When is There an “Actual Invention” Involving Computers?

February 2, 2021
By Paul Horbal and Sunil Rao

Good news for patent applicants with computer-implemented inventions: Canada’s Patent Appeal Board (PAB) recently ruled that proposed claims in Yves Choueifaty’s patent application define patentable subject matter and should be allowed. Choueifaty’s patent application was the subject of a recent Federal Court decision, which held that the Canadian Intellectual Property Office (CIPO) had been using an incorrect test for patentable subject matter. Choueifaty’s application was remanded back to the PAB for further consideration, resulting in this new and favourable decision. The PAB decision should provide patent applicants with further clarity and guidance regarding patentable subject matter or, in other words, what can be patented.

To be patentable in Canada, an invention must meet four main criteria: it must be new, it cannot be obvious, it must be useful and, crucially, it must fall within the definition of “invention” (as defined in the Patent Act). On this latter point, CIPO had, in recent years, used an approach that often excluded computerized elements from consideration, unless they were deemed “essential” to solving a problem faced by the patent applicant. This resulted in patent examiners often characterizing the alleged “problem” in such a manner that any computer elements recited in a claim were deemed non-essential and thus disregarded.

Faced with such a rejection, Yves Choueifaty had appealed to the Federal Court of Canada. The Court ruled in Choueifaty’s favour in August 2020, and remanded the application to CIPO, to perform a fresh assessment of the claims in view of the decision.

In response to the Federal Court decision, CIPO published a practice notice – a guidance document for patent examiners – to aid in applying the correct analysis: purposive construction. The practice notice raised some eyebrows by suggesting an “actual invention” test, in which an element “would not form part of the actual invention because the fact that it has no material effect on the working of the invention means it does not cooperate with other elements of the claimed invention” (emphasis added). This had some observers fearing that CIPO’s new approach would continue to disregard computerized claim elements.

The PAB decision in Choueifaty’s application puts some of these fears to rest. As expected, in reconsidering the Choueifaty application, the Patent Appeal Board did apply the new CIPO guidelines and in particular, the requirement that an abstract idea “must cooperate with other elements of the claimed invention so as to become part of a combination of elements making up an actual invention.” But the PAB noted that in Choueifaty’s invention “the computerized calculations here are not merely for yielding information, but for permitting the computer to carry out the portfolio optimization procedures with significantly less processing and greater speed.” In other words, the computer in Choueifaty’s claims is not just a computer, it is a better computer. More importantly, the computer is better because of Choueifaty’s algorithms. Or, as the PAB put it, the “algorithm improves the functioning of the computer used to run it […] the computer and the algorithm together form a single actual invention that has physicality and solves a problem related to the manual or productive arts.”

If this Choueifaty PAB decision is a sign of how CIPO will approach examination of patentable subject matter, then hopefully the days where computer claim elements are routinely and offhandedly dismissed as “non-essential” are behind us. This new approach should therefore be welcomed by patent applicants whose inventions serve to improve the functioning of computers, for example, by increasing speed, efficiency, security or reliability. However, it is likely that CIPO will continue to reject computer-implemented invention claims where the computer is incidental or tangential to the invention, where the remaining claim elements can be classified as mere scientific principles or abstract theorems.  As ever, careful and considered patent drafting will continue to be important to craft proper claims and avoid such potential pitfalls.

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