PAB refuses financial-related software invention patent application for unpatentable subject matter

In 2025 CACP 7 / Commissioner’s Decision 1688, the Patent Appeal Board refused Edward Jones & Co.’s patent application because the claims in the application were not patentable subject matter, as they were directed to subject matter prohibited under subsection 27(8) (mere scientific principle or abstract theorem) of the Patent Act. 

Edward Jones & Co. (Re), 2025 CACP 7

Background

Edward Jones & Co. filed Canadian patent application No. 2,800,066, titled “System and Method for Income Managed Account,” in late 2012. After three earlier office actions through 2018–2019, the examiner issued a final action in 2019. The applicant replied in early 2020, with amendments, but the examiner maintained the refusal and issued a summary of reasons, referring the file to the Patent Appeal Board (PAB). 

The PAB’s preliminary review letter of November 2024 acknowledged that a proposed description amendment would address a formality issue but concluded the claims remained directed to unpatentable subject matter. The applicant responded in early 2025, arguing patentability and submitting further claim amendments. An in-person hearing was held before the Board in January 2025.

The rejected patent application relates to a computer-implemented method for managing consolidated investment accounts, predicting balances, and ranking asset liquidation transactions. 

Claim 1 is reproduced below (emphasis added):

1. A method of managing a consolidated account, comprising the steps of:

(a) providing a first account of non-cash assets;

(b) providing a second account of non-cash assets, the second account being different than the first account;

(c) using a processor, predicting the account balance of the consolidated account associated with a plurality of accounts, including the first and second account as a function of time and balance amount, including the steps of:

(i) predicting the amount and timing of income to be earned from the assets of the first account to be deposited into the consolidated account;

(ii) predicting the amount and timing of income to be earned from the assets of the second account to be deposited into the consolidated account; and

(iii) predicting the amount and timing of withdrawals from the consolidated account;

(d) using a processor, comparing the predicted balance of the consolidated account with predetermined criteria, and if the predicted account balance is less than the predetermined criteria:

(i) identifying the time at which the predicted account balance of the consolidated account is less than the predetermined criteria;

(ii) identifying a list of potential transactions for the plurality of accounts in which to liquidate assets to thereby increase the predicted balance of the consolidated account to satisfy the predetermined criteria within a selectable window of time before the identified time at which the predicted account balance of the consolidated account is less than the predetermined criteria;

(iii) for each potential transaction, performing step (c) above and comparing the predicted balance of the consolidated account with the predetermined criteria and discarding a potential transaction if the predicted account balance is less than the predetermined criteria;

(iv) for the potential transactions that have not been discarded, ranking the list of potential transactions for the plurality of accounts in a priority order.

In its reply, the applicant stated that the use of computer components including the rules engine programmed with specific rules is essential to perform the invention. The applicant’s response to the preliminary review also notes that, “These steps belong to a class of mathematical optimization problems that cannot be solved or verified in polynomial time and that these steps are not practically performable in the human mind,” and, “The method of claim 1 discards and ranks potential transactions to reduce the total number of potential transactions under consideration, such that the claimed method and system effectively uses the graphics user interface to display and allow navigation of prioritized records, thereby improving performance and increasing efficiency of the system.”

The Patent Appeal Board found the claimed invention was solely directed to an abstract set of rules or a scheme for managing consolidated accounts.

The Board considered the four factors set out in the Canadian Intellectual Property Office (CIPO)’s PN2020-04¹  guidance for reviewing computer-implemented inventions, which is being incorporated into MOPOP by the recent draft revisions.² The Board set these out in this decision as follows:

• the mere fact that a computer is among the essential elements of the claimed invention does not necessarily mean the claimed invention is patentable subject matter;
• an algorithm itself is abstract, unpatentable subject matter and prohibited by subsection 27(8) of the Patent Act;
• a computer programmed to merely process an abstract algorithm in a well-known manner without more will not make it patentable subject matter; and
• if processing an algorithm improves the functionality of the computer, then the computer and the algorithm would together form a single actual invention that would be patentable.

In this case, the Board determined the computer was used conventionally and did not improve the functioning of the computer itself. The Board was therefore not satisfied of the “physicality requirement” and found the invention was unpatentable subject matter. (A more detailed analysis of the applicant’s arguments is provided at paras. 69-78.)

Notably, at para. 72, the Board commented on a lack of description of specific means resulting in the computational complexity as asserted by the applicant, the improvements thereof in terms of memory usage or processing speed, or mention of a computer operating in anything but a well-known manner. At para. 73, the Board also noted the claim steps were not limited in any way to means resulting in the computational complexity as postulated by the applicant.

Proposed Claims also did not overcome Subject Matter Defect

Additionally, the applicant proposed amendments, including, among others, amendments to the independent claims 1, 14, and 15:

• To further define a first and second account of non-cash assets, each with a current value.
• To further refine the claimed method by providing a total current value of the first and second account of non-cash assets.
• To further refine that the priority order is based on a specified mathematical optimization criteria of the total current value.
• To further refine the claimed method by displaying the predicted account balance over one or more time periods and generating and displaying alerts if the predicted account balance is less than the predetermined amount.

The Board noted the proposed amendments are (1) refinements of an abstract set of rules or scheme for managing a consolidated account and therefore do not change the nature of the actual invention as identified for the claims on file, (2) the actual invention is solely directed at an abstract set of rules or scheme for managing a consolidated account, similar to the finding in the claims on file, and (3) the subject matter of the proposed claims does not fulfil the physicality requirement.

Practical considerations for applicants claiming computer-implemented inventions

CIPO has circulated draft MOPOP revisions for consultation to provide additional guidance for applicants seeking to patent computer-implemented inventions. The examples should be carefully considered, as examples are provided for asserting physicality, technical improvements to the functioning of a computer or a network, or specialized hardware or tangible discernible effects.

The authors would like to thank Sulayman Syed, articling student, for his contribution to preparing this IP monitor.