India: Aspects of Patentability of Software Programmes in India

The Indian Patent Office on 19th February, 2016 released guidelines related to examination of Computer Related Inventions (CRIs)[1]. These guidelines are meant to aid and guide the examiners at the Patent Office in determining whether a CRI claimed as an invention falls within the category of excluded subject matter (subject-matters for which patents cannot be granted) as prescribed by S.3(k) of the Patents Act, 1970. Determining whether a claimed invention falls in the category of subject-matter statutorily excluded from patentability is condition precedent to examining the claimed invention further for other tests of patentability.

S.3(k) of the Patents Act, 1970 excludes from patentability: a mathematical or business method or a computer programme per se or algorithms. S.3(k) was added in 2002 by way of an amendment of the Patents Act, 1970.

An earlier version of the guidelines was released by the Patent Office in August, 2015. The Patent Office received feedback and objections on these earlier guidelines from various stakeholders. The objections inter alia suggested that the issued guidelines greatly broadened the scope of what could be claimed as a software patent and it was apprehended that this would lead to miring of the software sector in patent litigation and in turn hamper the productivity of the sector. The objections to this end also suggested that the guidelines broadened the scope of what could be claimed as software patent to such an extent that they fell afoul of the Patents Act 1970 and Rules made thereunder, and thus were ultra vires the same.  

The Patent Office released the latest guidelines after taking into consideration the feedback it received from stakeholders on the earlier version of the guidelines.

The current guidelines released on 19.02.2016 now prescribe a three-step test to determine whether a CRI falls within the category of excluded subject-matter under S.3(k), as follows:

(1) Properly construe the claim and identify the actual contribution; 

(2) If the contribution lies only in mathematical method, business method or algorithm, deny the claim; 

(3) If the contribution lies in the field of computer programme, check whether it is claimed in conjunction with a novel hardware and proceed to other steps to determine patentability with respect to the invention. The computer programme in itself is never patentable. If the contribution lies solely in the computer programme, deny the claim. If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability.

It is to be noted that this three-step test does not suggest that a computer programme is not patentable under any circumstance. What the emphasis of the test appears to be is that a computer programme by itself or computer programme per se might not be patentable unless it is supplemented with 'something more' in the claimed invention in terms of hardware. This appears to be the import of the words: "whether it is claimed in conjunction with a novel hardware " and "If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability". Thus there should be 'something more' in the claimed invention in terms of hardware beyond just the computer programme that pulls the invention out of the ambit of the statutory prohibition of S.3(k). 

Alignment with the position in US:

The formulation of the three-step test in this particular form by the Indian Patent Office appears to bring the process for determining patentability of computer programmes in India in line with the law laid down in this regard by the US Supreme Court in the Alice v. CLS Bank[2] case in 2014.

The patent law jurisprudence as developed by Courts in US excludes from patentability matters that would fall in the category of abstract ideas (like mathematical equations, algorithms etc.).

The US Supreme Court in the Alice case set about to clarify and lay down the law in clear terms and dispel the confusion related to the patentability of computer programmes as evidenced earlier in the Bilski [3]case and in various other judgments of the Federal Circuit Court of Appeals.

The US Supreme Court in the Alice case formulated the test as a two-step process that is to be invoked once the relevant claim(s) in the invention is/are identified. The first step is to determine whether the claim falls within the category of subject matter excluded as abstract ideas. In US patent law jurisprudence the subject matter excluded as abstract ideas would include the matters excluded under S.3(k) of the Indian Patent Act, 1970 like: mathematical or business methods; computer programmes per se; and algorithms. The second step is to then ask the question whether there is 'something more' in the invention that can make the invention patentable regardless of the fact that the claim is directed towards a so called abstract matter.

Following this step-wise test the Court in Alice found a claim directed towards a computer programme implementing a method of risk-reduction in financial transactions through the use of a trusted intermediary to not be patentable. The Court could not find that 'something more' in the claims that would pull the computer programme in this case implementing a particular business method out of the ambit of abstract ideas. A generic computer implementation of the said computer programme was found to be not sufficient by the Court for patentability.

The Court in Alice  also applied the two-step test to analyze its own earlier judgment in Diamond v. Diehr (1981) and found the invention there to be patentable and the judgment correct. The claim in Diehr was directed to a mathematical equation implemented as a computer programme that also included miscellaneous pieces of hardware including a Thermocouple to determine when rubber was cured in the curing process. The Court found that the presence of additional hardware like the Thermocouple along with the computer programme was sufficient to take the invention in this claim out of the ambit of abstract ideas.

It is to be noted that it appears that the three-step test outlined by the Indian Patent Office in the latest guidelines related to examination of CRIs if applied to Alice and Diehr would in all likelihood give the same results as those arrived at by the US Supreme Court in Alice. That is, the claim in Alice would be likely found not patentable as per the guidelines, while the claim in Diehr would likely be found patentable as per the guidelines due to presence of "novel hardware" alongside the software in the claimed invention.

A corollary of this correspondence is that the three-step test in India would be hobbled by the same difficulty that the test laid down in Alice appears to face. Namely, what is 'something more' and how much more is 'something' more' when it comes to analyzing the hardware accompanying the computer programme in the claimed invention. The answer to this question can be expected to leave open some scope for judicial interpretation and for corresponding arguments to be made by counsels on both sides in particular cases that may be agitated in the future.

It is to be noted that the three-step test now laid down by the Indian Patent Office (and read with Alice as above) would seem to leave a number of software patents vulnerable to challenge that do not meet the criteria laid down. Inventions claiming business methods like online searching etc. implemented as computer programmes that can be run on generic computers are also left vulnerable now -as illustrated in some of the examples appended to the new guidelines issued by the Indian Patent Office. 

Divergence from the position in EU and UK:

The bar on patentability of computer programmes in the EU/UK on the other hand appears to be lower. The law in this regard is perhaps influenced and to some extent corresponds to the law elaborated by the US Federal Court of Appeals in regard to software patents before the US Supreme Court stepped in through the Alice case to circumscribe the patentability of software.

Article 52 of the European Patent Convention provides inter alia that mathematical methods, methods for doing business and programs for computers 'as such' are barred from patentability. 

The jurisprudence related to patentability of computer programmes (and interpretation of above Article 52) in the EU/UK appears to be essentially guided by the 'technical effect/contribution test' as outlined by the Courts in numerous judgments like VICOM Systems[4]IBM[5]Microsoft Clipboard[6] case.

The 'technical effect/contribution test' it will be seen is by its nature a very general and flexible test that can encompass a wide variety of computer programmes within the ambit of patentability. For instance, the said test was applied to find even a 'Clipboard' for transfer of data implemented purely in software in the Microsoft Clipboard case to be subject-matter capable of being patented.

The three-step test of the Indian Patent Office (and the Alice case) in all probability would not arrive at the same result. That is, in all likelihood these tests when applied to the Microsoft Clipboard case would find the subject matter involved there as not patentable.

Section 1(2) of the UK Patents Act, 1977 provides inter alia that mathematical methods, methods for doing business and programs for computers 'as such' are not patentable.

The Courts in UK appear to have largely adopted the jurisprudence prevalent in the EU (as also evidenced in the VIACOM case) in regard to patentability of computer programmes.

Courts in UK have adopted a somewhat similar 'technical effect/contribution test' as outlined in various judgements like  Merrill Lynch[7]Aerotel[8]Halliburton[9] etc.

The three-step test as formulated by the Indian Patent Office would appear to be significantly stricter compared to the position in UK as regards patentability of computer programmes. And would appear to exclude many inventions in the category of computer programmes from patentability that might possibly be patentable in the UK.

Possible dilution of the three-step test in view of the law laid down by the Delhi High Court:

The Hon'ble Delhi High Court recently had an occasion to address itself to the question of patentability of computer programs and interpretation of S.3(k) of the Patents Act, 1970 in the Ericsson[10] case.

S.3(k) of the Patents Act, 1970 excludes from patentability: a mathematical or business method or a computer programme per se or algorithms. 

The Delhi High Court in Ericsson  while disposing off an application for interim injunction passed an order dated 13.03.2015 where it addressed itself to the aforesaid questions. In the same order the Court appears to adopt the 'technical effect/contribution' test of European jurisprudence to interpret S.3(k) in relation to patentability of computer programmes:

"Para120.   Thus, it is appears to me prima facie that any invention which has a technical contribution or has a technical effect and is not merely a computer program per se as alleged by the defendant and the same is patentable. The objection raised by the defendant in the suit for infringement is not tenable, however, admittedly defendant's revocation petitions are pending, the same have to be considered on merit including the objection of Section3(k) and (m). At this interim stage, this court is not impress with the argument of the defendant that the injunction be refused on this ground"

This pronouncement of the Hon'ble Delhi High Court, while made in an order disposing of an application for interim injunction, assumes a further important dimension when seen in the context of the latest guidelines for examination of CRIs issued by the Indian Patent Office. This is so because while the former lays down the law being an order of Court, the latter is what it claims to be: only a set of guidelines.

The guidelines themselves allude to their subsidiary status in Para 1.5 of the guidelines:

"However, these guidelines do not constitute rule making. In case of any conflict between these guidelines and the provisions of the Patents Act, 1970 or the Rules made thereunder, the said provisions of the Act and Rules will prevail over these guidelines. The guidelines are subject to revision from time to time based on interpretations by Courts of law, statutory amendments and valuable inputs from the stakeholders"

Thus it remains open as to how the said order of the Hon'ble Delhi High Court will affect the interpretation of the latest guidelines issued by the Indian Patent Office and the impact of such interpretation on patent-prosecution and patent-litigation.

At the least it appears that this current position in the law related to the patentability of computer programmes leaves open scope for judicial interpretation and for corresponding arguments to be made by counsels on both sides in matters pertaining to patentability of computer programmes.


[1]http://www.ipindia.nic.in/iponew/GuidelinesExamination_CRI_19February2016.pdf

[2] Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014)

[3] In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008)

[4] VICOM/Computer-Related Invention T208/84 [1987] EPOR 74

[5] IBM/Text processing T65/86 [1990] EPOR 181

[6] MICROSOFT/Clipboard formats I T424/03 [2006] EPOR (39) 414

[7] Merrill Lynch's Application [1989] RPC 561

[8] Aerotel Ltd v. Telco Holdings Ltd [2007] RPC (7) 117

[9] Halliburton Energy Services Inc.  v. Smith International (North Sea) Ltd.  [2006] RPC (2) 25

[10] http://lobis.nic.in/ddir/dhc/MAN/judgement/16-03-2015/MAN13032015S10452014.pdf

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