Federal Court Rejects “Problem-Solution” Approach applied by the Canadian Patent Office in Construing Patent Claims

Federal Court Rejects “Problem-Solution” Approach applied by the Canadian Patent Office in Construing Patent Claims

In a decision largely applauded by patent owners and practitioners, the Federal Court of Canada has struck down the approach of the Canadian Intellectual Property Office (CIPO) to patent claim construction in determining whether an element of a patent claim is essential in Yves Choueifaty v Attorney General of Canada, 2020 FC 837 [Choueifaty].

If the term “claim construction” has you scratching your head, you may want to skip to “The Takeaway” section at the end of the article.

Background

Two decades ago, the Supreme Court of Canada (SCC) set out the principles of patent claim construction in a pair of decisions: Free World Trust v Électro Santé, 2000 SCC 66 [Free World Trust] and Whirlpool Corp v Camco Inc, 2000 SCC 67 [Whirlpool]. The principles have been followed by the courts a number of times since in cases directed to a variety of subject matters, including “computer implemented inventions” in Canada (Attorney General) v Amazon.com, Inc, 2011 FCA 328 [Amazon].

Shortly after the Amazon decision in 2011, CIPO issued Examination Practice Notices directing that patent examiners follow a “problem-solution” approach to claim construction. This was subsequently formalized in CIPO’s Manual of Patent Office Practice (MOPOP). The “problem-solution” approach requires an Examiner to first identify the problem and the solution of the invention, and then determine which claim elements are essential to the proposed solution, and which elements are superfluous non-essential) (Section 12.02.02e of the MOPOP).

However, the principles laid out by the SCC in Free World Trust and Whirlpool did not provide direction to construe claims in this manner. Rather, the SCC indicated that the proper test for determining the essential elements of a claim is a “purposive construction”, as summarized in Halford v Seed Hawk Inc., 2006 FCA 275 in paragraph 13 as:

In the process of construing the claims of a patent, a court will identify some elements of the invention as essential. The determination of which elements are essential depends upon the language of the claims, read purposively, and informed by evidence as to how persons skilled in the art would understand the claims (Whirlpool at paragraph 45). An element may be found to be essential on the basis of the intent of the inventor as expressed or inferred from the claims, or on the basis of evidence as to whether it would have been obvious to a skilled worker at the time the patent was published that a variant of a particular element would make a difference to the way in which the invention works (Free World at paragraphs 31 and 55). [emphasis added]

CIPO’s practice of determining essential elements using a “problem-solution” approach has baffled some patent practitioners, since it does not align with the principles of a purposive construction laid out by the courts.

Application of the “Problem-Solution” Approach by CIPO

The application of the “problem-solution” approach by patent examiners has resulted in many patent applications being rejected by CIPO, particularly applications having claims to computer-implemented inventions. When applying the problem-solution approach, an examiner often asserts that the computer or hardware elements in a computer-implemented method claim are “non-essential” to the solution, i.e. that the claimed method could be performed without any computer or hardware and still solve the problem. If no computer or hardware elements are needed, then the method claim is directed to an “abstract” algorithm or mere plan, and therefore does not fall within the statutory definition of “invention” provided in Section 2 of the Patent Act.

Many of these examiner statutory subject matter rejections have been appealed to the Patent Appeal Board at CIPO. The Patent Appeal Board has almost always upheld the examiner’s decisions, despite arguments from patent practitioners that CIPO’s “problem-solution” approach is not in line with the leading court decisions (Free World, Whirlpool, Amazon). Now, at last, what has been perceived as improper practice by CIPO has been successfully appealed to the Federal Court in Choueifaty.

The Choueifaty Decision

Mr. Choueifaty applied for a patent application with claims directed to a new method, implemented by a computer, for selecting and weighing investment portfolio assets that minimizes risk without impacting returns to provide “an anti-benchmark portfolio”. The application was rejected by the Examiner on the grounds that the claims were directed to non-statutory subject matter. The rejection was upheld by the Patent Appeal Board. Both the Examiner and Patent Appeal Board construed the claims using the “problem-solution” approach and determined that the computer was not an essential element, and therefore the claims were directed to “a scheme or rules involving mere calculations” and therefore non-statutory.

In the appeal to the Federal Court, the Court agreed that CIPOs “problem-solution” approach to claim construction does not follow the teachings laid out in Free World Trust and Whirlpool, stating:

[i]n order “to establish that a claim element is non-essential, it [the patentee] must show both (i) that on a purposive construction of the words of the claim it was clearly not intended to be essential, and (ii) that at the date of publication of the patent, the skilled addressees would have appreciated that a particular element could be substituted without affecting the working of the invention” [emphasis in original]. The problem-solution approach to claims construction focuses only on the second aspect above, it fails to respond, as taught in Whirlpool, to the issue of the inventor’s intention. [para 0039 of Choueifaty quoting Shire Canada Inc v Apotex Inc, 2016 FC 382 at paras 134-143]

The Takeaway

Choueifaty is one of the most important cases in recent years related to patent claim construction. The decision doesn’t change the principles of claim construction that were set out by the SCC in Whirlpool and Free World Trust, but it confirms what many patent practitioners have argued for years – that CIPOs application of a “problem-solution” approach was misguided.

This is welcome news for innovators in the field of computer software and other computer related technology. One would hope that with the proper application of claim construction principles, patent protection will be a viable option in these subject matter areas.

The Choueifaty decision may be appealed, and if it is, CIPO won’t likely change its practice around claim construction until there is a final determination in the case. Therefore, this may not be the last you hear about Mr. Choueifaty and his “anti-benchmark” portfolio. Stay tuned…

If you have any questions or would like further information, please contact patent agent Melanie Ward.