In this blogpost, Sudhi Ranajn Bagri, Student, National Law Institute University, Bhopal, critically analysis the guidelines issued by the Indian Patent Office in 2015.

Introduction

A Patent is a statutory right, granted to the patentee by the government, for an invention and is granted for a limited period of time. Although the situation regarding patents, in most areas of technology, have significantly changed over years in India, there exists a segment of ‘software inventions’ wherein no significant developments has been noticed, neither by patent office nor by the judiciary.

Legal History of Section 3(k)

To understand this situation more clearly, the history of the provisions governing the patentability of software under the Patents Act needs to be looked into:

1. There was no provision in the Patents Act, 1970, to govern the patentability of software; it was in the year 2002, that provision to govern such a situation was inserted.
2. June 25, 2002: Section 3(k) was introduced in the Patents Act,1970. It provided for excluding mathematical, business methods, computer program per se or algorithms from getting patented.
3. December 26, 2004: Patent (Amendment) Ordinance 2004, was promulgated to amend Section 3(k) with intent to extend patentability to “Computer programmes having technical application to industry or in combination with hardware”. The Ordinance came into force on January 1, 2005.
4. April 4, 2005: The Patents (Amendment) Act, 2005 repeals the 2004 Ordinance. Patents Act 1970 restored to its original form.
5. August 21, 2015: Guidelines for Examination of Computer Related Inventions released by Indian Patent Office. The guidelines provides that:

• Mere use of mathematical formula in a claim to clearly specify the scope of protection being sought would not render the claim a mathematical method. Eg. Method of encoding, decoding, encryption
• While business methods are non-patentable, if the claimed matter specifies an apparatus or technical process for carrying out invention even in part, the claims to be examined as whole
• So long as a computer programme is not claimed in itself, but in a manner so as to establish industrial applicability and fulfils all other criteria of patentability, the patent should not be denied.[1]

General rule regarding patentability

The Patents Act provides that an invention could be patented. However, for an invention to become patentable, the subject-matter of the invention must meet the following criteria-

• It should be novel in nature.
• It must not be obvious or should have inventive
• It should be capable of Industrial application.
• It should not fall within the provisions of section 3 and 4 of the Patents Act, 1970.

However, the matter with which we are concerned here is covered under Section 3 of the Act. When the concerned provision was enacted, it was in the nature of providing a blanket ban for patentability of the computer programs. In other words, it intended that no computer program, whatsoever, must be allowed to get patented.[2]

Guidelines issued in 2015

The Guidelines provide that the claim can be considered an invention if it specifies equipment or a technical process for carrying out a business method or demonstrates a practical application of a mathematical method. This violates the true intent of Section 3(k) of the Patents Act as it means that such process/application could be the subject of patenting if it meets the other tests of patentability.

The Guidelines also lay down that a patent should not be denied on the ground that the claim is regarding patenting of software if it is established that such invention has some industrial applicability of the invention.

The Guidelines further states that permit patents may be granted where a claim shows novel software with known hardware, which goes beyond the normal interaction with that hardware and that affects a change in functionality of the hardware.

Criticising points in the Guidelines

The new Guidelines which have been issued directly go against the previous statutory provision, and hence can be termed as ‘ultra vires’.

The guidelines can be said to be against the globally accepted principles of patenting law, according to which the abstract ideas, mathematical models occur naturally/are found in nature and as such are not ‘invented’, but merely ‘discovered’.

Some are of the view that if software patents are allowed in our IT industry, it would do more harm than good, and can be seen as a “plague” to the Indian software industry.

Problems with the guidelines

Carefully examining the guidelines, it can be interpreted that the guidelines which have been issued in relation to software patents, have misinterpreted the earlier suggestions given by Joint Parliamentary Commission, and have also ignored the various critical changes which were brought about by the Patents (Amendment) Act of 2005.[3]

In 2005, an amendment was proposed to amend Section 3(k), which was introduced in the year 2002. The amendment which was sought to be made would have further narrowed the exception created by the section, and hence, would have increased the scope of the patenting software. The Parliament specifically rejected the proposed amendments in Section 3(k).[4]

Parliament also specifically rejected proposals to permit software to be patented when the industrial or technical application was demonstrated or when in a combination with hardware.

Reasons as to why software patents should not be encouraged

Following are the reasons as to why the patenting of software should not be allowed, and the problems attached therewith if such patenting is granted.

• Software patents restrict technological progress and thus would encourage monopolisation.
• They also massively enhance costs through the creation of patent bulk and through the diversion of funds from productive Research and Development towards litigation and discovery/licenses, and thus substantially hamper the productivity of the industry.
• Allowing software patenting would lead to hampering technical progress and innovation capability of the software industry of the country.[5]

Conclusion

On reading Indian Patent Act, it can be observed that it does not specifically exclude software inventions, and as enumerated in Joint Committee Report, inventions that are ancillary to or are developed using computer programmes are patentable. So it is clear that software inventions are patentable subject matter in India.[6]

However this is not the situation in other countries, like New Zealand and Germany have already taken steps to abolish software patenting. In a recent case of Alice Corporation v. CLS Bank[7] decided by the U.S. Supreme Court, it has been reaffirmed that software patenting would lead to monopolisation and such situation might come up as a hindrance in innovation rather than promoting it, thereby defeating the primary object of intellectual property law.

Following the guidelines which have been issued by the IPO, high chances are there that the patent examiners might take such steps which might contravene the basic purpose of the Act. Implementation of these guidelines will lead to patent examiners issuing patents which the Act does not allow for.[8]

Thus, in my opinion, the guidelines issued by the Patent Office are ‘ultra vires’ the Act, and must be called off as soon as possible.

[1]http://www.medianama.com/2015/10/223-software-patents-policy-india/

[2]Insights into Editorial: Tying up Innovation in Legal Knots, available at http://www.insightsonindia.com/2015/10/16/insights-into-editorial-tying-up-innovation-in-legal-knots/

[3] Ibid

[4] R. Bailey, Tying up innovation in legal knots, available at http://www.thehindu.com/opinion/op-ed/rishab-bailey-writes-about-software-patents-tying-up-innovation-in-legal-knots/article7766959.ece

[5] Supra 2

[6]PATENTING OF SOFTWARE INVENTIONS IN INDIA, available at http://www.lawyersclubindia.com/articles/print_this_page.asp?article_id=891.

[7] 134 S.Ct. 2347 (2014)

[8]Issues with the “Guidelines for Examination of Computer Related Inventions”, available at http://www.medianama.com/2015/09/223-issues-with-the-guidelines-for-examination-of-computer-related-inventions-spicy-ip/