This article is written by Divya S. Sohoni, University of Mumbai, LL.M (1st Year) during her internship at LeDroit India
Scope of the Article
1. Examining Section 3(k) of The Patents Act of 1970 that specifically excludes “computer programme per se.”
2. Analyzing the Indian Patent Office Computer Related Inventions (CRI) Guidelines 2017, and providing a frame of reference for how these guidelines are interpreted.
3. Examination of the “technical effect” and “technical contribution” tests as they relate to conducting software-related patent examinations.
4. Evaluating judicial interpretation in landmark and recent decisions related to CRIs rendered by the Delhi High Court.
5. Providing a comparative reference between Europe and the United States approaches to software patentability in order to understand the context of India.
6. Assessing the various doctrinal ambiguities and inconsistencies that exist regarding the use of Section 3(k) in India.
7. Evaluating the policy implications of software patenting and CRIs such as: innovation incentives; public interest; and the effect of software patenting on the Indian technology sector.
8. Providing suggestions for interpretive and legislative reforms that will enhance clarity and consistency in the area of software patent jurisprudence.
Abstract
The patentability of computer related inventions has generated a large amount of debate in the context of Indian intellectual property law, specifically with Section 3(k) of the Patents Act, 1970 allowing for an exemption of “computer programme per se” from patent protection. While there is no case law specifically dealing with the interpretation of this exclusion, it can be seen that there have been significant developments with respect to how this exclusion has been interpreted through administrative guidelines and how it has evolved through administrative guidelines and through judicial decisions.
This Article will explore the current legal framework relating to the scope of Computer Related Inventions (CRIs) in India, including, but not limited to the examination of the CRI Guidelines, 2017, and relevant judicial decisions including Ferid Allani v. Union of India and Microsoft Technology Licensing LLC v. Union of India which contain discussion on this issue. The emergence of the technical effect test and technical contribution test will also be examined in relation to their doctrinal coherence with respect to the statutory framework of patents in the Indian legal system, and to the respective purposes of both tests and how they are applied.
Finally, this Article will argue that there are interpretative ambiguities that arise as a result of the current approach to balancing incentives for innovation against protections for the public, and that the rapid advances in computing technology highlight the need for greater legislative clarity, in order to enable India to have a patent examination system that is consistent with, transparent, and conducive to innovation.
Keywords
Software Patenting; Computer Related Inventions (CRI); Section 3(k); Patents Act, 1970; Technical Effect; Technical Contribution; Algorithm Exclusion; Intellectual Property Law; Innovation Policy; Delhi High Court Jurisprudence.
Introduction
Long regarded as one of the most controversial topics in Indian IP law, patenting software has recently become even more convoluted by the rapid expansion of technologies such as artificial intelligence, fintech platforms, blockchain systems and other digital technologies. As such, determining if and in what way software-based inventions will receive protection under patent law is pressing issue today.
This debate is primarily formulated by Section 3(k) of the Patents Act, 1970 where it states that “a mathematical or business method or a computer programme per se or algorithms” cannot be patented.
At the time, the Indian Patent Office made an attempt to clarify this provision by publishing its Computer Related Invention (CRI) Guidelines as revised in 2017. These CRI Guidelines are designed to achieve a balance between statutory implications and protecting legitimate technological advances. However, existing inconsistencies in law and ambiguity in the doctrine of law have continued to create uncertainty.
This article will critically analyse how the legislation surrounding patenting software in India has changed as well as discussing the evolution and interpretation of the CRI Guidelines, therefore evaluating how Section 3(k) has been dealt with in the courts. In the current regime, the attempt to balance between innovation and the public interest continues however, the endless ambiguity surrounding the “technical effect” requirement creates an unpredictable environment that may deter technological progress.
Statutory Requirements: Section 3(k) of the Patents Act, 1970
Section 3(k) of the 1970 Patents Act states that the following will not be considered inventions according to the law:
“A mathematical or business method or a computer programme ‘per se’ or algorithms”.
The word ‘Per Se’ is very important. In the ongoing discussions leading up to the amendment in 2002, the term ‘per se’ was left in to allow computer-program applications to be excluded from patentability on their own merits, while also allowing them to be patentable in conjunction with hardware or if they accomplish some technical result.
In this case, Indian Law does not prohibit software patents absolutely, but sets forth the conditional exclusion of software patents from the Patents Act.
The CRI Guidelines
It originated from the Indian Patent Office’s Guidance on Computer Related Inventions (CRIs) that was published in 2013. The Guidelines were revised again in 2016, but were revised a third time in 2017. The 2016 version of the Guidelines had introduced the controversial “novel hardware” requirement for computer-related inventions (i.e., that computer-related inventions had to exhibit both novel hardware and software). It was widely criticized for being an unreasonable and inconsistent interpretation of Section 3(k), which does not explicitly require hardware novelty.
In response to stakeholder comments/objections, the Guidelines have reverted to the approach of “technical effect” and “technical contribution” from the 2017 Guidelines. Evaluators have to determine:
- if the subject matter of the claim is a program for a computer only,
- Also if the computer related invention demonstrates a technical effect/advancement, and
- if it meets the general requirements of Sections 2(1)(j) and (ja) with respect to novelty, inventive step and industrial applicability.
The examples of “technical effect” in the Guidelines include: faster speed, lower hard disk access time, better control over robotic systems, improved security and increased efficiency in transmitting data.
While this clarification of the Guidelines generally brings them into closer conformity with the international standards of patentability, the term “technical effect” is undefined in the CRI Guidelines.
Judicial Interpretation of Section 3(k)
- Ferid Allani v. Union of India (2019)
This landmark decision decided the case Ferid Allani v. Union of India; it was affirmed on appeal by the Delhi High Court, with the following citation: Ferid Allani v. Union of India, 2019 SCC OnLine Del 11867 (Del. HC 2019).
1. Court
Delhi High Court
2. Facts
The petitioner filed an application for a patent for a method and apparatus for accessing sources and services (including information) via the Internet. The Patent Office rejected the application under section 3(k) of the Patents Act, 1970, concluding that the invention in question was a computer program as such and was not capable of being patented.
3. Issue
Is a computer-related invention demonstrating a “technical effect” or “technical contribution” capable of being patented according to section 3(k) of the Patents Act, 1970?
4. Held
The Delhi High Court held that computer programs are capable of being patented if they produce a technical effect or demonstrate technical effects or advances. The matter was remitted to the Patent Office for reconsideration.
5. Ratio Decidendi
The phrase “computer programme per se” only excludes pure software claims as such; therefore, an invention will qualify for patent protection if it provides a technical effect and/or provides a technical solution to a problem in an innovative manner.
6. Significance
The judgment liberalised the interpretation of section 3(k) and brought Indian practice more in line with global norms, particularly the European “technical effect” test of patentability. It serves as the primary authority for CRI patentability in India.
Recent Case Summary
- Case Name: Microsoft Technologies Licensing LLC v. Assistant Controller of Patents and Designs
- Citation: Microsoft Technologies Licensing LLC v. Assistant Controller of Patents and Designs, 2023 SCC OnLine Del 2284 (Del. HC 2023)
- Court: Delhi High Court
- Factual Background: Microsoft applied for a patent relating to software and was denied as Section 3(k) prohibits patents for computer implementation software. The application was rejected because it included programmable elements in its claims and there were elements of software in the claimed invention as well.
- Issue: The issue to be decided in this case was whether or not the mere inclusion of a computer program in a claimed invention was sufficient to bar the acceptance of an application under Section 3(k) of the Patents Act, 1970.
- Holding: The Delhi High Court overturned the rejection of Microsoft’s patent application and remanded the matter back to the Assistant Controller for further consideration. The Court found that the Assistant Controller had failed to follow the appropriate procedures, and had mechanically applied the provisions of Section 3(k). The Court stated that the test to be applied for determining the applicability of Section 3(k) is to conduct a “holistic assessment” of the claimed invention rather than to “mechanically” apply the provisions of Section 3(k).
- Ratio decidendi: The prohibition under Section 3(k) is not to be applied simply because the claimed invention includes a computer program, but rather the proper test for the prohibition is to determine whether or not the subject matter of the claimed invention involves a technical contribution to the art and demonstrates a technical contribution that is beyond the realm of simply conceptualizing the claimed invention as an abstract idea.
- Significance: The Court’s decision provides guidance on the purposive approach to interpreting Section 3(k) of the Patents Act, 1970, and indicates a willingness to recognize and protect legitimate technology innovation that is developed from software-based innovations.
Conceptual Ambiguities of the “Technical Effect” Test
While the Technical Effect Test is recognized in CRI Guidelines, there are still some conceptual ambiguities regarding its application:
- Statutory Definition Not Included: “Technical Effect” does not have a definition in the Patents Act. The introduction of a definition through administrative guidelines raises concerns for the legal certainty of an ultimate decision.
- Variations in Interpretation by Different Examiners: There is a potential for different patent examiners to interpret “Technical Effect” in different ways leading to unpredictable results.
The Distinction between Technical Effect (Section 3(k)) and Technical Advancement (Section 2(1) (ja)): The distinctions between these two terms are often unclear to patent examiners, which confuses patent prosecution and creates a greater likelihood of litigation.
Comparative perspective
European Union
The European Union’s EPC Article 52 provides that “programs for computers as such” are not patentable. However, the EPO uses a further technical effect doctrine, which allows software to get utility patents where it works in concert with a computer to provide a technical result that cannot normally occur from the execution of the program on its own.
Like European law, India’s CRI framework provides for a greater emphasis on making a technical contribution.
United States
In the US, 35 U.S.C. § 101 governs the patentability of software by using the “Alice and Mayo” standard, which was established in Alice Corp. v. CLS Bank, 573 U.S. 208 (2014). The Supreme Court ruled that an abstract idea can only be patented if it has an inventive concept that is significantly different from any prior art.
In comparison, India’s statutory scheme is clearer than the United States statute, but its administrative scheme is harder to comprehend due to its reliance on mere guidelines rather than legislative change.
Considerations on policies:
Innovation contrasted to Public Interest, the dispute on software patents can lead to multiple policy considerations.
Arguments in favour of broadening patentability
Will stimulate Greater domestic innovation and R&D
Will lead to Greater Foreign direct investment into the Technology industry
Will allow India to conform to Global IP (Intellectual Property) Standards.
Arguments Against Broadening Patents
The risk of Algorithm monopolization and monopolization of abstract ideas
The risk of a chilling effect on Startups and Open-Source Communities
The increased probability of substantial litigation arising from the creation of patent thickets.
As India is a developing economy also with a significant IT capability, a careful balance must be struck. to Avoid over-expanding will have a negative impact on access; over-restricting will have a negative impact on innovation.
Analysis and Critical Assessment
The present CRI system represents a practical compromise but is afflicted by inherent structural problems.
- A dependence on Guidelines: The CRI Guidelines are not statute-based and are therefore easily subject to alteration without the need for parliamentary oversight; this leaves us without stability.
- A lack of consistency in examining: Based on empirical evidence, there is a lack of consistency across the actual work product of patent offices.
- Ambiguity in doctrine: The overlap between technical effect or inventive step is producing a lack of doctrinal clarity.
- One possible reform would be to:
Statutorily incorporate a standard for the technical effect;
Define through clear legislative examples the difference between patentable and non-patentable software;
Implement a structured training programme for patent examiners to create uniformity and consistency in how patents are examined.
Judicial rulings have defined through harmonization with international patent standards but legislative reform is needed to achieve long-term certainty.
Conclusion
In India, the patenting of software is controlled by a complex legal system that includes both Section 3(k) of the Patents Act 1970 and CRI Guidelines 2017. While legislative restrictions on granting patents for software were due to concerns regarding public policy, the courts have been willing to use technology-based interpretations of the technical effect (TE) and technical contribution (TC) methods to expand their use.
However, there remains an ongoing lack of clarity regarding how the TE method is applied to new technologies when evaluating patentable software. To support continued growth in innovation while still meeting the public interest, India should provide clearer legislative direction and establish a more consistent administrative approach to software patents.
Ultimately, the future of software patents in India will be determined by the creation of a clearer, more cohesive statutory scheme that can align innovation policies with both constitutional and economic realities.
