Solving the ‘problem-solution’ problem for patent applicants: Choueifaty decision

In a world of startups and innovation, Canadian companies are used to uncertainty — whether it’s getting the money they need to grow, wondering if the technology they are developing stands the tests of science and the marketplace or even securing a patent that will allow them to own the inventions they create.

However, on that last uncertainty at least, based on a recent Federal Court ruling, Yves Choueifaty v. Attorney General of Canada, innovators may be able to breathe a little easier, as the court has ordered the Canadian Intellectual Property Office to go back and review a decision it made to deny a patent on the basis of the “problem-solution” approach it has been using.

Instead, the Federal Court has directed CIPO to employ the “purposive construction” approach that was outlined almost 20 years ago by the Supreme Court of Canada in Free World Trust v. Électro Santé Inc. and Whirlpool Corp. v. Camco Inc.

Canadian IP lawyers are saying that, absent a successful appeal of the Choueifaty decision, a significant roadblock will be removed for those seeking patent protection, especially in the areas of computer-based and medical diagnostic inventions.

“It will open doors to a lot more patenting in these areas if the court’s decision stands,” says Paul Horbal, a partner at Bereskin & Parr LLP, adding that having a clear approach to the issue “that is supported by case law is a good thing.” However, he thinks there is a chance the decision could be appealed, as it would be “consistent with the office’s past approach to patentable subject matter.”

In a blog post following the release of the ruling, the lawyers who acted on behalf of the applicant — J. Bradley White, Nathaniel Lipkus, Geoffrey Langen of Osler Hoskin & Harcourt LLP — wrote that Choueifaty is “an important decision that should help provide clarity on the correct approach to claim construction when a patent application is being prosecuted before the Canadian Intellectual Property Office, particularly where the claims are being assessed for subject-matter eligibility.

“The Court’s approach ensures that the inventor’s intention as set out in the claims will be considered when determining the essential elements.”

Federal Court Justice Russel Zinn said in the Choueifaty decision that “the problem-solution approach to claims construction is akin to using [an] approach discredited by the Supreme Court of Canada.” 

He emphasized that the correct approach for construing claims is to apply a purposive construction approach that had been stipulated by the Supreme Court of Canada in its decisions in 2000. A claim must be construed based on the inventor’s purpose, and the essentiality of a claim element is to be determined by asking the following questions:

1. Would it be obvious to a skilled reader that varying a particular element would not affect the way the invention works? If modifying or substituting the element changes the way the invention works, then that element is essential.
2. Is it the intention of the inventor, considering the express language of the claim, or inferred from it, that the element was intended to be essential? If so, then it is an essential element.

The Federal Court emphasized that both questions must be satisfied when assessing essentiality. The "problem-solution" approach used by CIPO only considered whether one of ordinary skill in the art would understand that a particular claim element could be varied, or removed, without affecting the way the invention works, and disregarded the intention of the inventor. To do so was improper and akin to using the "substance of the invention" approach rejected by the Supreme Court of Canada in the Free World Trust case.

Based on the approach used by CIPO, many patent applications have been refused and finally rejected. Between January 2016 and August 2020, 70 patent applications were referred to the Patent Appeal Board for reconsideration after being rejected under the problem-solution analysis. In all 70 cases, the claims were refused. 

The particulars of the Choueifaty decision relates to the invention of using a computer for selecting and managing investment portfolios. It was rejected by CIPO on the basis that it was outside the definition of “invention.” It next went to a panel review, which used the problem-solution approach, and it found the problem was not one of computer implementation but rather of reducing volatility in an investor’s portfolio. The solution was the construction of an anti-benchmark portfolio, where the weighting of each security within the portfolio is calculated according to an anti-benchmark ratio in such a way that the portfolio maximizes diversification.

Using this analysis, the panel concluded the essential elements did not include the computer-related details but rather are directed to rules involving calculations to construct the anti-benchmark portfolio, which are not patentable subject matter.

The case was then appealed by the applicant, who asserted that the patent office erred by using the problem-solution approach to judging the essential elements of the claim and finding that the problem and the solution did not include a computer element.

But Zinn found that the office erred in determining the essential elements of the claimed invention by applying the problem-solution approach, an approach that does not consider the inventor’s intention.

It also noted that patent examiners were not being guided to follow the teachings of the Free World Trust or Whirlpool cases. While CIPO took the position that the Whirlpool decision doesn’t apply to patent examinations, only litigation, based on Genencor International Inc. v. Canada (Commissioner of Patents), the Federal Court in Choueifaty said the Court’s 2011 decision in Canada (Attorney General) v. Amazon.com, Inc. required the office to employ the purposive construction test set out in Whirlpool and Free World Trust.

Horbal says that, although the ruling in Choueifaty has implications in all cases where purposive construction is to be used during patent examination, it has particular importance with respect to the question of patentable subject matter.

In computer-related cases, patent examiners will often characterize the alleged “problem” in such a manner that any computer elements in a patent claim are non-essential and can be disregarded. Once the computer elements are disregarded, what remains is easily classified as an abstract idea or mere scheme and, thus, the entire invention is excluded from patentability.

Similarly, in medical diagnostic cases, while detecting a new molecule that is implicated in a disease or developing a new detection system for a molecule implicated in a disease, CIPO would likely consider that patentable, says Jennifer Marles, a partner at Oyen Wiggs Green & Mutala LLP in Vancouver. However, under the problem-solution assessment, “what might not be in the patentable bucket” is a way of assessing existing genetic markers, often used in personalized medicine, to better determine how to treat somebody for a particular disease or a type of a disease such as cancer.

The view of those in the field argue that “you have to look at the whole transaction as one thing,” she says. “It’s about getting the data from a specific person, looking at that data and figuring out what treatment will work best,” not simply abstract thinking that is not patentable.

Both Marles and Horbal say that more clarity on the use of the purposive construction or problem-solution methods is important from a policy point of view. If, for example, the federal government wants to encourage more innovation, then allowing more patents to be granted helps that policy, as it allows inventors to better monetize their product or methods, especially in two areas, computers and medical diagnostics, where the problem-solution approach of CIPO has stymied the ability to get a patent.

Having a patent allows inventors to find investors to get the idea off the ground, Marles says, encouraging the development of innovation into something tangible. Horbal says it can also encourage innovation by encouraging inventors to “come up with a new and better way to solve a problem, if there is already a similar patent out there.”

And both say that the clarification that the Choueifaty decision provides, if followed, gets CIPO out of the realm of creating policy through its problem-solution approach to patentable subject matter, rather than it being federal law interpreted and backed by case law.