IP monitor: Patenting computer-implemented inventions (Canada): AI-based system utilizing neural computational logic and graphical user interfaces, Stanley Victor Campbell (Re)

A recent Commissioner of Patents decision regarding Canadian patent application number 2816107 provided an example application of the practice guidance PN2020-04 for computer-implemented inventions, finding the proposed claimed subject matter not to be patentable under section 2 and subsection 27(8) of the Patent Act.

Introduction

A recent Patent Appeal Board (the Board) / Commissioner of Patents decision, Stanley Victor Campbell (Re), provided an example application of the practice guidance PN2020-04 for computer-implemented inventions (AI-based system utilizing neural computational logic / graphical user interfaces). This decision, similar to Intercontinental Exchange Holdings, Inc (Re), underscores the challenges facing software patents and algorithm-based inventions under Canadian law, particularly in relation to the physicality requirement and the prohibition against abstract ideas.

Legal principles

In Canada, software and computer-implemented inventions can be patentable, but they must meet specific criteria. The key challenge lies in distinguishing between unpatentable abstract algorithms and inventions that improve the functionality of a computer or have sufficient “physicality.”   

Recent Federal Court of Appeal jurisprudence reverted the analysis to the current version of the Manual of Patent Office Practice with the benefit of the Federal Court of Appeal decision, setting aside the test from the earlier Federal Court decision. 

The Federal Court of Appeal noted (emphasis added): "[...] the Commissioner should keep an open mind and not hastily conclude that the subject matter claimed is not patentable simply because it involves the use of conventional computer technology. As always, the determination of patentability is a highly fact specific exercise, and it is impossible to attempt to define the full spectrum of particular circumstances that may exist depending on the nature of a particular invention implemented by computer in these reasons.” 

The latest guidance is PN2020-04, which provides a framework for applying section 2 (definition of “invention”), alongside subsection 27(8) (mere scientific principles or abstract theorems are not patentable) of the Patent Act. This guidance has been applied in a number of Commissioner’s decisions recently with mixed outcomes.

Background

The claimed subject matter in application number 2816107 relates to a system and method for automating the identification and processing of medical diagnostic codes. The system uses machine-based algorithms to analyse patient data, matching specific medical identified codes with known or reference medical codes, thereby streamlining the adjudication of insurance claims.  

It is important to note this application had an earliest priority date of 2010-10-26 and was a national phase entry of a PCT application filed in 2011. Accordingly, the patent application was likely drafted before the change in guidance in various jurisdictions. The application had faced six rounds of examiner’s requisitions in Canada.  

In Canada, the application was initially rejected for lacking patentable subject matter, and despite amendments and arguments presented by the applicant, the Board upheld the rejection and the application was ultimately found not to be directed to patentable subject matter. 

The corresponding US application was granted in 2020 after nine years of examination, and there is a further granted child US continuation application. In the image file wrapper of the corresponding US application, it is noted the US application had successfully overcome a patent eligible subject-matter rejection, referring to Examples 39, 40 in the US 2019 PEG. Accordingly, these applications can be contrasted to identify a potential divergence in US and Canadian practice.

Patentable subject-matter analysis

The primary issue in the patentability of the claims was whether the invention met the physicality requirement that the decision notes is “implicit” in the definition of invention. The Board’s consideration begins at paragraph 43, noting there was also a proposed amendment to indicate that, “The Medical Code-based decision making is ‘by an artificial intelligence (AI) based system utilizing neural computational logic’ and further includes ‘a user interface configured to receive self-monitoring patient data that is used to further determine whether an acceptable code decision is reached.’” 

The applicant submitted a response to a preliminary review letter arguing that the proposed claims recite patentable subject matter because the proposed amendments to the independent claims have physical existence and exhibit physical effects. The Board disagreed, for the reasons below, and concluded the proposed amendments did not transform the underlying abstract nature of the claims and the actual inventions remain the series of abstract data manipulations and rules related to medical claims adjudication. 

The Role of AI and Neural Computational Logic

The applicant attempted to address the patentability issue by amending the claims to include references to an “AI-based system utilizing neural computational logic.” However, according to the Board at paragraphs 48-50, the processing steps described remained standard data manipulation processes that could be executed by any general-purpose computer system. Including AI terminology did not change the nature of the computer system itself, nor did it demonstrate any improvement to the computer's performance or efficiency. 

The Board found the AI-based system was merely implementing the existing medical claims adjudication algorithm, focused on improving the accuracy of the results rather than the computer's performance. Furthermore, the system was noted to be performing standard data processing tasks, using an AI-based algorithm for adjudicating medical claims, and that the mere inclusion of AI and neural network terminology did not elevate the system beyond a generic data processing tool. 

The User Interface for Self-Monitoring Patient Data

Another amendment introduced a user interface configured to receive self-monitoring patient data. The applicant argued that this user interface, which allows for human feedback, constituted a physical element that interacted with the system. However, the Board determined, at paragraphs 51-55, that the user interface was a generic input device used to enter data into the algorithm. It did not alter the way the computer system functioned or improve its technical aspects such as memory usage or processing speed. 

The user interface was found to be a standard input mechanism, and its inclusion did not elevate the system beyond the abstract processing of information.  

Conclusion

The decision on patent application number 2816107 highlights the challenge for patenting computer-implemented inventions / patenting software in Canada. This decision reinforces the importance of including as much technical detail as possible to support an argument that the claimed computer-implemented embodiments exhibit a discernible physical effect or sufficient technical change to be considered patentable subject matter under Canadian law.

For more information, please contact your IP professional at Norton Rose Fulbright Canada LLP.

For a complete list of our IP team, click here.