Section 3 of the Patents Act, 1970, provides an exclusion to patent eligibility in India, which has remained a matter of debate. The Computer-Related Inventions (CRI) Guidelines of 2017 specifically provide and reinforce that claims must show technical advancement and a practical application that enhances hardware functionality to qualify as a patentable subject matter in India. In Kroll Information Assurance, LLC vs Controller of Patents(C.A.(COMM.IPD-PAT) 439/2022), an appeal was filed where Kroll challenged the refusal of its patent application for a system and method to locate persons via peer-to-peer networks. The Delhi High Court upheld the decision of the Controller of Patents and Designs, where the Controller found that the claimed invention fell within the ambit of exclusion as earmarked under Section 3(k), which excludes "computer programme per se" and "algorithm" from patentability.
Factual Matrix
Kroll Information Assurance (the appellant) filed a national phase patent application in India Patent Application No. 8100/DELNP/2007 titled 'A System, Method and Apparatus to locate at least one type of person, via a Peer-to-Peer Network' for a system to locate persons using peer-to-peer networks, claiming priority from a US application dated April 12, 2005. On examination and after giving the hearing The Controller refused the application on the following grounds viz., non-patentable under Section 3(k) as subject matter being algorithm/computer programme per se; lack of inventive step under Section 2(1)(j) and Amendments beyond the scope of the original claim scope not allowed under Section 59.
Question Before the Appeal Court
The Applicant preferred an appeal against the refusal order dated June 25, 2019, passed by the Assistant Controller of Patents and Designs. The main issue before the High Court was whether the claimed invention fell under "computer programme per se" or "algorithm" that is excluded under Section 3(k) of the Act. The other issue was the lack of inventive step and amendments beyond the scope of the original claim.
Appellant's Case
The Appellant submitted that the claimed invention demonstrated a technical effect by identifying and preventing unauthorised data sharing on peer-to-peer networks, combining hardware and software to enhance security infrastructure. Knoll argued that patents were granted for the same invention in the USA, China, Australia, and Japan, meaning that its inventive merits were found by other patent offices. Knoll submitted that the proposed claim amendments were within scope, and they narrowed the claims, serving as clarifications and thus permissible under Section 59. Knoll argued that the cited prior art (D1) was for a client-server model, whereas the claimed invention targeted peer-to-peer environments with profiling. This clearly proves novelty and inventive step. Knoll also relied on the judgments in Lava International Ltd. vs Telefonaktiebolaget LM Ericsson(2024 SCC OnLine Del 2497) and Microsoft Technology Licensing vs Controller of Patents(2024 SCC OnLine Del 3239).
The Controller's Argument and Reasons for Refusal
The Controller argued that the claimed invention was essentially a computer-implemented algorithm for query processing on a peer-to-peer network, lacking any technical effect or hardware transformation. Therefore, the claims fell squarely under exclusions provided in Section 3(k) for being "computer programme per se" and "algorithm". The Controller submitted that the proposed amendments introduced features that were not disclosed in the original claims, thereby expanding the scope, and were not permissible under Section 59.
Court's Decision on Allowability of Amendments
Citing Nippon A & L Inc. vs Controller of Patents(2022 SCC OnLine Del 1909), where the Court held that amendments must be by disclaimer, correction, or explanation, without expanding claim scope. The Court observed that in this case, additional features narrowed down the scope of the claims, and the additional features were in the nature of explanation, which explains how the locating of a specific file and person is done, and did not include anything that was not disclosed in the Complete Specification. Therefore, the findings of the Controller relating to amendments were erroneous. The Court ruled that these amendments are permissible under Section 59 of the Act, setting aside the order of the Controller so far as it relates to the rejection of the proposed amendments.
Court's Decision on Refusal Under Section 3(k)
The Court looked into CRI guidelines and noted that while assessing the patentability of 'computer programme per se' under Section 3(k) of the Act, the Controller must see whether the invention results in a technical effect or a technical advancement of the hardware. On the applicability judgment in Lava and Microsoft, the Court noted that it was misplaced. The Court found that these judgments were considered in Blackberry vs Controller of Patents & Designs (C.A. (COMM.IPD-PAT) 229/2022), decision date August 30, 2024, and the reasoning adopted by a Coordinate Bench in that case for upholding non-patentability under Section 3(k) of the Act was squarely applicable in the present case. In the Blackberry case, the Court upheld that the algorithms without hardware enhancement are not patentable under Section 3(k).
The Court observed that the invention claimed in the present case was merely a sequence of instructions stored in hardware, without solving any technical problem or offering any technical advancement to the hardware. Additionally, the invention claimed was merely enabling a search within a peer-to-peer network. The Court noted that the function of search was being performed based on the keywords given by the user, which reflected conventional 'computer programme' behaviour, and it could not be stated that the 'computer programme' was enhancing the functionality of the hardware.
Further, the profiling aspect of the invention, which uses keyword lists to search for specific types of users or data, was abstract in nature and lacked any technical character. The Court ruled that "the features claimed in Claims 1 to 7 fall under the category of 'computer programme per se' and Claims 8 to 10 fall under the category of algorithms. Therefore, they will collectively fall within the scope of excluded subject matter under Section 3(k) of the Act, being directed towards a mere 'algorithm' or 'computer program per se' without any demonstrable technical advancement.
The Court upheld the decision of the Controller, concluding that the Controller rightly refused the subject patent application under Section 3(k) of the Act. In view of this, the Court also observed there was no need to examine the sustainability of the rejection under Section 2(1)(j) of the Act.
Conclusion
While dismissing the appeal of Kroll Information Assurance LLC, the Delhi High Court ruled that the claimed invention for a system and method to locate persons via peer-to-peer networks fell under the exclusion of "computer programme per se" and "algorithm" under Section 3(k) of the Patents Act, 1970. The Controller rightly refused the claimed invention on finding that the invention as claimed, even embedded in hardware, did not demonstrate any technical advancement or transform the hardware's functionality necessary to cross the line of the exclusion of "computer programme per se" and "algorithm" as stipulated under Section 3(k) of the Patents Act, 1970. This case once again reaffirms that an invention claiming a computer program embedded in hardware must demonstrate technical advancement or transform the hardware's functionality to qualify for a patent in India.
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