Pharmascience: a predictor of the Supreme Court’s approach to business method inventions?
The recent Pharmascience case[1] was all about patenting methods of medical treatment. It clarified the law that methods of medical treatment which require professional skill and judgment are not patentable. What, if anything, are the implications of this case for the patentability of other subject matter, such as business methods?
A case can be made that this judgment says nothing meaningful about business methods. It is based on the unpatentability of those methods that require professional skill and judgment. It leans heavily on the public policy, mentioned more than once, that doctors do not need patents because they have a regulated professional monopoly (decision: paragraphs 44, 91) Business methods, to some extent, may involve professional judgment but they certainly do not have any protection as a regulated monopoly.
The Court specifically advances four reasons why methods of medical treatment are not patentable (decision paragraph 55):
- Professional skills are not patentable under Canadian law
- Canadian courts have continued to affirm that methods of medical treatment are unpatentable even after the repeal of s.41 (1)
- The repeal of section 41.1 did not address the patentability of methods of medical treatment and
- International law treaties to which Canada is a signatory leave the question to be decided by each state in accordance with its own public policy.
None of these points apply to business methods. TRIPS 27 (3) has no parallel for business methods. Section 27(1) of the TRIPS agreement provides that “patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.” This could suggest that unlike methods of medical treatment, the question of the patentability of business methods has been addressed in TRIPS. However are business methods in a field of “technology”? Are they “inventions”? However while there have been a few cases on the patentability of business methods, none of them have cited Section 27(1) as the basis for an argument that such methods are patentable.[2] It is arguable that a Canadian court would consider the question of patentability of business methods is an open question under the TRIPS agreement precisely because “technology” and “invention” are not defined which leaves the question to be decided by each state in accordance with its public policy.
The Supreme Court’s decision in Pharmascience sheds little light on the definition of “invention” except to say that the definition is left to judges to work out. (paragraph 37) and that the definition of “invention” is statutory but subject to “common law glosses” (paragraph 38). Further that any attempt to precisely define the ambit of the definition of “invention” in the Patent Act was “bound to fail”. (paragraph 39). In quoting Harvard College the Court acknowledged that the term invention is “broad” but not “unlimited” and does not include “anything under the sun made by man” (paragraph 40).
Would the Supreme Court approach to patentable subject matter in the Pharmscience case apply to a consideration of business method patentability?
The Court emphasizes that the Patent Act must be interpreted having regard to its text, context and purpose and that the purpose of the Patent Act is to promote scientific and technological innovation by creating economic incentives for research and development (paragraph 33-34). This would seem to apply equally to methods of medical treatment and business methods. This should favour the patentability of business method patents. if the Court considered that such patents would promote scientific and technological development.
In considering the Court’s first reason mentioned above, the majority leans heavily on the existing case law and scholarly consensus that methods of medical treatment have not been traditionally patentable and that therefor allowing patenting of methods of medical treatment would “disrupt settled commercial expectations” (paragraph 117). This would seem to be a factor favouring the patentability of business methods as the Federal Court of Appeal has stated that it is possible that a novel business method may be an essential element of a valid patent claim.[3] Is this enough to conclude that there is a settled commercial expectation one way of the other as to the patentability of such inventions? This issue has not yet reached the Supreme Court, except in an oblique way, in the Shell Oil case. [4]
Finally the Court opined “By defining “invention” as it has”, “Parliament signalled a clear intention to include certain subject matter as patentable and exclude other subject matter as being outside the confines of the Act. (Harvard College paragraph 158[5], quoted in Pharmascience at paragraph 40). This implies that because methods of medical treatment are not specifically mentioned, they are not patentable, but the court does not explain how the definition of invention excludes methods of medical treatment. The best that can be said is that the Court is influenced by prior Supreme and Federal Court decisions that have “repeatedly” held that methods of medical treatment and professional skills are unpatentable (paragraph 44) and that from a public policy rationale medical professionals do not require the incentives of the patent bargain to exercise their skill and judgment .
However if should be noted that although methods of medical treatment could arguably promote scientific and technological progress, nevertheless the court held that they are not per se patentable where “the real subject matter of the claim” is such a method (paragraph 90-92). “The exercise of professional skill is simply not the kind of inventiveness that the Patent Act is intended to encourage.” (paragraph 59). Quoting Vaver “Patents should be awarded to encourage desirable inventiveness. Therefore, where the activity is adequately encouraged and would occur even without the prospect of a patent, patenting is unjustified.” Are we to conclude that because business method patents do not have the statutory monopoly of doctors that they deserve patent protection? On this basis how would a Court decide what kind of activity would occur without the prospect of a patent?
Nevertheless the rationale for denying patentable subject matter based on a doctor’s monopoly would not exist in the case of business methods.
“Distinguishing unpatentable professional skills from patentable innovations in trade, industry or commerce is fully consistent with the Patent Act’s purpose of encouraging desirable inventiveness” (paragraph 79). The Court in Pharmascience accepts that the definition of inventiveness is subject to traditional common law exceptions not subject to the strict definition of invention in the Patent Act. This suggests that the Supreme Court will look to public policy issues to determined whether business methods are patentable.
The Court rejected the notion that the question of patentability should turn on whether the patent is directed to “non-economic’ or “economic” activities (paragraph 86). The court recognized that, in effect, these activities of doctors would have economic value. However this was not determinative since professional skills should be excluded from patentability as not in the field of trade, industry or commerce. This too should distinguish methods of medical treatment from business methods patents. However the court’s willingness to add a common law gloss on the definition of “invention” casts a doubt on what the ultimate decision would be if the subject of computer business method patents ever reaches the Supreme Court.
The Pharmascience Court was prepared to consider traditional common law exceptions to patentable subject matter whether or not those exceptions were explicit in the Patent Act. They recognized that the “invention” was not defined and they looked to established consensus or “settled expectations” to inform policy decisions about patentable subject matter. This suggests the approach the Court will make when or if the question of business patents reaches the Supreme Court.
The non-patentability of methods of medical treatment was based, in large part on the Court’s observations about doctor’s regulatory monopoly: a factor that does not exist in respect of business method patents, If this is the overriding rational of the decision than we may be back to the proposition I suggested at the beginning that Pharmascience tells us little about what the court would do with business method patents.
However one cannot ignore that the Court clearly endorsed the view that the definition of invention was broad but not unlimited and that there existed common law “glosses” based on settled commercial expectations. What would those expectations say about the patentability of business method patents?
[1] Pharmascience Inc. v. Janssen Inc et al 2026 SCC 26. All subsequent paragraph references are to the Supreme Court Judgment in this case unless specifically noted otherwise.
[2] See for example Amazon.com, Inc. v. Canada (Attorney General), 2011 FCA 328 (CanLII);
Choueifaty v. Canada (Attorney General) 2020 FC 837
[3] Amazon.com, Inc. v. Canada (Attorney General), 2011 FCA 328 (CanLII)
[4] Shell Oil Co v. Commissioner of Patents 1982 CanLII 207 (SCC)
[5] Harvard College v. Canada (Commissioner of Patents) 2002 SCC 76