44 www.worldipreview.com

MURKY WATERS: SOFTWARE INNOVATIONS AND

BUSINESS METHODS IN INDIA

Patent protection in India is governed by

the Indian Patents Act 1970. Indian so�ware

companies such as Infosys, TCS, Wipro and many

multinational companies have been proactive in

#ling patent applications for their innovations

in India. �is is evident from the annual report

of 2010–2011 published by the Indian Patent

O%ce, which indicates that in the year 2010–

2011, around 219 applications were #led in the

#eld of bioinformatics and 9,594 applications in

the #eld of computer science/electronics, which

SOFTWARE PATENTS

44 World Intellectual Property Review March/April 2013

�e so�ware industry has been one of the most

promising sectors of the global economy. Many

so�ware companies come up with creative

business models in their endeavour to grow. In

recent years, it has been observed that so�ware

companies ardently seek intellectual property

protection as part of their business strategies to

build on their assets.

In India, so�ware and computer programs are

protected under the Indian Copyright Act 1957.

is an increase of 12.6 percent over the previous

year. In the same year, 892 patents were granted

in the #eld of computer science/electronics.

�e grant of so�ware patents is a debatable subject

matter under the Indian patent regime. �e Indian

Patent Act, 1970 under Section 3(k) provides that

“a mathematical or business method or a computer

program per se or algorithm” is non-patentable,

which raises the questions of what is actually

patentable under the act.

45World Intellectual Property Review March/April 2013www.worldipreview.com

SOFTWARE PATENTS

As per the guidelines of the dra� manual, the

method claim should clearly de#ne the steps

involved in carrying out the invention. It should

have a technical character—in other words, it

should solve a technical problem. �e claim

orienting towards a ‘process/method’ should

contain a hardware or machine limitation. In

view of these guidelines it would be safe to

interpret that so�ware in conjunction with a

speci#c hardware or a device or apparatus, which

results in a substantial technical e9ect, may be

patentable.

�e recent prosecution trend based on the

Controller’s decisions throws light on a few

interesting facts. In some of these decisions, a

number of patent applications that were initially

objected to under Section 3(k) for innovations

involving so�ware or algorithms, eventually

obtained a grant. In a case decided in May 2012,

the Controller had objected that the claims of

the invention fell within the scope of Section

3(k), because it relates to a computer program.

�erefore, the invention claimed in these claims

was not patentable.

The argument presented in the case was that

the invention claims a method for a process

containing various steps being performed by

the structural components for fetching an

instruction from the memory for execution

in a processor. It was argued that the method

claims do not claim the software to perform

said steps and hence the subject matter of the

method claims cannot be said to be a computer

program per se. The case was granted in

acceptance of this argument. In view of such

decisions, it would be safe to say that the

presence of substantial technical effect and

hardware limitations in the claims may help

overcome such objections.

Business methods

Section 3(k) also provides that business

methods are non-patentable. Business method

patents are scrutinised more than so�ware

innovations. �is is re:ected in the notable

pre-grant opposition involving Yahoo Inc and

Redi9.com. In this case, the IP Appellate Board

(IPAB) held that business method patents are

not an appropriate subject matter in India. �e

case involved a patent application, dated May

14, 2004, #led by Overture Services Inc of the

US for a business method.

Yahoo acquired Overture in 2003. �e

application was examined and claims were

objected to under Section 3(k), but the applicant

successfully overcame the objections in the

examination proceedings. �e applicant was

It has been observed that Section 3(m), which

provides that “a mere scheme or rule or method

of performing a mental act” is non-patentable, is

also cited for so�ware innovations that do not

involve hardware limitations.

It is interesting to explore the possibility or

probability of obtaining patent protection for

software innovations in India. The manual

of patent office practice, published in 2011,

specifies that the claims directed at computer

program products are computer programs

per se stored in a computer readable medium

and as such, are not allowable. From the

draft manual published by the Indian Patent

Office in 2008, it is a common understanding

that methods implemented by software that

lack technical character and methods with

a technical character but lacking hardware

limitations in the specification are not

patentable.

Software companies have long struggled

with how best to protect their IP in India,

as Shivendra Singh explains.

46 www.worldipreview.comWorld Intellectual Property Review March/April 2013

IP protection and proactively protecting one’s

IP continue to be necessary factors to derive

economic value from so�ware innovations.

Shivendra Singh is a patent agent and associate

with Krishna and Saurastri Associates. He can be

contacted at: shivendra@krishnaandsaurastri.com

SOFTWARE PATENTS

informed on June 9, 2006 that the application

was found to be in order for grant, but only

a�er disposal of any pre-grant opposition. On

April 20, 2007 the application was published.

Redi9 #led a pre-grant opposition on October

27, 2007.

Meanwhile, Yahoo Inc informed the patent o%ce

that it had taken over the original applicant.

Yahoo Inc was informed that the application did

not pass the patentability test and was therefore

rejected.

Shivendra Singh holds a Bachelor’s

degree in electronic engineering and

is currently pursuing an LLB from the

Government Law College in Mumbai.

Singh has extensive experience in providing

freedom to operate opinions, due diligence,

patent dra�ing and prosecuting patent

applications at the Indian Patent O%ce.

Yahoo Inc #led an appeal with the IPAB against

the Controller’s decision, arguing, among other

things, that many such patents had been granted

to Google.

The IPAB in its decision dated December

8, 2011 dismissed the appeal, stating that

“There are huge innovations in the computers

themselves, but the invention claimed is not

for the machine but for the method. From

whichever point of time we look at it, it still

looks to be a business method.”

As we look ahead to the future of so�ware in India,

it is evident that with the growing competition in

the Indian market an apposite IP protection for

the so�ware technologies is a must.

Patents involving so�ware innovations are

di%cult to interpret on most occasions, but in the

present scenario when companies #nd di9erent

ways to obtain protection for their so�ware, an

indolent approach by others may prove to be

adverse for their growth.

�e progress for protecting IP in so�ware

in India has been slow. Nevertheless, careful

strategy, adequate understanding of appropriate