Amazon.com Appeal Allowed By The Federal Court Of Appeal

Nora Sleeth is a JD candidate at Osgoode Hall Law School.

In June 2011, Amazon.com appeared before the Federal Court of Appeal as respondents in an appeal of the Federal Court’s decision that Amazon’s “one-click” business model was patentable subject matter. On November 24, 2011, the Federal Court of Appeal released its decision and allowed the appeal. The Court directed that the Commissioner of Patents re-examine Amazon’s application in accordance with the Court’s reasoning. The full decision may be found here.

The parties framed the relevant issues very differently, illustrating a “fundamental disagreement” regarding the appropriate analytical approach for determining what is patentable subject matter and when a patent should be granted. My previous blog on the Federal Court of Appeal proceedings details the different arguments led by the Appellant and Respondent.

Section 27(1) of the Patent Act mandates that the Commissioner grant a patent for an invention if the application meets certain statutory requirements. Thus, the subject matter of the application must be an invention as described under section 2 of the Patent Act. Considerations under section 27 include patentability of the subject matter, novelty, obviousness, and utility. The subject matter is “the subject matter defined by the claim” as opposed to “what the inventor claims to have invented.” The Commissioner, however, is directed to ask what was actually invented as this may be relevant to the section 27 concerns. Further, case law suggests that a purposive construction of the actual invention is necessary to prevent the influence of any deceptive language in the claim. A determination of patentable subject matter is made when a purposive construction describes something that is an invention, as defined as an art or process under section 2 of the Patent Act.

The Court discussed the tests applied by the Commissioner that led to the original rejection of Amazon’s patent application. Specifically, patentable subject matter “must be technological in nature; must not be a business method; and must cause a change in the character or condition of a physical object.” The Court stated that the scientific or technological nature of the patent is subjective and should not be the sole basis of a decision. In addition, the Court found that a business method could be “an essential element of a valid patent claim.” Finally, a patent cannot be granted for an abstract idea; it must be something with physical existence or something that manifests change.

Since the Court referred the application back to the Commissioner, the ultimate result remains to be seen. Regardless, this decision represents an important step in the recognition of computer-related patents. Given the significance of this case, it is speculated that there will be an appeal to the Supreme Court of Canada.

[Note: By January 3, 2012, the Commissioner of Patents had allowed Amazon.com’s patent application and the final fee had been paid.]