Tying up innovation in legal knots

Software patents not only restrict technological progress and encourage monopolisation, but also massively enhance costs through the creation of patent thickets.

Updated - December 04, 2021 11:35 pm IST

Published - October 16, 2015 01:30 am IST

While law-making in Parliament seems to have come to something of a halt over the last couple of years, the executive branch of government, in contravention of its constitutional role, is busy passing regulations that are, in essence, amendments to laws. The examples of executive overreach over the last few years are numerous — for instance, the notification of the Information Technology (Intermediaries Guidelines) Rules, 2011, which, inter alia , expanded the scope of offences under the Indian Penal Code in the context of the Internet by criminalising activities such as blasphemy.

Recently, we have seen yet another instance of executive overreach that could prove to be a substantial impediment to the future of the Indian economy and the government’s plans to promote innovation in the technology sector.

The Patent Office on August 21 released a new set of Guidelines for the Examination of Computer Related Inventions that completely change the extant interpretation of the Patents Act, 1970 and the legislative intent behind certain provisions of the Act.

JPC caveat Section 3(k) of the Patents Act was introduced in 2002, following a Joint Parliamentary Committee (JPC) report on various amendments to the Act proposed initially in 1999. The provision was originally intended as a blanket ban on patenting of all mathematical/business methods, computer programmes and algorithms. However, following the recommendations of the JPC, the exclusion on software was narrowed by the insertion of the words “per se” to qualify “computer programme”. The intent of the JPC was made clear in its report, in that it did not mean for software to be granted patent protection, and that it was only narrowing the exclusion made by Section 3(k) to permit patents for those innovations comprising both hardware and software, where the entire device was worthy of patent protection and not merely the software portion thereof. The JPC was clear in its intent to only permit protections for those inventions where the novelty being protected did not reside exclusively in the software portion of the invention.

The final provision in the Patents Act, 1970 therefore specified that a patent could not be granted for “a mathematical or business method or a computer programme per se or algorithms”, while limiting the scope of patenting of software to certain specific circumstances.

The August 21 Guidelines go directly against this statutory provision as well as globally accepted principles of patenting law, which recognise that abstract ideas, mathematical models and the like all occur naturally/are found in nature and as such are not ‘invented’, but merely ‘discovered’. Further, laws of nature and abstract ideas are considered the basic tools of scientific and technological work. As reaffirmed by the U.S. Supreme Court in Alice Corporation v. CLS Bank , “monopolisation of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of intellectual property law.”

The Guidelines provide that if a claim specifies an apparatus in connection with or a technical process for carrying out a business method or demonstrates a practical application for a mathematical method, it can be considered an invention (i.e. could be the subject of patenting if it meets the other tests of patentability). This, however, clearly violates the letter and spirit of Section 3(k) of the Patents Act. The fact that the statute uses identical language in so far as algorithms, business and mathematical methods is concerned seems to have escaped the notice of the Patent Office, which has, for some reason, treated each very differently.

In so far as software patents are concerned, the Guidelines misinterpret the comments of the JPC and in fact ignore certain critical changes made by Parliament to the Patents (Amendment) Ordinance of 2004, when finally enacted as the Patents (Amendment) Act of 2005.

The Guidelines lay down that a patent should not be denied if a claim directed primarily at software also establishes industrial applicability of the invention. The Guidelines also permit patents to be granted where a claim shows novel software with known hardware that goes beyond the normal interaction with that hardware and that affects a change in functionality of the hardware.

This interpretation ignores the fact that in the 2005 amendment to the Patent Act, Parliament specifically rejected proposed amendments to Section 3(k) that would have the effect of further narrowing the exception created by the section (thereby increasing the scope of patenting software). Parliament specifically rejected proposals to permit software to be patented when industrial or technical application was demonstrated or when in a combination with hardware.

Innovation hobbled By making these changes, the Patent Office, it appears, has given in to the demands of the pro-patenting lobby, thereby putting innovation in India at serious risk.

Research has demonstrated that not only do software patents restrict technological progress and encourage monopolisation, they massively enhance costs through the creation of patent thickets and through the diversion of funds from productive R&D towards litigation and discovery/licenses. Enhancing patent protection for software has only really benefited patent trolls who sue innovative companies based on spurious claims. Given that programmers typically lack the resources to defend against trolls, this basically means a stunting of technical progress and innovation.

Countries like New Zealand and Germany have already moved to reconfigure their patent regimes to abolish software patents — a move India could learn from. This opinion is shared by many leaders from the Indian IT industry, one of whom has recently stated that software patents are a “scourge” to the Indian software industry.

In this context, it is also worth noting that as per World Intellectual Property Organisation statistics, only about 22 per cent of all patents granted by the Indian Patent Office were to Indian residents. Given that the percentage of patents held by Indians is so low, it is also questionable whether it makes economic and strategic sense to permit enhancement of patent protections — thereby excluding Indians from being able to access knowledge that is vital in today’s day and age.

(Rishab Bailey is a lawyer with Knowledge Commons.)

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