Amazon.com Inc. v. Canada (Attorney General), (2011) 423 N.R. 337 (FCA)

• Judge: Sharlow, Trudel and Stratas, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 21, 2011
• Jurisdiction: Canada (Federal)
• Citations: (2011), 423 N.R. 337 (FCA);2011 FCA 328

Amazon.com Inc. v. Can. (A.G.) (2011), 423 N.R. 337 (FCA)

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Temp. Cite: [2011] N.R. TBEd. DE.015

The Attorney General of Canada and the Commissioner of Patents (appellants) v. Amazon.com, Inc. (respondent) and Canadian Life and Health Insurance Association Inc. and the Canadian Bankers Association (intervenors)

(A-435-10; 2011 FCA 328; 2011 CAF 328)

Indexed As: Amazon.com Inc. v. Canada (Attorney General)

Federal Court of Appeal

Sharlow, Trudel and Stratas, JJ.A.

November 24, 2011.

Summary:

Amazon.com Inc. sought a patent for an invention entitled "Method And System For Placing A Purchase Order Via A Communication Network". The claimed invention enabled internet shopping with a simplified "one-click" process in ordering. The Examiner rejected the patent on the basis of obviousness and non-patentable subject matter. Amazon.com challenged the Examiner's decision. The Patent Appeal Board recommended that the Commissioner of Patents reverse the examiner's objection on the ground of obviousness, uphold the examiner's objection on the ground of no patentable subject matter, and reject the application solely on the ground of no patentable subject matter. The Commissioner subsequently made a ruling concurring with the findings and recommendations of the Board, and refusing to grant the patent (i.e., the Board rejected the claims on the basis that they did not conform to s. 2 of the Patent Act and accordingly were non-patentable subject matter). Amazon.com appealed.

The Federal Court, in a decision reported at 376 F.T.R. 288, allowed the appeal. The misapprehension of the Commissioner and the Examiner as to the patentability of the subject matter was a fundamental error of law. A "business method" could be patented in appropriate circumstances. The Commissioner's decision was quashed and sent back for expedited re-examination with the direction that the claims constituted patentable subject matter to be assessed in a manner consistent with the court's reasons. The Commissioner did not grant the patent and, along with the Attorney General of Canada, appealed the judgment of the Federal Court. The Canadian Life and Health Insurance Association Inc. and the Canadian Bankers Association sought leave to intervene in the appeal.

The Federal Court of Appeal, per Trudel, J.A., in a decision reported at 420 N.R. 42, granted leave to intervene and set a strict timetable.

The Federal Court of Appeal allowed the appeal, but only by amending the direction so that it required the Commissioner to re-examine the patent on an expedited basis in a manner consistent with the appeal court's reasons (i.e., to do a purposive construction of the patent claims).

Patents of Invention - Topic 8

General - Invention defined - [See all Patents of Invention - Topic 702 ].

Patents of Invention - Topic 702

Application for grant - General - Items patentable - Amazon.com Inc. sought a patent for an invention entitled "Method And System For Placing A Purchase Order Via A Communication Network" - The claimed invention enabled internet shopping with a simplified "one-click" process - The Commissioner refused to grant the patent because the claimed invention was not an "art" or a "process" (Patent Act, s. 2) and, therefore, was non-patentable subject matter - The Federal Court of Appeal held that the Commissioner had erred in the analytical framework by failing to do a purposive construction of the patent claims - The court returned the matter to the Commissioner - See paragraphs 49 to 75.

Patents of Invention - Topic 702

Application for grant - General - Items patentable - The Federal Court of Appeal discussed the analytical framework to be applied by the Commissioner of Patents in determining whether a patent application should not be granted for want of patentable subject matter (i.e., in determining whether there was an "invention" as defined in s. 2 of the Patent Act) - The court concluded the Commissioner's determination of subject matter had to be based on a purposive construction of the patent claims, as opposed to determining subject matter solely on the basis of the inventive concept - See paragraphs 27 to 48.

Patents of Invention - Topic 702

Application for grant - General - Items patentable - Section 2 of the Patent Act defined an invention as meaning "... any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter" - The Federal Court of Appeal referred to a discussion of the jurispurdence on the meaning of "art" and "process" - See paragraphs 49 to 55.

Patents of Invention - Topic 702

Application for grant - General - Items patentable - Amazon.com Inc. sought a patent for an invention entitled "Method And System For Placing A Purchase Order Via A Communication Network" - The claimed invention enabled internet shopping with a simplified "one-click" process - The Commissioner refused to grant the patent because the claimed invention was not an "art" or a "process" within the meaning of those words as used in the definition of invention in s. 2 of the Patent Act - In particular, the Commissioner found that the invention failed three tests implicit in the meaning of "art" for purposes of the Patent Act: (1) it did not add to human knowledge anything that was technological in nature; (2) it was merely a business method and a business method was not patentable; and (3) it did not cause a change in the character or condition of a physical object - The Federal Court of Appeal discussed whether these tests were appropriate - See paragraphs 49 to 69.

Patents of Invention - Topic 702

Application for grant - General - Items patentable - Amazon.com Inc. sought a patent for an invention entitled "Method And System For Placing A Purchase Order Via A Communication Network" - The claimed invention enabled internet shopping with a simplified "one-click" process - The invention had been patented in the United States, Australia and New Zealand, but not in Europe - The Federal Court of Appeal stated that "... it would not be helpful in the disposition of this appeal to attempt to explain the results of Amazon's patent applications in other jurisdictions. It is enough to say that every jurisdiction has its own patent laws and administrative practices, and they are inconsistent with one another in important respects. The fact that a patent is granted for a particular invention in one or more other jurisdictions cannot determine whether it constitutes patentable subject matter in Canada" - See paragraph 16.

Patents of Invention - Topic 883

Application for grant - Appeals or judicial review - Scope of appeal or standard of review - Amazon.com Inc. sought a patent for an invention entitled "Method And System For Placing A Purchase Order Via A Communication Network" - The claimed invention enabled internet shopping with a simplified "one-click" process - The question before the Commissioner was whether the claimed invention was within the scope of the definition of "invention" in s. 2 of the Patent Act - The Federal Court of Appeal stated that the answer to that question required the Commissioner to interpret the definition of "invention" (especially the words "art" and "process" in that definition) - Those were questions of law reviewable on the standard of correctness - See paragraph 17 - The Commissioner's construction of the patent claims was also reviewable on the standard of correctness, however, any factual determinations in connection with that construction were reviewable on the standard of reasonableness - See paragraph 18.

Cases Noticed:

Shell Oil Co. v. Commissioner of Patents, [1982] 2 S.C.R. 536; 44 N.R. 541, refd to. [para. 21].

Progressive Games Inc. v. Commissioner of Patents (1999), 177 F.T.R. 241 (T.D.), affd. (2000), 265 N.R. 392; 9 C.P.R.(4th) 479 (F.C.A.), refd to. [para. 21].

Free World Trust v. Electro Santé Inc. et al., [2000] 2 S.C.R. 1024; 263 N.R. 150; 2000 SCC 66, refd to. [para. 25].

Whirlpool Corp. et al. v. Camco Inc. et al., [2000] 2 S.C.R. 1067; 263 N.R. 88; 2000 SCC 67, refd to. [para. 25].

Schlumberger Canada Ltd. v. Commissioner of Patents, [1982] 1 F.C. 845; 38 N.R. 299 (F.C.A.), refd to. [para. 44].

Commissioner of Patents v. Farbwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning, [1964] S.C.R. 49, refd to. [para. 45].

Consolboard Inc. v. MacMillan Bloedel (Sask.) Ltd., [1981] 1 S.C.R. 504; 35 N.R. 390, refd to. [para. 45].

Lawson v. Commissioner of Patents (1970), 62 C.P.R. 101 (Ex. Ct.), refd to. [para. 64].

Statutes Noticed:

Patent Act, R.S.C. 1985, c. P-4, sect. 2 [para. 12]; sect. 27(1) [para. 28]; sect. 27(3), sect. 27(4), sect. 27(8) [para. 35]; sect. 40 [para. 30].

Counsel:

Frederick B. Woyiwada and Sharon Johnston, for the appellant;

Steven B. Garland, Colin B. Ingram and John R. Morrissey, for the respondents;

Brian W. Gray, Allyson Whyte Nowak and Adam Haller, for the intervenors.

Solicitors of Record:

Myles J. Kirvan, Deputy Attorney General of Canada, Ottawa, Ontario, for the appellant;

Smart and Biggar, Ottawa, Ontario, for the respondents;

Ogilvy Renault LLP, Toronto, Ontario, for the intervenors.

This appeal was heard at Toronto, Ontario, on June 21, 2011, before Sharlow, Trudel and Stratas, JJ.A., of the Federal Court of Appeal. The following decision was delivered for the court by Sharlow, J.A., at Ottawa, Ontario, on November 24, 2011.