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Software Patents and SR&ED Pt. 3: Conclusions and Intellectual Property Law

Software patents

Good treasure maps are only useful for a select few–software patents are the same.

It’s a chicken and egg scenario: if you can patent something, it can probably be claimed under the SR&ED program–and vice versa. Irresepective of which comes first, it’s important to protect the intellectual property being developed and and described in your SR&ED claims. That’s why SREDucation has teamed up with David French LLB BEng PEngan intellectual property lawyer turned patenting/IP educator with 35 years of professional experience.

 

As shown in the previous post, it is vitally important to understand the requirements involved in obtaining patent or copyright protection for your SR&ED-eligible work, especially with respect to novelty. In the third and final installment of our Software Patents and SR&ED series, we’re shedding light on the overarching laws behind intellectual property protection.(If you’re wondering what software patents have to do with SR&ED-eligible work, read the first patent and copyright post that gives definitions and the scope of software copyright and patent law, as well as the competitive edge this can lend to your SR&ED-eligible work.)

Intellectual Property Law in Canada

In Canada, the guidelines issued by the Canadian Intellectual Property Office stipulate that to obtain a patent involving software, the patent claims must focus on:

“an act or series of acts performed by some physical agent upon some physical object and producing in such object some change either of character or condition”

and that that physical agent:

“must produce an essentially economic result in relation to trade, industry or commerce.”

Software protection in Canada can be obtained in the form of method claims, which define a series of operations that take place within the hardware of a computer. Infringement includes the use, manufacture, and sale of software media. Anyone who infringes on the patent must be in possession of operating hardware which incorporates the software in order to be guilty of infringement. As such, substantial protection for Canadian software inventions is available, since this hardware limitation is not overbearing or excessively restrictive.

Most recently in Canada, the Federal Court of Appeal made an important decision in The Attorney General of Canada and the Commissioner of Patents vs. Amazon.com Inc that reversed the ruling by the Trial Decision that a patent could issue in Canada for Amazon’s “one click” method of enabling online purchasing. The case was sent back to the Commissioner for further review based on principles provided by the appeal court. While addressing a “business method patent”, this decision includes statements that relate to software. Foremost are the following points:

  • It is not essential that patentable subject matter must be scientific or technological in nature (except insofar as it distinguishes such patents from the fine arts or works of art that are inventive only in an artistic sense);
  • There is no basis within the law to suggest that a business method cannot be patentable subject matter in Canada; and
  • A patentable art must cause a change in the character or condition of a physical object.
The full meaning and resultant impact of this decision is still being debated within professional circles.

Intellectual Property Law in the United States – Patents

Prior to the United States Supreme Court decision in Bilski v. Kappos, 130 S. Ct. 3218 (2010), the US Court of Appeals for the Federal Circuit had attempted to establish a rule that would limit both software and business method patents. The proposed rule would ensure that all patent claims had to be a) tied to a particular machine or apparatus, or b) transform a particular article into a different state or thing. Essentially, it was proposed that patents should only address either a machine element or something that would effect a transformation in something tangible. This rule was to apply in conjunction with the novel feature requirement (read more about the novelty requirement here) and extended to both method and apparatus claims. The presence of software in such a claim would not defeat the claim’s validity if the proposed test and other requirements for patenting beyond novelty–such as adequate disclosure–were met.

In its 2010 Bislki decision, the Supreme Court rejected the notion that the machine-or-transformation test could serve as the exclusive test of the patentable subject matter of a newly invented process. In the new rubric, the machine-or-transformation test offers only an important clue. Instead, the Supreme Court seemed to suggest that patents could issue as long as they did not attempt to monopolize an abstract theorem. This guideline has been highly unsatisfactory so far.

The result is that there is a continued state of uncertainty as to the full extent to which software can be patented in the United States. However, if the machine-or-transformation test is met, a patent can likely be issued for what is essentially a software invention.

The Bottom Line: Avoid Complacency

Given the cluster of issues surrounding whether or not patents can be obtained for inventions that are essentially SR&ED eligible software, it can be difficult to understand what exactly falls under the umbrella of IP protection. However, there is certainly scope for patenting software in the proper context. In the case of valuable advances, it may be worth the cost of investing in a patent application because the jurisprudence is still in flux.

In previous articles, the importance of a) understanding the scope of patent and copyright protection for software inventions, and b) conducting market research before submitting your patent claim to ensure that your claim meets the “novelty requirement” were both stressed. As with reducing the risk of a SR&ED review, the key to maximizing your time and resources when it comes to IP protection for software inventions lies in avoiding complacency.

Here are some conclusions that can be taken away from our Software Patents and SR&ED series:

1) Find out if copyright protection or patenting will be useful for your software invention.

Depending on the specifics of your particular invention, IP protection may or may not add value to your invention. Useful IP protection gives you a competitive edge over inventors with similar software, as it blocks competitors from attempting to market products that are highly similar to yours.

2) There is no point obtaining a patent if there are other ways to achieve the same result.

If you have a treasure map showing a single path through a forest on a remote island that leads to buried treasure, then this map possesses an obvious value.  The map will have far less value if others are able to produce their own distinct maps showing alternate paths to the treasure. The same can be said for software patenting.

3) Do the research. 

Before investing any money in the prospect of obtaining a software patent, a sober evaluation should be made of the marketplace to determine whether the prospective patent will have any significant blocking power which will give it commercial value.

We hope you’ve taken away some useful advice from this series about the value-adding potential of software patenting and copyright protection. While it may not be of use to every inventor, it is worth taking the time to consider the benefits and drawbacks.

This article is presented only for informational purposes and does not constitute legal advice. You should retain legal counsel if you require legal advice regarding your individual situation.

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Have patent-related questions to ask or experiences to tell? Contact us or start a discussion on LinkedIn®.

Stay tuned for info on how to take part in our upcoming free intellectual property copyright webinar, led by David French of Second Council Services and hosted by the SREDucators, courtesy of The InGenuity Group®.

About David:

David French is a senior Canadian patent attorney with 35 years of experience. His company, Second Counsel Services can help you ensure that Intellectual Property will advance the interests of your business.

David is a graduate of McMaster University in Engineering Physics (1965) and of the University of Toronto Law School (1969). Having worked with Gordon Henderson after qualifying as a lawyer in 1971, David spent six years with the Canadian government working on law reform and international patent issues. Thereafter he has been practicing Intellectual Property law, eventually with the firm MiltonsIP in Ottawa, Canada. On January 1, 2010 David retired from regular practice at this firm to continue with his new business, Second Counsel Services.

During his career, David has helped numerous firms and inventors obtain patent rights, trademark and design registrations, providing guidance on not only understanding Intellectual Property but appreciating how to make IP work effectively to serve a business’s interests.

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