Law Times

Law Times • June 8, 2009 FOCUS New draft guidelines issued on business method patents BY GLENN KAUTH Law Times draft guidelines on busi- ness method patents, and the proposed rules may not be good news for e-commerce. Th e draft, which ex- T cludes protection claims for processes in a "non- technological fi eld," will likely make it diffi cult, if not impossible, for many Internet-based businesses to get patents for their inventions. "I think it's going to be a lot harder he Canadian Patent Offi ce has issued new cases are much dimmer. "It's sounding more 'It's not like creating a new drug for cancer, which costs billions of dollars,' says Chris Hunter, referring to business methods. in Canada to get patents on e-commerce because e-commerce almost by defi nition is non-technological," says Chris Hunter, a partner at Ogilvy Renault LLP in Toronto. At issue is whether doing business online has a physical component, a question that is fairly obvious when the invention at hand is a widget. "It's not like creating a new drug for cancer, which costs billions of dollars," says Hunter, referring to business methods. A common test for whether something is patentable is whether you can hit it with a hammer, he notes. But that's not often the case with business methods, which are essentially a way of doing something. Th ey include methods in economics, commerce, accounting, and marketing, according to the intellectual property of- fi ce. Should, for example, someone be able to patent a system for fi ling taxes? Hunter gives another example, that of lining people up at a bank into one queue for all tellers instead of leaving custom- ers to wait in separate lines. "I think that would probably be a method of commerce or a business method," he says, nevertheless arguing that whether such a system should be eligible for a patent is unclear. "It's physical. People are moving around. Gravity is in place." Banks, of course, have organized them- selves that way for years, and while the whole question of business methods and patents for them is murky, the issue came to the forefront in a recent decision involv- ing Amazon.com. In that case, the online retailer applied for a patent for it's so-called one-click system, which allows customers to order goods quickly by enabling a cook- ie that records their information without requiring them to use a shopping cart or input credit-card numbers each time. But the Canadian Patent Appeal Board turned down Amazon's application, arguing that while the one-click system fi t the standard requirement of being new and not obvious, as a business method, it wasn't eligible. Th e move represents a departure. In 2005, for example, the federal agency's Manual of Patent Offi ce Practice quashed the notion of automatically rejecting busi- ness method patents, Hunter says. Now, with the Amazon decision, and the proposed updated version of the manual released last month, prospects of getting patents in such and more like the U.S. Bil- ski decision," says Hunter, referring to a high-profi le U.S. Court of Appeals for the Federal Circuit rul- ing last year. In that case, judges turned down a re- quest to patent a method for hedging risks in com- modities trading. In do- ing so, they emphasized that in order to be eli- gible, a process must have ties to a particular appara- tus and transform a good into something else. "You notice the language of physical sounding," says Hunter, noting the new Canadian manual refl ects that approach. "Fields of human endeavour such as economics, commerce, accounting, record keeping, marketing, and law are not them- selves fi elds of technology," the draft states. "While it is certainly possible for inventions of relevance to such fi elds to be patentable (ie. tools for use in their practice), advances in the concepts of their practice are beyond the scope of . . . the Patent Act." But the challenge, according to Hunter, is that although a section of the current manual allowing for business-method patents is gone from its proposed replace- ment, what does and doesn't fall into that category still isn't obvious. With Amazon, for example, he argues the one-click sys- tem isn't necessarily a business method. "A book order certainly is something physical," he says, noting various pieces of computer hardware are also involved. For Hunter, then, the concern isn't so much that authorities should allow busi- ness-method patents but rather the need for clarity on what is and isn't eligible. "I think what needs to be done is clarifi ca- tion, fi rst and foremost. Right now, we're sitting here scratching our heads thinking about how to line up at McDonald's." Where businesses stand on the issue, meanwhile, depends on their position in the patent world. Someone who invents what is or could be a business method, of course, would be advocating for rules that allow for a patent, while those fac- ing potential infringement challenges would want more restrictive guidelines in order to protect their right to produce something, Hunter notes. So far, however, the new guidelines from the Patent Offi ce remain a pro- posal, and stakeholders have until Aug. 14 to provide comment on them. Th ey aren't law, meaning their main eff ect would be in providing instructions to patent examiners on how to evaluate ap- plications, Hunter points out. But at the same time, he argues the proposals do create risks for businesses struggling to fi gure out what is and isn't patentable. As a result, he expects it might take a court challenge from a company, such as Amazon, to sort out the issue. "If there's clarity, then we can agree to disagree," he says. LT Go to www.bar-ex.com or call 1-877-462-2739. PAGE 11 WRITS OF EXECUTION OWL® Report Requested By: MB, Reference Number: DOE Date of Search: March 01, 2009 Total Cost(including GST): $52.45 Name Searched: DOE, JOHN The following writs of execution were retrieved: ENFORCEMENT OFFICE: WRIT NUMBER: 06-0002045 06-0003692 ENFORCEMENT OFFICE: WRIT NUMBER: 03-0000638 ENFORCEMENT OFFICE: WRIT NUMBER: 95-0003348 ENFORCEMENT OFFICE: WRIT NUMBER: 05-0000399 92-0000155 ENFORCEMENT OFFICE: WRIT NUMBER: 95-0000346 95-0000632 96-0000200 ENFORCEMENT OFFICE: GODERICH PARRY SOUND LINDSAY KITCHENER WELLAND NEWMARKET www.twitter.com/lawtimes www.lawtimesnews.com Teranet_LT_May11/18_09.indd 2 5/6/09 2:44:48 PM 3868.BX LawTimes 04/09

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