For the London Free Press – November 22, 2010

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Traditionally, they have been reserved for inventions that are tangible

The recent Federal Court of Canada decision in Amazon.com Inc v. the Attorney General of Canada held that a “business method” can be patented in Canada.

This essentially allows an idea, without an actual physical manifestation, to be patented if the right tests are met. The Federal Court in Amazon overturned the previous ruling by the Commissioner of Patents that rejected Amazon’s efforts to patent a business method.

Patents have been traditionally granted for tangible inventions. In other words, they can be held in your hand or touched. Business methods are an intangible process.

“Business method” patents (BMPs) are a class of patents covering new methods of conducting business. For example, in the Amazon decision, Amazon sought to patent single-click online ordering as a proprietary invention.

“One-click ordering” allows users to make online purchases with a single click of the mouse, the payment information having already being entered by the user. The result is that users do not need to enter billing and shipping information every time a purchase is made; the information is entered once and future purchases require only one click to complete the check-out.

Amazon obtained a U.S. patent for the 1-click method years ago.

According to patent agent Natalie Raffoul, the reasoning and final decision in Amazon follow closely that of the leading U.S. case, re Bilski. Ms. Raffoul pointed out similar to Amazon, the U.S. Supreme Court in re Bilski decided an abstract idea is not patentable; so the business method in question must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing.

Business method patents have been controversial in both Canada and the U.S. They aren’t typical in that they do not attach to a tangible item but instead to a more abstract idea or process. Detractors have used this to support the claim that they should not be allowable under patent law. Critics have also voiced concern about the implications to start-up businesses.

In Amazon, Justice Phelan held the appropriate test to identify a business method patent is the test set out in the Progressive Games Inc. v. Canada (Commissioner of Patents) decision: 1) there must be a practical application; 2) it must be a method of applying skill and knowledge and; 3) it must have a commercially useful result.

Justice Phelan decided Amazon’s single-click ordering met these criteria and was a tangible new business method, not simply a scheme or abstract idea, which was put into action through the use of cookies, computers, the Internet and the customer’s own action.

The Amazon decision signals a divergence from the old process in Canada as it is the first case to recognize business method patents are patentable. The case bears watching because the decision has been appealed and could be overturned.

There has been a lot of controversy and debate over whether too many things are patentable, especially in the software and business method areas. 

Many thought the Amazon 1-click patent, which was under review, should not be valid.  The USPTO has, however, confirmed the patent.

Mike Masnick of Techdirt sums it up nicely, with links to further detail.  Mike says:

US Patent Office Decides That One Click Really Is Patentable

from the wow dept

Ladies and gentlemen, we now have confirmation that the USPTO is a joke. After years of back and forth, it has decided, once again, that Amazon’s one-click patent is perfectly valid. This, despite tons of prior art, and basic common sense. We were just wondering what was taking so long for the USPTO to reject the patent. But, of course, it seemed like the USPTO was willing to go out of its way to help keep this patent around. Of course, as some are pointing out, the end result of this patent surviving is that it may be used as example number one for patent reform.

For the London Free Press – March 30, 2009

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Virtual reality was taken to a new level recently when famous guitar manufacturer, Gibson, sued Activision Publishing, Inc., creators of Guitar Hero, alleging that the video game system infringed upon one of its patents.

Specifically, Gibson Guitar Corp. registered U.S. Patent No. 5,990,405 in 1999. This patent covered,”a system and method for generating and controlling a simulated musical concert experience.”

In 2006, Gibson licensed to Activision certain Gibson trademarks for use within the Guitar Hero game.

In January 2008, Activision received a letter from Gibson stating that though the game maker had permission to use Gibson’s trademark, it did not have permission to use Gibson’s patent for simulated musical performances. The letter requested that “Activision obtain a licence under Gibson’s 405 patent or halt sales of any version of the Guitar Hero game software . . . and . . . instrument controllers.”

Activision instead filed a pre-emptive request with the court for a declaration that its top-selling video game did not infringe on Gibson’s patent. Gibson responded to Activision by filing a suit of its own.

In Activision Publishing Inc. vs Gibson Guitar Corp., decided Feb. 26, 2009, the California District Court dismissed the lawsuit and held that Activision had not infringed upon Gibson’s patent. The court made its opinion of the case clear when it held that the allegations brought forth by Gibson, “border on the frivolous.”

Throughout the case, Gibson tried to argue that their patent was infringed and even went as far as to say that, “the ’405 Patent covers any system where a user controls something ‘musical’ with any device.”

The court rejected the argument stating that, “by arguing that any sound made by any controller can potentially be musical, Gibson would have everything in the world — from the buttons of a DVD remote, to a pencil tapping a table — be an ‘actual musical instrument’ within the ’405 Patent.”

Ultimately, the court refused to give the term “musical instrument” such a broad interpretation and instead held that, “no reasonable person of ordinary skill in the relevant arts would interpret the ’405 Patent as covering interactive video games.”

The motivation for the lawsuit may be found in the pre-existing relationship between Gibson and Activision. Industry insiders have suggested that Activision’s decision not to renew the Gibson trademark licence was the motivating factor behind the lawsuit.

In fact, Activision itself, in a letter dated Match 10, 2008, suggested that, “Gibson knew about the Guitar Hero games for nearly three years, but did not raise its patent until it became clear that Activision was not interested in renewing the Licenses and Marketing Support Agreement.”

Whatever the motivation, the California District Court made it clear that the lawsuit was without merit. This decision has now put into question several other outstanding lawsuits Gibson had also commenced against various companies involved in the creation and distribution of Guitar Hero, such as MTV, Harmonix, Electronic Arts, Wal-Mart, Target and K-mart.

From my post to Slaw today:

Slashdot reports that today has been declared World Day Against Software Patents by the European based Foundation for a Free Information Infrastructure

They believe that software patents impede innovation and investment.

So depending on what side of this debate one falls on, feel free to either celebrate and promote it, or cringe and rail against it.

My thoughts? First, my bias – I’m not a patent agent, although I do deal with a lot of IP and IT issues, and advise companies that create and sell software or SAAS products. I have mixed feelings about it – but can’t help wonder if there is a good argument that to some extent patent protection has gone too far and can indeed impede innovation. That may be especially true in fields like software where change and innovation happen far more quickly, and from far more sources, than traditional technology.