In our post earlier this year (Business Method Patents: Amazon Clicks Through) we reviewed the story of Amazon’s battle with the Canadian patent office over its famous  1-click patent. South of the border, the USPTO confirmed the patentability of many of the Amazon’s claims earlier this year.

Yesterday, the Canadian Federal Court handed down its decision upholding the patent. The court was clear: “At its core, the question is whether a ‘business method’ is patentable under Canadian law. …the Court concludes that a ‘business method’ can be patented in appropriate circumstances.”  The court scolded the patent office for rewriting patent law in its rejection of the application. This is a major (and long-awaited) clarification of the law in Canada and will require time to assess its practical impact on patent applications. It is important to note that the Court sent the application back to the patent office to be re-examined, so the patent has not yet issued.

On that point, the Canadian Intellectual Property Office is currently reviewing its Manual of Patent Office Procedure (MOPOP) Chapter 16 – Computer Implemented Inventions. This chapter will need some re-thinking in light of the court’s guidance in Amazon.

In both the Amazon case in Canada, and the recent Bilski case in the US, the courts have indicated that the “machine-or-transformation” test should not be applied to patentability analysis in all cases, and that each application must be determined on its merits. In other words, there has been some guidance but no clear rules to apply to all applications. The state of Canadian law (unless this decision is appealed) is now clear that business methods can be patented in Canada, with careful drafting.

Calgary – 11:30 MT