Decisions of the Commissioner of Patents - Summary of decision number  1290

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This table provides a summary of decision number 1290

Decision Number 1290
Application Number 2246933
Date 2009-03-05
Patent Number 2246933
CPC:
IPC: G06Q 30/06 (2012.01)
Topics J00: SUBJECT MATTER OF APPLICATIONS - Meaning of Art
J70: SUBJECT MATTER OF APPLICATIONS - Process or Method Claims
O00: OBVIOUSNESS

Decision Text

COMMISSIONER'S DECISION SUMMARY

C.D. 1290 Application 2,246,933

Statutory Subject Matter, Obviousness

The Examiner rejected the application for being an obvious ordering method and system. The Examiner also alleged that the subject matter of the claims is directed to non-patentable subject matter under Section 2 of the Patent Act.

The application was refused by the Commissioner of Patents because the claimed invention was not patentable under Section 2 of the Patent Act.


IN THE CANADIAN PATENT OFFICE

DECISION OF THE COMMISSIONER OF PATENTS

Patent application number 2,246,933, having been rejected by the Examiner under Subsection 30(3) of the Patent Rules, was reviewed. The rejection has been considered by the Patent Appeal Board and by the Commissioner of Patents. The findings of the Board and the decision of the Commissioner are as follows:

Agent for the Applicant

OYEN WIGGS GREEN & MUTALA LLP
480 - 601 West Cordova Street
VANCOUVER, British Columbia
V6B 1G1


Table of Contents


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . .1
PROCEDURAL MATTERS . . . . . . . . . . . . . . . . . . . . . . .1
BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Claims. . . . . . . . . . . . . . . . . . . . . . . . . . .3
ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
APPLIED REFERENCES . . . . . . . . . . . . . . . . . . . . . . .7
Dates of publication. . . . . . . . . . . . . . . . . . . .7
OBVIOUSNESS. . . . . . . . . . . . . . . . . . . . . . . . . . .8
The Examiner's position . . . . . . . . . . . . . . . . . .8
The Applicant's response. . . . . . . . . . . . . . . . . 10
Legal Principles - Obviousness. . . . . . . . . . . . . . 12
The question . . . . . . . . . . . . . . . . . . . . 12
Problem and solution . . . . . . . . . . . . . . . . 14
The skilled technician and the problem to be solved. 15
The state of knowledge at the claim date - Selected excerpts from Ye il16
General overview . . . . . . . . . . . . . . . . . . 16
Session and subscription-based tracking. . . . . . . 17
Collecting customer information. . . . . . . . . . . 18
Cookie technology. . . . . . . . . . . . . . . . . . 18
Tracking state information in Ye il. . . . . . . . . 20
Analysis - Section 28.3 . . . . . . . . . . . . . . . . . 21
Overview: Comparing Chapter 4 of Ye il to the instant application21
Distinguishing features argued by the Applicant. . . 22
Account information: Storing and retrieving using identifiers (cookies)23
Single-Action Ordering (one-click ordering). . . . . 25
Other benefits and advantages. . . . . . . . . . . . 26
Findings: Section 28.3. . . . . . . . . . . . . . . . . . 28
The approach to assessing obviousness set out in Sanofi . 28
Subsidiary features . . . . . . . . . . . . . . . . . . . 30
STATUTORY SUBJECT MATTER: SECTION 2. . . . . . . . . . . . . . 32
The Examiner's position . . . . . . . . . . . . . . . . . 32
The Applicant's response. . . . . . . . . . . . . . . . . 32
Clarifications at the Hearing . . . . . . . . . . . . . . 34
Nature of the rejection. . . . . . . . . . . . . . . 34
Applicant's views regarding statutory subject matter 35
Addition to human knowledge. . . . . . . . . . . . . 36
Legal principles - Statutory Subject Matter . . . . . . . 36
Invention defined. . . . . . . . . . . . . . . . . . 36
Approach to assessing subject matter . . . . . . . . 37
Consider both the form and the substance of the claims37
Form of the claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Substance of the claims (What has been discovered?) . . 37
Subject matter must fit the definition of a category37
Change of character or condition . . . . . . . . . . . . . . . . . . . 37
Excluded (non-statutory) subject matter . . . . 37
Non-technological subject matter is not statutory37
Basis for the approach . . . . . . . . . . . . . . . 38
Form of the claim (the claim on its face) . . . 38
Substance of the claim (What has been discovered?)38
Subject matter must fit the definition of a category40
There must be a physical object or a change in character or
condition of a physical object . . . . . . . . . . . . . . . . . . . . . . 40
Excluded subject matter: Business methods are not patentable 42
Subject matter that is not technological is non-statutory subject
matter. . . . . . . . . . . . . . . . . . . . . 45
Overlap between excluded subject matter and non-technological
subject matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Analysis: Section 2 . . . . . . . . . . . . . . . . . . . 48
Approach to assessing subject matter . . . . . . . . 48
Form of the claims. . . . . . . . . . . . . . . 49
Substance of the claims . . . . . . . . . . . . 50
Is there some change in character or condition (Lawson test)?51
Is the substance of the claims a method of doing business?52
Is the substance of the claims non-technological in nature?52
Findings - Section 2. . . . . . . . . . . . . . . . . . . 55
RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . 56

INTRODUCTION

[ 1 ] This decision deals with a review by the Commissioner of Patents of the Examiner's Final Action on patent application number 2,246,933 which was filed on September 11th, 1998 and is entitled "METHOD AND SYSTEM FOR PLACING A PURCHASE ORDER VIA A COMMUNICATIONS NETWORK". This application claims priority from a United States application filed on September 12th, 1997 and a United States application filed on March 23rd, 1998. The Applicant is AMAZON.COM, INC and the inventors are Shel Kaphan, Joel Spiegel, Jeffrey P. Bezos and Peri Hartman. The Examiner in charge issued a Final Action on June 1st, 2004 rejecting claims 1 to 75 and the application based on obviousness and non-statutory subject matter. The Applicant submitted arguments in response to the Final Action on December 1st, 2004.

[ 2 ] A hearing before the Patent Appeal Board was held on September 18th, 2008. Appearing on behalf of the Applicant was Mr. David McGruder ["the Applicant"] from the firm of Oyen Wiggs Green Mutala. Representing the Patent Office were Ms. Carla DiNardo (née Carpinone), the Examiner in charge of the application and Mr André Gélinas, Section Head.

PROCEDURAL MATTERS

[ 3 ] An earlier hearing for this application had been held on November 16th, 2005. Appearing on behalf of the Applicant was Mr. David McGruder from the firm of Oyen Wiggs Green Mutala. Representing the Patent Office were Ms Carla Carpinone, the Examiner in charge of the application and Mr. Peter Ebsen, Section Head. Mr. John Cavar and Mr. Murray Wilson were members of the Board at that hearing, but they have both since retired from the Public Service before a recommendation was finalized.

[ 4 ] On June 11th, 2008 the Chair of the Patent Appeal Board contacted the Applicant to explain that a new Board would be formed to review the Final Action. The Applicant was offered the opportunity to have another hearing, which was accepted.

[ 5 ] On July 30th, 2008 the new Board wrote to the Applicant to confirm a new hearing date of September 18th, 2008 ["the Hearing"]. At that time, the Board also notified the Applicant that the rejection under Section 2 would be assessed based on whether the essence of the claimed invention, or what has been added to human knowledge (in online ordering technology) is non-statutory because it does not fall into one of the categories of invention (under Section 2 of the Patent Act). Before the Hearing, the Applicant was also informed that all claims would be assessed for compliance under Section 2 of the Patent Act. At the Hearing, the Applicant addressed all of the claims with respect to Section 2. In the letter dated July 30th, 2008, the Applicant was also informed that the publisher stated the Ye il book (cited in the Final Action) was published on November 8th, 1996.

BACKGROUND

[ 6 ] The application sets out a method and a system which allow a purchaser to place an order for an item over the Internet. Figure 2 shows a block diagram of the system and Figure 3 is a flow diagram which shows a feature of the system which allows the purchaser to purchase an item with a single-action.

[ 7 ] The server uses a client identifier sent from the client's computer to associate the client's computer with the purchaser's payment and shipment information (purchaser-specific account information). The client identifier is stored in the client's computer by the server when the client enters his identification, billing and shipping information (purchaser-specific account information), usually at the time of the client's first visit. On a subsequent visit to the Web site by the client's computer, the server recognizes the client identifier as belonging to that client. The client may then browse items, and decide to buy an item by clicking on only one button which sends the request to order the item along with the client identifier. The effect of this single-action is to instantly order the item. The server system will receive the purchase request, automatically retrieve the client's account information using the client identifier, and combine the retrieved account information to generate the order. Only one click of the client's mouse is required.

Claims

[ 8 ] There are 75 claims in the application, submitted on November 27th, 2002 in response to the Examiner's report dated May 28th, 2002. Independent claims 1, 19, 33, 51, 60 and 68 are method claims and independent claim 44 is directed to a system.

[ 9 ] Claim 1 provides for storing a client identifier on a client system, displaying item information and an indication of a single-action to be performed for activating single-action ordering when an item is to be ordered, and includes the identifier in the request to order the item so that the identifier identifies account information previously supplied by the user. Claim 1 also provides for changing account information by logging in to the server system. Claim 1 is as follows:

1. A method in a client system for ordering an item, the method comprising: receiving from a server system a client identifier of the client system; persistently storing the client identifier at the client system; when an item is to be ordered, displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and in response to the single action being performed, sending to the server system a request to order the identified item along with the client identifier, the client identifier identifying account information previously supplied by a user of the client system wherein the user does not need to log in to the server system when ordering the item; and when account information is to be changed, coordinating the log in of the user to the server system; receiving updated account information; and sending the updated account information to the server system whereby the user does not need to log in to the server system when ordering the item, but needs to log in to the server system when changing previously supplied account information.

[ 10 ] Claims 2 to 18 introduce several variations on the ordering method of claim 1 including:

- specifying that the type of account information is billing and/or shipping information;
- providing for client/server communication via the Internet;
- the server confirming a generated order;
- clicking a mouse button when a cursor is positioned over a predefined area of the displayed information;
- displaying partial information of the user's identity, partial shipping information present on the server, or partial payment information present on the server;
- ordering the item alternatively using a shopping cart model;
- the server combining multiple order requests into a single order;
- the server combining multiple requests into a single order when sent within a certain time interval, such as 90 minutes;
- including an ordered item in an order with another item based on similar availability;
- categorizing order availability as short-term or long-term and/or intermediate-term; and
- displaying an indication that an order may be cancelled within a time period.

[ 11 ] Claim 19 sets forth single-action ordering and combining orders into a single order:

19. A method in a client system for ordering items, the method comprising: receiving from a server system a client identifier of the client system; persistently storing the client identifier at the client system; and for each of a plurality of items, displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and in response to the single action being performed, sending to the server system a request to order the identified item and the client identifier, the client identifier identifying account information of a user wherein the server computer automatically combines orders into a single order.

[ 12 ] Claims 20-32 introduce variations on claim 19 with respect to combining the orders into a single order, as well as displaying partial information and permitting order cancellation, such as:

- the server combining multiple requests into a single order when sent within a certain time interval;
- setting 90 minutes as the interval within which requests will be combined;
- including an ordered item in an order with another item based on similar availability;
- categorizing order availability as short-term or long-term and/or intermediate-term; - providing for client/server communication via the Internet;
- clicking a mouse button when a cursor is positioned over a predefined area of the displayed information;
- displaying partial information supplied by the server such as the users identity, partial shipping information, or partial payment information;
- ordering the item alternatively using a shopping card model; and
- displaying an indication that an order may be cancelled within a time period.

[ 13 ] Independent claim 33 is similar to claim 19 except that it provides for order cancellation within a certain time interval instead of order combining. Dependent claims 34-43 introduce similar variations as found in claims 20-32.

[ 14 ] Claim 44 sets forth a client system for ordering, stating:

44. A client system for ordering an item, comprising: a component that receives from a server system a client identifier of the client system and that stores the client identifier persistently; a component that orders an item by displaying information identifying the item along with an indication of a single action that is to be performed to order the identified item and by sending to the server system a request to order the identified item along with the client identifier, the client identifier identifying account information previously supplied by a user wherein the user does not need to log in to the server system when ordering the item; and a component that updates account information by coordinating the log in of the user to the server system, receiving updated account information from the user, and sending the updated account information to the server system.

[ 15 ] Claims 45-50 provide for the following:

- specifying that the type of account information is billing and/or shipping information;
- clicking a mouse button when a cursor is positioned over a predefined area of the displayed information;
- ordering the item alternatively using a shopping card model;
- the server combining multiple order requests into a single order; and
- displaying an indication that an order may be cancelled within a time period.

[ 16 ] Independent claim 51 adds the step of automatic generation of a single order for identified items without the user having to specify that they be so combined.

[ 17 ] Independent claim 60 includes, along with single-action ordering, displaying an indication of the possibility of order cancellation.

[ 18 ] Independent claim 68 is similar to claim 1. The remaining dependent claims 52- 59, 61-67 and 69-75 specify similar provisions as those noted in earlier dependant claims.

[ 19 ] Thus, the main theme common to all of the claims is single-action ordering by virtue of the transmitted client identifier being associated with purchaser-specific account information already stored at the server system. Each independent claim is additionally limited by including at least one of the following features: user log in for changing user account information; automatic combination of multiple orders into a single order; and displaying an indication that an order can be cancelled within a time interval.

ISSUES

[ 20 ] The Final Action dated June 1st, 2004 gives rise to the following questions:

1 Are claims 1-75 obvious under Section 28.3 of the Patent Act?

2 Are claims 1 to 75 directed to non-statutory subject matter under Section 2 of the Patent Act? What is the approach to be followed?

The Summary of Reasons from the Examiner did not refer to the objection in the Final Action to the apparatus claims 44 to 50 under Section 2 of the Patent Act. However, before the Hearing, the Board informed the Applicant that all of the claims would be assessed for compliance with Section 2 of the Patent Act, consistent with looking to the substance of the claimed invention, and not only the form of the claims. At the Hearing, the Applicant addressed all of the claims on this point.

While the approach to be followed in assessing statutory subject matter was not a question raised in the Final Action, there was considerable discussion in the prosecution about the correct approach. It is therefore incumbent upon the Commissioner (and the Board) to set out the correct approach.

APPLIED REFERENCES

[ 21 ] In the Final Action, the Examiner cited the following prior art:

- Creating the Virtual Store, pages 118 to 121 and 326, M. Ye il, John Wiley and Sons, 1997.

- Cookies - What every web designer should know, Journal of Design Science 1997-2001

[ 22 ] The Examiner also brought several references of interest to the attention of the Applicant. As the manner of applying these references was not discussed in the Final Action, we will not discuss these references further.

Dates of publication

[ 23 ] Before beginning an analysis of the cited references, the Board will comment on the dates indicated in the copyright notice of the cited art.

[ 24 ] In the Ye il reference, the copyright notice indicates that the book was published in 1997. Usually, when only the year of publication is given, the precise date accorded to a reference is the last day of the year [i.e. December 31st, 1997].

[ 25 ] At the first hearing (on November 16th, 2005), the Applicant was concerned about the date of disclosure for Ye il, since it only bears a copyright date for 1997, while the earliest claim date of this application is September 12th, 1997. In the letter sent on July 30th, 2008 the Board informed the Applicant that the publisher stated that the Ye il book was published on November 8th, 1996. Therefore, this reference was available to the public before the earliest claim date of the application, and can be considered as prior art on the claim date of invention. No further submissions were made by the Applicant on this matter.

[ 26 ] With respect to the Journal of Design Science, the Examiner stated the publication date was 1997 to 2001. Since the earliest date is after the claim date of the application, this reference cannot be considered when assessing obviousness.

OBVIOUSNESS

The Examiner's position

[ 27 ] The Summary of Reasons forwarded to the Applicant maintained the rejection of claims 1 to 75 for being obvious in view of Ye il and the common knowledge of using client identifiers for on-line purchasing methods as taught by the Journal of Design Science.

[ 28 ] The Examiner argued that the claimed ordering method was obvious, stating in part:

The method of ordering items of the present invention uses cookies to store a client identifier on the client system to enable ordering items, with a single click, without logging in to the server system. Ye il teaches a system and method of ordering items on-line whereby registration may or may not be required because cookies can be used to keep track of shoppers. Shoppers are not required to log on using a password or a code to make a purchase (page 121). Ye il also mentions the idea of an instant buy option (page 326) whereby merchants can provide shoppers with an instant buy button for some or all items, enabling them to skip checkout review. Ye il's previous teachings regarding cookies and their involvement within Web stores implies that the Instant Buy option can be implemented using these techniques because it is obvious that the user is not required to logon to make a purchase. Thus, on-line methods and systems for ordering an item which allow a user to order an item by a single action are clearly outlined in the prior art of Ye il.

[ 29 ] The Examiner stated that Ye il provides an "Instant Buy button for some or all items" on page 326.

[ 30 ] The Examiner also argued that logging in to change account information was not inventive, stating:

Ye il's teachings indicate that a user can order items by a single action (Instant Buy option) "without requiring them to log on using a password or code", page 121. Ye il also specifies that users should register in the server system for more than basic levels of information. This implies that changing sensitive account information requires a higher level of security, such as a password or code. It would then be obvious to require the user to log on to change account information in systems which facilitate single action ordering. However when ordering an item, only the activation of the Instant Buy button is required according to Ye il.

[ 31 ] With respect to the feature of order cancellation, the Examiner stated:

Ye il does not state that an order cannot be cancelled. Ye il does not refer to a cancel option because it is not an issue. It is well known in the art of on-line shopping, or with any type of purchase, that even after an order has been placed, the shopper has the right to cancel the order, within a certain time period, e.g., before it is shipped. Shoppers change their minds all the time. It is common knowledge and practice to cancel an order before delivery and this feature does not add any patentable subject matter to the claims.

[ 32 ] In discussing the feature of combining multiple orders into a single order, the Examiner had this to say:

. . . the non-statutory item ordering scheme in which they are used cannot patentably distinguish over the prior art.

Based on the Examiner's statement in the "Non-statutory subject matter" section of the Final Action that "[t]he underlying technical features of the system remain the same", it is clear that she considers the potentially distinguishing feature of the item ordering scheme to be non-statutory and not patentably distinguishing because it is non-technical in nature.

[ 33 ] There are similarities between the Examiner's statement and the practice in the European Patent Office (EPO). In the EPO, non-technical features may, in some instances, not be considered to form part of the inventive step. In other cases, non-technical features may confer a further technical effect. The Board is unaware of any Canadian jurisprudence either supporting or dismissing these considerations in a test for obviousness. The Board is of the opinion that Subsection 80(1) of the Patent Rules, which specifies that "the description shall . . . describe the invention in terms that allow the understanding of the technical problem, . . ., and its solution", is consistent with such considerations.

[ 34 ] However, even if these considerations could be part of a test for obviousness, it would not be appropriate to simply dismiss non-technical features from an analysis of inventiveness; it would be necessary that something of a non- technical nature be further assessed for a further technical effect. This would require an articulated and structured line of reasoning to permit assessment of obviousness by discriminating between, and analysing the interplay of, technical and non-technical features in the claimed invention. Since the prosecution under obviousness does not pursue this type of reasoning, the Board cannot give any weight to the above quoted statement while comparing the claims to the prior art. The Board recommends that the treatment of non-technical features in a test for obviousness should be subject to further analysis by the Office to determine proper practice.

The Applicant's response

[ 35 ] In response to the Final Action, the Applicant argued that Ye il does not disclose single-action ordering, because checkout is still required in the Netscape Merchant System Instant Buy Button.

[ 36 ] The Applicant also disagreed that Ye il disclosed single-action ordering without the need to log in, stating in part:

. . . the phrase quoted by the Examiner is taken out of context, as evidenced by the following excerpt from Ye il, page 121:
"Requiring registration to create shopping carts on the Web is, to a certain extent, understandable, but it certainly is not necessary for basic levels of visitor information. For instance, it is possible to keep track of some visitors' actions without requiring them to log on using a password or code."
It is clear from the foregoing that Ye il is discussing the tracking of the actions of a visitor without requiring login, not allowing a visitor to make an order without logging in.
. . .
Ye il teaches that basic information may be collected without requiring the user to log in. Ye il also teaches that registration (and presumably logging in) is required for shopping (see the last line of page 121 of Ye il: "While logging on to shop"). However, there is nothing in Ye il to teach or suggest that a user may make an order by performing a single action without logging in, but that the user will need to log in to change account information.

[ 37 ] With respect to the automatic combination of multiple items into a single order, the Applicant said, in part:

...these claims recite that multiple items, each ordered by a single action, may be automatically combined into a single order. As previously submitted, none of the prior art cited by the examiner teaches or suggests this combination of features. The Examiner contends that the "Instant Buy" option of Ye il suggests this combination of features. However, a careful review of Ye il shows that the "Instant Buy"option requires the user to go to a checkout page as discussed above. Thus, Ye il teaches away from automatically combining multiple items each ordered by a single action, into a single order.

[ 38 ] In the Final Action, the Examiner cited pages 118 to 121 from this chapter. At the first hearing on November 16th, 2005, the Examiner referred to other pages from the same chapter and the Board gave the Applicant additional time to review these other pages and to make a separate submission. The Applicant provided additional arguments to the Board in a letter dated November 29th, 2005, which are reproduced below:

Under the heading "Using Subscription-Based Tracking," Ye il describes that "registration is still not required for customizing a single visit or for completing a purchase." (Ye il, p. 122.) Ye il is suggesting that a web site that generally requires registration can still accommodate purchases by customers who are not registered. Although some customers who register and "log[] on to shop" will realize advantages of a "customize[d] and personalize[d]" shopping experience, other customers may be "scar[ed] away" by such registration." (Ye il, p. 119-122.) Thus, unregistered users can still shop at the web site using session-based tracking in which purchases are tracked in a shopping cart until "the customer presents the payment instrument, settles, and the transaction is done." (Ye il, p. 112.)

Ye il is simply suggesting that both tracking techniques can be supported by a web site: If a customer logs on, then the web site uses subscription-based tracking; otherwise, it uses session-based tracking. Ye il is, however, not suggesting that the subscription-based tracking technique can be used without requiring a customer to log on. Moreover, since Ye il's session-based tracking keeps "no information about the customer ... beyond the duration of his or her visit to the site," Ye il's session-based tracking cannot identify "account information previously supplied by a user of the client system" as recited by the claims.

Applicant's claims are directed to an invention that combines advantages of session-based tracking and subscription-based tracking. The advantage of session-based tracking is not having to log in when making a purchase, and the advantage of subscription-based tracking is not having to supply account information when making a purchase. The invention realizes both of these advantages, assuming that a user previously supplied account information (e.g., billing information when a previous purchase was made or when registering) by "persistently storing a client identifier [received from the server system] at the client system" and sending that client identifier to the server system when an item is ordered. The client identifier identifies both the user and the account information so the user does not have to log in or re-supply the account information when placing an order. The invention does, however, require a user to log in when changing the account information. By not requiring a user to log in when placing an order, but requiring a user to log in when changing account information, the invention achieves an acceptable level of security. In particular, if a thief places an order using the same client system as a legitimate user, then the order will be billed and shipped according to the account information provided [sic] the legitimate user and not the thief. Since the thief cannot log on to change the account information, the order will be delivered to the legitimate user making the legitimate user aware of the attempted theft.

[ 39 ] At the Hearing, the Applicant reiterated these arguments to illustrate the differences between Ye il and the claimed invention.

[ 40 ] The Applicant also acknowledged that the practice of cancelling an order at retailers was known and accepted that cancelling orders is an aspect of retailing. However, the Applicant emphasized that claims 33-43 and claims 60-67 are not reciting order cancellation, but rather "displaying an indication that the order for the item that is requested can be cancelled within a time interval." The Applicant stated that this indication is displayed alongside the single action ordering indication and it is useful because impulse purchasers can be reassured that they have the option to cancel within a certain time period, even though there is no checkout review. The Applicant said that Ye il does not say anything about a cancel option or an indication for order cancellation.

Legal Principles - Obviousness

The question

[ 41 ] A test for obviousness was established by the Federal Court of Appeal in Beloit Canada Ltd. v. Valmet Oy (1986), 8 C.P.R. (3d) 289 (F.C.A.), at 294 [Beloit]:

The test for obviousness is not to ask what competent inventors did or would have done to solve the problem. Inventors are by definition inventive. . . . The question to be asked is whether this mythical creature . . . would . . . have come directly and without difficulty to the solution taught by the patent.

Thus, a test for obviousness can ask what the "technician skilled in the art" would have done to solve the problem.

[ 42 ] Recently, in Apotex Inc. v. Sanofi-Synthelabo Canada Inc., 2008 SCC 61, 69 CPR (4th) 251, at paragraph 62 [Sanofi], Rothstein J. had this to say about the Beloit test:

[62] I do not think that Hugessen J.A. in Beloit intended that the rather colourful description of obviousness that he coined be applied in an acontextual manner applicable to all classes of claims.

The Supreme Court of Canada further set out a four-step approach for assessing obviousness which will be discussed in the analysis.

[ 43 ] There is some risk that the test in Beloit may end up in a quest for anticipation. In Janssen-Ortho Inc. v. Novopharm Ltd., 2006 FC 1234, 57 C.P.R. (4th) 6, affirmed 2007 FCA 217, 59 CPR (4th) 116, paragraphs 111-113 [Janssen], before setting forth tests and criteria applicable to the question of obviousness, Hughes J. had this to say about the Beloit test [emphasis added]:

This definition comes perilously close to that for anticipation as set out by the Supreme Court of Canada if it is to be interpreted that the person skilled in the art has "no scintilla of inventiveness or imagination" and that being led "directly and without difficulty" to "the solution taught by the patent" means that there must be only one way so as to inevitably arrive at the invention and that the "invention taught' is different from the claim as properly construed. There would be no point in considering obviousness if it is, in effect, little different than a consideration of anticipation.

[ 44 ] To distinguish between anticipation and obviousness, in Eli Lilly Canada Inc. v. Apotex Inc., 2008 FC 142, 63 C.P.R. (4th) 406, (currently under appeal to the F.C.A), at paragraphs 127-128, Hughes J. had this to say [emphasis added]:

127 Anticipation and obviousness are closely related concepts having their foundation based on the requirement that there be an "invention" and that the invention be "new". Justice Desjardins of the Federal Court of Appeal explained the concepts in Rothmans, Benson & Hedges Inc. v. Imperial Tobacco Ltd./Ltée (1993), 47 C.P.R. (3d) 188 (Fed. C.A.) at pages 197-199. She explained that anticipation and obviousness are different concepts although both are questions of fact. Prior art may be used in the application of both tests but is to be used differently. She said:

Prior art may be used in the application of both tests but differently. H.G. Fox, Canadian Patent Law and Practice, 4th ed. (Toronto: Carswell, 1969) at p. 137 states:

Prior specifications are generally used to show anticipation if they disclose exactly and fully what the patentee has claimed. If such disclosure is not made by the prior specification and it cannot be used as an anticipation, it may be used as indicating the state of the art at the time that the patentee made his alleged invention and as showing that what the patentee did was so slight a contribution to existing knowledge as to lack the essential element of invention and to be merely obvious.

Anticipation must therefore be found in a single document which already gives a skilled person what is claimed and which teaches it all. In the case of obviousness, however, "the prior art should be reviewed and its cumulative effect considered", op. cit., p. 72.

128 A useful way to consider those concepts was given by Professor Carl Moy (author of the United States multi-volume patent treatise, Moy's Walker on Patents, Thompson West, updated annually) to students at the Osgoode Intellectual Property Masters Programme in considering the bargain theory of patents. He said, as best I can recall:

You do not pay the price of a monopoly for something you already have, nor do you pay the price for something you could get anyway.

129 Another way of looking at the matter is to consider what "room" has been left for anything given the prior art. If there is no "room" or the "room" could be filled by a person skilled in the art without doing anything inventive, then the matter is anticipated or obvious.

Problem and solution

[ 45 ] That a patent usually involves an inventive solution to a practical problem, is a sentiment reflected in Apotex Inc. v. Wellcome Foundation Ltd., 2002 SCC 77, [2002] 4 S.C.R. 153, at paragraph 37, where it was generally stated by Binnie J. [emphasis added]:

37 A patent, as has been said many times, is not intended as an accolade or civic award for ingenuity. It is a method by which inventive solutions to practical problems are coaxed into the public domain by the promise of a limited monopoly for a limited time.

[ 46 ] In GlaxoSmithKline Inc. v. Canada (Minister of Health), 2003 FC 899, 28 C.P.R. (4th) 307, at paragraph 45, the Federal Court discussed the considerations of problem and solution when answering the question of obviousness, stating in part [emphasis added]:

45 The notion of obviousness ultimately means lack of inventiveness. In 1988, Mr. Justice Rouleau, in Cabot Corp. v. 318602 Ontario Ltd. (1988), 20 C.P.R. (3d) 132 (Fed. T.D.), commented on the fact that inventiveness is an essential element of patentability:

Although not specifically so stated in the Act, inventiveness is an essential element of patentability. As stated by H.G. Fox in his book Canadian Law and Practice Relating to Letters Patent for Inventions, at pp. 70 and 71:

In order that a thing shall be "obvious" it must be something that would directly occur to someone who was searching for something novel, a new manufacture, or whatever it might be, without the necessity of his having to do any experimenting or serious thought, or research, whether the research be in the laboratory or amongst literature. So, the means by which an object is attained may be quite simple and common, but yet there may be invention, if the patentee has discovered a variant that will render more useful that which has been previously described. Where there is a problem awaiting solution, a disclosure solving that problem is likely to be accepted as one involving invention, particularly if there have been unsuccessful attempts to solve that problem. There may be an inventive step in recognizing that a problem exists at all: but given a problem which is known to exist which it is the object of the invention to solve, the question always is: "Is the solution claimed by the patentee one which would have occurred to everyone of ordinary intelligence and acquaintance with the subject-matter of the patent who gave his mind to the problem?

46 Accordingly, the next step I must take is to evaluate the prior art relating to the use of carvedilol and, based on it, determine whether the solution claimed by GlaxoSmithKline is one which would have occurred to everyone of ordinary intelligence and acquaintance with carvedilol who applied his mind to the problem.

Thus, in most situations one must consider obviousness from the perspective of whether the solution claimed would have occurred to the skilled technician who applied his mind to the problem.

[ 47 ] An invention does not have to be one solution to only one problem because solving one problem may gave rise to another problem (AB Hassle v. Genpharm Inc., 2003 FC 1443, 243 F.T.R. 6, paragraphs 49-50). However, a claimed solution to a problem that sets forth unrelated features to solve a separate and different problem may require further attention. Before attempting to apply tests for obviousness, one must decide what the invention is and whether there is only one invention to be considered or more than one (See Canadian Patent Act Annotated, 2nd edition, Barrigar, 28.3:25, May 2006; citing Sabaf SpA v. MFI Furniture Centres Limited, [2004] UKHL 45 at paragraphs 22-26 [Sabaf], appealed from [2002] EWCA Civ 976).

The skilled technician and the problem to be solved

[ 48 ] Identifying the notional skilled person in the art is an important aspect of the obviousness inquiry [Sanofi paragraph 67]. In Almecon Industries Ltd. v. Nutron Manufacturing Ltd. (1997), 72 C.P.R. (3d) 397 (F.C.A.), at paragraph 10, the concept of the skilled workman was framed in relation to the problem to be overcome, as follows [emphasis added]:

While the appellants contend that the Trial Judge misdescribed the relevant "workman skilled in the art" as the user, not the maker, of seismic equipment, we consider this essentially a question of fact for his determination. Given the fundamental artificiality of the concept of the "skilled workman" we are not prepared to elevate to a principle of law a requirement that such a workman must in all cases be a maker and not a user of equipment. What is important is that he be a person who understands, as a practical matter, the problem to be overcome, how different remedial devices might work, and the likely effect of using them.

[ 49 ] The notional skilled technician can be a composite of scientists, researchers and technicians bringing their combined expertise to bear on the problem at hand (Bayer Aktiengesellschaft v. Apotex Inc. (1995), 60 C.P.R. (3d) 58 at p. 79 (Ontario Court General Division)).

[ 50 ] Neither the Applicant nor the Examiner made submissions with respect to identifying the notional skilled technician. Based on the disclosed invention, the Board considers that the skilled technician would be knowledgeable in any subject matter to which the claims are directed, such as the fields of online retailing models or techniques, e-commerce, Web development, marketing, and consumer psychology.

The state of knowledge at the claim date - Selected excerpts from Ye il

General overview

[ 51 ] The Ye il book analyzes various concepts which can be used by merchants who wish to sell products or services via a Web site on the Internet. Chapter 4 of this book [page 107 to page 126] is entitled "Getting To Know Your Virtual Customer" and deals with many issues relating to how a seller can and should obtain information about potential buyers who access its Web site. Sellers can ask buyers to supply information voluntarily or they can use customer tracking systems to learn about Web site visitors. The author mentions two such tracking systems; session-based tracking and subscription-based tracking. The methods are different in respect of how a merchant follows or tracks a consumer electronically as he/she visits the virtual store. Ye il states that one of the purposes of this tracking is to provide varying degrees of customization for individual shoppers. In session-based tracking, no information about a customer is kept on the system beyond the duration of his/her visit. If an order is placed in a session-based system, only a shipping address (associated with the customer's name) may remain on file. In subscription-based tracking, a user registers and logs in to a merchant site, and the merchant can provide a more customized shopping experience to returning customers.

[ 52 ] Interestingly, on page 122 of Ye il, the author describes a visit to the AMAZON.com Web site and problems encountered which resulted in a lost sale from an impulsive purchase [emphasis added]:

Internet businesses attract customers in a variety of ways. A popular method for attracting a user base is free or nonpaid subscription services.
. . .
These types of services usually ask visitors to set up an account, with the benefits of user authentication . . .
. . .
when I visited the Amazon Books Web site, (www.amazon.com) I had to set up an account to make a purchase of any size. Next, I had to choose between a "secure" and a "nonsecure server." . . . Not wishing to sort through the details, I made the choice to cancel - and a sale was lost. My book purchase at Amazon was impulsive.

Thus, as in the instant application, Ye il too acknowledged the impulsive nature of some Internet purchases.

Session and subscription-based tracking

[ 53 ] On pages 112 and 115, Ye il provides further information about session-based tracking and when a new visit to a site begins [emphasis added]:

Using Session-Based Tracking One customer's visit to an Internet Web site, from start to finish (login to logout), is considered a session. During a session, a visitor connects to a Web site, travels around the site, performs some actions, and then leaves. . . . All these events are recorded, or tracked as they occur, by that host's server. (For more definitions of terms, see the "Web Tracking Terms" sidebar in this chapter.)
. . .
Session-based tracking opens and closes a customer relationship in real time. No information about the customer is kept on the system beyond the duration of his or her visit to the site. Session-based tracking is useful because it encourages spontaneity while providing anonymity for customers.
. . .
If the goods are delivered over the Internet, absolutely no information may be retained with the possible exception of an E-mail address for downloading. On the other hand, if hard goods are purchased using the session-based tracking model, at least a shipping address may need to remain on file.

The Shopping Cart Session-based tracking works by creating a shopping cart for the consumer, which lasts the duration of the shopping experience. When the consumer pays, the prices of the contents are totalled for that session. Then, as in a physical store, the customer presents the payment instrument, settles, and the transaction is done.

Web Tracking Terms
. . .
visit: A series of consecutive file requests made by one user at a given site. If such a user makes no requests from that site during a predetermined (and discretionary) period of time, her/his next hit would constitute the beginning of a new visit. The industry standard time-out interval is 30 minutes for all sites, for purposes of comparability.

[ 54 ] On page 118, Ye il describes how subscription-based tracking can collect information by requiring customer registration:

Subscription-based tracking currently is an accepted method of obtaining customer information in the off-line world of commerce. For instance, if you subscribe to a magazine, the publisher can learn a lot about you . . .

Translating subscription-based tracking to the virtual store means that the customer fills out an information form on-line and opens an account before making purchases in the store. All the payments go to one central processing center . . .

Collecting customer information

[ 55 ] Page 121 points out that the objective to track and access useful customer information can be achieved in both session and subscription-based models [emphasis added]:

Requiring registration to create shopping carts on the Web is, to a certain extent, understandable, but it certainly is not necessary for basic levels of visitor information. For instance, it is possible to keep track of some visitors' actions without requiring them to log on using a password or code. Session-based Web tracking systems do precisely this.

. . . the information generated by these systems assists in the development of the visitor's psychographic profile - those elements (demographics, interests, usage statistics) that establish a complete picture of the visitor. It is a user's psychographics that sites seek.

Cookie technology

[ 56 ] Pages 124 to 125 of Ye il, although not cited by the Examiner, provide some details about cookie technology under the general heading "Asking Users for Information Privacy Issues":

Magic Cookies
The addition of a simple, persistent, client-side 'state', or recognition device, significantly extends the capabilities of Web-based client/server applications. - Netscape

"Magic" cookies are a mechanism by which host servers can store and retrieve information to and from a client's browser. The cookie, developed by Netscape and MCI, is useful for Web hosts who wish to provide a "stateful" or "customized" experience for their visitors, because by using a cookie, a host can tag a visitor at the end of a session with information for a future visit. . . . The action of encoding information into the cookie of a user is referred to as user hard drive storage. This type of server access, storage and caching typically has been forbidden.

[ 57 ] In our understanding, "state" information is information about a communication between a user and a server. HTTP, the protocol that underpins the World-Wide Web (WWW), is stateless. That is, each request (over the web) stands on its own; origin servers don't need to remember what happened with previous requests to service a new one ["the state"]. In the broadest sense, a cookie allows a site to store state information on a user's machine. This information lets a Web site (i.e. server) recall what state the user's browser is in. In operation, by introducing state into HTTP, requests and response headers carry the state back and forth, thus relieving the origin server from needing to keep an extensive per-user or per-connection record of the "state" information.

[ 58 ] From Ye il, we understand that "state" information can include a variety of information. It follows that any information transmitted by a user can be included in a cookie, and ultimately tracked and stored by a server. Cookies provided Web sites (servers) the ability to track all types of user information over time, as acknowledged on page 124:

Netscape has promised to disable the cookie software that could be utilized to keep track of information about its users over time.

[ 59 ] Pages 113 to 115 set forth some uses of a "cookie", most notably, "unique user" identification. Ye il states [on page 113] that "cookies" can be used to store client identifier information on the client's hard disk and that by identifying a repeat visitor it permits on-the fly-customization of a Web site. A server can recognize a unique user when persistent cookie data on a client's computer is recognized by the server. Some notable excerpts are reproduced below [emphasis added]:

Web Tracking Terms
. . .
cookie: The capability of some Web browsers to allow Web servers to store information about user visits to the Web site on the hard disk in the user's PC or workstation. Because it can be used to identify repeat visitors, the cookie allows on-the-fly customization of a Web site to feature items the user showed an interest in during previous visits. The cookie also allows a Web server to track the sequence