized Device (Bill Acceptor & Safe)

The patent application in issue is numbered 2,693,164 and titled "PROCESS OF AND SYSTEM FOR ADVANCING CREDIT FOR CASH COLLECTIONS." The application is directed to a process for providing bank credit to retailers for cash that has been deposited into an electronic safe at a retailer location. Credit is advanced based on data files gathered by a bill acceptor of the safe and transmitted to the bank indicating the amount of cash collected.

The application faced three rounds of Examiner’s Reports and was subsequently rejected by a final action for failing to satisfy the patentable subject matter requirement set out in PN2020-04 (as well as obviousness defects that are beyond the scope of the current discussion). In response, the applicant submitted amended claims and additional arguments, which were forwarded to the Board for review.

Claim 1 of the latest amended application recites (key portions underlined):

1. A process for providing credit to a retailer for cash collections, comprising the steps of:

collecting cash by a retailer over a plurality of business days;

depositing by the retailer the collected cash into a safe disposed at the retailer, the safe including a bill acceptor for accepting the cash and for determining the denomination of the cash;

calculating, by a processor of the safe, at an end of day for each of the business days, a total amount of cash deposited into the safe between the end of day of a business day preceding the respective business day and the end of day for the respective business day;

electronically transmitting, at the end of day of each of the business days, a respective data file identifying the respective calculated total amount;

arranging, on each of the business days, for the retailer to be credited by a bank with the respective calculated total amount identified in the respective electronically transmitted data file;

transferring the cash deposited into the safe to a facility;

verifying at the facility the amount of cash to produce a verified amount;

adjusting the credit previously provided to the retailer based on differences, if any, between the verified amount and the calculated total amount of cash deposited into the safe as identified in the transmitted data file; and

tracking adjustments of credit to the retailer and storing the tracked adjustments in a database,

wherein the step of tracking includes tracking an identity of a creator of a deposit or deposits corresponding to each adjustment and tracking an identity of a facility personnel handling the deposit or deposits at the facility, and storing the tracked identities in the database.

In its preliminary review, the Board partially disagreed with the final action and found the proposed claims compliant with the patentable subject matter requirement. The recitation of the safe and bill acceptor was emphasized in the preliminary review letter (see decision at paras. 41-43). A key section to note is the third and fourth paragraphs reproduced at para. 41, which noted (emphasis added), “[…] While the safe does include a processor that performs abstract calculations, such as the total amount of cash deposited over a time period, and does perform other functions of a generic computer, such as transmitting information over a network, in our preliminary view such a device cannot be characterized as a generic computer processing an algorithm in a well-known manner. The safe is a specialized device with components that are not part of a generic computer system, namely a bill acceptor with the aforementioned functionality […] the bill acceptor and its associated functionality cooperate with the other functions of the safe […] Therefore, the use of the safe in the claims on file is not, in our view, similar to the use of a generic computer to perform calculations in an expected manner, as was the case in Schlumberger.”

Practical Notes

This decision provides a very helpful guidepost for computer-implemented inventions that combine computing functions with specialized components that functionally cooperate to provide a specialized device.

Conclusion

The return to the patentability guidance from PN2020-04 has provided fresh insights and practical drafting and examination approaches for computer-implemented inventions.

The applications as filed / amended and the corresponding decisions in Senior, Rodney (Re) and Landmark Graphics Corporation (Re) both highlight the benefits of explicitly attaching steps to physical actions operating in the real world; and Creditex Group, Inc (Re) indicates that emphasizing efficiency improvement of computers through interoperation with external systems may be a viable argument for patentable subject matter. Brink’s Network, Inc (Re) additionally provides guidance on characterizing specialized devices that incorporate computing tasks with specialized physical systems to impart sufficient physical effect, even if the device itself is capable of performing functions of a generic computer.

Notably, engagements with CIPO in all four cases show an incremental and collaborative approach throughout their respective prosecution history.

The author would like to thank Daniel Wang, articling student, for his significant contribution to preparing this article.