How and When can Software be Patented? How IP law principles interact with emerging tech

How and When can Software be Patented? How IP law principles interact with emerging tech

Michelle Mao is an incoming 2L student at Osgoode Hall Law School and an IPilogue writer.

The IP principle that abstract ideas cannot be patented has often been misapplied to the development of software, often boiling down to concluding software to be unpatentable. However, which parts of software are patentable, and which parts are not? The short answer is that while lines of code are not patentable, software can be patentable if it is useful and can be susceptible to commercialization.

Canada’s Patents Act and the Manual of Patent Office Practice (“MOPOP”) both  guide the Canadian Intellectual Property Office (“CIPO”) in issuing patents. Applicants must meet certain requirements for a software patent to be issued. . First, several criteria of patentability must be met, including novelty, non-obviousness, and being of a patentable subject matter. Second, additional criteria often apply to software-related inventions, including needing to have a physical impact on the real world or needing to be operated through a physical medium, such as a computer.

The above criteria are rooted deeply in the principles of IP law, specifically that abstract ideas, functions, scientific principles, or abstract theorems cannot be patented – as codified in section 8 of the Patent Act. Those criteria protect the objective of IP law, which is to compensate inventors for innovative ideas while preventing barriers from being created as a result of patenting ideas and basic building blocks that are essential to innovation.

Given all these requirements, it is not hard to see how the misconception that software is not patentable arose – with software seeming like an intangible collection of code performing certain functions. However, with the immediate and ever-increasing utility of computer-based applications, new software patent applications very often meet the criteria of usefulness and novelty, allowing most software patents to be eligible.

Interestingly, a large tech company in 2011 almost failed to adequately define its software patent application. In Inc v Canada (Commissioner of Patents), Amazon tried to patent a “one-click” shopping feature to increase the speed at which a purchase can be completed. The case was positioned uniquely in the intersection of increasing utility, which fulfills a patent requirement, and an abstract idea, a business method. Originally, the Commissioner had rejected the patent for several reasons, one of which was the unpatentability of an abstract idea. The Federal Court of Appeal, however, found that business methods may be essential to a utility and the mere characteristic of a patent application to be part of a business method does not make it ineligible for patent.

Commercializing new developments in software has been an important concern as the tech sector continues to thrive. Courts have treated the delicate balance between business methods, the features and functions of code, novelty, and protecting innovation carefully for the past several decades.

As of now, the courts have created enough case law to provide a stable guideline for CIPO in software patent applications. It is interesting, however, that statutory provisions dealing specifically with software patents have not been integrated into the Patent Act. Only time will tell whether this allows for flexibility as the tech sector continues to develop or causes continued confusion and debate.