Software Related Inventions Patentable Subject Matter Cameron Gale

Software Related Inventions Patentable Subject Matter Cameron Gale 2020

Statutory definition of invention • “Invention” means any new and useful – Art; – Process; – Machine; – Manufacture; or, – Composition of matter • Patent Act, s. 2

Art or process • Art means a method of doing something – “A computer-implemented method of placing an order for an item” • Process means doing something to a material or materials – “A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer”

Machine or manufacture • Machine – “A mobile computing device” • Manufacture means a product that is made by some process – “A computer-readable medium having stored thereon computer-executable instructions for performing a method for …”

Statutory exclusions • No patents for mere formulas, scientific principles, abstract theorems – “No patent shall be granted for any mere scientific principle or abstract theorem” - Patent Act, ss. 27(8) • Why are these explicitly excluded?

Justifications • Patents exist to promote progress • Patents are granted to “useful” inventions (“applied science”) • An abstract theorem or scientific principle, by itself, is not useful – Needs a practical application to be useful • To allow patents for theorems/principles would lock up scientific progress – This is bad 6

Where does software fit in? 7

What about software? • If A & B then C … – If computers are glorified calculators – & everything a computer does is based on computer code (which is a very detailed mathematical formula) – Then, isn’t all software a “mathematical formula” of sorts?

Against… • Software is a glorified algorithm • Software isn’t a machine or an art • Copyright already exists to cover software code • Patent terms are too long and impede progress • “Information wants to be free” • Not necessary • Creates risks for small business

In favour… • Software is inherently useful (must produce an output) • Software makes a computer into a particular machine • Copyright does not protect functionality, or against reverse-engineering • Software is the modern steam engine, and is found in all areas of industry • Software is enabling completely new industries: artificial intelligence, blockchain, etc. • Critical for small business to defend against copycats

Click to edit Master title style AI Industry 11

A framework for thinking about subject matter w You can’t patent math or science w You can patent applied science ?

Consider • Claim 8. A method for calculating value “f”, comprising the step of: – calculating f = m · a • Claim 9. A computer implemented method for determining the force “f” provided by a moving brick, comprising the steps of: – determining variable “m”, where “m” is the mass of the moving brick measured in kilograms; – inputting variable “a”, where a is the acceleration of the moving brick measured in meters per second; – automatically calculating f = m · a, where “f” is the force provided by the moving brick in newtons; and – displaying variable “f”. • Is this applied science?

Consider • Claim 10. A method for automatically lifting bricks, comprising: – measuring a mass of a brick; – determining an acceleration of the brick; – computing a force of gravity on the brick according to the formula F=m*a, where “m” is the mass and ”a” is the acceleration of the brick; – applying a second force to the brick using a robotic arm, the second force greater than the force of gravity and opposed to the force of gravity to lift the brick.

Where’s the dividing line? software? Software control system Hardware

Canada Schlumberger Canada Ltd. v. Commissioner of Patents (1981), 56 C. P. R (2 d) 204 (FCA) • Measurements obtained in the boreholes are recorded on magnetic tapes, transmitted to a computer, modified by mathematical formula set out in the specification and converted to human readable form. • Not patentable: – “mere scientific principle or abstract theorem”

Canada Schlumberger Canada Ltd. v. Commissioner of Patents (1981), 56 C. P. R (2 d) 204 (FCA) • “What the appellant claims as an invention here is merely the discovery that by making certain calculations according to certain formulae, useful information could be extracted from certain measurements. This is not, in my view, an invention within the meaning of s. 2”

Canada Shell Oil Co. v. Commissioner of Patents (1982) 67 C. P. R. (2 d) 1 (S. C. C. ) • “Art” is a word of very wide connotation and not to be confined … but extended to new and innovative methods of applying skill or knowledge provided that produce effects or results commercially useful to the public • This broad definition has been restricted in Harvard Mouse and Monsanto v. Schmeiser

Canada Shell Oil Co. v. Commissioner of Patents (1982) 67 C. P. R. (2 d) 1 (S. C. C. ) • Eligible process: 1. is not a disembodied idea but has a method of practical application; 2. is a new and innovative method of applying skill or knowledge; and 3. has a result or effect that is commercially useful.

Computers performing business methods Re: Application 564, 175 to Atkins, Sep. 1999, (Comm. Patents) • Applicant substitutes a computer programmed in a specific manner to make decisions which were formerly made by a financial advisor – professional skill • An operation which is not patentable when carried out by an individual cannot be made patentable merely by having it carried out by a computer

Amazon 21

Amazon’s invention • 1. A method in a client system for ordering an item, the method comprising: […] when an item is to be ordered, displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and in response to the single action being performed, sending to the server system a request to order the identified item along with the client identifier, the client identifier identifying account information previously supplied by a user of the client system wherein the user does not need to log in to the server system when ordering the item; and […] 22

Amazon’s adventures in the Patent Office • Commissioner’s Decision No. 1290 • Introduced “form and substance” evaluation of claims – Effectively a “contribution” test: what, in substance, has been discovered? • Does the discovery ”cause a change in character or condition of some physical object”? • Is the discovery “technological” in nature? • Business methods are excluded subject matter 23

Amazon. com 1 -Click Amazon. com, Inc. v. Canada (Attorney General), 2010 FC 1011 (Phelan J. ) • “There is no basis for the Commissioner’s assumption that there is a ‘tradition’ of excluding business methods from patentability in Canada” • A technological character test “would be highly subjective and provide little predictability” • Conduct purposive construction of claims • Look to Shell Oil: – “The Patent Act is not static; it must be applied in ways that recognize changes in technology such as the move from the industrial age to the electronic one of today. ”

Amazon. com 1 -Click Canada (Attorney General) v. Amazon. com, Inc. , 2011 FCA 328 • Affirmed Phelan J. in part • Looking for “scientific or technological in nature” is unclear and confusing • A patent claim may be expressed in language that is deliberately or inadvertently deceptive • Just because a business method has a practical embodiment or a “practical application” does not mean that it is patentable subject matter

CIPO’s current approach • New guidelines introduce tweaked “problem-and-solution” approach: 1. Conduct purposive construction 2. Look for “computer problem” (be wary of deception!) • problem with the operation of a computer • controlling a chip, system component or technical architecture element • addresses challenges or deficiencies in prior computers 3. Ask whether computer is essential to solving the problem • Is this based on existing case law?

Software patents are a thing Canadian Patent No. 2, 937, 693, issued January 17, 2017 • Claim 1. A computer-implemented method for evaluating a level of noise in a biosignal, the method comprising: – receiving a time signal representative of a biological activity, the time signal comprising a biological activity component and a noise component; – determining a modulation spectrum for the time signal, the modulation spectrum representing a signal frequency as a function of a modulation frequency; – determining, from the modulation spectrum, a first amount of modulation energy corresponding to the biological activity component and a second amount of modulation energy corresponding to the noise component; – determining an indication of the level of noise using the first and second amounts of modulation energy; and – outputting the indication of the level of noise.

SCC on subject matter, since Shell Oil (1982)

The definitive test? Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014) • Method of using a third party to mitigate settlement risk (aka “hedging”) • Apply the test from Mayo v. Prometheus, 132 S. Ct. 1289 (2012): – Is the claim directed to a patent ineligible concept: a law of nature, a natural phenomenon, or an abstract idea? – If yes, then examine the claim “as an ordered combination” to determine whether the additional elements offer “significantly more” than the ineligible concept, that can “transform the nature of the claim” into a patent-eligible application. • Conclusion: not statutory subject matter – an abstract idea.

The new way… Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014) • “Laws of nature, natural phenomena, and abstract ideas are ‘the basic tools of scientific and technological work. ’ … ‘Monopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, ’ thereby thwarting the primary object of the patent laws. We have ‘repeatedly emphasized this … concern that patent law not inhibit further discovery by improperly tying up the future use of’ these building blocks of human ingenuity. ” • “In any event, we need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case. ”

We need not labor… • But, all inventions can be distilled down to an abstract idea • How do we know when to stop distilling? • Is pre-emption a good test?

Alice in Software • Applies not just to business methods • Routinely applied to knock out variety of software-related inventions 32

US Patent Office Approach • Are the patent claims “directed to” an exception (e. g. , abstract idea)? – Abstract idea = mathematical concepts, methods of organizing human activity, or mental processes • If yes, is the exception “integrated into a practical application”? • If no, do the claims contain “significantly more” than the exception? 33

Where’s the dividing line? Business Methods? software Software control system Hardware

Business methods in Canada Progressive Games, Inc. v. Canada (Comm. Patents) (2000) 9 C. P. R. (4 th) 479 (F. C. A. ) affirming (1999) 3 C. P. R. (4 th) 517 (F. C. T. D. ) • Method of playing poker • Is shuffling cards an “art”? • Not patentable because “known use for playing cards”

Overlap with software patents Re: Application 564, 175 to Atkins, Sep. 1999, (Comm. Patents) • Applicant substitutes a computer programmed in a specific manner to make decisions which were formerly made by a financial advisor – professional skill • An operation which is not patentable when carried out by an individual cannot be made patentable merely by having it carried out by a computer

Business methods in US State Street Bank v. Signature Financial (Fed. Cir. 1998) • data processing system for administering mutual funds • hub and spoke method • calculated final share price • “useful, concrete & tangible result” • patentable • there is no “business methods” exclusion to patentability

Where’s the dividing line? signals Business software method Software control system Hardware

Signal claims • A signal is data or information briefly transmitted • It is not stored in memory. – e. g. , data communicated over the Internet

Signal claims In Re Nuijten (500 F. 3 d 1346, Fed. Cir. 2007) • A signal, standing alone, is not patentable • A new method of watermarking (adding data listener cannot hear to an audio file, but which can be detected by computer) • Court held: – A manufacture must be tangible – “Transient” or “fleeting” inventions not patentable – Claimed signal is devoid of any semblance of permanence during transmission

Contrast signal claims • Chemical claims – Fleeting “intermediate” produced in a chemical reaction is patentable

“Fixing” signal claims • Patentable claims: – Method to watermark signal (add the inaudible data) – Device to watermark signal – Storage medium containing watermarked signal

Signal claims in Canada • CIPO formerly regarded signal claims (e. g. , carrier wave representing computer instructions) as patentable • More recently, considered a transitory “form of energy” and therefore not patentable • But methods, processes, machines or manufactures involved in the generation, transmission, reception, or processing of signals may be patentable

Where’s the dividing line? data Signals structure Business Software method Software control system Hardware

Data structures • Represent a physical implementation of a data model for organizing and representing information which is used by a computer program • Physical organization is responsive to the attributes of the data rather than specific content – e. g. MP 3, customer database, or DVD data structure: organized and linked compressed video data portions having an indexing system or interface such as chapters, pointers, etc. to access particular portions of the video

US - 1994 In re Lowry (1994) • data structure of database was patentable • dictated how application programs managed information • allowed the computer to operate more efficiently

US - 2014 Digitech Image v. Electronics for Imaging (Fed. Cir. 2014) • “Data in its ethereal, non-physical form is simply information that does not fall under any of the categories of eligible subject matter” • The claim “recites an ineligible abstract process of gathering and combining data that does not require input from a physical device”

Canada • No case law • Once upon a time CIPO Guidelines supported patentability – Claimed as a product • Latest guidelines consider a data structure to be an abstract idea

Questions? Cameron Gale cgale@bereskinparr. com 2019