PATENABLE SUBJECT MATTER Osgoode Hall Law School A. David Morrow Smart & Biggar March 8, 2005

1. PATENABLE SUBJECTMATTEROsgoode Hall Law SchoolA. David MorrowSmart & BiggarMarch 8, 2005

2. “Patent protection rests on the concept of a bargain between the inventor and the public. In return for disclosure of the invention to the public, the inventor acquires for a limited time the exclusive right to exploit it. It was ever thus.” Binnie, J., Free World Trust v. Électro Santé Inc. (2001), 9 C.P.R. 4th 168 at p. 178

3. THE PATENT SYSTEM: PURPOSES • grant of exclusivity • reward the inventor • public disclosure

4. THE PATENT SYSTEM: ORIGINS • In the reign of Queen Elizabeth I, monopolies granted in commodities such as salt, coal, playing cards • letters patent (Latin: litterae patentes- “open letters”) • the first statutory enactment in the U.K. - Statute of Monopolies, 1624

5. STRONG PATENT SYSTEM • U.S. • EUROPE • JAPAN

6. Requisite Qualities of a Patentable Invention A patentable invention must be: • Useful • New • Non-obvious (inventive) • Statutory subject matter

7. Contents of a Patent • Disclosure Patent • Claims

9. The Definition of “Invention” • Section 2: “invention” means 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.

10. Statutory Categories ofPatentable Subject Matter • Art • Process • Machine • Manufacture or composition of matter ART PROCESS MANUFACTURE

11. Art / Process • A physical action on a certain substance to produce a tangible result Examples: • a process for increasing the hardness of a metal by subjecting the metal to a thermal treatment • a process for welding metallic pieces • a process for assembling a machine • a process for manufacturing a chemical compound

12. Machine • The embodiment in mechanism of a dynamic function or mode of operation Examples: • a nuclear reactor • an internal combustion engine • a radio • a hairdryer • a computer

13. Manufacture or Composition of Matter • Tangible products of a generally static nature Examples: • a chair • a chemical compound • a transistor • a paper clip

14. Claims • Fence of words” defining monopoly • Must define a new and non-obvious invention • Typically a patent / application will include multiple claims, only one need be infringed

15. Example of Claims of a Patent 1. Pneumatic tire for an automotive vehicle having a corrugated tread including transverse grooves opening at lateral extremities of the tread 2. Pneumatic tire for a light automotive vehicle, having a corrugated tread for preventing the tire from hydroplaning, the tread having transverse grooves opening at lateral extremities of the tread for channeling toward the side walls of tire water under the tread, thereby increasing the traction of the tire on the wet pavement

16. TRIPs, Article 27(1)“Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial applications”

17. Diamondv.Chakrabarty (1980)the U.S. Congress intended statutory subject matter to “include anything underthe sun that is made by man”

18. Historical Subject Matter Exceptions to Patentability • A mere scientific principle or abstract theorem • A method of medical treatment • A new plant variety • Printed matter having only a literary or artistic value • Human conduct or mental steps • A computer program solely used for making calculations • A scheme or a system which is solely the result of professional skill / business method

19. Development of the Law • Exclusions from subject matter historically included: • Mathematical Algorithms / Equations • E=mc2 • Business Methods • Eg. method for deciding how salesmen should best handle respective customers (In re. Mancorps)

20. Discovery Versus Invention

22. Periodic Table

23. Tennessee Eastman Co. v. Commissioner (1973), 8 C.P.R. (2d) 202 Patent Act, 5.41 (1) In the case of inventions relating to substances prepared or produced by chemical processes and intended for food or medicine, the specification shall not include claims for the substance itself, except when prepared or produced by the methods or processes of manufacture particularly described and claimed or by their obvious chemical equivalents.

24. Imperial Chemical Industries v. Commissioner of Patents (1986), 9 C.P.R. (3rd) 289 Claim1: A method of cleaning dental plaque or stains, including tobacco stains, from human teeth by applying thereto an aqueous composition which consists of an unbound lanthanum cation in the form of a dissolved water-soluble salt in such a concentration that an individual dose contains from 0.01 m mole to 1 m mole of the cation, said composition being substantially free from any ingredients which precipitate the lanthanum cation as a water-insoluable salt, being designed for direct application to the teeth and being in a form for use in a non-sequential manner.

25. Re General Hospital Corp. (1997), 74 C.P.R. (3d) 544 Claim 8: A method for preventing pregnancy in a female mammal, comprising(a) administering via a delivery system an effective amount of a luteinizing hormone releasing hormone (LHRH) composition and an effective amount of an estrogenic steroid to said female during the follicular phase of the menstrual cycle, beginning at the onset of normal menses in said female; and(b) replacing said first delivery system at the end of said follicular phase with a second delivery system, wherein said second delivery system administers a luteinizing hormone releasing hormone (LHRH) composition, an effective amount of an estrogenic steroid and an effective amount of a progestational steroid to said female during the luteal phase of the menstrual cycle, until the beginning of normal menses in said female.

26. Apotex v. Willcome (2003) 21 C.P.R(4th499(S.C.C.)Claim 22:A pharmaceutical formulation for use in the treatment or prophylaxis of AIDS comprising an effective amount of 3’-azido-3’-deoxythymidine in association with a pharmaceutically acceptable carrier.

27. Apotex v. Willcome (2003) 21 C.P.R (4th) 499 (S.C.C.)The AZT patent does not seek to “fence in” an area of medical treatment. It seeksthe exclusive right to provide AZT as a commercial offering. How and when, if atall, AZT is employed is left to the professional skill and judgment of the medicalprofession.

28. Canada • Section 27(8) of the Act derogates from this broad definition, providing that: • [n]o patent shall be granted for any mere scientific principle or abstract theorem

29. Schlumberger

30. Schlumberger • What is new here is the discovery of the various calculations to be made and of the mathematical formulae to be used in making those calculations. If those calculations were not to be effected by computer but by men, the subject-matter of the application would clearly be mathematical formulae and a series of purely mental operations;

31. Schlumberger (cont’d) as such, in my view it would not be patentable. A mathematical formula must be assimilated to a “mere scientific principle or abstract theorem” for which s-s. 28(3) [now 27(8)] of the Act prescribes “no patent shall issue”.

32. Schlumberger • The Court then concluded that • ... the fact that a computer is or should be used to implement discovery does not change the nature of that discovery.

33. The Business Method Exclusion Origin? • Fetherstonhaugh and Fox, 1926: neither “business systems” nor “a plan for the efficient conduct of business” are within the meaning of the term ‘patentable invention’ • Proposition not supported by the three cited foreign authorities

34. Lawson v. Commissioner (1975), 62 C.P.R. 101

35. Professional Skills: Lawson “Art” and “process” in s.2 (“invention”): • A patentable process “must [belong] to a useful art as distinct from a fine art … its value to the country is in the field of economic endeavour. …”

36. Professional Skills: Lawson • “… professional skills are not the subject-matter of a patent. . If a surgeon were to devise a method of performing a certain type of operation he cannot obtain an exclusive property or privilege therein. Neither can a barrister who has devised a particular method of cross-examination or advocacy obtain a monopoly thereof so as to require imitators or followers of his methods to obtain a licence from him”

37. Professional Skills: E-Commerce • Electronic and computer-implemented inventions are necessarily reproducible: pre-defined rules to be applied in every case, without room for intuition, educated guesses or gut feelings. • Therefore, e-commerce inventions should not fall within the “professional skills” exception

38. State Street Bank & Trust Co. v. Signature Financial Group Inc.47 USPQ(2d)1596 (1998) C.A.F.C. “Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation…” “...This renders it statutory subject matter, even if the useful result is expressed in numbers, such as price, profit, percentage, cost, or loss.” “...Whether the claims are directed to [patentable] subject matter ... should not turn on whether the claimed subject matter does “business” instead of something else.”

39. State Street • Patent 5,193,056: Data Processing System for Hub and Spoke Financial Services Configuration • Data processing system including means for allocating percentage share that each fund (“spoke”) holds in the portfolio (“hub), for processing income, expenses, net gain/loss for the portfolio, and allocating gain/loss among the funds, etc.

40. The Wake of State Street • USPTO downplays significance, notes business method patents existed for two centuries (despite pre-1996 MPEP) • Patent filings in Class 705* grew from 927 in 1997 to 8200 in 2001 • Flurry of commentary in Canada and elsewhere as to patentability of “business methods” * Data Processing: Financial, Business Practice, Management, Or Cost/price Determination

41. One-Click Patent - Amazon.comU.S. Patent No. 5,960,411 Claim 11 • A method for ordering an item using a client system, the method comprising: • 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 only the indicated single action being performed, sending to a server system a request to order the identified item • whereby the item is ordered independently of a shopping cart model and the order is fulfilled to complete a purchase of the item.

42. Re Progressive Games, Inc. Patent Application No. 596,848 (2000), 3 C.P.R. (4th) 517

43. Re Progressive Games, Inc. Patent Application No. 596,848 (2000), 3 C.P.R. (4th) 517 • Claim 1: • A method of playing a poker game comprising the steps of: • (a) a player anteing a first bet means, • (b) a dealer dealing a hand comprising a predetermined number of cards to each of the player • and dealer, • (c) the player either folding in which case the player loses his first bet means to the dealer, or • betting a second bet means, • (d) the player comparing his hand to the hand of the dealer using poker rank as the criterion for • comparison, • (e) if the dealer’s hand is not at least a predetermined rank, the player wins a preselected amount • based on the player’s first bet means and the player keeps his second bet means, • (f) if the dealer’s hand is at least a predetermined rank, and the dealer’s hand is higher than the • player’s hand, the player loses both his first bet means and his second bet means, • (g) if the dealer’s hand is at least a predetermined rank, and the player’s hand is higher than the • dealer’s hand, then the player wins a first predetermined amount on his first bet means and the • player wins a second predetermined amount on his second bet means based on the type of • poker hand combination that the player has, said second predetermined amount having a • potential return of at least twenty times the amount of the second bet means.

44. Method of Exercising a Cat U.S. Patent No. 5,443,036 Claim 1 • A method of inducing aerobic exercise in an unrestrained cat comprising the steps of: (a) directing an intense coherent beam of invisible light produced by a hand-held laser apparatus to produce a bright highly-focused pattern of light at the intersection of the beam and an opaque surface, said pattern being of visual interest to a cat; and (b) selectively redirecting said beam out of the cat’s immediate reach to induce said cat to run and chase said beam and pattern of light around an exercise area.

45. System and method for providing reservations for restroom useU.S. Patent No. 6,329,919 issued December 11, 2001 (owned by IBM) 1. A method of providing reservations for restroom use, comprising: • receiving a reservation request from a user; and • notifying the user when the restroom is available for his or her use.

46. The Canadian Manual of Patent Office Practice (MOPOP) 16.04 Examples of Non-Statutory Subject Matter • (a) Plants and animals are not patentable subject matter. Seeds are also • non-patentable, however a coated seed may be patentable if the invention resides in the coating given to the seed provided that the life process of the seed has not been altered and there is no new living matter.

48. Canadian Patent number1,341,231 Claims: 1. An isolated DNA molecule consisting essentially of a nucleotide sequence selected from the group consisting of a nucleotide sequence which encodes the human 70kDa mitochondrial autoantigen of primary biliary cirrhosis (PBC), a nucleotide sequence which encodes an antigen fragment of said human autoantigen, and a nucleotide sequence which hybridizes to the nucleotide sequence encoding said human autoantigen and which encodes a mitochondrial autoantigen of PBC.

49. President and Fellows of Harvard College v. Commissioner of Patents Supreme Court of Canada, December 5, 2002

50. Patent: Claim 1