This article has been written by Tanchok Limboo pursuing a Diploma in US Intellectual Property Law and Paralegal Studies from LawSikho.

 This article has been edited and published by Shashwat Kaushik.

Introduction

India is currently going through a transformational phase. From 4,227 patents granted and registered in the fiscal year of 2013-2014, Indian patent applications also increased and the estimated growth was 31.6%. It exceeded and outdid itself nearly tenfold in the fiscal year 2023-2024, with around 41,010 patents granted and registered until November 15, 2023. The importance of patents is being recognised amongst Indian inventors, creators, and designers. Nevertheless, the patent laws in India require consistent improvement to supervise such a great number of patents registered in India. With nearly five crore backlog court cases pending, document processing delays and a lack of awareness amongst common people and entrepreneurs can have a detrimental effect or slow the growth rate.

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The issues within the Indian patent system can be divided into two parts Internal issues and external issues, internal issues related to the operative nature of Patent Law in India and the lacunae that need to be filled since laws require reform considering the current government policies, economic and social aspects The article shall also give an overview of external factors related to the enforcement of patent laws in India, the scope of patent protection and factors affecting it, and technological developments such as AI, spatial computing, and digital advancements that have their own distinctive problems concerning the patent system in India. 

Patent law in India

Definition of patent

A right that is personally held and granted by the government, which exclusively allows the right holder/inventor to prohibit others from using the product or a process that is innovative and provides a solution to existing problems, is an exclusive right that authorises the inventor of a patent to produce, create, and sell the product. A patent is also granted for improvements to previous inventions. After the grant of a patent, a period of 20 years is provided to the patent holder from the date of application. 

Prior art

Any product or process that is already in existence and can be physically or commercially available anywhere in the world at any time, and with anyone who has already explained or described such existence, which is identical in usage with any created invention of existence, is prior art, and as such, it proves that such invention already existed.

The Indian Patent Act of 1970 serves as the fundamental legal framework governing patents in India. It establishes the criteria and conditions for granting patents, safeguarding intellectual property rights, and promoting technological advancement in the country. Several key sections of the Act hold significant relevance in determining the patentability of an invention. These sections include:

  1. Section 2(1) (j): This section provides the definition of an invention, which includes any new product or process (or any improvement thereof) that involves an inventive step and is capable of industrial application.
  2. Section 3: This section outlines the conditions for the grant of a patent, including requirements such as novelty, inventive step (non-obviousness), and industrial application.
  3. Section 13: This section deals with the non-patentable subject matter, identifying certain inventions that are not eligible for patent protection, such as scientific theories, mathematical methods, and literary, dramatic, musical, or artistic works.
  4. Section 29: This section sets forth the term of a patent, which generally lasts for 20 years from the date of filing the patent application.
  5. Section 30: This section addresses the rights conferred to the patentee, including the exclusive right to make, use, sell, and distribute the patented invention within the territory of India.
  6. Section 32: This section deals with the grounds for opposition to the grant of a patent, allowing third parties to challenge the patentability of an invention based on prior art or other objections.
  7. Section 34: This section provides for the revocation of a patent if it is found to be invalid or if certain conditions are not met, such as failure to pay maintenance fees.

The patentability is tested on three grounds, also known as the NUNs test:

  1. Novelty- No such existence of the product or process, the product or process has to be novel or new. 
  2. Utility-  Invention has to serve practical utility or provide solutions to the problem, the invention is required to perform according to the claim made; however, speculative or vague performance is not within the scope of  practical application.
  3. Non-obvious nature- Any invention that is not prior art or a product or service already in existence.

Impact of TRIPS agreement on Indian IP laws

India became a member of the World Trade Organisation with effect from January 1, 1995, and a party to the TRIPS agreement. Subsequently, after the adoption of the agreement, India introduced multiple amendments to the Patents Act of 1970, the major and most important being the Patent Law Amendment Act of 2005 and 2002.

  • Patent Term – Increasing the patent term to 20 years after the date of filing under Section 53 of the Patents Act of 1970.
  • Product Patent Protection- Introduced protection of patents for pharmaceutical products.
  • Compulsory Licensing- Compulsory licensing is required by third parties and is granted by the government to utilise a patented invention.
  • Pharmaceutical & Biotech Patents- Under Section 3(d) of the Patents Act, patenting of chemicals, biotech, food processing, drugs, and pharmaceuticals is possible.

Challenges related to patent protection 

Delay of grant & procedure

The lethargic or sluggish nature of the process of a grant—the delay of the patent grant within 2 to 6 years from the date of the application process—is a four-step process. The initiation of the process begins with application filing and publication, which can take up to 18 months, as mentioned under Section 11A of the Patents Act of 1970. There are many types of applications, such as ordinary patent applications, PCT national phase patent applications, etc.

Then, secondly, the process of requesting a search and examination mentioned under Section 11B of the Patents Act 1970, which has to be filed within 48 months of the patent filing date/ date of priority. The examination of the patent is conducted by an examiner, exercising discretion to issue an examination report containing objections.

The third step is filing a response against the objections raised in the examination report issued by the examiner. The filing has to be done within 12 months of the issuance date of the examination report. The process is also termed patent prosecution. After all the objections to the examination report have been replied to, if the examiner is satisfied with the responses, he or she may put forward an order for the grant of a patent.

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Complexity of patent laws

Patent laws vary from country to country, and their interpretation can be complex and challenging to navigate. This complexity can make it difficult for inventors and businesses to understand and comply with the requirements for obtaining and maintaining patents, potentially leading to missed opportunities or legal complications.

Balancing innovation and competition

The patent system aims to strike a balance between protecting intellectual property rights and promoting competition. However, achieving this balance can be challenging, as overly broad or restrictive patents can stifle innovation and hinder the entry of new competitors into the market. Finding the right balance is critical for fostering a healthy and dynamic innovation ecosystem.

Patentability criteria

Determining whether an invention meets the criteria for patentability, such as novelty, non-obviousness, and industrial applicability, can be subjective and challenging. Patent examiners must evaluate a wide range of factors and make judgements based on technical expertise and legal principles. This process can be time-consuming and may result in inconsistent decisions or disputes over the validity of patents.

Patent infringement and enforcement

Enforcing patent rights can be a significant challenge, especially in cases of cross-border infringement. The process of detecting, investigating, and pursuing legal action against infringers can be costly and time-consuming. Additionally, the effectiveness of patent enforcement can vary depending on the jurisdiction and the resources available to patent holders.

Patent trolls

The rise of patent trolls, entities that acquire patents solely for the purpose of asserting them against others in lawsuits, has become a significant concern. Patent trolls often engage in aggressive litigation tactics, even against legitimate businesses, to extract settlements or licensing fees. This can create an environment of uncertainty and stifle innovation, as companies may be reluctant to invest in new technologies for fear of being targeted by patent trolls.

Computer related inventions under Section 3(K) 

Under Section 3(k) of the Patents Act of 1970 (hereinafter called the Patents Act), an invention related to mathematics, business methods or a computer programme or algorithm is barred from being patentable. The section is stringent and intransigent and expressly rejects that there is no exception to the patentability mentioned under Section 3(k) of the Patents Act. According to the Guidelines for Examination of Computer Related Inventions (CRIs).

The guidelines consider these factors crucial for the grant of a patent. These inventive steps—technical advancement, innovation, and practical application—can be patented the reason for the barring of patentability by section 3(k) is for the same fact that the claims under the section lack either one or all of the factors of patentability Section 09.03.05.10 of the Patent Manual explains section 3(k) of the Patents Act 1970, wherein, most notably, subsections 1 to 4  provide guidelines in various instances of the claim raised under Section 3(k):

  • Mathematical Methods- under sub-section 1, wherein, in case of mathematical methods, any form of intellectual or abstract method along with the formulation of the equation, finding square roots, and cube roots are not patentable. For mathematical methods to be patentable, the claim must be practically applicable; the mere addition of mathematical formulae not being the primary subject shall not dismiss the patentability
  • Business Methods- Under sub-section 2 of Section 09.03.05.10 of the Patent Manual, activities related to commercial and industrial enterprises and transactions of goods and services, the claimed subject matter, if it specifies a technical process partly or wholly for the invention to be created, can be considered for examination, or else a claim for a business method, trade, transaction, or commercial activity is not patentable, as shall be treated as business methods. The Intellectual Property Board (hereinafter referred to as the IPAB) held in Yahoo vs. Controller of Patents & Rediffcom India Limited (2009) that the application filed was not patentable u/s 3(k) of the Patents Act 1970. The IPAB held that such invention falls under the exclusion of Section 3(k)  and is not patentable.
  • Algorithms – Under sub-section 3 –  self-explanatory (see sub-section 3 of Section 09.03.05.10 of the Patent Manual)
  • Computer programmes per se- under sub-section 4 Invention, are not to be treated as rejected for patentability; however, any computer programs/set of instructions/routines and/or subroutines and related products, databases, etc., according to the section in this category, are not intended to grant a patent.

In the case of Microsoft Technology Licensing, LLC vs. The Assistant Controller of Patents and Designs (2023), wherein Microsoft filed for registration of its invention related to “ Methods and Systems for Authentication of a User for Sub-Location of a Network Location,” the Controller rejected the application under Section 15 of the Patents Act, 1970, rejecting the patentable claim under Section 3(k).

The court, keeping in mind the exclusion of subjects mentioned under Section 3(k) and the Patents (Amendments) Acts, 2005, explained that the term “per se” was added to bar the patentability of computer programmes; nevertheless, the Patents (Amendments) Acts, 2005 subjected the essential factors such as technical advancement, inventive steps, prior arts, etc. To allow the grant of patents related to Computer Related Inventions (CRIs). 

The court opined that the controller had misinterpreted Section 3(k) and hence did not outright lead to the rejection of the patent. The possibility of an algorithm used in a computer device contributing towards the technical solution for a technical problem; the computer programme being just the instrument for the technical solution to be implemented for the technical problem.

Since the claimed invention surpassed the negative factors such as being used only for the user interface of a computing device or just being a mere complimentary addition towards the already known devices and mathematical methods, but it also provided solutions to security issues, a two-tier authentication process similar to encryption of devices, by the utilisation of two different cookies for the access of the client computer, which secured computer devices from hackers and possible data breach, hence the court set aside the impugned order passed by the controller and remanded the matter back for the re-examination of the examinations related to inventive step, novelty, and technical advancement, in the purview of the other referred prior arts.

The issue, however, lies in the fact that many inventions may be excluded from patentability under Section 3(k) of the Patents Act of 1970. As such, Section 3(k) exclusions need to be reconsidered in view of worldwide technological advancement and innovation.

Patentability of AI innovation : analysis of AI DABUS

The contemporary age of scientific and technological innovation has pushed the boundaries where the computer or the machine in itself can create and operate autonomously, even though AI still requires minimal control, commands, and direction. AI technology is undeniable and pivotal, like an organ in a body. AI is becoming part of machines, computer devices, cars, drones, robots, etc., but it also seems that it is playing an important role in creating new inventions.

AI technology has progressed at such a fast pace that it generates novel processes and creates new ideas by itself. In 2019, such an AI technology was created by Stephen Thaler, known as the Device for the Autonomous Bootstrapping of Unified Sentence (hereinafter referred to as “DABUS”). South Africa’s patent office granted DABUS AI its first patent for an invention related to a food container product, based on fractal geometry, which has been accepted by the Intellectual Property Commission as well.

Court proceedings concerning “DABUS” patent application filings in various countries

The Patent Cooperation Treaty application (hereinafter referred to as the PCT application) was filed in various countries, such as Australia, the US, the UK, South Africa, New Zealand, Brazil, Canada, Germany, the European Patent Office, and the Republic of Korea.

Common grounds for rejection are:

  1. Inventor-  Almost all of the country’s patent laws define an inventor as a natural person, and the definition of an inventor according to the country’s patent laws does not apply to an AI to be considered an inventor.
  2. No specific definition- All the patent laws of the countries did not recognise AI as an inventor.
  3. Patent incentive-  One of the most important aspects of granting patents is to provide usage incentives to the inventor; granting the same to the AI as an inventor would nullify the same.
  4. Legal capacity-  A non-human entity or a machine does not have the legal capacity to raise objections or file suit if there is any form of infringement of the patent rights or copyright; an AI can not represent itself in court and provide evidence if required.
  5. Legal complication- There is no legislation to provide transfer of patent rights from an AI to a natural person; an AI does not have any fundamental rights nor does it enjoy any rights provided by the constitution.

Trade secrets : an alternative solution to patent for AI-generated and invention

Since AI inventorship requires the support of policymakers through legislation and amendments inclusive of the concept of artificial intelligence as discussed earlier, AI-driven innovations are not currently recognised by the various patent laws of the countries; resolving the same requires time, and the issue has been lingering since 2019 to date.

However, there is an alternative approach to preserving the exclusivity of the innovation created, which is through trademark secrets. The advantages of trademark secrets are that the invention need not be disclosed in the public domain, has an unlimited time, a registration fee is not required and most importantly, the uncertainty of the patentability of the AI invention is avoided.

What is a trade secret

It is one of the IP rights available to rightful holders that keeps the information confidential and is not disclosed in the public domain or published. Information that may be sold or licensed is called a trade secret. Trade secrets have to be commercially valuable; the confidential information may only be known to a certain group of people. The protection of information is both for technical information such as design and pharmaceutical test data. Commercial information such as a list of suppliers and clients, etc.,  can also be a combination of information and keeping the same provides a competitive edge.

The protection that trade secrets offer against unfair competition, espionage, breach of contract, breach of confidence, etc. Trade Secrets are a go-to option for Non-human innovation, the DABUS case in many courts of different countries, whether it is original, special, or appellate courts all were of the view that the definition of inventor shall only cover a human being or a natural person that has applied its mind to create an invention, for time being it is settled position of law that filing of a patent for non-human innovation with the use of generative AI shall not be covered under the definition of an inventor or declared as an inventor, South Africa is an exception, however for trade secrets to be granted there is no mandatory requirement for an innovation to be recognized in the ambit of being created by a natural person.

Conclusion

The TRIPS agreement, policies, and laws were all formulated for the sake of innovation and advancement. Despite the positive growth of invention and technological flourishment, the contemporary age is moving at a very fast pace, and as such, one must consider the new ways an invention is created, whether it be from a computer device by algorithm and programming or through generative AI. The time is such that laws are required to be amended for the sake of growth and a wider scope of opportunities for inventors; perhaps an amendment to the definition of what constitutes an inventor is required to be re-examined once again considering the overall development of technology.

Backlogs of cases, delays in the proceeding, or infringement of protection provided by the patent rights are abandoned if the concept of novelty is undervalued. Although the Indian Patents Act of 1970 is the law that regulates it, the spirit of the concept of novelty is yet to be imbibed in the Act itself. Policymakers and patent law experts need to consider the enhancement of the patent laws not only in India but all over the world.

References

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