This article has been written by Bikramjit Chatterji, pursuing a Diploma in How to Get A Law Firm Job from LawSikho. It has been edited by Ojuswi (Associate, LawSikho).

This article has been published by Rachit Garg.

Introduction 

In the last decade, India has witnessed an explosion in the software industry and an ever-rising growth in terms of technological advancements. This has made it very essential to protect the intellectual property in these programs, software and machines which are using these software and programs. The software is like the brain of the system which commands the operations of the system, which are intangible in nature. However, the software is very different from goods that we see on a day-to-day basis which is why treating them like traditional goods are not justified. Unlike other goods, especially the traditional ones, when a software is sold to a customer, the customer gets the license to use that software but the use has its limitations. The software can be used only for a certain period of time, which these software companies decide. There are some specific do’s and don’ts which are set by the licensor for the licensee. 

Software, computer programs and mobile programs face very severe competition in the market and the developers are quite often vulnerable to suffering losses because people might use this software without paying the remuneration for them. There is also a risk of the software getting copied and pirated which means that people pirating them can sell them at a lower price or offer them for free, leaving the developers at a disadvantage. 

On top of that, due to the cutthroat competition in the market, there is often a risk that the competitors might introduce better versions of current software making the old ones obsolete and outdated. 

So, the protection of the software by getting a software patent doesn’t just protect the economic interests of the software developer but also promotes innovation and creativity among the upcoming software developers of India.    

Protecting intellectual property rights to a software

When we talk about software licensing, the two things that automatically come to the minds of experts are copyright and patents, which are the two well-known methods of protection for intellectual property. Copyright is one of the most common methods of protecting software programs because writing source codes or programs are quite similar to writing a literary piece. A patent is one of the best ways to protect intellectual property but the process is not that easy, especially in India. There is a stringent criterion that needs to be fulfilled in order to get a patent for software. Firstly, the patent can only be granted to something new, which means it cannot be something which is already discovered and in use. Secondly, it needs to be an inventive solution and lastly, it needs to have industrial applicability.  However, despite going through a lengthy process of getting a patent, there is always the risk of infringement and piracy of the software, thanks to the new digital world. 

With such advanced technologies and programs, it is possible to copy the whole code of the program in just a few minutes. On top of that, copyright protection does not necessarily mean that it will protect the process, procedure or discovery of a program or software. In general, novelty, non-obviousness and industrial usage of the technology are the parameters which are seen before granting a patent to an invention, however, computer software and algorithms fall in a different category altogether. Patent laws create an exception when it comes to mathematical formulas, scientific discoveries and algorithms. 

Coming to India, the software is not directly patented and a patent is granted if it is attached with novel hardware which means that it is a unique invention and is capable of industrial usage. 

According to the RBI’s annual survey, the export of India’s software services increased to more than $108 billion in 2017-2018 from just $30-40 million in the 1990s. It is expected to grow to 227 billion dollars in the year 2021-22. Considering this amazing expansion and growth of the software industry, the Intellectual Property laws need to be amended, in order to keep up with the modern day because the last time Intellectual Property Laws were amended in India was in the year 2005, which is 17 years back. 

Due to the age-old Intellectual Property Laws, there is a huge need gap in the laws and there are no laws that deal exclusively with software and computer programs. Software is protected under patents, copyrights and sometimes under trade secrets. 

Even though there are legal provisions for Intellectual Property protection, India still lacks behind because of the lack of developed jurisprudence, due to which the American approach is applied the majority of the time, when dealing with cases related to intellectual property, especially infringement of intellectual property. Even the amended Information Technology Act of 2008 doesn’t specifically talk about the protection of software and computer programs.   

Copyright of softwares

Section 2(o) of the Copyright Act, 1957 states the following phrase: “literary work” which includes computer programmes, tables and compilations. However, there is no mention of source codes, object codes and executable codes in the Copyright Act, 1957. All of these are integral parts of software but they are just covered under literary work in the Copyright Act, 1957. 

But for a software or computer program to be granted copyright protection, it is very important that the software or computer program in question is an original one. In the general context, the owner of a copyright is the author of the work. But in case an employee develops something during their tenure in a company, the employer becomes the owner of such work which applies in the case of the development of software and computer programs as well. However, the employee can be the owner, if the contractual terms between the employer and employee are different. The owner of a copyrighted product, in this case software, has the exclusive right to store, reproduce, sell and lease the software. 

When someone leases a software or computer program, the relationship between the software owner or computer program owner and the customer is the same as that of a bailor and bailee. The bailor has absolute rights over the software or computer program and the bailee has limited rights over it and has it for a specified period of time after which they have to return it. The provisions of a Bailment have been explained in Section 148 of the Indian Contract Act, 1872

If any third party tries to reproduce the software or computer program, they would be liable for copyright infringement. In the case of criminal copyright infringement, the minimum punishment for an infringement of copyright is imprisonment for six months with a minimum fine of Rs. 50,000. Subsequently, in case of a second or subsequent conviction, the minimum punishment is imprisonment for one year and a fine of Rs. 1,00,000. 

However, the Copyright Act of 1957 does allow fair use and reverse engineering which means that fair use and reverse engineering of a software or computer program are allowed and it won’t be constituted as an infringement of copyright. Further, creating copies or adaption of such a software or computer program by a lawful possessor of such a software or computer program in order to create a temporary backup if there is a risk of loss or destruction, would not constitute an infringement. 

On top of all of these, if a person has been granted a license by the copyright owner to use the copyrighted work, then they cannot be made liable for copyright infringement.

Patent of softwares

Coming to patents for software and computer programs, even though the expression and methods of programming codes can be copyrighted, the operational methods and principles of the software and computer program cannot be copyrighted. Also, reverse engineering is fair use because of which reverse engineering of trade secrets is also permissible. 

So for all these reasons, patents become essential, to protect the software. A patent works on the scope of the work and not on how the work was developed. A patent is an ideal solution when the question concerns the protection of ideas and functionality of the software. But getting a patent is not that easy. 

To be granted a patent, the program or software mustn’t be merely an algorithm but a technical invention as well. Section 3(k) of the Patent Act, 2002 says: that mathematical methods, business methods, computer programmes per se and algorithms are not considered patentable inventions. In relation to computer programs, the law provides a qualification that what is not patentable is only computer programs per se. 

So software can be patented only if it is attached to an invention and the software is a component of that invention. To avoid the claim of Section 3(k) of the Patent Act, 2002, the hardware must be a part of the invention along with the computer program and the software. 

Similar to copyright laws, patent laws also allow the patent owner to give a license or authorize his patented work to be used by an individual or a third party, but it gives them limited rights over the patented work. But such a license can be granted through a written agreement as well, where all the terms and conditions are precisely mentioned and agreed upon. 

Software contracts

Just like any other contract, software contracts are also governed by the Indian Contract Act, 1872. Software contracts can be an agreement, license, or even a complete sale of the software. Since software fits into the definition of a good, irrespective of whether they are movable, tangible or intangible goods, then it would come under the purview of the Sale of Goods Act, 1930. In the case of Tata Consultancy Services v/s State of Andhra Pradesh (271 ITR 401), the apex court of India held that software could be considered a ‘good’, and it further stated that irrespective of whether computer software is protected by Intellectual Property, it is still considered to be a good, and it is subject to taxation.  

Licence agreement

A rightful owner of the software or a computer program can give access to a third party to use their software or computer program but this is not what is popularly followed. Most software and computer program developers prefer granting a license to the buyer rather than selling the whole software or computer program to them. This is preferred because a license is governed under Intellectual Property laws. Further, a license means that the rightful owner can retain some substantial and important rights related to that software. Plus, the owner has a higher chance of controlling several aspects of the software. Consequently, almost all rights to the software are reserved for the owner or developer, except for the right to run it.

Patent registration for a software in India

Patent Registration in India is governed by The Patents (Amendment) Act, 2005 which came into effect on the 20th of May, 2003. But getting patents for software is a complex process when compared to getting patents for other inventions. So, in order to secure a patent for software, it would be best to seek the advice of a legal professional in the field of software patent registration. 

Filing a patent for a software in India: 

  1. The idea needs to be written down first including the concepts lying behind it. There should be as much detail as possible in the description, including the working of the software, the area of invention, the codes, the advantages of the software, and how it will be used.
  2. The workings of the invention need to be explained properly and it is best if the diagrams, objects and sketches are mentioned as well. 
  3. It’s best to check whether the innovation is already enlisted and if yes, then if it follows the patent criteria. 
  4. After conducting proper and thorough research, it’s best to finalize whether to continue with the patent application. 
  5. Then a patent application needs to be drafted. 
  6. Once all the requirements and specifications are fulfilled, the application should be published. 
  7. Then the next step is to Request for Application and only after the request is submitted, the examiner examines the submitted application. 
  8. If any objections are raised with respect to the invention, it is best to respond and clear them.    
  9. Once all the requirements are met and the patent process is completed, the innovator can check the patent journal to check whether they have finally been granted the patent.

It is important to note that even though the process of software patenting seems fairly easy, many innovations are not allowed to be patented in India, especially those belonging to the technological field which includes the development of applications and software. The whole process is very complex, tedious and highly demotivating for the several coders and developers of India who come up with amazing innovations.   

However, it is well established in the Patent Laws that while establishing patentability, the focus should be on the fundamental substance of the invention and not on the particular form, which is claimed. Hence, it is important to judge the substance of the claims while considering the whole claim. If any claim, is in any form, such as a method or process, apparatus, system or device, computer program product or computer-readable medium, which falls under an excluded category, then such a claim would not be patentable. However, if the claim taken as a whole, does not fall in any of the excluded categories, then the patent registration cannot be denied. 

Hence, in order to obtain patent registration for software, it is very important to establish that the patent registration application does not pertain to only the software but also to the invention which is applicable for industrial use. 

In order to get a patent in India, one must go to the government portal where they can find all the information related to the patent filing, fees, forms, jurisdictions of patent offices and more and they can also check the status of their patent on that very same website.     

Conclusion 

The protection of computer software in India comes under the purview of copyright laws. But there is a scope of protection of literal and nonliteral parts of the software, fair use criteria, and authors’ rights under the ambit of license agreements which is yet to be discovered and recognized by the Indian courts. It can be further concluded that such programs can be protected under the patent laws provided that it is not merely algorithm-based software but it is an invention as well. But, without any proper legislation in place, defining the scope and protection of software as a trade secret seems like a limited and restricted option for the protection of the Intellectual Property vested in this software. 

In this era of advancing digital technologies, having these limited options for the protection of one’s original work in the field of software and computers might lead to a lack of newer innovation and creativity. Hence it is essential that the laws which are so vaguely made are amended and developed to protect a creator’s work and ensure that they are not disadvantaged at any point in time.  

References

  1. https://www.livemint.com/industry/infotech/indian-it-sector-sees-highest-growth-in-a-decade-adds-4-5-lakh-new-jobs-11644908035968.html
  2. https://www.law.cornell.edu/wex/intellectual_property#:~:text=Overview,monopoly%20in%20the%20protected%20property.
  3. https://www.techtarget.com/searchapparchitecture/definition/software#:~:text=Software%20is%20a%20set%20of,that%20run%20on%20a%20device.
  4. https://copyright.gov.in/
  5. https://www.wipo.int/patents/en/
  6. https://indiankanoon.org/doc/797096/#:~:text=(z)%20%E2%80%9Cwork%20of%20joint,sculpture%E2%80%9D%20includes%20casts%20and%20models.
  7. https://indiankanoon.org/doc/1240329/#:~:text=148.,of%20the%20person%20delivering%20them.
  8. https://www.indiafilings.com/learn/copyright-infringement-in-india/#:~:text=In%20the%20case%20of%20criminal,1%2C00%2C000%2F%2D.
  9. https://www.wipo.int/ip-development/en/agenda/flexibilities/details.jsp?id=8825#:~:text=Under%20this%20provision%20(Section%203,only%20computer%20program%20per%20se.
  10. https://ipindia.gov.in/writereaddata/Portal/IPOAct/1_69_1_patent_2005.pdf
  11. https://legislative.gov.in/sites/default/files/A1872-09.pdf
  12. https://indiankanoon.org/doc/153638/
  13. https://www.investopedia.com/terms/l/licensing-agreement.asp#:~:text=Licensing%20agreements%20are%20legal%20contracts%20that%20are%20written%20between%20two,to%20which%20licensing%20is%20allowed.

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