Citation: United Parcel Service of America, Inc (Re), 2021 CACP 29

Commissioner’s Decision #1582

Décision du commissaire n^o 1582

Date: 2021-06-09

Application No. : 2572762
Demande n^o 2572762

IN THE CANADIAN PATENT OFFICE

DECISION OF THE COMMISSIONER OF PATENTS

Patent application number 2572762, having been rejected under subsection 30(3) of the Patent Rules (SOR/96–423) as they read immediately before October 30, 2019, has subsequently been reviewed in accordance with paragraph 199(3)(c) of the Patent Rules (SOR/2019–251). The recommendation of the Patent Appeal Board and the decision of the Commissioner are to refuse the application.

Agent for the Applicant:

ROBIC

20^th Floor

630 Réné-Levesque Boulevard West

Montréal, Quebec

H3B 1S6

 

Introduction

[1] This recommendation concerns the review of rejected patent application number 2572762, which is entitled “Systems and methods for processing invoices based on a minimum invoice amount” and is owned by United Parcel Service of America, Inc. The defects indicated by the Final Action (FA) are that the claims define non-statutory and obvious subject matter. The Patent Appeal Board (the Board) has reviewed the rejected application pursuant to paragraph 199(3)(c) of the Patent Rules (SOR/2019–251). As explained below, our recommendation is to refuse the application.

Background

The application

[2] Canadian patent application 2572762, based on a previously filed Patent Cooperation Treaty application, is considered to have a filing date of July 7, 2005 and has been open to public inspection since February 16, 2006.

[3] The invention relates to methods for processing invoices (such as shipping invoices), particularly such methods where, if an invoice would be for an amount below a certain threshold, its generation is deferred to the next billing cycle or otherwise processed differently.

Prosecution history

[4] On November 7, 2017, an FA was issued pursuant to subsection 30(4) of the Patent Rules (SOR/96–423) as they read immediately before October 30, 2019 (the former Rules). The FA indicated the application to be defective on two grounds: claims 1 to 17 (i.e. all claims on file) encompass subject matter outside the definition of invention in section 2 of the Patent Act, and define obvious subject matter, failing to comply with section 28.3 of the Patent Act.

[5] In its May 7, 2018 response to the FA (RFA), the Applicant submitted arguments for allowance and proposed an amended set of 19 claims (the proposed claims) with corresponding amendments to the description. The Examiner neither considered that the amendment would remedy the defects nor was persuaded by the Applicant’s arguments to withdraw the rejection.

[6] Therefore, pursuant to subsection 30(6) of the former Rules, the application was forwarded to the Board for review on behalf of the Commissioner of Patents. On September 18, 2018, the Board forwarded to the Applicant a copy of the Examiner’s Summary of Reasons along with a letter acknowledging the rejection.

[7] A Panel was formed to review the application; following our preliminary review, we sent a letter on February 23, 2021 (the PR letter) presenting our analysis and rationale as to why, based on the record before us, we considered the claims on file to define subject matter falling outside section 2 of the Patent Act (and prohibited by subsection 27(8) of the Patent Act), but subject matter that is non-obvious, thus complying with section 28.3 of the Patent Act. In accordance with subsection 86(9) of the Patent Rules, the PR letter also explained why we considered claims 1 to 6, 8, 9, 14, 15 and 17 on file to be indefinite and contravene subsection 27(4) of the Patent Act; this defect was observed during the preliminary review. In addition, the PR letter explained why we considered proposed claims 1 to 19 to also define unpatentable but non-obvious subject matter, and proposed claims 1 to 6, 8, 9, 14, 15, 17 and 18 to be indefinite.

[8] Two email messages of March 9, 2021 and March 30, 2021 indicated that the Applicant did not wish to continue the review process, but to let the application go abandoned.

[9] Since no written submissions were forthcoming and the Applicant did not wish to have a hearing, we undertook our final review based on the written record. As nothing has changed in the record since the mailing of the PR letter, we have maintained the rationale provided in that letter.

Issues

[10] This review addresses the issues of whether the claims on file:

• define subject matter falling outside the definition of invention in section 2 of the Patent Act and prohibited by subsection 27(8) of the Patent Act;

• define subject matter that would have been obvious, contravening section 28.3 of the Patent Act; and

• are indefinite, contravening subsection 27(4) of the Patent Act.

[11] The review then addresses whether the proposed claims would constitute necessary amendments under subsection 86(11) of the Patent Rules.

Legal Principles and Patent Office Practice

Purposive construction

[12] In accordance with Free World Trust v Électro Santé Inc, 2000 SCC 66 and Whirlpool Corp v Camco Inc, 2000 SCC 67, purposive construction is performed from the point of view of the person skilled in the art in light of the relevant common general knowledge (CGK), considering the whole of the disclosure including the specification and drawings. In addition to interpreting the meaning of the terms of a claim, purposive construction distinguishes the essential elements of the claim from the non-essential elements. Whether or not an element is essential depends on the intent expressed in or inferred from the claim, and on whether it would have been obvious to the skilled person that a variant has a material effect upon the way the invention works.

[13] “Patentable Subject-Matter under the Patent Act” (CIPO, November 2020) [PN2020–04] also discusses the application of these principles, pointing out that all elements set out in a claim are presumed essential unless it is established otherwise or such presumption is contrary to the claim language.

Patentable subject matter

[14] The definition of invention is set out in section 2 of the Patent Act:

invention means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.

[15] Subsection 27(8) of the Patent Act also prescribes that:

No patent shall be granted for any mere scientific principle or abstract theorem.

[16] In Canada (Attorney General) v Amazon.com Inc, 2011 FCA 328 at paras 61–63, 69 [Amazon.com], the Federal Court of Appeal explained that simply realizing an abstract business method by programming it into a computer does not make it patentable subject matter.

[17] PN2020–04 describes the Patent Office’s approach to determining if a claim is patentable subject matter:

To be both patentable subject-matter and not be prohibited under subsection 27(8) of the Patent Act, the subject-matter defined by a claim must be limited to or narrower than an actual invention that either has physical existence or manifests a discernible physical effect or change and that relates to the manual or productive arts, meaning those arts involving or concerned with applied and industrial sciences as distinguished in particular from the fine arts or works of art that are inventive only in an artistic or aesthetic sense.

[18] PN2020–04 further describes the Patent Office’s approach to determining if a computer-related invention is patentable subject matter. For example, the mere fact that a computer is among the essential elements of the claimed invention does not necessarily mean that the claimed invention is patentable subject matter. An algorithm itself is abstract and unpatentable subject matter. A computer programmed to merely process the algorithm in a well-known manner without solving any problem in the functioning of the computer will not make it patentable subject matter because the computer and the algorithm do not form part of a single actual invention that solves a problem related to the manual or productive arts. On the other hand, if processing the algorithm improves the functionality of the computer, then the computer and the algorithm would together form a single actual invention that solves a problem related to the manual or productive arts and the subject matter defined by the claim would be patentable.

Obviousness

[19] Section 28.3 of the Patent Act requires claimed subject matter to not be obvious:

The subject-matter defined by a claim in an application for a patent in Canada must be subject-matter that would not have been obvious on the claim date to a person skilled in the art or science to which it pertains, having regard to

(a) information disclosed more than one year before the filing date by the Applicant, or by a person who obtained knowledge, directly or indirectly, from the Applicant in such a manner that the information became available to the public in Canada or elsewhere; and

(b) information disclosed before the claim date by a person not mentioned in paragraph (a) in such a manner that the information became available to the public in Canada or elsewhere.

[20] In Apotex Inc v Sanofi–Synthelabo Canada Inc, 2008 SCC 61 at para 67, the Supreme Court of Canada stated that it is useful in an obviousness inquiry to use the following four-step approach:

(1) (a) Identify the notional “person skilled in the art”;

(b) Identify the relevant common general knowledge of that person;

(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

(3) Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed;

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?

Indefiniteness

[21] Subsection 27(4) of the Patent Act requires claims to distinctly and explicitly define subject matter:

The specification must end with a claim or claims defining distinctly and in explicit terms the subject-matter of the invention for which an exclusive privilege or property is claimed.

Analysis

Purposive construction

The skilled person and the relevant CGK

[22] The PR letter cited two references—which had been cited in the FA—as providing demonstrations of the CGK through their descriptions of the background:

• D2:US 2001/0056362December 27, 2001Hanagan et al.

• D3:WO 02/19211March 7, 2002Williams et al.

[23] The FA identified the skilled person as a team including a business analyst and an information technology (IT) specialist, and identified the CGK accordingly.

[24] The Applicant disagreed in the RFA, identifying the skilled person as solely a business analyst, who would have little to no knowledge of IT. The Applicant submitted that caution is needed when characterizing a skilled person as a multidisciplinary team, since invention can exist in the very collaboration between the team members of different disciplines. Therefore, argued the Applicant, a skilled person is to be characterized as a team only in limited circumstances, and even then, each individual’s CGK must be imputed to the team’s CGK separately from that of the other individuals—the team’s CGK does not include the application of one individual’s skills or knowledge to that of the others.

[25] Accordingly, submitted the Applicant, even if the skilled person in this case were characterized as a team including an IT analyst in addition to the business analyst, the IT analyst would have little to no knowledge of business processes. Such a team would have no CGK of how to apply the ordinary skills of the one analyst to those of the other.

[26] As explained in the PR letter, the skilled person is the addressee of a patent application, and is expected to practise the disclosed and claimed invention; see e.g. Manual of Patent Office Practice (CIPO) at §§12.02.02b and 14.02.02, revised June 2015 and October 2019. In this case then, given the field of the invention, the description of the invention and the subject matter of the claims, the skilled person or team must possess skills related both to processing invoices and to computing systems.

[27] Furthermore, the CGK of this skilled person or team also includes the application of those skills to each other, or the collaboration between team members with different skill sets. The description (pages 1 and 4) indicates it to be well known to use computing systems for processing accounts receivable information and preparing invoices, and gives an example of a typical such computing system. Thus, a team of business and IT specialists supporting or collaborating with each other is reflective of real world teams.

[28] As a result, the PR letter characterized the skilled person as a team comprising one or more business professionals experienced with the processing of accounts receivable information and invoice preparation, as well as programmers and other technologists experienced with developing and providing the software, tools and infrastructure conventionally used to support such professionals.

[29] Based on the above identification of the skilled person, and supported by what the present application (pages 1, 2 and 4 to 6; figure 1), D2 (paragraphs 5 to 51) and D3 (pages 1 to 2) describe as generally known or conventionally done in the field, the PR letter identified the relevant CGK as including:

• recognition of the costs incurred in the processing of accounts receivable information, and the preparation and processing of invoices;

• the business practice of sometimes waiving an amount due when that amount is less than the cost that would be incurred in preparing and processing an invoice for it;

• the use of computer systems in the processing of accounts receivable information, and in the preparation and processing of invoices;

• familiarity with standard networking architectures, tailoring of software applications to meet specific billing requirements, database programming and management, as well as common computing equipment hardware; and

• the printing and mailing of invoices, as well as the electronic transmission of invoices.

The essential elements

[30] Independent claims 1 and 7 on file are directed to the selective printing of invoices, where claim 1 is in the form of a computer system and claim 7 in the form of software. Claim 1 is representative:

Claim 1. A computer system for selectively printing invoices comprising:

a database storing a predetermined invoice threshold amount indicating a numerical value defined by a processor of a communication device and a plurality of records wherein at least one of the records comprises an account identifier corresponding to an account, a balance due amount, a historical indicator comprising historical data, an invoice printing suppression counter, and a flag comprising indicator data indicating whether minimum invoice level processing is allowed by the communication device in conjunction with the record; and

a processor of the communication device operatively connected to a printer and the database, the processor of the communication device configured to:

retrieve from the database the at least one invoice record from the plurality of records;

determine whether the indicator data specifies that minimum invoice level processing in conjunction with the record is allowed, wherein minimum invoice level processing comprises deferring generation of an invoice associated with the account;

determine whether the invoice was previously deferred a predetermined number of times based on evaluation of the historical data of the historical indicator stored in the database; and

generate the invoice associated with the record for the balance due, in response to determining that an amount of money associated with the balance due corresponding to the account is below the threshold amount, and in response to the processor of the communication device determining that generation of the invoice was previously deferred by the communication device the predetermined number of times based in part on the evaluation of the historical data.

[31] Dependent claims 2 to 6 on file each describe the processor in claim 1 as being further programmed to print the paper-based invoices in certain conditions according to certain rules. Dependent claims 15 and 17 on file recite further details of the rules for determining whether to print an invoice.

[32] Dependent claims 8, 10 and 11 on file describe the software of claim 7 as including further instructions for facilitating printing of paper-based invoices in certain conditions according to the rules, dependent claims 9, 12 to 14 and 16 on file recite further details of the rules for determining whether to print an invoice.

[33] Following the practice at the time, the FA identified the essential elements as the recording of certain data concerning minimum invoice level processing and at least one account, and, for each account, either deferring invoice generation or generating an invoice based on the recorded data and certain rules. The Examiner did not consider any computer technology to be essential.

[34] The Applicant disagreed in the RFA, submitting that all the elements in the independent claims are essential. Without all the claimed details concerning which conditions lead to invoice deferral or generation, and without the claimed computer-implemented elements, a complete solution to the proposed problem would not be provided.

[35] As stated in the PR letter, we see nothing in the claim language or on the record before us leading to a determination of any claimed elements being non-essential.

Patentable subject matter

[36] The FA identified the problem as the occurrence of the scenario where the cost of generating an invoice exceeds the amount owed, and the solution as the act of deferring invoice generation until a subsequent billing opportunity when the aggregate amount owed meets or exceeds the cost of generating an invoice. Accordingly, it was submitted in the FA that the essential elements of the claims on file are directed to a set of administrative rules and mental processes, abstract and thus not patentable.

[37] The Applicant disagreed in the RFA, submitting that a complete solution in this context should address the important practical considerations of the problem: the problem pertains to printed paper-based invoices as opposed to electronic billing, discrete instances of generating paper-based invoices can be counted, and cost savings are measured in terms of personnel time, resource usage and material consumption. Accordingly, it was submitted in the RFA that the computer-implemented elements of the claims on file are essential, and that the claimed invention is statutory subject matter: it has a physical existence and/or manifests a discernible effect or change, and produces a commercially useful result.

[38] As explained in the PR letter, the independent claims introduce their subject matter as being “for selectively printing” paper-based invoices, but only define the generation of the invoice, not its printing. The title of the description and the section describing the field of the invention (page 1) introduce the invention such that the context is not limited to the generation of paper-based invoices. The section describing the background of the invention (page 1) acknowledges that it is known to transmit invoices as well as to print and physically mail them. Generating and processing invoices incurs costs regardless of the mode of communication used. Even though using electronic transmission would avoid the need to print and mail an invoice, personnel time would still be consumed and resources would still be used in generating and communicating the invoice, recording the amount due, receiving the payment, and updating the records and accounting information. The prior art solution described by the application (page 2), regardless of which mode of communication was used, would both work and yet be unsatisfactory for the reason given by the description. The description (pages 5 to 7 and 14) does not exclude electronic forms of invoice presentation or transmittal.

[39] The PR letter nonetheless noted that the description (pages 2, 5, 7, 10 and 14) also refers to embodiments specifically involving selective printing of invoices, and that the claims are directed to such embodiments, even if the independent claims do not explicitly recite the step of selective printing. Therefore, the skilled person would consider the claimed inventions to be limited to the context of paper-based invoices.

[40] The solution proposed by the application (pages 2 and 4) is called threshold level invoice processing or minimum invoice level processing: if an invoice amount is below a certain threshold level, and certain criteria are met, the generation of the invoice may be deferred to the next billing cycle. Although a computer system is typically used, the application does not preliminarily seem to be addressing a computer problem or an improvement to the functioning of a computer, so much as an improvement to an administrative invoice generation procedure. The application does not refer to any challenges in implementing the proposed strategy or rules, or in computerizing the algorithm by which the rules are embodied. The application (pages 5 to 6; figure 1) generally describes a conventional computer system, indicating it to be able to carry out the invention.

[41] Accordingly, in representative claim 1, the computer programmed to realize the abstract idea of selectively deferring invoice generation is merely a computer programmed to process this abstract algorithm or abstract set of business rules in a well-established manner, without solving any problem in the functioning of the computerized equipment. The computer and the algorithm do not form a single actual invention which has physical existence or manifests a discernible physical effect or change, and which relates to the manual or productive arts.

[42] As explained in the PR letter—and as the above discussion of Amazon.com and PN2020–04 shows—such a claimed invention is unpatentable subject matter and prohibited by subsection 27(8) of the Patent Act.

[43] We see nothing in the essential elements of claims 2 to 17 on file that would affect the above reasoning. For example, many of the dependent claims include means for printing (or for “facilitating” the printing) of invoices, but these constitute generic data output means, representing some of the well-established functionality of the computer programmed to realize the abstract idea. Therefore, our view is that claims 1 to 17 on file define unpatentable subject matter, falling outside section 2 of the Patent Act and prohibited by subsection 27(8) of the Patent Act.

Obviousness

Identify the notional person skilled in the art and the relevant CGK

[44] As noted in the PR letter, we consider the above identifications of the notional skilled person and relevant CGK to be applicable for the purpose of assessing obviousness.

Identify the inventive concept of the claim in question or if that cannot readily be done, construe it

[45] Above, we construed claim 1; we take the above identified essential elements of claim 1 for the purpose of assessing obviousness.

Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed

[46] As noted in the PR letter, D2 is the most relevant reference. D2 (abstract; paragraphs 33 to 44, 79, 80, 162, 176, 231 to 236 and 259) discloses a modular and convergent customer care and billing system that includes means for maintaining customer accounts and generating bills or invoices both on a cyclical basis and in response to triggering events. D2 (paragraph 232) explains that one of the triggering events can be the occurrence of a certain threshold being met, but does not elaborate. D2 also does not explicitly discuss the concept of minimum invoice level processing, or the selective deferral (or printing) of a cyclical invoice, let alone the keeping track of the number of times generation of such an invoice has been deferred.

[47] The PR letter also described D3: that document (abstract; pages 1, 9, 17 and 18) discloses a third-party billing system, also capable of maintaining customer transaction accounts, and capable of aggregating a customer’s transactions before charging them to the customer’s billing account. D3 (page 18) suggests that transactions could be aggregated until a predetermined period of time passes or until the total of their amounts exceeds a predetermined threshold. D3 also explains that the triggering event for submitting the aggregated transactions to the billing account should be chosen such that operation of the third-party billing system is profitable, in view of any processing fees charged by the authority associated with the customer’s billing account. D3 also discloses an embodiment where the system can use predetermined criteria to determine whether to aggregate a transaction with others or to charge it directly to the billing account; the criteria could comprise a pass-through threshold amount, where any transaction above the amount is charged directly. D3 does not explicitly disclose the embodiment where transactions are aggregated for a set period of time and charging is further deferred if the aggregate total amount is less than a threshold. Nor does D3 suggest tracking the number of times charging is deferred.

Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention

[48] As explained above, neither D2 nor D3 suggests keeping track of the number of times generation of a periodic invoice for an account has been deferred, and generating one, regardless of the amount due, once a maximum number of deferrals has been exceeded. Nor is this suggested by the CGK on record. Accordingly, our view is that this detail, in the particular arrangement of essential elements in claim 1 on file, would not have been obvious to the skilled person. As the PR letter remarked, claim 7 and the dependent claims on file similarly possess this detail.

Conclusion on obviousness

[49] As explained in the PR letter, we consider that the subject matter of the claims on file would not have been obvious to the skilled person in view of D2, D3 and the CGK. Therefore, these claims comply with section 28.3 of the Patent Act.

Indefiniteness

[50] Claim 1 on file defines the computer system as storing both “a historical indicator comprising historical data” and “an invoice printing suppression counter.” The claim later states that the computer system determines “whether the invoice was previously deferred a predetermined number of times based on evaluation of the historical data of the historical indicator.” The suppression counter is not mentioned again by this claim but dependent claim 2 on file states that the system can also print an invoice (despite the flag indicating that minimum invoice level processing is allowed and the balance due being less than the threshold amount) when “the invoice suppression counter equals a maximum invoice suppression counter value.”

[51] The description and drawings (pages 10 to 13, 15; figures 3 to 5) do not suggest any counter used to suppress printing except for one that is part of the historical indicator, one that is associated with previous deferrals. There does not appear to be any “suppression counter” separate from the “historical indicator.” Therefore, the inclusion of these terms in claims 1 and 2 as separate entities appears to be redundant and makes the scopes of these claims (and their dependencies, claims 3 to 6, 15 and 17) unclear. Dependent claim 15 on file compounds the redundancy by introducing an additional counter to track previous deferrals.

[52] Claim 8 on file, which depends on claim 7 on file, suffers a similar defect. Claim 7 defines software employing “a historical indicator comprising historical data” to “determine whether the invoice was previously deferred a predetermined number of times,” but claim 8 adds that the computer program product also employs “a counter from the invoice record” indicating “a number of times the processor has previously suppressed printing of the paper-based invoice” to determine whether printing has already been suppressed a maximum number of times. Dependent claims 9 and 14 on file inherit this defect.

[53] Therefore, as stated in the PR letter, our view is that claims 1 to 6, 8, 9, 14, 15 and 17 on file are indefinite and do not comply with subsection 27(4) of the Patent Act.

Proposed claims

[54] As stated above, the Applicant proposed an amended set of 19 claims with the RFA. The amendments consist of a minor wording change to the preamble of claim 1 and the addition of dependent claims 18 and 19, which specify that if an invoice is to be transmitted electronically, it is transmitted regardless of the amount due.

[55] The PR letter explained that the proposed amendment to the preamble of claim 1 would not affect the essential elements of claims 1 to 17 (claims 7 to 14 and 16 would be untouched), the above identifications of the skilled person and the CGK, or the wording of claims 1, 2, 15 and 17 discussed above in relation to the indefiniteness defect.

[56] Furthermore, our view is that there are no differences between the essential elements of proposed claims 18 and 19, and those of the other claims, that would affect the above reasoning concerning the issue of patentable subject matter.

[57] Accordingly, our view concerning patentable subject matter and obviousness also applies to proposed claims 1 to 19, and our view concerning indefiniteness also applies to proposed claims 1 to 6, 8, 9, 14, 15, 17 and 18.

[58] It follows that the proposed claims are not considered a necessary amendment under subsection 86(11) of the Patent Rules.

 

Recommendation of The Board

[59] In view of the above, we recommend that the application be refused on the basis that:

• claims 1 to 17 on file define unpatentable subject matter, falling outside section 2 of the Patent Act and prohibited by subsection 27(8) of the Patent Act; and

• claims 1 to 6, 8, 9, 14, 15 and 17 on file are indefinite, and thus do not comply with subsection 27(4) of the Patent Act.

Leigh Matheson	Paul Bourgeois	Paul Fitzner
Member	Member	Member

DECISION OF THE COMMISSIONER

[60] I concur with the findings of the Board and its recommendation to refuse the application on the basis that:

• the claims on file define unpatentable subject matter, falling outside section 2 of the Patent Act and prohibited by subsection 27(8) of the Patent Act; and

• claims 1 to 6, 8, 9, 14, 15 and 17 on file are indefinite and do not comply with subsection 27(4) of the Patent Act.

 

 

 

 

 

 

 

 

 

 

[61] Accordingly, I refuse to grant a patent for this application. Under section 41 of the Patent Act, the Applicant has six months to appeal my decision to the Federal Court of Canada.

Virginie Ethier, Assistant Commissioner of Patents
Dated at Gatineau, Quebec
this 9^th day of June, 2021