SOFTWARE PATENTING IN INDIA

Palak Jangalwa
National Law University, Delhi

Introduction
A patent can be defined as a grant of exclusive rights to an inventor over his invention for a
limited period of time. The exclusive rights conferred include the right to make, use, exercise,
sell or distribute the invention in India. The term of a patent is twenty years, after the expiry
of which, the invention would fall into the public domain. So basically, patents can be
considered a twenty-year monopoly granted by the State on any invention.
Before the grant of a patent, there are certain requirements that have to be fulfilled.
Patentable subject matter: To be patentable, an invention should fall within the scope of
patentable subject matter. There are certain things that are not considered inventions. They
are listed under Section 3 of the Indian Patent Act, 1970.
Utility: The product should be industrially applicable and can be made and used in an
industry.
Novelty: The invention claimed must be novel and it should be considered with respect to its
prior art.
Obviousness/Inventive Step: The invention should not be obvious to any person having
ordinary skill in the art to which the patent claim relates.
Specification: It is a description of the patent that indicates the scope of the invention.
Software patents are patents granted to particular computer program software. The
intellectual property protection of computer software has been highly debated at the national
and international level. [1] This particular paper will focus on software patenting in India.
There is a debate about how necessary a software patent really is and it is important weigh its
pros and cons before continuing with patenting software.
The goal of patent law is to create incentives for innovation which has many benefits for
society. But, these benefits are countered by the fact that patents reduce competition and can
thus slow the pace of innovation and increase legal costs.
Since the mid-1990s, the number of software patents has continuously and exponentially
increased. Not only has the total number of software patents constantly grown since the
1980s, but also the scale of patents per annum has increased from dozens of patents in 1980
to over 18000 patents in 2003. [2] We have noticed how the development in the world of
information technology is very rapid. Therefore, it might not be worth the money spent on
patenting a software when significant changes can be made to it almost immediately. Most
software entrepreneurs file patent applications as a defensive strategy, not because they see
any major benefit in patenting their software.
Computer programs or software are considered a series of algorithms. Algorithms are not
patentable subject matter, as they are mere expressions of abstract ideas, and not inventions in
themselves. Computer programs, therefore, are also abstract ideas. They stop being ideas
when they come to life in the form of a machine or are applied to a machine or a process that
is capable of being patented. It is very important for the machine or the process to be the
subject matter and not the software. [3] That way, the patent protection will be granted to the
machine or process and not to the software itself. Therefore, the abstract idea that is a part of
a process or a product is not a patentable subject matter and therefore, it can be used in any
other machine as well. [4]
The Manual of Patent Practice of Indian Patent Office [5] describes the policy for Patent of
Program/Software/Algorithms as follows
Applications related to computer inventions may broadly fall under the following categories:
(a) Method/process:
(b) Apparatus/system:
(c) Computer program product.
The examiners of the Patent office have been instructed to look into following aspects while
dealing with such applications. These are with respect to the requirements of a patent.
The method claim should clearly define the steps involved in carrying out the invention. It
should have a technical character i.e. it should solve a technical problem.
The claims should incorporate the details regarding the mode of the implementation of the
invention via hardware or software, for better clarity.
The claim orienting towards a “process/method” should contain a hardware or machine
limitation. Technical applicability of the software claimed as a process or method claim, is
required to be defined in relation with the particular hardware components. Thus, the
“software per se” is differentiated from the software having its technical application in the
industry. A claim directed to a technical process which process is carried out under the
control of a program whether by means of hardware or software), cannot be regarded as
relating to a computer program as such and hence patentable.
For example, “a method for processing seismic data, comprising the steps of collecting the
time varying seismic detector output signals for a plurality of seismic sensors placed in a
cable.” Here the signals are collected from a definite recited structure and hence allowable.
Further in case of the apparatus claim it should clearly define the inventive constructional
hardware features. The claim for an apparatus should incorporate a “process limitation” for
an apparatus, where “limitation” means defining the specific application and not the general
application.
As a general rule, a novel solution to a problem relating to the internal operations of a
computer, although comprising a program or subroutine, will necessarily involve
technological features of the computer hardware or the manner in which it operates and hence
may be patentable.
Algorithms and Computer Software
Before proceeding further, we must understand what an algorithm or computer programmes
are for the purpose of patent.
The word has not been defined in the Patent Act 1970; however, the Patent Manual [6]
defines as follows:
“any invention the performance of which involves the use of computer, computer network or
other programmable apparatus, or an invention one or more features which are realized
wholly or partially by means of a computer program/ programs”.
Computer programs are a set of instructions for controlling a sequence of operations of a
data processing system. It closely resembles a mathematical method. It may be expressed in
various forms e.g., a series of verbal statements, a flowchart, an algorithm, or other coded
form and maybe presented in a form suitable for direct entry into a particular computer, or
may require transcription into a different format (computer language). [7]
It doesn’t matter what kind of medium is used. It may merely be written on paper or recorded
on some machine readable medium such as magnetic tape or disc or optically scanned record,
or it may be permanently recorded in a control store forming part of a computer.

Software Patenting How it all started?

In USA, with the advent of the computer technology, the question arose as to the patentable
protection. The Supreme Court of the USA initially encountered with the then emerging
technology in Gottschalk v. Benson. [8] In that case, Mr. Douglas delivered the opinion of the
Court. The respondents in that case filed in the Patent Office an application for an invention
which was described as being related “to the processing of data by programme and more
particularly to the programmed conversion of numerical information” in general-purpose
digital computers. They claimed a method for converting binary coded decimal (BCD)
numerals into pure binary numerals. After considering numerous decisions, the Supreme
Court came to the following conclusion and held that one may not patent an idea. But in
practical effect, that would be the result if the formula for converting BCD numerals to pure
binary numerals were patented in the instant case. The mathematical formula involved in this
case has not substantial practical application except in connection with a digital computer.
The patent laws should be extended to cover those programmes, a policy matter to which the
Supreme Court was not competent to speak. [9]
The Indian patents act has excluded computer program per se from the list of patentable
inventions. The non-patentability of computer program as such does not preclude the
patenting of computer-implemented inventions. Since the US Supreme Court first addressed
the patentability of computer software in Gottschalk v. Benson[10] there has been
considerable change in this doctrine. The patent sought in on a method of programming a
general-purpose digital computer to convert signals from binary coded decimal form into
pure binary form. A procedure for solving a given type of mathematical problem is known as
an algorithm.
In Gottschalk[11], the Supreme Court was faced with a patent claiming a mathematical
formula, where the claims were not related to
a. Any particular art or technology
b. Any particular apparatus or machinery
c. Any particular end use
The claims simply purported to cover any use of the claimed formula in association with a
general purpose digital computer. The court recognised:
While a scientific truth, or the mathematical expression of it is not a patentable
invention, a novel and useful structure created with the aid of knowledge of scientific
truth may be.
The court went on to hold that the mathematical formula involved in this case had no
substantial practical application except in connection with a digital computer, which meant
that if the patent is valid, it would completely pre-empt the mathematical formula and in
practical effect would be a patent on the algorithm itself. Therefore the patent in question did
not stand.
Almost a decade later, the Supreme Court in Diamond v. Diehr, [12] first recognised that a
computer program may indeed deserve patent protection. [13]
In this case, the patent in question claimed a process for curing synthetic rubber which
includes in several of its steps, the use of a mathematical formula and a programmed digital
computer is patentable subject matter under 35 USC Section 101.
The court held that a physical and chemical process for moulding precision synthetic rubber
products falls within the section 101 categories of possibly patentable subject matter. In
finding the software patentable, the Supreme Court explained:
A claim drawn to a subject matter otherwise statutory does not become non-statutory
simply because it uses a mathematical formula, computer program or digital
computer. A process is not unpatentable simply because it contains a law of nature or
a mathematical algorithm. It is now common place that an application of a law of
nature or mathematical formula to a known structure or process may well be
deserving of patent protection.
In India, the question of patenting software came much later and changes were made
accordingly to the Indian Statute. After the Patents (second amendment) in 2002, the scope of
non patentable subject matter in the Act was amended to include the following: “a
mathematical method or a business method or a computer programme per se or algorithms.”
[14]
The patent on software, algorithms are per se not patentable in India or even in US. Section
3(k) of Patent Act, 1970 states “The following inventions are not inventions within the
meaning of this Act - a mathematical or business method or a computer program per se or
algorithm” This sub-section for the first time in India’s patent history made patentable at least
certain aspects or variations of computer program related inventions. In 2005, the President
of India moved an Ordinance to include computer software that was embedded in hardware
like computer, mobile, televisions etc. and having industrial application under the definition
of patentable inventions by amending Section 3(k) of the Indian Patent Act, 1970.
As a result, the law as it stands now has been reverted to the original position of excluding
computer programs per se from patentability. The “per se” catch again introduced ambiguity
to the law and as a result a number of applications relating to software inventions are filed in
India every year by not claiming computer programs “per se” but attaching a hardware
component to meet the statutory requirements.
Though the section has not been interpreted by the Courts in India so in absence of a clear
interpretation by the Courts we can say the patent protection is accorded when the software is
incorporated into a hardware that has some technical effects like it was discussed previously
in the paper.
There are two challenges that one encounters when dealing with software patents. The first is
about the instrument of patent itself and whether the manner of protection it confers is suited
to the software industry. The second is the nature of software, and whether it should be
subject to patenting. [15]
The complexity of computer software makes it difficult to be understood by any one person.
This capacity for complexity allows for the creation of highly sophisticated products but also
means that they are independent on a vast range of technologies.[16]
Major software may comprise up to 10 million lines of code, potentially thousands of
inventions, any of which might be patented. For example, Apple was sued because its
HyperCard program allegedly violates patent number 4, 736, 308, which covers a specific
technique that, in simplified terms, entails scrolling through a database displaying selected
parts of each line of text.[ ]
In its complexity, software is different from other engineering and mechanical inventions for
which patent protection was devised. The latter are often characterized by large “building
block” inventions that can revolutionize a given mechanical process. Software, especially a
complex program, seldom includes substantial leaps in technology, but rather consists of
adept combinations of many ideas. Whether a software program is a good one does not
generally depend as much on the newness of a specific technique, but instead depends on the
unique combination of known algorithms and methods. Patents may not protect such methods
of innovation.[18]
Software technology is evolving much faster than other industries, even with its own
hardware industry. Against this light, a patent that lasts up to 20 years is extremely alarming.
Research in software is galloping ahead of developments. In most industries, researching new
ideas often costs more money than bringing them to the market. The software industry is, on
the other hand, loaded with ideas. What this means is that on an average of every two years, a
product will have to be replaced in the market. Although, the idea underlying it will remain
the same, the particular means and variants of its applications may have changed radically.
[19]
Coming out with a full-featured product, every two years is costly especially in relation to the
inexpensive idea that backs it.
The objective of granting patent rights should be to foster the growth and evolution of the
industry. By the time an immature technology develops to the point where it can be
incorporated into products, it has a dozen or more patents on it that render it commercially
intractable. A software product can be sold to a particular customer at most once. If it is sold
to that customer again, it must be enhanced with new features and functionality. Therefore,
the industry will remain innovative whether or not software patents exist.
The process of software development by its very nature is incremental, i.e developing of new
software majorly consists of building upon existing algorithms and mathematical formulae.
Patent protection over software or over a set of algorithms within patented software would
inevitably create a thicket of patents which the subsequent software developer might need to
obtain clearance from before he can begin work on it.. This would act as a disincentive for an
aspiring software developer and would adversely affect the growth of the Indian software
industry.[20]
By its nature software industry is ‘innovation driven’ i.e. the only way a software company
can compete and improve its sales or grip over market is by making better and more useful
features available. This innovation which is the driving force behind the Indian software
industry is bound to get affected if a patent protection is provided to software patents. If a
company can easily sustain itself on its ‘invention’ (by obtaining patents upon its software)
and need not remain innovation driven, which would mean that a patent monopoly would
inversely impact innovation and competition in software industry.
There are a certain procedural issues involved which are of determinative nature as to the
allowance of a software patent regime in India. India doesn’t have a well laid out or even a
well practiced software patent practice to guide Indian patent office. In the absence of any
such policy, examining software patent application becomes a very daunting task, coupled
with which the complicated and highly technical nature of software, Indian patent office is
quite incapable to evaluate complicated and technically trivial claims which software patent
often present. Imposing a software patent regime in such a scenario would impact the quality
of such patents which might then prove counterproductive in the development of Indian
software industry.
Since it became widespread and commercially valuable, software has been remarkably
difficult to classify within a specific category of intellectual property protection. This is
because software’s characteristics are unique among protected intellectual creations,
presenting particular difficulties for those drawing analogies with existing legal subjects. [20]
The problem may lie in the fact that software is not a monolithic work. [21] A software may
be considered a set of instructions given to a certain machine that help generate a certain
result. Software may comprise different elements that may fall within different categories of
Intellectual property protection. The manner in which these instructions are given to the
machine may help us identify which type of protection should apply to the software.
These instructions are initially expressed in written form, software may logically be defined
as being subject to copyright protection as literary work. However, software is not only
source code; to be able to operate in a computer, software has to be translated into object
code by a process of compilation. This transaction has no bearing on the type of protection
awarded to software because the object code is a direct result of the source code and should
arguably be linked to its fate.
Patenting or Copyright protection?
The primary benefit of protecting computer software through the patent system is the strength
of protection provided by the patent laws. An owner of a patent may prevent all others from
making, using, or selling the patented invention.
It is not necessary to patent software because the option of copyright protection can be a
better choice in many cases. Copyright protection has been the most common form of
protection used in the software industry over the last 20 years, and it works better for
software than it does for books. This is because a key feature of software is a distinct
separation between executable binary code and editable source code.
Software has traditionally been protected under copyright law since code fits quite easily into
the description of a literary work. Software patenting has recently emerged as an alternative
that software companies are increasingly employing to, in order to protect their products.
Copyright law gives the owner the exclusive right to reproduce the material, issue copies,
perform, adapt and translate the work. However, these rights are tempered by the rights of
fair use which are available to the public. Further, independent recreation of a copyrighted
work would not constitute infringement.
A patent confers on the owner an absolute monopoly which is the right to prevent others from
marking, using, offering for sale without his/her consent. In general, patent protection is a far
stronger method of protection than copyright because the protection extends to the level of
idea embodied by a software and injuncts ancillary uses of an invention as well. It would
weaken copyright in software that is the base of all European software development, because
independent creations protected by copyright would be attackable by patents.[22]
It should be noted that a patent is granted to a person who applies for it first, not to the person
who invents it first. [23]

Conclusion
Computer programs per se are not allowed in India since those fall under the scope of
copyright protection in India. It helps in preventing the confusion with respect to patentable
software. Therefore, any computer program in the form of an algorithm is restricted under
Section 3(k) of the Indian Patent Act.
The researcher agrees with the stance taken by the court as regards patentability of software
since the main purpose of patenting was to promote innovation but even if software are not
patented, innovation is not hindered at all. It helps increase competition which in turn leads
to innovation. Copyright protection is sufficient enough intellectual property protection for
softwares.
End notes
[1] http://www.wipo.int/sme/en/documents/software_patents_fulltext.html
[2] Elad Harison, Intellectual Property Rights, Innovation and Software Technologies: The
Economics of Monopoly Rights and Knowledge Disclosure, Edgar Elgar Publishing, 2008, p.
145
[3] Shilpa Shanbhag, Software Patents Along with Government Support.
[4] Pranesh Prakash, Arguments Against Software Patents in India, The Centre for Internet
and Society.
[5] Manual of Patent Office Practice and Procedure, version 01.11 available at
http://www.ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Pat
ent%20Office%20Practice%20and%20Procedure%20-
%20pdf/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure.pdf
[6] Manual of Patent Office Practice and Procedure, version 01.11 available at
http://www.ipindia.nic.in/ipr/patent/manual/HTML%20AND%20PDF/Manual%20of%20Pat
ent%20Office%20Practice%20and%20Procedure%20-
%20pdf/Manual%20of%20Patent%20Office%20Practice%20and%20Procedure.pdf
[7] Sudha Selvaraj, Patenting Software, Algorithms & Mathematical Processes – Some
Thoughts and Approaches, IIT Kharagpur.
[8] 34 L Ed 2D 273: 409 US 63 (1972)
[9] Saharay’s Commentaries on Patents Law and Practice, Kamal Law House, Kolkata, 2007,
p. 43.
[10] 34 L Ed 2D 273: 409 US 63 (1972)
[11] 34 L Ed 2D 273: 409 US 63 (1972)
[12] 67 L Ed 2d 155: 450 US 175 (1981)
[13] Elizabeth Verkey, Law of Patents, Second Edition, Eastern Book Company, Lucknow,
p. 218.
[14] Section 3(k), Indian Patent Act, 1970.
[15] Tanay Nadi, Satabdee Mohanty, Implications of Software Patenting in India.
[16] Frederick P. Brooks, Jr., , No Silver Bullet Essence and Accidents of Software
Engineering, University of North Carolina at Chapel Hill, April 1997.

[17] Tanay Nadi, Satabdee Mohanty, Implications of Software Patenting in India.

[18] Tanay Nadi, Satabdee Mohanty, Implications of Software Patenting in India.
[19] GigaLaw.com, “Lessons from the United States and Europe on Computer Related
Patents”, Retrieved from http://gigalaw.com/articles/2001all/mccoy200108all.html
[20] Andres Guadamuz Gonzalez, The Software Patent Debate, Journal of Intellectual
Property Law and Practice, p. 1.
[21] Andres Guadamuz Gonzalez, The Software Patent Debate, Journal of Intellectual
Property Law and Practice, p. 3.
[22] Tanay Nadi, Satabdee Mohanty, Implications of Software Patenting in India.
[23] Tanay Nadi, Satabdee Mohanty, Implications of Software Patenting in India.