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In recent years, arbitration has become increasingly popular as a dispute settlement mechanism in the field of intellectual property (IP). Traditionally, arbitration in this area was thought to be restricted to disputes arising from contracts for the licensing or the transmission of IP rights. But in some jurisdictions the issue of the validity of such rights has of late also been admitted as a proper subject-matter for arbitration. And certain legal systems have instituted mandatory arbitration proceedings aimed at a more expeditious disposition of IP disputes. This article aims at giving an overview of these developments, which will be considered here from a comparative standpoint. Belgian Patent Law (1984) [ Loi sur les brevet d'invention ] Civil Code of Quebec, Canada (1994) [ Code civil du Quebec ] Quebecois Act Respecting the Professional Status of Artists in the Visual Arts, Arts and Crafts and Literature, and their Contracts with Promoters (1988) [Loi sur le statut professionnel des artistes des arts visuels, des metiers d'art et de la litterature et sur leurs contrats avec les diffuseurs] French Intellectual Property Code (2011) [ Code de la propriete intellectuelle ] Portuguese Code of Industrial Property (1995) [Codigo da Propriedade Industrial] Portuguese Code on Copyright and Related Rights (1995) [ Codigo do Direito de Autor e dos Direitos Conexos ] South African Patents Act (1978) US Patent Act (1982)

On November 24th, 2011, in Commissioner of Patents v. Amazon.com Inc. (2011 FCA 328), the Federal Court of Appeal held that business methods, when properly construed, could constitute patentable subject matter. The decision, while generally well-reasoned, rational, and consistent with the wording and legislative purpose of the Patent Act, introduced some uncertainties into an area of law that could benefit from greater clarity, especially due to the scarcity of jurisprudence in this area. In this article, I analyse the decision and its practical implications.

In Canada patents are administratively granted by the Commissioner of Patents. Yet administrative law principles have never been applied when determining the validity of a patent during litigation. Courts have always proceeded on the basis of a trial de novo to determine whether (on a balance of probabilities) the patent was indeed valid and properly granted. This paper examines the apparent tension between the Patent Act, patent jurisprudence and administrative law principles in litigating the validity of a patent.

In AstraZeneca Canada Inc. v. Apotex Inc., 2017 SCC 36, the Supreme Court of Canada unanimously rejected the “promise doctrine” in determining a patent’s usefulness under section 2 of Canada’s Patent Act.

The Patent Appeal Board recently refused a patent application filed by Amazon.com for placing orders on-line using one click (the ‘one-click patent application’). Customers were identified using cookies that were stored locally on their computers; these identifiers were used to obtain the customer's pre-recorded information from Amazon.com's database. The patent examiner initially rejected the application as being either obvious or directed towards non-statutory subject matter. Although the Board reversed the examiner's findings on obviousness, the application was rejected as being directed towards non-statutory subject matter. Section 2 of the Patent Act defines an ‘invention’ as ‘any new and useful art, process, machine, manufacture or composition of matter’ (or any improvement thereof); the Board considered that the application fell outside this statutory definition.

‘For unexplained motivations’, the Canadian Patent Office instituted abandonment proceedings against Sarnoff Corporation because the patent maintenance fees—which were always paid on time—were paid by an ‘improper person’ according to the Commissioner of Patents; however, on judicial review, Mr Justice Roger Hughes of the Federal Court of Canada held that it would clearly be a frustration of the legislative intent of the Patent Act if ‘non-patent’ matters always required the specialist intervention of patent agents and, in such routine and clerical matters, payment of fees can be achieved through ‘any’ agent acting on behalf of the principal, provided they are so authorized.

According to the US Patent Act, “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title” (1). The courts have construed this statement as covering “anything under the sun made by man” (2). Although this language is very encompassing, not everything is patentable. The invention must be novel (3) and nonobvious (4). In addition, “laws of nature, natural phenomena, and abstract ideas” are not patentable (5), but novel applications of laws of nature, natural phenomena, and abstract ideas can be patentable. The courts have been struggling with just how much application is required to turn an unpatentable natural phenomenon or law of nature into a patentable invention. Two current cases involving laboratory medicine illustrate this difficulty. The “Prometheus” case (6), decided recently by the US Supreme Court, relates to the patentability of using a patient's metabolite concentrations to provide proper drug dosing. The “Myriad” case (7) has been decided by the US Court of Appeals for the Federal Circuit (the US appeals court that handles all patent appeals), but the Supreme Court has asked the appeals court to reconsider its ruling in light of the Prometheus decision. The Myriad case involves the patentability of gene targets. Table 1 shows how the 2 cases have progressed through the courts. View this table: Table 1. Court decisions in the Prometheus and Myriad cases. The patents involved in both the Prometheus and Myriad cases certainly describe natural phenomena and laws of nature. The Prometheus patents set forth a specific metabolite concentration above which would cause harm and another metabolite concentration below which would prove ineffective. The Myriad patents involve various aspects of the BRCA1 2 (breast cancer 1, early onset) and BRCA2 (breast cancer 2, early onset) genes. A …

The changes brought about by the Patent Act of 1952 were needed to adjust the administration of patents to the reality that invention and innovation now primarily result from investment rather than from individual creativity. An unintended result of these changes has been to make it difficult for firms in most non-chemical technologies and especially smaller firms involved in the innovation of complex technologies to obtain the protection they need. Also, denying firms in complex technologies the power to operate patent pools has forced them to multiply their patents as bargaining chips: these large numbers of interlocking patents effectively bar entry by newcomers to complex technologies, thus reducing competition. Reforms are possible and they could enable the patent system to fulfill its proper function in relation to complex technologies and transform the economic climate for small-firm innovation, replacing the patent system's present emphasis on serving large firms in simple technologies. Copyright , Beech Tree Publishing.

Since the time the USA was first formed, our founding fathers recognized that rewarding inventors with a limited monopoly on their invention in exchange for public disclosure was an important part of the American nation's fabric. Indeed, the US Constitution included this power in Article I(8)(8), in the patents and copyright clause, and in 1790, one of our nation's first laws was the original Patent Act (see 1 Stat 109 (1990)). However, our founding fathers were also sceptical of granting just anyone a monopoly, based on misuse of this power by the Crown in England in earlier times. So the concept was that only ‘Inventors’, understood under Anglo-American principles dating to the Cases of Monopolies, Darcey v Allein, 77 Eng Rep 1260 (KB 1602) and the Statutes of Monopolies, 21 Jac I, Ch 3 (1624), to mean ‘first and true’ inventors, should be entitled to a patent award. From that time on, it has been a fundamental premise of the American patent system that only ‘first and true’ inventors are entitled to a patent.

The US Federal Circuit recognizes the broad reach of patent-eligible subject matter and narrow scope of the ‘abstract idea’ exception under 35 USC §101. Legal context Over the past few years, culminating in the US Supreme Court decision in Bilski v Kappos , the scope of what type of inventions are eligible for patent protection has been addressed and clarified. In the first significant decision since the Supreme Court decided Bilski, the Federal Circuit addressed patent-eligible subject matter, and the ‘abstract idea’ exception to patent-eligibility in particular. The Federal Circuit has now taken a big step towards providing more clarity to the scope of patent-eligible subject matter. Facts RCT is the owner of six related US patents directed to digital half-toning technology: 5,111,310, 5,341,228, 5,477,305, 5,543,941, 5,708,518 and 5,726,772. Almost a decade ago, RCT filed a patent infringement lawsuit against Microsoft in the Arizona federal court, alleging that Microsoft's operating systems, office suites, and other applications infringe these six RCT patents (Research Corp. Techs., Inc. v Microsoft Corp., No. 01-CV-658 (D. Ariz. filed 21 Dec. 2001)). In prior proceedings, a District Court assigned to the case granted a series of summary judgment motions without opinions relating to non-infringement and invalidity in favour of the defendant, Microsoft. The District Court also issued a finding of inequitable conduct. These decisions were the subject of a prior appeal, which resulted in reversal and an order that on remand the case be assigned to a new District Court judge (Research Corp. Techs., Inc. v Microsoft Corp., 536 F.3d 1247, 1254 (Fed. Cir. 2008) '(RCT I))'. On remand, the new judge assigned to the case held, inter alia, that the asserted claims of the '310 and '228 patents were invalid under 35 USC §101. This ruling (as well as others relating to the effective date of claims of four of the asserted patents) was appealed in the present appeal. This Current Intelligence addresses only the Section 101 issues raised in it. Amster, Rothstein & Ebenstein LLP / 90 Park Avenue, New York, New York 10016 / www.ARElaw.com © Copyright Amster, Rothstein & Ebenstien LLP. All rights reserved. Analysis On appeal, the Federal Circuit again reversed the District Court's summary judgment, finding that the '310 and '228 patents did not claim patent-eligible inventions under 35 USC §101. In reaching this decision, the court (per Chief Judge Rader) provided a helpful state of the law on patent-eligibility after the Supreme Court's decision in Bilski. II begins its analysis with a restatement of Section 101 itself, and the statutory definition of ‘process’ found at 35 USC §100(b). Relying upon the Supreme Court's decision in Bilski v Kappos, 130 S. Ct. 3218, 3225 (2010), II confirmed the broad words of the statute, and the ‘wide scope’ of patent-eligible subject matter. Drawing from Bilski's discussion of previous Supreme Court cases, II, at 867–68 (citations omitted), explains: the Supreme Court has “more than once cautioned that courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’” The Supreme Court has articulated only three exceptions to the Patent Act's broad patent-eligibility principles: “laws of nature, physical phenomena, and abstract ideas.” The Supreme Court reasoned that laws of nature and natural phenomena fall outside the statutory categories because those categories embrace “the basic tools of scientific and technological work.” Abstractness, also a disclosure problem addressed in the Patent Act in section 112, also places subject matter outside the statutory categories. RTC II concludes that ‘section 101 does not permit a court to reject subject matter categorically because it finds that a claim is not worthy of a patent’. Id. at 868. Thus Section 101 is merely a ‘threshold’ test, and the other provisions of the US Patent statute (eg Sections 102, 103, and 112) serve better gate-keeping functions. With respect to the case-at-hand, RTC II found that the claims at issue met the statutory aspects of Section 101 and the statutory definition of process found in Section 100(b). The court then considered whether the claims were subject to one of the three judicial exceptions. In this regard, the only issue raised was whether the ‘abstract’ exception applied. RTC II took this opportunity to follow the Supreme Court's mandate in Bilski to avoid applying a rigid formula or definition for abstractness but instead develop ‘other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text’. Bilski, 130 S. Ct. at 3231. Thus RTC II, at 868, held: Id. With that guidance, this court also will not presume to define “abstract” beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act. With this guiding principle, RTC II recognized that Amster, Rothstein & Ebenstein LLP / 90 Park Avenue, New York, New York 10016 / www.ARElaw.com © Copyright Amster, Rothstein & Ebenstien LLP. All rights reserved. In that context, this court perceives nothing abstract in the subject matter of the processes claimed in the ’310 and ’228 patents. The ’310 and ’228 patents claim methods (statutory “processes”) for rendering a halftone image of a digital image by comparing, pixel by pixel, the digital image against a blue noise mask. Id. (emphasis added). II found support for its conclusion in ‘[t]he fact that some claims in the ’310 and ’228 patents require a “high contrast film,” “a film printer,” “a memory,” and “printer and display devices” ... .’ It also offered as a new touchstone ‘that inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act' Id. at 869 (emphasis added). Relying upon the Supreme Court's decision in Diamond v Diehr, 450 U.S. 175 (1981), RTC II flatly rejected the notion that the inclusion in the claims of ‘algorithms and formulas, even though admittedly a significant part of the claimed combination, do not bring this invention even close to abstractness that would override the statutory categories and context’. Id. As a concluding note, returning to the court's original point that Section 101 does not replace the other requirements of the Patent Act, II distinguished its holding that the claims at issue were not so abstract as to override the statutory language of Section 101 from a holding that the claims were concrete enough to meet the specificity requirements of Section 112: " In the context of the statute, this court notes that an invention which is not so manifestly abstract as to over-ride the statutory language of section 101 may nonetheless lack sufficient concrete disclosure to warrant a patent. In section 112, the Patent Act provides powerful tools to weed out claims that may present a vague or indefinite disclosure of the invention. Thus, a patent that presents a process sufficient to pass the coarse eligibility filter may nonetheless be invalid as indefinite because the invention would “not provide sufficient particularity and clarity to inform skilled artisans of the bounds of the claim.” Star Scientific, Inc. v R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1371 (Fed. Cir. 2008). That same subject matter might also be so conceptual that the written description does not enable a person of ordinary skill in the art to replicate the process. Id. Practical significance II appears to offer a first taste of the new standard governing patent-eligible subject matter that we can expect to see coming out of the Federal Circuit with Chief Judge Rader in charge. In II, the court rejects myopic rules that would unduly narrow the scope of patent-eligible subject matter, and keeps the focus on the other protections of the US Patent Act as mechanisms to protect against patent claims that are vague and of suspect validity. * Mr. Macedo is a Partner at Amster, Rothstein & Ebenstein LLP and author of The Corporate Insider’s Guide to U.S. Patent Practice, published by Oxford University Press. Mr. Macedo’s practice specializes on intellectual property issues including litigating patent, trademark and other intellectual property disputes, Amster, Rothstein & Ebenstein LLP / 90 Park Avenue, New York, New York 10016 / www.ARElaw.com © Copyright Amster, Rothstein & Ebenstien LLP. All rights reserved. prosecuting patents before the U.S. Patent and Trademark Office and other patent offices throughout the world, registering trademarks and service marks with the U.S. Patent and Trademark Office and other trademark offices throughout the world, and drafting and negotiating intellectual property agreements. He may be reached at cmacedo@arelaw.com. Powered by TCPDF (www.tcpdf.org) Amster, Rothstein & Ebenstein LLP / 90 Park Avenue, New York, New York 10016 / www.ARElaw.com © Copyright Amster, Rothstein & Ebenstien LLP. All rights reserved.

The Patent Act's safe harbour for preparing FDA submissions also operates as a defence in USITC Section 337 actions.