Publication
Regulation Around the World: Open Finance
In this issue of Regulation Around the World we look at how regulators are developing their proposals for Open Finance.
Draft MOPOP revisions: Computer-implemented inventions and patentable subject matter
Canada | Publication | July 3, 2025
The Canadian Intellectual Property Office recently circulated draft revisions to chapters 17 and 22 of the Manual of Patent Office Practice. These revisions aim to clarify the scope of patentable subject matter in light of evolving jurisprudence, particularly regarding computer-implemented inventions. These revisions will have impacts on software patents, computer-implemented inventions, and in particular, emerging technologies for artificial intelligence, machine learning, and blockchains / distributed ledger.
We will summarize these key changes, contextualize them against the existing legal framework (including PN2020-04 and the Federal Court of Appeal’s decision in Canada (Attorney General) v Benjamin Moore & Co 2023 FCA 168 [Benjamin Moore FCA]), and provide practical recommendations for patent drafting and responding to subject matter examiner’s reports.
1. Context and background
The Manual of Patent Office Practice (MOPOP) has long served as an administrative guide for Canadian Intellectual Property Office (CIPO) examiners and patent practitioners, providing guidance on how to construe and examine patent claims under the Patent Act (the US equivalent is MPEP). However, recent Federal Court and Federal Court of Appeal cases—most notably Benjamin Moore FCA —have prompted CIPO to revise existing guidance. The Federal Court’s decision in Choueifaty (2020 FC 837) also played a key role in spurring updates to CIPO’s approach by clarifying that CIPO should not rely on purely “problem-solution” or “technological solution” frameworks for evaluating essential claim elements (in contrast with earlier PN2013-02 and PN2013-03).
PN2020-04 introduced interim guidance regarding computer-implemented inventions, emphasizing that the identity of a computer in a claim does not necessarily confer patentable subject matter if the computer is merely used in a generic manner. It also effectively set aside portions of older MOPOP sections that employed the “problem-solution” approach. Now, with the draft chapters 17 and 22, these clarifications are being incorporated into MOPOP itself.
2. Overview of proposed changes
(a) Changes in Draft Chapter 17
The revised Chapter 17 underscores the requirement that claimed subject matter must relate to an “actual invention” with identifiable “physicality.” This revised language stems partly from Benjamin Moore FCA, where the Federal Court of Appeal highlighted that merely asserting a computer among the essential elements does not, on its own, supply the necessary “physical existence or discernible physical effect.”
Draft Chapter 17 clarifies that an “actual invention” means a practical, physical solution to a recognized problem, emphasizing:
- The combination of elements required to solve the problem.
- The importance of identifying whether the invention truly resides in the computer’s cooperation with other elements, or rather remains an abstract idea.
The new text in sections 17.02 and 17.02.01 highlights that, while a claim may recite several essential elements, the “actual invention” is not automatically all of these elements. Rather, it is the subset or combination of these elements that “cooperate” to provide a physically discernible change. This can be compared with the decisions in Shell Oil and Schlumberger: if the computer is merely a tool to perform a new formula, the essential discovery is the formula itself—an abstract idea not conferring patentability.
(b) Changes in Draft Chapter 22
In the revised Chapter 22, CIPO has laid out guidance particular to computer-implemented inventions. A number of useful examples are provided.
The text reiterates that a computer used in a merely conventional, generic way will not suffice for patent eligibility. Proposed sections 22.03 and 22.03.01 discuss how the improvement must relate to how the computer actually operates—e.g., reducing memory usage, improving data throughput, or otherwise manifesting a tangible technical benefit. Simply performing or automating an abstract process, or adding a “computer” to an otherwise unpatentable business method, must be distinguished from solving a “computer-centric” problem.
More specifically, sections (22.03.03(a) through (g), for instance) illustrate typical scenarios, including data compression algorithms, sensor-based input, and improved encryption protocols.
These examples are very useful and it is worth consulting the examples when drafting the claims, especially when drafting dependent claims to serve as backup positions for patentable subject matter. These examples clarify that if the claim recites not only the steps but also the physical measurement or output that evidences real-world effect, the invention may well cross the threshold into patentable subject matter.
An appendix at the end of this publication summarizes the examples.
As noted in the examples, there are subtle nuances in claim drafting and specification drafting that need to be considered to best position an application in view of the guidance.
3. Actual invention approach
The term “actual invention” figures prominently in both draft chapters, serving as a critical concept in determining patentability.
The courts explained that one must look beyond mere literal claim language—especially if that language might be “deliberately or inadvertently deceptive”—and identify what has really been discovered.
If the essential discovery is an abstract formula or business scheme, then the “actual invention” may fail the physicality requirement. If, on the other hand, all essential claim elements cooperate to produce a discernible change in the physical realm, the invention likely meets the statutory definition of “invention” under section 2 of the Patent Act.
It is worth contemplating the differences between the “actual invention” approach and the now outdated “essential elements” / problem-solution approach analysis from prior patent notices PN2013-02 and PN2013-03.
4. Practical impacts and examination implications
These proposals, once finalized, will shape how examiners approach claims that rely heavily on software, algorithms, data manipulation, or purely informational processes. Practitioners can expect a more searching analysis on whether a computer-implemented element truly “cooperates” with other elements to achieve a new or better technical result. If examiners remain unconvinced that the recited steps yield a tangible physical effect, they may categorize the claim under an excluded area (merely a scientific principle, abstract theorem, or disembodied idea).
Industries and technology fields most affected by this guidance include those where computer-implemented inventions are central to innovation. This encompasses information technology, software development, artificial intelligence and machine learning, industrial automation, and control systems.
Sectors such as oil and gas (e.g., drilling optimization and geological modeling), manufacturing (e.g., process control and sensor integration), financial technology (e.g., trading platforms and portfolio management), and specialized devices (e.g., smart safes, medical devices, and embedded systems) are particularly affected. In these fields, demonstrating a tangible physical effect or a technical improvement in computer functionality will be critical for patent eligibility.
The guidance also has significant implications for emerging technologies, such as quantum computing, data security, and advanced networking, where the distinction between abstract algorithms and practical, physical implementations is often nuanced. Applicants in these industries should be especially attentive to how their claims are drafted and supported, ensuring the invention is anchored in a real-world effect or a demonstrable technical advance.
5. Patent Appeal Board decisions highlighting physicality
Patent Appeal Board (PAB) decisions after PN2020-04 have shown that claims can be found patentable if they clearly recite steps indicating physical input, discernible output, or improvement in computer function, and these can provide useful guidance in an attempt to support persuasive arguments.
For instance, in certain PAB cases where sensor-based measurements and subsequent algorithmic analysis led to an optimized drilling process or a better real-time output for an industrial process, the board found that the invention manifestly affected physical materials or machine operation. This demonstrates a viable path to emphasizing—both in the specification and in claims—the real-world “mechanical” or “technical” transformation that the invention enables.
6. Recommendations for drafting
Given these draft changes, patent applicants and their representatives may wish to highlight and document the explicit physical advantages or improvements that arise from using the claimed invention. This includes steps such as:
- Describing in detail how a new algorithm reduces memory footprint or processing cycles, and thus solves a specific technical problem.
- Setting out clearly how sensor-collected data is transformed into improved operations in a manufacturing or an industrial context, and actively including these physical steps in the claim.
- Embedding references to tangible system architecture that demonstrate direct cooperation between computing elements and real-world processes.
Likewise, ensuring that any intangible or abstract process is anchored in something physically verifiable or improves the functioning of the computer itself is key. To the extent that supporting material is available, such as experimental, simulated, or hypothesized improvements, it should be emphasized in the specification and the figures. As shown in the examples, the specification support can sometimes help provide helpful context.
7. Responding to examiner’s reports
When confronted with an examiner’s report that questions subject matter eligibility, a robust response would do well to:
- Show that at least one step involves active language and results in a discernible physical effect, such as controlling a piece of equipment, generating a real-time physical measurement, or affecting the functionality of the device itself.
- Describe the “actual invention” as a synergy of computer and other physical components, rather than leaving the computer as a mere add-on to an otherwise abstract method.
- If relevant, cite PAB decisions or analogous examples that allowed comparable claim language due to an evident physical link or technical improvement.
This emphasis on physically anchored claims will likely prove decisive in establishing compliance with the newly articulated “physicality” threshold.
Conclusion
Overall, the draft revisions to MOPOP chapters 17 and 22 refine Canada’s stance on patentable subject matter in the face of evolving case law.
While Canada remains relatively open to computer-implemented inventions, the new guidelines reinforce that the invention must have a real-world, physical dimension or a bona fide technical improvement.
The changes, building on PN2020-04 and crystallized by judicial decisions such as Benjamin Moore FCA and Choueifaty, underscore that “actual invention” and demonstrable “physicality” are the pillars for patent eligibility.
Patent applicants and counsel should now focus on explicitly documenting physical or tangible attributes during drafting, with carefully chosen claim language to ensure the invention as claimed securely falls within the acceptable boundaries of Canadian patent law.
The authors would like to thank Shu Jing Li, articling student, for her contribution to preparing this article.
Appendix
22.03.03a – Automated calculations
- Example 1: Seismic Measurements
- Example 2: Drug Dose Levels from Extrapolated Drug Concentration Levels
- Example 3: Video Compression
22.03.03b – Measurement and control systems
- Example 1: Chemical Reactor Improvement
- Example 2: Predictive Algorithm for Weakly Transmitting Controller
- Example 3: Optical Sensor-based Wheel Alignment System
22.03.03c – Artificial intelligence (AI)-related inventions
- Example 1: Crop Irrigation Scheduler using Neural Network
- Example 2: Back Propagation Algorithm for Crop Irrigation Scheduler Neural Network
22.03.03d – Computerized Games
- Refers to 17.02.02g – no examples.
22.03.03e – Communication security and encryption
- Example 1: Data Encryption with Automatically Corrupting Packets
22.03.03f – Commercial and financial operations
- Example 1: Simplified Calculation Algorithm for Investment Portfolio
- Example 2: Cryptocurrency Mining Computer Multi-Processor Architecture
22.03.03g – Graphical user interfaces (GUIs)
- Example 1: GUIs Adapted for Devices with Different Display Capabilities
- Example 2: GUI for Estimating Cost of Hardwood Floors
22.03.03h – Data structures/databases
- Example 1: Dynamic Inventory Tracking Data Structure
| Example Claim (emphasis added, truncated for length) | Patentable? | Summarized Explanation |
|---|---|---|
|
22.03.03a – Example 1, Claim 1 “A computer-implemented method of analysing data from seismic measurements comprising: (a) performing seismic measurements; (b) receiving the data from the seismic measurements; (c) processing the data on a computer using algorithm X; and (d) displaying the results of the analysis.” |
Yes |
The claim includes actively performing seismic measurements, which is a physical step and not merely generic data retrieval. The seismic measurements cooperate with the computer processing to yield a discernible physical effect, thus providing patentable subject matter. |
|
22.03.03a – Example 1, Claim 2 “A system for analysing data fromseismic measurementscomprising: (a) sensors to measure seismic measurements; (b) a module configured to receive the data from the sensors; (c) a processor configured to apply algorithm X to the data received from the sensors; and (d) a display configured to present the results of the processing.” |
Yes |
The presence and use of non-generic sensors, which physically measure seismic data, provide the needed physicality. The sensors cooperate with the computer-based algorithm to form part of a single actual invention. |
|
22.03.03a – Example 1, Claim 3 “A computer-implemented method of analysing data from seismic measurements comprising: (a) retrieving stored data from seismic measurements; (b) processing the data on a computer using algorithm X; and (c) displaying the results of the analysis of the processing.” |
No |
The claim retrieves previously measured data from storage and then applies an algorithm. All essential steps (retrieval, processing, output) are abstract uses of a generic computer. The invention lacks a physical step (the actual seismic measurement is in the past) and does not improve computer functioning. |
|
22.03.03a – Example 1, Claim 4 “A computer-implemented method of drilling for oil comprising: (a) receiving data from seismic measurements; (b) processing the data on a computer using algorithm X; and (c) drilling for oil at a location indicated by the results of the processing.” |
Yes |
Actively drilling for oil based on the processed data is a physical step triggered by the computational output. The drilling step cooperates with the computer processing, rendering the claim patentable subject-matter. |
|
22.03.03a – Example 2, Claim 1 “A method of determining when to administer a patient’s next dose of drug X, comprising: (a) providing to a computer the blood concentration level of drug X in a patient’s bloodstream, taken from measurements at a first point in time and a second point in time; (b) causing the computer to extrapolate the drug concentration…; (c) causing the computer to calculate and display…” |
No |
The measurements themselves are not actively carried out in the claim; they are merely provided to the computer. The claim is thus effectively a data-processing algorithm—no physicality or improvement in computer operation is found. |
|
22.03.03a – Example 2, Claim 2 “A method of determining when to administer a patient’s next dose of drug X, comprising: (a) measuring, using a sensor, the blood concentration level of drug X in a patient’s bloodstream…; (b) causing the computer to extrapolate…; (c) causing the computer to calculate and display the patient’s next required dose time…” |
Yes |
By actively measuring the blood concentration level with a sensor, the claim includes a physical step. That measurement step cooperates with the computer’s processing of the data, conferring physicality and rendering the claim patentable. |
|
22.03.03a – Example 3, Claim 1 “A computer-implemented method of digitally coding a video signal comprising: (a) receiving digital video data; (b) encoding, using a digital signal processor, the digital video data using algorithm Y; and (c) providing the encoded video data.” *Note that the example patent description includes additional supporting detail. |
Yes |
Algorithm Y reduces the number of processing steps needed for encoding, thus improving the functioning of the computer by using fewer processor cycles. This improvement is a discernible physical effect on the computer’s operation. |
|
22.03.03b – Example 1, Claim 1 “A computer-controlled method of producing substance X from ingredients Y and Z in a chemical reactor comprising: (a) feeding ingredients Y and Z into the reactor at flow rates and temperatures controlled by pumps and pre-heaters under control of a computer; (b) monitoring process variables… (c) supplying the sensor readings… (d) calculating… (e) supplying the calculated flow rates…” |
Yes |
The claim recites monitoring sensor data and controlling pumps and pre-heaters to produce a chemical substance, a physical process. The computer’s algorithm cooperates with real-world apparatus, so there is physicality in the actual invention. |
|
22.03.03b – Example 2, Claim 1 “A method of controlling a game console using a weakly-transmitting game controller, consisting of: (a) recording, in storage within a game console device, a recent history of commands… (b) monitoring a time interval… (c) determining a probable command by extrapolating… (d) executing the determined command.” *Note that the example patent description includes additional supporting detail. |
Yes |
The method improves the operation of the console by compensating for weak transmission signals. The physical effect is that the game console remains responsive despite reduced controller battery power, thus creating a discernible improvement in system function. |
|
22.03.03b – Example 3, Claim 1 “A system for vehicle wheel alignment comprising: (a) a set of optical sensors for measuring vehicle wheel alignment angles; (b) an automated tool for the synchronous adjustment of vehicle wheel angles… (c) a general-purpose computer… [with means for receiving and processing measurements, retrieving recommended angles, and outputting signals to actuate the tool]…” *Note that the example patent description includes additional supporting detail. |
Yes |
Non-generic optical sensors measure wheel alignment angles, and an automated tool physically adjusts those angles in synchronization with the computer’s outputs. The presence of these physical elements cooperates with the computer system to yield patentable subject-matter. |
|
22.03.03b – Example 3, Claim 2 “A system for calculating a vehicle wheel angle condition comprising: (a) aninput meansfor inputting measured values… (b) a processor means for searching for corresponding recommended angles… (c) an output means for displaying the calculated angle differences on a computer display.” |
No |
All the elements (input, processing, display) are merely generic computer components. The claim is effectively an algorithm that calculates differences in angles and displays them; there is no physical adjustment or improvement in the computer’s own functioning. |
|
22.03.03c – Example 1, Claim 1 “A computerized method of determining irrigation parameters for a crop planted at a location comprising the steps of: (a) supplying to a computer, historical weather and crop yield from database X for the location; (b) training neural network V implemented on the computer…; (c) inputting recent weather data Y…; (d) outputting recommended irrigation parameters…” |
No |
The steps involve inputting data, performing a machine-learning step, and outputting advice. There is no physical action on the environment nor an improvement to the computer itself. Hence, the actual invention remains an abstract algorithm. |
|
22.03.03c – Example 1, Claim 2 “A computerized method of determining irrigation parameters for a crop planted at a location comprising the steps of: (a) supplying data… (b) training the neural network… (c) inputting recent weather data… (d) outputting recommended parameters… and (e) irrigating the crop according to the recommended irrigation parameters .” |
Yes |
The additional physical step of irrigating based on the recommended parameters supplies the required physicality. The cooperation between the computer’s output and the real-world irrigation action renders the claim patentable subject-matter. |
|
22.03.03c – Example 2, Claim 1 “A computerized method of determining irrigation parameters… comprising the steps of: (a) supplying to a computer, historical weather and crop yield from database X'… (b) training a neural network V' using algorithm T… (c) inputting recent weather data Y'; (d) outputting recommended irrigation parameters…” *Note that the example patent description includes additional supporting detail. |
Yes |
Although the output is ultimately informational, the method improves the functioning of the computer itself by using fewer resources (fewer layers and less data) thanks to the specialized back-propagation approach (algorithm T). This is a discernible computer optimization. |
|
22.03.03e – Example 1, Claim 1 “A method of reducing the risk of secure communications being intercepted… comprising steps of: (a) transmitting, by an originator, a series of encrypted data packets , each having a timestamp… (b) upon receipt, the recipient system queries a time server… (c) the recipient system initiates a decryption process using the current time… (d) if elapsed time exceeds a threshold… corrupted data…” *Note that the example patent description includes additional supporting detail. |
Yes |
The method addresses timing of encryption and decryption to thwart interception, thereby improving computer communications security. This is considered an improvement in the functioning of a physical system, so the claim is patentable subject matter. |
|
22.03.03f – Example 1, Claim 1 “A method whereby a computer is used to: (a) generate return scenarios… (b) create a mapping from each financial product… (c) simulate return scenarios… (d) determine an optimal feasible portfolio… by maximizing an expected value of wealth… using algorithm A.” |
No |
The invention is a purely computational or mathematical exercise—selecting an investment portfolio based on risk/return profiles. There is no concrete physical effect or improvement in the computer’s own functioning; it is accordingly regarded as abstract subject matter. |
|
22.03.03f – Example 1, Claim 2 “A method whereby a computer is used to: (a) generate return scenarios… (b) create mappings… (c) simulate return scenarios… (d) determine an optimal feasible portfolio…using algorithm A by applying transform B.” *Note that the example patent description includes additional supporting detail. |
Yes |
Applying transform B reduces arithmetic operations and thus improves the functioning of the computer in a physically discernible way (faster or more efficient computation). That improvement to the computer supports patentable subject matter. |
|
22.03.03f – Example 2, Claim 1 “A computer system for generating cryptocurrency tokens wherein a plurality of processors is networked together according to network architecture C for execution of algorithm D, operating on an input target hash number to generate an output number that qualifies to receive a cryptocurrency unit.” *Note that the example patent description includes additional supporting detail. |
Yes |
The multi-processor architecture and algorithm D produce a discernible physical effect, namely reduced power consumption in a server farm. This improvement in computer operation renders the invention patentable subject matter. |
|
22.03.03g – Example 1, Claim 1 “A method of implementing a GUI enabling selection and ranking of imagesfor display on a user device, comprising: (a) determining by a host computer, from the user device on which the GUI is to be implemented, the particular type and orientation of the user device; (b) determining, by the host computer, a display aspect ratio based on the particular type and orientation of the user device; (c) randomly retrieving by the host computer, a number of images from a repository, wherein the number of images is determined by the host computer based on the determined display aspect ratio; (d) determining, by the host computer, an optimal display arrangement of the randomly retrieved images and the other elements of the GUI, based on the determined display aspect ratio; (e) displaying, on the user device, the GUI, according to the determined optimal arrangement, wherein the GUI includes elements permitting a user to select and rank their preferred images from those displayed. *Note that the example patent description includes additional supporting detail. |
Yes |
The host computer adjusts the display arrangement based on the device’s physical properties, resulting in an improved way the GUI is shown. The steps are all performed under the control of the host computer providing the GUI. The "optimal display arrangement" determined in step d) and implemented in step e) has the physical effect how the user interacts with the physical display based on its physical properties. Execution of the software results in a functional change to the user device. |
|
22.03.03g – Example 2, Claim 1 “A method of providing an estimate for hardwood floor installation, comprising: (a) presentation of a GUI… for room dimensions; (b) upon selection of a wood species, displaying a list of board widths; (c) using stored price data to compute and display the estimated cost… (d) accepting an order…” |
No |
The steps are generic input and output interactions, ultimately producing a quote and finalizing an order. There is no improvement to the functioning of the computer or any physical effect on the environment. The method thus remains an abstract usage of a GUI-driven data process. |
|
22.03.03h – Example 1, Claim 1 “A method of inventory management comprising steps of: (a) creating records, hosted on a network server, representing articles…; and (b) creating a data structure consisting of associations between articles frequently ordered together…” |
No |
Generating records and creating a data structure do not provide any physical effect or real-world change. The server is used in a generic manner, so the claim is an abstract organization of information. |
|
22.03.03h – Example 1, Claim 2 “The method of claim 1 further comprising steps of: (a) performing a query on the network server…; and (b) generating areportsummarizing inventory reallocation recommendations.” |
No |
Generating a report is a generic output with no further physical step. The claim simply processes and displays information and thus lacks physicality. |
|
22.03.03(h) – Example 1, Claim 3 “A method of inventory management and order fulfilment comprising steps of: (a) creating records… (b) creating a data structure… (c) performing a query… (d) generating a report… (e) reallocating inventory… (f) fulfilling typical multi-article orders…” |
Yes |
Reallocation of inventory is an active, physical step, and fulfilling orders physically involves shipping items from one location to another. This cooperation of software and real-world action confers patentable subject matter status. |
Recent publications
Subscribe and stay up to date with the latest legal news, information and events . . .