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What about Schlumberger?

July 25, 2017

For decades, Schlumberger Canada Ltd v Canada (Commissioner of Patents), [1981] 56 CPR (2d) 204 (FCA), was the only Canadian decision on computer-implemented inventions. In that case, the court upheld the Commissioner’s rejection of an invention implemented by way of software. The Federal Court of Appeal revisited the issue in 2011 in Canada v Amazon.com Inc, 2011 FCA 328, when it considered the subject matter rejection of Amazon.com’s “one-click” method of online ordering. In that case, the appellant prevailed and the patent was granted. Yet, the Schlumberger decision remains and is occasionally cited by Examiners as authority for limiting the subject matter eligibility of computer-implemented inventions. A closer look at the details behind the Federal Court of Appeal’s Schlumberger decision shows that it should be ascribed a narrower scope than it previously enjoyed.

The Schlumberger decision itself is extraordinarily short. In eight paragraphs, the court affirms the Commissioner’s decision to reject the applicant’s patent application. By contrast, the reasons the Commissioner of Patents provided for his decision are much more fulsome. A review of those reasons—published by the Patent Office as Commissioner’s Decision No. 441 (C.D. 441)—and the application at issue is particularly instructive as to what was actually before the court in Schlumberger.

In C.D. 441, the Patent Appeal Board (PAB) reviews developments in foreign computer-related subject matter jurisprudence and then sets out a revised position on subject matter eligibility for computer-implemented inventions based on the foreign developments. Notably, this revised position reverses the earlier position of the Patent Office that “[c]laims to a new method of programming a computer are patentable” and replaces its earlier position that “[c]laims to a computer programmed in a novel manner are patentable” with an exclusion from patentability for “claims to a computer programmed in a novel manner … where the novelty lies solely in the program or algorithm”.

Also of note, the PAB’s reasons for these new positions and, in particular, their application of them to the claims before it, seem to reflect a reliance on a “contribution analysis” approach that was ultimately rejected thirty years later in the Amazon.com decision. For example, the PAB rejects claim 1, directed to “[a] machine operated method of processing well logging data”, as being directed to “a method for programming a computer” and therefore, under its revised position, not directed to patentable subject matter. The PAB explains that “[e]ven assuming that the ‘meritorious idea’ reflects an inventive contribution, the setting, nevertheless, of this idea (itself unpatentable) in our view does not meet the requirements for patentable subject matter” (emphasis added).

Central to the PAB’s findings appears to be a concern that there are no novel apparatus features in the claims—the PAB specifically comments that “[i]f these methods or processes were carried out with specific novel apparatus devised to implement the newly-discovered ‘meritorious idea’ then the claim would be patentable” (emphasis added). Given this, one may wonder whether a claim involving the combination of using various devices used to collect well measurements and a machine to process them would have been found subject matter eligible, especially given that claims of that nature issued from a substantially identical U.S. application as U.S. Patent No. 4,495,604 in 1985. Unfortunately, however, there is no answer to this question to be found in C.D. 441: although the applicants proposed apparatus claims, they were rejected by the PAB as lacking description support. As such, there is no consideration of the subject matter eligibility of those claims in either C.D. 441 or the subsequent appeal.

Based on the review of the decision in C.D. 441, it is clear that only the subject matter rejection of claims to “machine operated methods” made up of various calculation steps was before the Federal Court of Appeal in Schlumberger. Given this, together with the fact that subject matter analysis by the PAB relied on the now-rejected contribution analysis, it seems unlikely that Schlumberger can be properly said to stand for anything broader than the narrow proposition for which it was cited for in Amazon.com.

Pleasingly, it seems that the Patent Office may be finally abandoning notions of a broad holding in Schlumberger: proposed revisions to Chapter 12 of the Manual of Patent Office Practice (MOPOP) delete lofty statements in the current MOPOP suggesting that Schlumberger provides a “guiding principle in respect of computer-related inventions” leaving the decision only to stand for the limited proposition that claims to processes that are exclusively mental steps are unpatentable and as an example of the statutory exclusion from patentability of “mere scientific principles” and “abstract theorems”.

All told, it seems that it may finally be time to put to bed any suggestion that Schlumberger stands for any grand propositions related to the patentability of computer-implemented inventions in Canada.