Federal Court Delivers Good News for Software Patents In Choueifaty v. Canada (Attorney General), 2020 FC 837, the Federal Court issued a welcome rejection of the current approach followed by the Canadian Intellectual Property Office (CIPO) for assessing whether claims are directed to patent-eligible subject matter. Specifically, the court held that “problem-solution” approach to claim construction applied by CIPO in the analysis is not correct. Background The claims at issue in this case are directed to a computer-implemented method for selecting and weighing investment portfolio assets that minimizes risk without impacting returns. The application had been refused by CIPO on the basis that the claims were merely directed to “a scheme of rules involving mere calculations” for weighing securities. This conclusion was based largely on the “problem-solution” approach to claim construction, which found that a computer was not an essential element of the claims. Determining Essential Claim Elements An assessment of patent-eligibility starts with a purposive construction of the claims. The framework for purposive construction is set out by the Supreme Court of Canada in its Free World Trust[1] and Whirlpool[2] decisions. Purposive construction involves determining whether claim elements are “essential” or “non-essential.” Non-essential elements may be varied or even omitted. This determination of “essential” or “non-essential” asks the following questions (as summarized by the court in Choueifaty at para 38): 1. Would it be obvious to a skilled reader that varying a particular element would not affect the way the invention works? If modifying or substituting the element changes the way the invention works, then that element is essential. 2. Is it the intention of the inventor, considering the express language of the claim, or inferred from it, that the element was intended to be essential? If so, then it is an essential element. However, for the past several years, CIPO has instead applied a “problem-solution” approach to claim construction. According to this approach, “essential” elements are only those required to provide a solution to an identified problem. Those elements not required for the particular solution are designated “non-essential” and are effectively omitted from consideration. For computer-implemented inventions, a patent examiner finding that the computer hardware elements are “non-essential” by this approach is likely to result in a rejection of the claims as not patent-eligible. The Decision In Choueifaty, the Federal Court has held that “problem-solution” approach followed by CIPO is not the correct legal test for determining what claim elements are essential. In a clear rebuke, the court held that: It is evident […] that the Commissioner [of Patents], notwithstanding stating that the patent claims are to be construed in a purposive manner, does not intend or direct patent examiners to follow the teachings of Free World Trust and Whirlpool. (para 31, emphasis added) The court went on to state that the “problem-solution” approach ignores the “intent” branch of the proper purposive construction framework. Thus, the court concluded that CIPO had erred in determining the essential elements of the claimed invention at issue. The court also rejected CIPO’s justification for applying a different test (problem-solution) than the proper test set out by the Supreme Court in Free World Trust and Whirlpool. CIPO had relied on a 2008 decision of the Federal Court[3] stating that the Supreme Court decision of Whirlpool was directed to trial judges and not patent examiners. However, the court in Choueifaty rejected this distinction as bad law, noting that the Federal Court of Appeal specifically directed CIPO to follow the purposive construction approach set out by the Supreme Court in the 2011 Amazon.com decision[4]. Rather than render a decision on the patent-eligibility of the claims at issue, the court sent the patent application back to CIPO to reassess the claims. Conclusion This decision gives fresh hope to applicants, particularly those pursuing patents for computer-implemented inventions, who have been frustrated by CIPO’s overly restrictive and often unpredictable application of the “problem-solution” test. The decision may be appealed by CIPO, and it remains to be seen how CIPO may revise their approach to assessing patent-eligibility. For more information or questions regarding patents, please contact our Intellectual Property Team. [1] Free World Trust v Électro Santé Inc, [2000] 2 S.C.R. 1024. [2] Whirlpool Corp v Camco Inc, [2000] 2 S.C.R. 1067. [3] Genencor International Inc v Canada (Commissioner of Patents), 2008 FC 608. [4] Canada (Attorney General) v Amazon.com, Inc, 2011 FCA 328 at para 43. Disclaimer: This article is to be used for educational and non-commercial purposes only. Parlee McLaws LLP does not intend for this article to be a source of legal advice. Please seek the advice of a lawyer before choosing to act on any of the information contained in this article.