PATENTABILITY OF SOFTWARES IN THE INDIAN JURISDICTION

INTRODUCTION

S.3(k) of the Indian Patents Act, 1970 provide absolute exceptions to the patentability of “mathematical methods, business methods, computer programme per se or algorithm” which are not deemed patentable under the Act. Hence the question arises why the legislature of our country and many other jurisdictions considered it necessary to exclude most software from being patentable while only allowing patents in few exceptional cases? This can be due to multiple reasons:

1. Software Patents, if allowed, incentivize more patenting rather than innovation. Upon observing the history of Patent laws in the US and EU, it can be clearly seen that after the legislature allowed for patents in these jurisdictions, the number of patents that were filed in this domain increased exponentially, and many of these filed patents did not have a novel character to them. Hence, allowing software patents may result in the abuse of such provisions.
2. Even under the most IPR-stabilized jurisdictions like the US, the distinction between software that can be patented from the ones that are ineligible remains a blurry one. A set of guidelines would be needed to set apart patentable software from unpatentable ones, to clarify on what achieves a sufficient level of ‘technical effect’ to warrant the grant of patents.
3. Studies have indicated that software patents have an ill-effect on prospering innovation. This is because allowing these patents on a large scale open the doors for an increase in the transaction costs for companies, many of which are start-ups. The barrier of litigation costs, filing of patent applications, contesting claims of these applications that it would create may prove to be detrimental, especially for a developing economy like India.

These issues have to be kept in mind to gain a better understanding of the laws related to the patentability of software/ ML/ AI and mathematical models. An overview of patent laws in India, the EU and USA are provided in the upcoming parts to help navigate someone toward the appropriate jurisdiction that has the best probability of granting such patents.

INTELLECTUAL PROPERTY PROTECTION OF SOFTWARES IN INDIA:

COPYRIGHT PROTECTION

Before looking at the patentability of Softwares, it is important to mention that the “Indian Copyright Act of 1957” was amended to include computer software as a ‘literary work’ in 1984, which was further amended in 1994. India, hence, became a pioneer in providing legal protection to computer software, enforces stringent rules against unauthorized copying or distribution of copyrighted software, and the same has been outlined in Section 14 of the Act. The Act only permits creating a backup copy for temporary protection against loss or damage to the original. Unauthorized sale, hire, or distribution of software copies is prohibited without the copyright holder’s explicit consent under s.14.

Hence, Software automatically receives copyright protection without the need for patenting. However, this form of protection has limitations. While patents safeguard the functionality of a product, copyright only covers the expression of an idea, not the inventive concepts within the software itself.

PATENT PROTECTION

Section 3(k) of Indian Patent’s Act, 1970 addresses absolute exceptions to the patentability relating to “mathematical methods, business methods, computer program per se or algorithm” which are not considered patentable.

However, there software may be patented under exceptional cases. The legislative intent behind using the term ‘per se’ was elaborated in the Joint Committee Report while introducing the Patents (Amendment) Act, 2002, which stated “”This change has been proposed because sometimes the computer program may include certain other things, ancillary thereto or developed thereon.” Hence, coupling software with hardware allows the software to be patentable in certain circumstances. The Indian patent system, hence, often sees software-related patents being granted by smartly incorporating hardware components, navigating the “per se” restriction applicable only to computer programs.

Another exception to the rule is when the software has a “technical effect”, or the software must be more than an algorithm and must be a technological invention that qualifies for such a patent.  In Union of India &Ors. v. FeridAllani 2019, the Court decided that, considering the prevalence of computer programs in contemporary appliances like refrigerators, cars, and ovens, it would be retrogressive to declare that they are not patentable. If this were the case, inventions using blockchain technology, artificial intelligence, and other digital goods would not be eligible for patent protection.

The court further declared that an invention, even one that is based on a computer program, is patentable provided it shows a technical impact or contribution. Because it expressly establishes that Section 3(k) does not apply to all discoveries involving computer programs or software, this judgment is among the most significant rulings made in India on software patenting.

According to the IPO Guidelines on CRIs, a few generic instances of technical effects are as follows:

• Faster;
• Shorter hard drive access times;
• Better control over a robotic arm;
• More economical use of memory;
• More effective data compression techniques;
• More effective data base search strategies;
• Better interface design; and
• Better radio signal receiving and transmission.

Recently, The Delhi High Court overturned a patent denial that was based on Section 3(k) of the Patents Act which pertained to a “computer program per se or algorithm” in Raytheon Company v. Controller General of Patents and Designs. The court upheld its rulings in Ferid Allani and Microsoft Technology Licensing, holding that the technological impact or contribution that innovation produces should be the primary consideration in situations involving computer-related inventions. The court held that there is no legal basis for requiring claims to include innovative hardware characteristics. It further emphasized that 2017 version of the rules, which do not impose any such requirements. In fact, the 2017 guidelines insist that in examination of computer-related inventions, the examiner’s focus should be on the substance of the claims and not on form or presentation.

CONCLUSION

In conclusion, the legal landscape in India balances the need to foster genuine innovation against potential abuse of patent rights, aligning with global trends in technology protection and highlighting the importance of understanding these legal nuances for innovators and policymakers. Due to the evolving nature of technology, especially in fields like AI, blockchain, and digital goods, the patentability laws relating to software are bound to change sooner or later, opening up more avenues for the patentability of software.