Patentable Subject Matter and Claim Substance in Canada and the U.S.

On August 13, 2010, in the case of Ultramercial, LLC v. Hulu, LLC, California Central District Court Judge R. Gary Klausner ruled that U.S. Patent No. 7,346,545 “does not cover patentable subject matter.” The ‘545 patent contains two independent claims to a method for distribution of products over the Internet. Judge Klausner invalidated the patent, in part, because, “At its heart, therefore, the patent does no more than disclose an abstract idea,” and that “the additional limitations beyond the abstract idea at the core of the ‘545 patent do not limit the claimed invention in a meaningful way.”

There are some parallels between this decision and the current Canadian stance on patentable subject matter. One of the new Canadian Patent Office practices, outlined in Chapter 13 of the Manual of Patent Office Practice (MOPOP), and stemming from last year’s Canadian Patent Appeal Board’s decision on Amazon’s 1-click patent, is that the “substance” of a claim may be considered non-statutory, regardless of the claim’s form Re (Patent Application 2,246,933 (Amazon.com) (2009) C.D. 1290, Commisioner of Patents, Canadian Patent Office). For example, in a claim to an apparatus comprising a general-purpose computer configured to perform method X, a Patent Examiner may argue that all of the parts of the computer are known or obvious, and hence the only possible contribution is in method X itself. Furthermore, if method X happens to be a business method, or other non-technological method, or a description of a scientific principle or abstract theorem, the claim can be excluded from patentability.

The Ultramercial decision addressed method claims only, as opposed to apparatus or system claims. Indeed, much of the decision is dedicated to establishing that the ‘545 patent is neither tied to a machine nor transforms an article. In this regard, the Ultramercial decision does not go as far as the Patent Appeal Board did in Canada. The parallels may be a telling indicator, however, of how the comparative practices between the two countries may ultimately converge. In this regard, the 1-click decision is under appeal in Canada and the Ultramercial decision may yet be appealed in the United States. The story, it appears, is still evolving.

By Michael Maskery