Thomas BaileyOyen Wiggs Green & Mutala LLP

Phone: 604 669 3432E-mail: tbailey@patentable.com

http//www.patentable.com

Patents - Lecture 3

Course Materials

• Handouts– PowerPoint Slides

http://www.patentable.com/lectures/

Lecture Outline

1. Computer-related subject matter and Business Methods

2. Combinations and Aggregations

3. Novelty - test for anticipation

4. Obviousness

5. Utility

Lecture Outline

6. Patent Specifications

7. Ownership

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Schlumberger case(Casebook , pp. 84-86)

• The Applicant sought patent protection for a method of obtaining useful information about geological formations

• The method involved lowering instruments into bore holes to measure characteristics of the subterranean soil

• The measurements were recorded on magnetic tapes and processed by a programmed computer

• The Court applied a two step test for determining whether the claims related to statutory subject matter

• In the first step, the Court determined: “What, according to the application has been discovered?”

Schlumberger case(Casebook , pp. 84-86)

• The Court then asked: “Is that discovery patentable regardless of whether a computer is or should be used to implement the discovery?”

• On the facts of this case, the Court held that the discovery made by the applicant was the various calculations and mathematical formulae used to make the calculations which were implemented by the computer

• The calculations were considered to be a series of mental operations akin to a scientific principle or abstract theorem and hence patent protection was not available

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DIAMOND v. DIEHR

209 USPQ 1 (United States Supreme Court, 1981)

1. A method of operating a rubber-molding press for precision molded compoundswith the aid of a digital computer, comprising:

providing said computer with a data base for said press including at least,

natural logarithm conversion data (In),

the activation energy constant (C) unique to each batch of said compound beingmolded, and

a constant (x) dependent upon the geometry of the particular mold of the press,

initiating an interval timer in said computer upon the closure of the press for monitoringthe elapsed time of said closure,

constantly determining the temperature (Z) of the mold at a location closely adjacent tothe mold cavity in the press during molding,

constantly providing the computer with the temperature (Z),

repetitively calculating in the computer, at frequent intervals during each cure, theArrhenius equation for reaction time during the cure, which is

In v = CZ + X

where v is the total required cure time,

repetitively comparing in the computer at said frequent intervals during the cure each saidcalculation of the total required cure time calculated with the Arrhenius equation and saidelapsed time, and

opening the press automatically when a said comparison indicates equivalence.

State Street Bank case

http://cyber.law.harvard.edu/property00/patents/StateStreet.html

http://cyber.law.harvard.edu/property00/patents/StateStreet.html

State Street Bank case

“Today we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a a mathematical algorithm, formula, or calculation, because it produces a ‘useful, concrete and tangible result’ - a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.”

Bilski case(Casebook , pp. 87-92)

• The applicant sought patent protection for a method of hedging risks in commodities trading

• An en banc panel of the Court of Appeals for the Federal Circuit held that, to be eligible for patent protection, a process must either be (1) tied to a particular machine or apparatus; or (2) transform a particular article into a different state or thing

• The Court held that the applicant’s process was non-transformative and encompassed a purely mental process

• The case was appealed to the Supreme Court of the United States

Bilski case(Casebook, pp. 87-92)

• The Supreme Court of the United States decision in Bilski was released on June 28, 2010

• The “machine or transformation” (MOT) test is not the sole test to determine patent eligibility, but it is a useful guideline

• The Court declined to explicitly endorse the State Street test

• A categorical exclusion of business methods from patentable subject matter is inappropriate

• Claims to an abstract idea (like Bilski’s) are not eligible for patent protection

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Amazon “One-Click” case(Casebook , pp. 93-104)

• The applicant sought patent protection for a method of ordering items on-line by means of a single click of a computer mouse or other single action

• The Canadian Patent Appeal Board held that that business methods do not qualify for patent protection and that the claimed method related to “non-technological” subject matter

• Both the “form” and “substance” of the claimed invention must be considered

• This decision has was overturned by the Federal Court

Amazon “One-Click” case(Casebook , pp. 93-104)

• Phelan J. held that the legal framework adopted by the Commissioner was unsupported by law and amounted to improper policy-making

• On further appeal , the FCA substantially agreed with the findings of Phelan J.

• The requirement that an invention must be “technological” was vague and confusing

• There is no Canadian jurisprudence which clear bars patent protection for business methods

Amazon “One-Click” case(Casebook , pp. 93-104)

• A patentable “art” must be something with physical existence, or something that manifests a discernable effect or change.

• The identification of the actual invention should be grounded in a purposive construction of the patent claims

• It was not appropriate for Phelan J. to have construed the claims without the benefit of expert evidence

• The application was referred back to the Examiner for further examination

Amazon “One-Click” case(Casebook , pp. 93-104)

• Following the FCA decision the applicant filed a voluntary amendment

• The application issued as Canadian Patent No. 2,246,933 on January 17, 2012

• Accordingly, a further appeal to the SCC will not be pursued

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Domtar case(Casebook , pp. 104-106)

• The patent in issue related to the design of a beer carton having several different structural elements including panels, reinforcing rims and hand holds

• The Court considered whether the invention constituted a combination, where the separate elements “cooperate” or “interact” to produce a new result or an aggregation where each of the elements perform essentially independent functions

• On the facts of this case, the Court held that the beer carton was an aggregation and hence not entitled to patent protection

No. 786,187

ISSUED May 28, 1968CLASS 229-17

CANADIAN PATENT

SIDE CARRY CARTON

J. Gordon Gilchrist, Calgary, Alberta, Canada

Granted to Domtar Limited, Montreal, Quebec, Canada

APPLICATION No. 003, 103FILED Oct. 21, 1967

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Mere juxtaposition of parts is insufficient for patentability. The elements mustcombine for a unitary result. If any element in the arrangement gives its own result,without any result flowing from the combination, then there is no invention.

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LAW 422 - INTELLECTUAL PROPERTY SPRING 2012

EXAMPLES - PATENT NOVELTY REQUIREMENT Review Section 28.2 of the Patent Act and consider whether Applicant "X" would be able to obtain a valid patent in Canada in the following circumstances: 1. X invents a new widget on October 24, 2007 and immediately begins testing his invention. Y independently invents an identical product on November 24, 2007. Y files a Canadian patent application on December 15, 2007. X files a Canadian patent application for the same invention on December 16, 2007. Is X's patent application valid? Is Y's patent application valid? 2. X invents a new widget on October 24, 2007 and immediately begins testing his invention. Y sees a prototype of X's invention and realizes it has commercial potential. Y decides to market the invention and files a patent application on December 15, 2007 so that she can mark the product "patent pending". X files a patent application on December 16, 2007. Is X's patent application valid? Is Y's patent application valid? 3. X invents a new widget in Canada on October 24, 2007. Y independently invents an identical product in Australia on November 24, 2007. Y files a patent application in Australia on December 15, 2007. X files a patent application in Canada for the same invention on December 16, 2007. Y later files a Canadian patent application on December 15, 2008 claiming Convention priority on the original Australian, filing. Is X's patent application valid? Is Y's patent application valid?

4. X invents a new widget in Canada on October 24, 2007. X's patent agent conducts a search of the prior art and locates a Canadian patent for a very similar invention which issued in 1910 and expired in 1927. Can X obtain valid Canadian patent rights for his product? Would it make any difference if the 1910 patent issued in the United States? 5. X invents a new widget in Canada on October 24, 2007. X's patent agent conducts a search of the prior art and locates a German patent application for a very similar invention which was published on September 24, 1985. The German patent application was later abandoned and never issued to patent. Can X obtain valid Canadian patent rights for his product? 6. X invents a new widget in Canada on October 24, 2007 and vows to keep it secret until he can file a patent application. He attends a trade conference in Japan later that month and is surprised when one of the other conference delegates delivers an oral presentation describing a very similar invention. Can X obtain valid Canadian patent rights for his product? 7. X invents a new widget on October 24, 2007 and immediately begins testing his invention. He attends a trade show in Japan later that month and delivers an oral presentation describing in detail a prototype of the invention. The invention is also on public display at a trade booth operated by X's Japanese distributor. Since the market response is favourable, X proceeds to file a Canadian patent application on December 16, 2007. Is the patent application valid?

EXAMPLES - PATENT NOVELTY REQUIREMENT

8. X invents a new widget on October 24, 2007 and immediately begins testing his invention in public to assess its commercial appeal. The response is favourable, but X defers filing a patent application for financial reasons. A Canadian application is eventually filed on December 16, 2008. Is the patent application valid? 9. X invents a new widget on October 24, 2007 in the United States. He commences selling the product on a small scale in Seattle, Washington in November, 2007. He files a United States patent application for the invention on December 15, 2007. Approximately one year later, on December 14, 2008, he files a Canadian patent application claiming Convention priority on the original U.S. filing. Is the Canadian patent application valid? 10. X invents a new widget on October 24, 2007 and immediately begins testing his invention in secret. Everyone viewing the invention, including potential investors, is required to sign a non-disclosure agreement. The investor response is favourable, but X defers filing a patent application until sufficient capital is raised. A Canadian patent application is eventually filed on December 16, 2008. Is the patent application valid?

EXAMPLES - PATENT NOVELTY REQUIREMENT

Ernest Scragg case(Casebook , pp. 109-111)

• The Plaintiff sought to impeach the validity of two Canadian patents on the basis that the inventions claimed were not new (and hence the patents should never have been granted)

• The case summarizes the test for “anticipation” (i.e. lack of novelty)

• The prior art must provide “clear and unmistakable directions” in order to anticipate an invention

• Anticipation must be found in a single prior art document - the teachings of multiple documents cannot be combined

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Sanofi case(Casebook , pp. 111 - 119)

• This case deals with “selection patents”• The test for anticipation was refined• Anticipation requires both (1) prior disclosure of the

claimed invention; and (2) “enablement” which means that a person skilled in the art would have been able to perform the invention

• While some trial and error experimentation is permitted at the enablement stage, the prior art disclosure must have been sufficient to enable a skilled person to perform or make the claimed invention without “undue burden”

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The Great Cookie War(1984), 82 C.P.R. (2d) 224 (F.C.T.D.)

(1989), 11U.S.P.Q. (2d) 1241 (Dist. Ct., Delaware)

V.

THE GREAT COOKIE WAR

PROCTER & GAMBLE CO. v. NABISCO BRANDS LTD.

(1984), 82 C.P.R. (2d) 224 (F.C.T.D.)(1989), 11 U.S.P.Q. (2d) 1241 (DIST. CT., Delaware)

19. A dough-based, ready-to-bake, sweetened food product in the formof a laminated dough structure, which when baked, has a substantiallyhomogeneous cross-section with respect to flavor and appearance and a shelf-stable cross-sectional texture variability typical of freshly baked cookies,comprising:

(a) a discrete body of a first cookie dough which comprises:

(i) a crystallization resistant sugar component comprisinga mono- or di-saccharide or mixture thereof whichcrystallizes substantially more slowly than sucrose atthe water content and water activity conditions of thebaked cookie, and

(ii) flour, water and shortening; and

(b) a lamina of a second cookie dough super-posed on at least aportion of the surface of said first cookie dough, said secondcookie dough comprising

(i) a readily crystallizable sugar component comprising amono- or di-saccharide or mixture thereof whichreadily and spontaneously crystallizes at the watercontent and water activity of the baked cookie, and

(ii) flour, water and shortening.

35. A method of making a laminated dough structure comprising: preparing afirst cookie dough from cookie ingredients comprising a crystallization resistant sugarcomponent comprising a mono- or di-saccharide or mixture thereof that crystallizessubstantially more slowly than sucrose at the water content and water activity conditionsencountered in semi-moist cookies of the home-baked type; and flour and shortening;preparing a second cookie dough comprising a readily crystallizable sugar componentcomprising a mono- or di-saccharide or mixture thereof which readily and spontaneouslycrystallizes at the water content and water activity encountered in semi-moist cookies ofthe home-baked type; and flour and shortening; and applying a layer of said seconddough to said first dough, thereby forming a laminated dough structure.

Cookies / 193

stick. Press currants or raisins into the little men for eyes, mouth and buttons. Bake for 10minutes at 400 degrees. Let the children dress up the gingerbread men with frosting if you wantthem to have some real fun.

SHORT CAKESI'm copying this straight from Bevvy's book.

1 quart flourA good handful of lard (How do you like that?)1½ cups sugar 1 cup currants1 teaspoon soda 2 teaspoons baking powderButtermilk to ro11 out

JAM JAMSThese are chewy and have a tantalizing old-fashioned flavour. Ithink it's the lard that does it.

1 cup lard 4 cups flour1 cup brown sugar 2 small teaspoons soda2 eggs 1 teaspoon lemon or vanilla6 tablespoons molasses

Blend lard and sugar, then molasses, vanilla and egg. Add flour sifted with soda. The dough iseasy to handle. Roll it quite thin and cut into rounds. Bake on a greased sheet at 325 degrees for7 minutes then look-it might take a minute more for the cookies to turn crisp and brown. Whilethey are still warm put two together with apple butter or jam spread between them. They becomesoft and keep well.

RIGGLEVAKE KUCHA (Railroad Cookies)Light part: Dark part:

1 cup sugar 1 cup sugar, brown1 egg 1 cup butter1 cup butter 1 cup molasses½ cup milk ½ cup water2 teaspoons baking powder 2 teaspoons soda½ teaspoon vanilla ½ teaspoon vanilla

Enough flour in each part to make dough easy to handle.

Mix the light and dark parts in separate bowls. Blend the sugar and butter for both parts. For thelight part beat in the egg then

RIGGLEVAKE KUCHA (Railroad Cookies)Light part: Dark part:

1 cup sugar 1 cup sugar, brown1 egg 1 cup butter1 cup butter 1 cup molasses½ cup milk ½ cup water2 teaspoons baking powder 2 teaspoons soda½ teaspoon vanilla ½ teaspoon vanilla

Enough flour in each part to make dough easy to handle.

Mix the light and dark parts in separate bowls. Blend the sugar and butter for both parts.For the light part beat in the egg then

• Plaintiff owned a patent for a protective shield for a car generator

• The inventor had made a prototype of the invention and disclosed it to a single customer more than two years prior to the date the patent application was filed

• Noel J. held that patent lacked novelty due to prior public use of the invention

• Disclosure of an invention on a non-confidential basis to a single member of the public may render a patent invalid

Gibney case(Casebook , pp. 120 - 123)

• Court also held that the experimental use exemption was not available

• The inventor had failed to take precautions to avoid disclosure of the invention and there was insufficient evidence that the inventor created the prototype for the purposes of experimentation

• In order to qualify as bona fide experimentation, tests must be conducted to perfect the invention or to convince the inventor of the merits or practical utility of the invention (rather than to convince others, such as investors)

Gibney case(Casebook , pp. 120 - 123)

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Dear Sir/Madam:

This is to confirm that it is understood between us that JOE BLOW (the"Inventor") owns certain proprietary rights respecting a new widget (the "Product") which youare interested in evaluating, subject to the conditions below.

You agree:

I . To keep secret and confidential all information or materials disclosed to you by theInventor. In particular, you agree not to disclose any such information or materials toothers; and, to take reasonable steps to safeguard the secrecy and confidentiality of allsuch information or materials, until such time as the Inventor may make such informationor materials known to the public.

2. Not to manufacture, use or sell the Product, any part of it, or any other thing based on orincorporating the ideas and concepts disclosed to you by the Inventor, without theInventor's prior written permission,

3. To use any specifications, plans, drawings, prototypes, models, documents or othermaterials relating to the Product only for your own evaluation of it. In particular, youagree not to copy any such materials or use the Product itself other than for evaluation.

4, To return to the Inventor any and all specifications, plans, drawings, prototypes, models,documents or other materials relating to the Product upon demand by the Inventor orupon completion of the purposes for which the materials were delivered.

5. Not to file an application for a patent, industrial design or any other intellectual propertyright relating to the Product in any country, or assist others in doing so.

If you are agreeable to evaluating the Product on the terms and conditions set forthabove, please signify your acceptance of these terms and conditions by signing and dating onecopy of this letter and returning the signed copy to the undersigned. Thank you.

Yours truly,

Joe Blow

Accepted this ___ day of ______________, 199_:

______________________________Name:Position:Company Name: C/S

Baker Petrolite case(Casebook , pp. 125 - 135)

• This case deals with anticipation by prior use or sale• There is very little jurisprudence interpreting Section

28.2(1)(a) of the Patent Act• The Federal Court of Appeal held that an “enabling”

disclosure is required• If a product is made available without restriction to even

one member of the public, and if a person skilled in the art would be able to discover the claimed invention without the use of inventive skill (such as by reverse engineering the product), then the invention may be found to be anticipated

Baker Petrolite case(Casebook , pp. 125 - 135)

• The amount of time and work involved in conducting the reverse engineering analysis is not determinative of whether a skilled person could discover the invention

• In this case the Court held that a person skilled in the art and using data and techniques available at the relevant time, and without the exercise of inventive skill, would have been led inevitably to the subject matter of the patent claims, namely the extraction of hydrogen sulphide from natural gas by contact with triazine (or its starting components)

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Concealed Use

• Some “black box” inventions are concealed or undetectable in normal use

• Query whether the sale of such inventions makes them “available to the public” within the meaning of Section 28.2(1)

• Canadian law now clearly requires an “enabling disclosure”, namely a disclosure by which information sufficient to enable a person skilled in the art to practice the invention has been “made available to the public”

Obviousness

“[The issue of obviousness] is as fugitive, impalpable, wayward, and vague a phantom as exists in the whole paraphernalia of legal concepts.”

Judge Learned Hand,

Harries v. Air King Products Co. (1950) 183 F.2d 158, 162, CA2, N.Y.

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Ernest Scragg case(Casebook , pp. 140 - 142)

• The courts apply an objective test - whether the alleged invention would have been obvious to a person of ordinary skill in the art

• A “mere scintilla” or slightest trace of an inventiveness is sufficient

• Workshop improvements are not patentable• “Hindsight analysis” should be avoided - many

important inventions may seem obvious once the solution to a particular problem has been shown

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CANADIAN PATENT

Henry H. Schweitzer, Pacific Palisades, California, U.S.A.and James R. Drake, Santa Monica, California, U.S.A.

No. OF CLAIMS 10

54 WIND-PROPELLED APPARATUS

ISSUED Oct. 24, 197245

52 CLASS 114-12C.R. CL.

CA No. 91292111

21 APPLICATION No. 061,852

30 PRIORITY DATE

22 FILED Sep. 12, 1969

• All of the component elements of the invention were known in the prior art

• The Plaintiff obtained a patent on the basis that the invention was a new and inventive combination

• The trial court held that the invention was obvious in view of a Darby sailboard which was described in a 1965 article in Popular Science magazine

• The Darby sailboard included a mast which could swivel in a socket, but it did not include a Marconi rig (i.e. a triangular sail) or a wishbone boom

Windsurfing case(Casebook , pp. 142 - 151)

• The trial judgment was overturned on appeal• Urie J. held that the advantages of the Marconi rig were

not obvious to the inventor of the Darby sailboard who the court considered to be someone skilled in the art

• Urie J. also considered the commercial success of the invention (i.e. a “secondary consideration”)

• In the result, claims 5 and 10 of the patent were found to be valid

Windsurfing case(Casebook , pp. 142-151)

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Claims

The embodiments of the invention in which an exclusive property or privilege is

claimed are defined as follows:

1. Wind-propelled apparatus comprising body means adapted to support a user and

wind-propulsion means pivotally associated with said body means and adapted to receive

wind for motive power for said apparatus, said propulsion means comprising a mast, a joint

for mounting said mast on said body means, a sail and means for extending said sail laterally

from said mast, the position of said propulsion means being controllable by said user, said

propulsion means being substantially free from pivotal restraint in the absence of said user,

said joint having a plurality of axes of rotation whereby said sail free falls along any of a

plurality of vertical planes upon release by said user.

2. The apparatus of Claim 1 wherein said propulsion means is adapted to be hand-

held by said user but is otherwise substantially free from pivotal restraint.

3. The apparatus of Claim 1 including means for said user to hold said sail.

4. The apparatus of Claim 1 wherein said sail extending means comprises a boom

laterally disposed on said mast to hold said sail taut and adapted to provide a hand-hold for

said user.

5. The apparatus of Claim 1 including means adapted to enable said user to grasp

either side of said sail.

6. The apparatus of Claim 1 adapted as a watercraft.

7. The apparatus of Claim 6 including water stabilizing means associated with said

body means.

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1. Wind-propelled apparatus comprising body means adapted to support a user and

wind-propulsion means pivotally associated with said body means and adapted to receive

wind for motive power for said apparatus, said propulsion means comprising a mast, a joint

for mounting said mast on said body means, a sail and means for extending said sail laterally

from said mast, the position of said propulsion means being controllable by said user, said

propulsion means being substantially free from pivotal restraint in the absence of said user,

said joint having a plurality of axes of rotation whereby said sail free falls along any of a

plurality of vertical planes upon release by said user.

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10

5. The apparatus of claim 1 including means adapted to enable said user to grasp either side of said sail.

10. The apparatus of claim 4 wherein said boom comprises a pair of boom members arcuately connected athwart said mast and securing said sail there-between.

Sanofi case(Casebook , pp. 151-160)

• This case also deals with the test for obviousness• The Court adopted the four-step Windsurfing/Pozzoli

approach• An invention may be “obvious to try” if it is more or less

self-evident that what is being tried ought to work• However, a mere possibility of finding an invention is

not enough• It was not self-evident from the “875 patent or common

general knowledge that the selected isomer ought to work, i.e. that it would be more effective and less toxic

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• An invention is not useful if will not operate at all or, more broadly, if it will not do what the patent specification promises it will do

• In this case the applicant sought patent protection for a “death ray” which allegedly used a path of photo-ionized air produced by a laser beam as a channel for the transmission of a very high voltage

• The Federal Court of Appeal upheld the judgment of the Patent Appeal Board which refused the application on the basis that the invention was not useful since it was inoperable for the purpose for which it was designed

X v. Commissioner of Patents(Casebook , pp. 161 - 162)

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Apotex v. Wellcome Foundation (Casebook , pp. 163 - 178)

• This case deals with the “doctrine of sound prediction”• AZT was a known compound which had been

synthesized and tested in the 1960s as a possible anti-cancer agent

• In 1984 the respondents Glaxo/Wellcome began to test AZT in mice as a drug candidate for treating retroviral infections such as HIV

• On March 16, 1985 Glaxo/Wellcome filed its initial patent application although scientific tests had not yet been completed

Apotex v. Wellcome Foundation (Casebook , pp. 163 - 178)

• Binnie J. held that when the 1985 patent application was filed Glaxo/Wellcome had sufficient information about AZT and its activity against HIV to make a sound prediction that AZT would be clinically useful in the the treatment and prophylaxis of HIV/AIDS in human beings

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BREADTH OF PATENT CLAIMS

• The inventor devised an improved concrete extruder during the course of his employment

• However, it was not part of the inventor’s employment duties to create new products and innovations

• According to the common law, if a person creates an invention as part of his or her employment duties, then ordinarily the employer is entitled to claim ownership of any resulting patent

• Otherwise, the ownership rights remain with the inventor (subject to the terms of any employment agreement or other contract)

Spiroll case(Casebook , pp. 181 - 184)

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