1. PATENTS IT.CAN Annual Meeting
Bruce Stratton
Dimock Stratton LLP
October 25, 2016

2. Outline:
U.S. law on patent-eligible subject matter
U.S. written description requirements and IT-based inventions
Utility, the “promise” and patents in the IT sector
Europe, patentability and Canadian law
Effective broad patent protection for IT systems
Fintech and patentable subject-matter

3. US Post-Alice Law and Canadian Patents
US law has careened from State Street to Alice
Where is it headed and why should clients be concerned?
“Off the rack” claims vs. bespoke patent drafting
Redrafting US claims for Canadian patent office
Cost of uncertainty
Reduction in value represented in patent portfolios

4. Canadian and U.S. Statutes
United States
Canada
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
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; 
No “mere scientific principle or abstract theorem” (s. 27(8)).

5. Canadian and US Courts United States Canada Alice: Amazon:
two-part test of Mayo v. Prometheus
(1) Does the claim include reference to patent ineligible features?
(2) “Something more” to render the subject-matter patent-eligible
Amazon:
Literal patent interpretation may be too permissive – inventor may intentionally or inadvertently mislead
Solution is “purposive construction”
Practical application test too permissive
Technical effect and business method rules are inappropriate

6. Canadian and US Developments
United States
Canada
CAFC: “In the section 101 calculus, adding software (which is as abstract as language) to a conventional computer (which rightfully resides in the public domain) results in a patent eligibility score of zero.”
“It is well past time to return software to its historical dwelling place in the domain of copyright.”
Intellectual Ventures v. Symantec (Fed. Cir. 2016), per Mayer, Circuit Judge (concurring)
Judge-free law with few statutory amendments PAB Decisions:
A return to prior art objections?
Section 2 and the importation of purposive construction
Canadian Alice (August 3, 2016, PAB Decision No. 1408)

7. US Written Description Requirement
Post-Alice and post-Amazon subject-matter requirements will cause more detail to be included in patent claims
For US patents, the “written description” requirement must be considered
Common general knowledge may be available to support the claimed detail

8. Canadian Utility Requirements
Special problems for IT-based inventions?
Often a pharmaceutical patent issue (see NAFTA arbitration: Eli Lilly and Canada)
Eurocopter decision warns that the “promise” may invalidate mechanical claims
Attempts to show special surprising results or improvements in operating parameters are risky
Use caution in making promises to avoid mere software on a computer rejections.

9. European Law and Canadian Patents
EU Directive – Art. 52(2) makes programs for computers patent ineligible, “as such” [Art. 52(3)]
How to avoid the “as such” exclusion? Where system has “further effects” that have a technical character or where they cause the software to solve a technical problem
“Technical” requirement is not the right test in Canada - but may be sufficient

10. Universal Patent Protection for IT?
Is there a cost-effective way for Canadian IT enterprises to obtain broad patent protection for their technology?
“Technological Effect” vs. The “Abstract”
Problem/solution model in CIPO
Physical effect as per Amazon
“Specific purpose equipment” vs. “general purpose”
Features of the IT system - eg. speed, distributed nature

11. Effective Patent Protection for Fintech?
Business models per se will be difficult to protect with patent rights (e.g. risk allocation models)
Technology that enables the business model will continue to be patentable
Technology that implements the business model will be in the grey zone
European, US and Canadian approaches to patentable subject-matter will be a significant roadblock to patents to protect Fintech, “as such”. Post-Alice grant rates have dropped.

12. PATENTS IT.CAN Annual Meeting
Bruce Stratton
Dimock Stratton LLP
October 25, 2016