10 January 2012

Canadian Patent Office Concedes, Allows Amazon ‘1-Click’ Claims

Raise the White FlagAfter a mere 13 years, it appears that Amazon.com, Inc is finally to receive a Canadian patent on its famous ‘1-click’ ordering system.  Although a formal notification of patent grant has yet to issue, various observers have noted status changes in Canadian application no. 2246933 in late December, indicating that the Canadian Intellectual Property Office (CIPO) has conceded defeat in its efforts to declare the Amazon claims ineligible for patenting (see, e.g., this report from Canadian intellectual property lawyer Barry Sookman).

In particular, the records show that on 22 December 2011 the status of the rejected Amazon application as ‘dead’ was reversed, and on 28 December 2011 a ‘final’ fee payment was made, which is only required once the application is found allowable.


The Canadian Commissioner of Patents had refused to grant a patent to Amazon based on a conclusion by the Patent Appeal Board that the 1-click purchasing invention failed three ‘tests’ which it had devised:
  1. it did not add to human knowledge anything that is technical in nature;
  2. it was merely a business method, which is excluded subject matter; and
  3. it did not cause a change in the character or condition of a physical object.
Amazon successfully appealed to the Federal Court (see Business Methods Patentable (Again) in Canada).  Undeterred, the Commissioner and the Attorney General of Canada appealed, in turn, to the Federal Court of Appeal (see Amazon '1-Click' Heads for the Canadian Federal Court of Appeal).  Last November, the appeals court issued its decision, essentially upholding the substantive finding of the lower court in relation to the criteria for patent-eligibility, but overturning the judge’s orders which effectively obliged CIPO to allow the patent.  The Court of Appeal determined, instead, that having spelled out the applicable law, it was more appropriate to remand the case back to the Patent Office for reconsideration (see Amazon Clicks-On in Canada as Appeals Court Keeps 1-Click Alive).


Considering the great antipathy demonstrated by the Commissioner towards the Amazon invention, and the significant (and somewhat inexplicable) investment made in the court proceedings, we are a little surprised so see the matter finally conclude (to quote T.S Eliot) ‘not with a bang but a whimper’.  However, the findings firstly of the primary judge, and then of the three judges in the Court of Appeal, are clear and substantially consistent: the fact that an invention might be described as relating to a ‘business method’ does not exclude it from patentability; the same considerations apply as for any other invention.

The Commissioner might be said to have made a pretty solid effort to bar the patenting of business methods in Canada, but a further attempt to appeal to the Supreme Court must ultimately have seemed unlikely to succeed, and a further waste of public money.  The other option – of rejecting the Amazon claims on new grounds, within the bounds of the law as decided by the Court of Appeal – might have been tempting, but was presumably considered untenable.


It has not escaped our attention, as we have noted previously, that the CIPO is one of three national patent offices which have each recently engaged in unilateral practice changes seemingly directed to limiting the extent to which certain computer-implemented inventions are considered eligible for patenting.  The other two are the UK IPO, and (of course) IP Australia (see IP Australia’s Escalating War on ‘Business Methods’).  Can it be coincidence that these three offices share a special relationship, as self-appointed members of the ‘Vancouver Group’?

The patentability of business methods is expressly limited within the member states of the European Patent Convention (including the UK), and Amazon’s corresponding European patent application received a final rejection before the European Patent Office (EPO) Boards of Appeal last January, in decision no. T 1244/07.  However, due to the particular approach taken in the EPO, the rejection was ultimately based on a lack of inventive step, rather than the express exclusion of the subject matter. 

Yet, apparently unsatisfied with this power of rejection, the UK IPO adopted a practice under which a broader range of computer-implemented inventions – including some which were clearly technical in nature – would be rejected on the basis of a ‘mental acts’ or ‘abstractness’ exclusion.


The UK IPO has been soundly criticised for its approach, in two recent appeal decisions issued by the High Court of England and Wales in Re Halliburton Energy Services Inc [2011] EWHC 2508 (Pat) (see Computer-Aided Design Method Held Patentable in UK) and again in Re Protecting Kids the World Over (PKTWO) Ltd [2011] EWHC 2720 (Pat).

Similarly, the Canadian Federal Court of Appeal made its views fairly clear regarding the significant shortcomings of CIPO’s approach to the Amazon 1-click claims.

It is not at all clear what has motivated three major patent offices to push the boundaries of the law in the way that they have.  Our best guess is that it is due to a perception that ‘software’ and ‘business method’ patents are controversial, and therefore that there is a ‘public interest’ in restraining the expansion of patentable subject matter in these areas.  Certainly there are some vocal opponents to such patents (assuming that by ‘vocal’ one means ‘prominent in certain online communities’), however there is a difference between something being in the public interest, and the observation that a segment of the public is interested in that thing.

The exercise appears to be over for the UK IPO and for CIPO.  It now remains to be seen whether the Australian Federal Court will be equally critical of IP Australia’s recent practices in this area when it comes, later this year, to consider appeals by Research Affiliates, LLC and RPL Central Pty Ltd.


Guest said...

what if you get an activist judge to hear your case?  i think judicial activism is very much alive...

Patentology (Mark Summerfield) said...

In Australia, at least, opportunities for judicial activism in the Federal Court at first instance are somewhat limited in this area.  A single judge of the court is bound by the reasoning of the earlier Full Court decisions in Grant and CCOM v Jiejing.

Most of the current Federal Court judges who commonly deal with patent cases appear to be fairly conservative in their approach.  The exception is perhaps Justice Bennett, as demonstrated by her decision on the grant of an interlocutory injunction to Apple last year.  But we now know how that ended: unanimously overruled by a Full Bench of the Federal Court, with another three judges of the High Court also unwilling to give the matter a further hearing.  In other words, she was wrong, and it is fairly safe to assume that she got the message, loud and clear!

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