Software Patentability: An Exploration

I. Introduction

Software has been defined as “A set of instructions, data, or programs used to operate a computer and execute specific tasks.”³ In the first quarter of 2022, software exports in India were roughly estimated at around 1.20 lakh crores.⁴ Though on the one hand, it is good to note that the software industry is contributing remarkably to the GDP of a country, on the other hand, the industry does suffer from pirated products. The rights of IP holders should be respected. This paper deals with the patentability of software.

II. Why software should be patented?

Patentability of software has not been dealt with under Indian law, but in general, it simply means granting patents to computer programs. Patentability of software is much sought since it paves the way for licensing rights. Though the software is protected under the Copyright Act 1957 as literary works to an extent, it isn’t adequate since the Act comes into the picture only if the software has been as such used by another party. Specific code is alone protected under the Act. Thus patenting software will ensure stronger IP protection.

III. Indian framework

The Patent Act 1970 grants patents to inventions. The invention has been defined under Section 2(1) (j) as⁵ –

“a new product or process involving an inventive step and capable of industrial applicati-on] ¹³ [ ¹⁴ [(ja) "inventive step" means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art;”.

Thus patent would be granted if the invention is novel, non –obvious and which is capable of industrial application

Section 3(k) of the Patent Act, 2002 states that software is not patentable ‘per se’. It reads as

“a mathematical or business method or a computer program per se or algorithms;”⁶

A mathematical algorithm forms software. Thus even though the term software has not been used explicitly, it can be taken in an impliedly way. The term ‘per se’ was inserted by a recommendation of the Joint Parliamentary Committee. The objective is to bring in ancillary computer programs within the ambit of patents.⁷

In 2017 a report published titled “Guidelines for Examination of Computer Related Inventions (CRI)⁸” threw light on the said topic. It states as follows-

“Since patents are granted to inventions, whether products or processes, in all fields of technology, it is important to ascertain from the nature of the claimed Computer-related invention whether it is of a technical nature involving technical advancement as compared to the existing knowledge or having economic significance or both, and is not subject to exclusion under Section 3 of the Patents Act.The sub-section 3(k) excludes mathematical methods or business methods or a computer programme per se, or algorithms from patentability. Computer programmes are often claimed in the form of algorithms as method claims or system claims with some “means‟ indicating the functions of flow charts or process steps. It is well-established that, while establishing patentability, the focus should be on the underlying substance of the invention and not on the particular form in which it is claimed.What is important is to judge the substance of claims taking the whole of the claim together. If any claim in any form such as method/process, apparatus/system/device, computer program product/ computer-readable medium falls under the said excluded categories, such a claim would not be patentable. However, if in substance, the claim, taken as a whole, does not fall in any of the excluded categories, the patent should not be denied.”

Thus Softwares are patentable if it has hardware that is novel, non-obvious and is capable of industrial application. The hardware should be of such a nature that it should form an intrinsic part of the software. Both software and hardware should fulfil the requirements under patent application.

IV. Judicial overview

In Ferid Allani vs. Union of India & Others,⁹ the honourable Delhi HC observed as follows-

"In today's digital world, when most inventions are based on computer programs, it would be retrograde to argue that all such inventions would not be patentable. Innovation in the field of artificial intelligence, blockchain technologies and other digital products would be based on computer programs; however, the same would not become non-patentable inventions – simply for that reason. It is rare to see a product that is not based on a computer program. Whether they are cars and other automobiles, microwave ovens, washing machines, refrigerators, they all have some sort of computer program in-built in them. Thus, the effect that such programs produce, including in digital and electronic products, is crucial in determining the test of patentability. Patent applications in these fields would have to be examined to see if they result in a `technical contribution.”

Thus patent would be granted if the software has some “technical effect” or some “technical contribution”.

In Microsoft Corporation v Yogesh Papat¹⁰ the defendant infringed the copyright of the plaintiff by using copyrighted software without their authorization. The court awarded compensation for the same. In Alice Corp v CLS Bank International¹¹ it was observed that technically improving the performance of a computer is a ground for patentability. The same was reiterated in Telefonaktiebolaget LM Ericsson v. Competition Commission.¹²

In Telefonktiebolaget LM Ericsson (Publ) v. Lava International Ltd,¹³ it was observed that the algorithm coupled with the industrial application is patentable. Patent was granted to Facebook since its invention along with algorithm was capable of industrial application and thus is not hit by Section 3(k). In Yahoo v Controller of Patents & Rediffcom India Limited,¹⁴ it was observed that software programs which form part of business methods are not patentable. Giving the patent right to the same would result in a monopoly. Google was granted a patent for a “technical solution to a technical problem of how to automatically identify phrases in a document collection”. Apple filed for a patent and contended that “although the steps of the method can be performed by means of software but the method constitutes a practical application of this software to produce a useful result bringing an improved technical effect while presenting advantages and overcoming drawbacks of known techniques.” Thus it was granted patent since it filled lacunas in the existing model.

V. Conclusion

It is sad to note that software is being increasingly pirated. Protecting software is of utmost importance. Thus India should strengthen its IP laws to increase software protection. The violation has to be dealt with strictly. It is not to be forgotten that the 21^st century is the era of Information Technology. Protecting software would not only encourage the innovator but would be beneficial to the company and ultimately would contribute to the nation’s GDP.

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