NCFA Fintech Confidential December 2020 (Issue 3)

In the Fintech context, it is important
understand what some of these categories
refer to. Copyright indeed covers all
visual, audio, and video material, but most
relevantly, also extends to computer code
(e.g., source code, pseudo code, machine
code, etc.). Awareness and solid policies for
developers are critical, because the inclusion
of copyrighted source code (or even open
source), even unknowingly, could jeopardize
ownership of a technology. Trademarks can
include a combination of words, sounds,
designs or other forms that distinguish one
company’s goods or services another’s. 6
These serve as a foundation for building
the credibility required by customers before
they entrust their most precious data to a
company. In a world where consumers are
being trained to treat any unknown online
entity as a potential scam, a recognizable
trademark will be what allows many brands
to sink or swim. They are also an invaluable
tool for distinguishing a company or service,
especially as the market floods with new
players.
Patents and the “shifting sands” of
patentable subject matter
Patents, however, represent a particular
challenge. We know that patents are granted
for new, useful and non-obvious inventions,
but Fintech-related patent applications are
often rejected, as they are frequently fall into
the legal grey area of “non-statutory patentable
subject matter”. In essence, what this means
is that if the computer is found to be a nonessential
component of the invention (e.g., can
be substituted by something else), and the only
remaining essential elements are non-patentable
(e.g. an abstract theorem, mathematical formula
(algorithm), etc.), the application would most
likely be rejected by the patent examiner on the
basis of non-patentable subject matter. On the
other hand, if the computer is considered to be
essential to the invention, the claims may define
patentable subject matter.
Distinguishing between what constitutes
patentable and non-patentable subject
matter is no easy feat, and has been the
object of many fierce debates and legal
disputes. 7 Following each of the Amazon.com
and Choueifaty decisions rendered against
Canadian Intellectual Property Office (CIPO),
the CIPO issued in the month of November
2020, a practice note on how to deal with “[p]
atentable subject-matter under the Patent
Act”. 8 This new guidance is expected to
align the patent application examination
process closer to the legal principles set
forth in relevant case law, as well as facilitate
the recognition of eligible subject-matter
related to business methods and computerimplemented
inventions, amongst others.
As Fintech entrepreneurs innovate new
solutions for the purposes of digital identity 9 ,
AML/KYC, digital onboarding, crypto-asset 10 ,
payment (MasterCard, Bank of America,
Walmart, etc.) 11 , they must keep a close eye
on the legislative developments that will bear
significantly on the proliferation and speed of
adoption of Fintech solutions. The best way
for companies to protect their competitive
advantage is to invest in a strong IP strategy
that will put them in a position to protect their
innovations, strengthen their reputation, and
comply with existing (andfuture) policies.
About:
David Durand
Member of the Quebec Bar and advisor
to the NCFA
Durand Lawyers
David Durand is a member of the Quebec Bar and advisor to
the NCFA. Durand Lawyers brings Law & Business Together. It
is a law and business advisory firm specialized in intellectual
property, business strategy, as well as civil and corporate
law. Durand Lawyers is uniquely positioned to help clients in
emerging technology industries, including Fintech, employing
both lawyers and experienced entrepreneur(s). For more
information visit our website at: www.durand-lex.com.Not
legal advice and hyperlinksThis content is provided solely for
information purposes and does not constitute legal advice,
professional advice or similar opinion. If you believe you
require legal assistance, do not hesitate to contact us. The links
contained on this web site which link to third party web sites
are not monitored by Durand Lawyers. Links are provided for
information and convenience only.
TRENDING
6
http://www.ic.gc.ca/eic/site/cipointernet-Internetopic.nsf/eng/wr03718.html.
7
Schlumberger Canada Ltd v. Canada (Commissioner of Patents) (1981), 56 CPR (2d) 204; Re Application No. 2,246,933 of Amazon.Com
(2009) C.D. 1290, Amazon Inc. v. Canada (Attorney General), 2010 FC 1011, and Canada (Attorney General) v. Amazon.com, Inc., 2011 FCA 328
[collectively “Amazon.com”]; and Choueifaty v. Canada (Attorney General), 2020 FC 837, available at: http://canlii.ca/t/j9bxg [“Choueifaty”].
8
http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04860.html (published on November 3rd, 2020).
9
https://patents.google.com/patent/US10325084B1/en.
10
Fran Casino, Thomas K. Dasaklis, Constantinos Patsakis, A systematic literature review of blockchain-based applications: Current status,
classification and open issues, Telematics and Informatics, vol. 36, 2019, pages 55-81, available at : http://www.sciencedirect.com/science/
article/pii/S0736585318306324.
11
https://www.paymentssource.com/list/6-fintech-patents-to-watch.
55