Law Times

Law Times • December 5, 2011 BRIEF: INTELLECTUAL PROPERTY LAW Appeal court overturns Amazon ruling But decision still a victory for business-method patents, lawyer says BY KENNETH JACKSON For Law Times A recent appeal court de- cision may have over- turned a lower court ruling that had granted Amazon. com a patent for its one-click online shopping method, but in doing so it brought the Canadian patent system into the 21st cen- tury, a patent lawyer says. According to Grant Tisdall of Gowling Lafl eur Henderson LLP, the Federal Court of Appeal deci- sion is a signal that the Canadian patent system has fi nally received an upgrade. "Business-method patents have been acknowledged as having their rightful place at the patent table alongside more traditional technologies," says Tisdall, a partner at Gowlings. "Th e commissioner of patents' self-imposed historical is referring stance on the prohibition of [busi- ness-method patents] has been deemed incorrect in law." Tisdall to the unanimous three-judge ruling on Nov. 24 that brought the 13-year battle for the one-click business- method patent to a possible close when it found Justice Michael Phelan of the Federal Court had overstepped his boundaries by or- dering the commissioner to issue a patent to Amazon. Nevertheless, appeal court Jus- tice Karen Sharlow ordered the commissioner to reconsider the patent. "I conclude that the ap- peal should be allowed but only to amend the direction so that it requires the commissioner to re- examine the patent on an expe- dited basis," wrote Sharlow. Amazon fi rst applied for the one-click patent in September 1998 when Internet shopping was relatively new and required merchants to go through multi- ple steps to sell items online. Th e one-click method shortened the process, making it easier to shop. Th e commissioner initially refused Amazon's application for a patent. Th e online com- pany has similar patents in the United States, Australia, and New Zealand. It took the government to court and fi nally won its pat- ent last fall when Phelan made his order. At least it thought it had won. Th e Department of Justice quickly fi led an appeal. Tisdall says that even though Amazon lost, companies can now benefi t from the ruling and need to pro- actively consider the role business methods play in their technology in order to take advantage of it. "However, careful attention must be paid to the form and patent must do so on the basis of a foundation of knowledge about the relevant art, and in particular about the state of the relevant art at the relevant time. For the commissioner, that assistance comes in the form of submissions from the patent ap- plicant and, I assume, from staff at the patent offi ce with the ap- propriate experience. Courts, however, generally require the expert evidence of persons skilled in the art." According to Sharlow, Phel- an didn't have the benefi t of expert evidence when reaching his decision. We're pleased to announce Mark Eisen's appointment as President of the Intellectual Property Institute of Canada The ruling brings Canada's pat- ent laws up to date, says Grant Tisdall. content of how technology re- lated to business methods is de- scribed and claimed in Canadian patent applications," he wrote in a blog post on lexology.com. Tisdall tells Law Times that companies in the United States have been dealing with business- method patents in their own backyard since the patent system formally recognized them in State Street Bank & Trust Co. v. Signa- ture Financial Group in 1998. "Th erefore, one can say that U.S. companies enjoy a 13-year head start over Canadian compa- nies on considering and perfect- ing how [business-method pat- ents] can be used to the benefi t or detriment," he says. He also says Amazon isn't the only U.S. company that has fi led for business-method patents in Canada since 1998. "Due to patent examination delays, for a variety of reasons, there is a glut of U.S.-based [business-method patent] ap- plications currently pending in the Canadian Intellectual Prop- erty Offi ce, the examination of which will be aff ected by this [appeal] decision," says Tisdall. According to Tisdall, the ap- peal court considered that the commissioner shouldn't have per- mitted its stance against business- method patents to cloud its judg- ment on the examination of the Amazon application in light of other statutory provisions such as novelty and inventiveness. "In my view, the task of pur- posive construction of the claims in this case should be undertaken anew by the commissioner, with a mind open to the possibility that a novel business method may be an essential element of a valid patent claim," wrote Sharlow. But she added that it should be the commissioner, not the court, that awards the pat- ent. "Anyone who undertakes a purposive construction of a A registered patent agent and trademark agent, Mark has focused exclusively on the protection of inventions and trademarks since his call to the Ontario Bar in 1985. He has more than 25 years experience securing patent rights in a wide range of technologies, with particular emphasis on electrical, electronic, networking and business method technologies, and protecting trademark rights around the world. Mark is certified by the Law Society of Upper Canada as a Specialist in Intellectual Property (Patent) Law, serves on numerous committees and is rated bv® Preeminent™ by Martindale-Hubbell. Congratulations Mark! PAGE 13 Dimock Stratton llp experience. results. 20 Queen W. 32nd fl, Toronto | 416.971.7202 | dimock.com Untitled-2 1 11-11-28 9:20 AM Untitled-2 1www.lawtimesnews.com 1/26/11 3:59:49 PM

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