Canadian Software Businesses Should Consider Patents Despite CIPO’s Misleading Messages
February 22, 2019
By Cameron Gale
As part of the government of Canada’s IP strategy, the Canadian Intellectual Property Office (CIPO) is making laudable efforts to educate the Canadian public about tools for protecting intellectual property assets. Unfortunately, some of these efforts may discourage Canadian innovators from using patents to protect patent-worthy software innovations.
A patent one-pager provided by CIPO at a recent symposium for entrepreneurs explained that “[s]oftware is considered a literary work and cannot generally be protected with a patent”. CIPO’s online guide to patents includes similar messages about the patentability of computer programs. However, these messages may be giving Canadian inventors the wrong impression that software innovations are not patentable. While the code used to generate computer programs may be a literary work protectable by copyright, many software innovations are nonetheless patentable in Canada and elsewhere.
Patenting software innovations may provide a number of advantages that copyright alone cannot. For instance, patents may be enforced to prevent competitors from using an innovation even if it was developed independently. By contrast, establishing copyright infringement requires evidence of actual copying. Patents can also provide a broader scope of protection. This may allow software innovators to prevent competitors from using the functionality of an invention even if the competitor has not implemented the functionality in exactly the same manner. However, before a patent can be enforced, it is necessary to apply for and have the patent office grant a patent application.
Convincing the patent office that an invention constitutes patentable subject matter continues to be a challenge, particularly for software patent applications. For instance, patent examiners in Canada and the United States tend to be antagonistic towards software innovations involving financial transactions. Even so, CIPO has recently issued patents directed to ordering traffic captured on a data connection (Canadian Patent No. 2,928,595), analyzing administrative healthcare claims data and other data sources (Canadian Patent No. 2,632,730), dynamic mobile network traffic control (Canadian Patent No. 2,747,336), and devices including multiple payment applications (Canadian Patent No. 2,703,492). Given the particular challenges involved in patenting software innovations, it is important that software patent applications be drafted carefully to provide the greatest chance of succeeding at the patent office.
Canadian courts have not had many opportunities to consider the patentability of software inventions. However, in a 2011 case involving Amazon, the Federal Court of Appeal set aside the Patent Office’s rejection of a patent application directed to Amazon’s one-click online ordering system. CIPO subsequently allowed the application to issue as Canadian Patent No. 2,246,933. As noted above, this is just one of many software patents that CIPO has granted and continues to grant. CIPO’s own examination manual provides that “software can be claimed by directing the claim to a physical memory storing the computer program”.
This does not mean that all innovative software is patentable. All patent applications still have to satisfy all the requirements of the Patent Act, including being new, useful and non-obvious. Software innovations also present additional challenges in convincing the patent office that they fall within the scope of “patentable subject matter” under the Patent Act. In the Amazon case, the Federal Court of Appeal explained that “patentable subject matter must be something with physical existence, or something that manifests a discernible effect or change”. Many software innovations satisfy these requirements, particularly when implemented on physical devices. When drafting patent applications for software innovations, it is important to emphasize the discernible or tangible effects resulting from the invention.
Like the Government of Canada’s Intellectual Property Strategy says, “businesses need to protect their intellectual property”. Canadian software businesses should not overlook patents as an important tool to consider when protecting their intellectual property.
 Canada (Attorney General) v. Amazon.com, Inc., 2011 FCA 328, [Amazon].
 Manual of Patent Office Practice s. 16.08.04.
 Amazon at para. 66.
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