India says no to software patents, here's what this means

As compared to the liberal approach taken by the previous patent guidelines, these guidelines greatly limit the scope of software patents.

By Asheeta Regidi

The Indian Patent Office issued revised guidelines on the patenting of software on February 19, 2016. As compared to the liberal approach taken by the previous guidelines, these guidelines greatly limit the scope of software patents.

Basic Indian Law on Software Patents

The Indian Patents Act, 1970, clearly prohibits the patenting of software ‘per se’ under Section 3. This means that software, in isolation, cannot be patented. Software can, however, be patented in the form of ‘computer related inventions’. These inventions may have one or more features which are either wholly or partially dependent on software to function. Software can, for example, be patented in combination with hardware.

Why were the previous guidelines stayed?

The Indian Patent Office had previously issued guidelines on August 21, 2015. These guidelines caused quite a stir in the software industry, for they allowed patents for the first time for software ‘per se’.

Rules prior to these guidelines only allowed patenting of software that is new in combination with hardware that is also new. Regulation 5.1 diverted from this by permitting patenting of software that is new, in combination with hardware that is not new. The removal of the criteria of new hardware greatly broadens the scope of patent applications which can be made, permitting applications for any new software under this head. Under this regulation, patenting was allowed when the software produces a ‘further technical effect’, i.e., an effect which is unusual, in comparison with the normal effects caused by software.

The guidelines did not give any further clarification as to how to determine if the effect caused by the software is a ‘further technical effect’. Regulation 6.1 contained factors to determine if the software showed ‘technical advancement’. Under these, any software which allows the computer to ‘work in a new way’, which allows the computer to ‘work more efficiently or effectively’, or which causes a ‘change in the functioning of the hardware’ could be patented. These factors were so vaguely worded, that it would have been left to the examiners of patent applications to determine the boundaries of what constitutes ‘technical advancement’ and what doesn’t. These regulations, cumulatively create the possibility of patenting software ‘per se’.

The fear was that these guidelines would greatly benefit multinational corporations, which have the funds to obtain expensive patents and manage patent litigation, as against smaller software developers. The broadly worded regulations could open up floodgates of patent applications which, if granted, would greatly stifle innovation in the software industry. These guidelines were stayed by the Indian Patent Office in December 14 2015.

Scope of the Revised Guidelines

The revised guidelines are in line with the Indian Patents Act, 1970, unlike the previous regulations. The method of permitting software patents only in combination with another process has been reverted to, and the vaguely worded regulations discussed above have been removed entirely. It can be assumed that software patents will now not be granted as easily, given the strict requirements prescribed by these regulations. This limited scope of patentability of software will help preserve innovation in the software industry. The main features of these guidelines are as follows:

Software ‘per se’ cannot be patented

The revised guidelines clarify that software ‘per se’ cannot be patented under any circumstances. For example, claims directed at ‘computer program products’ or ‘storage medium containing instructions’ cannot be patented.

Software in combination with new hardware only can be patented

Software can be patented in combination with new hardware only. Under Regulation 5(3), an examiner while applying the criteria prescribed for determining patentability, must check if the software is combined with new hardware. This regulation reiterates that software ‘per se’ can never be patented. Only when the invention lies in both the software and the hardware will the patent be permitted. For example, under the old regulations, any new software in combination with a regular smartphone could be patented. Under the revised regulations, unless the new software is combined with a unique device, it cannot be patented.

Software showing ‘further technical effect’ cannot be patented

The criteria of ‘further technical effect’ and ‘technical advancement’ as mentioned in the previous guidelines have been removed completely. Instead, a new, detailed test has been laid down under Regulation 4.2. Patent applicants will have to clearly prove that their invention shows either technical advancement or economic significance in comparison with existing inventions in the field.

Software which doesn’t show industrial applicability cannot be patented

Under Regulation 4.3, only software which shows industrial applicability, i.e., it produces a useful or practical activity can be patented. Software producing an aesthetic or intellectual activity cannot be patented. For example, a method of playing games, such as a novel gaming console, may not be patentable.

Detailed disclosure requirements are specified

A significant change in the revised guidelines is the prescription of detailed disclosure requirements for patent applications for software related inventions under Regulation 4.4.  These disclosure requirements will help ensure an adequate analysis of the patent application. For example, if the software is being patented in combination with certain hardware, detailed illustrative drawings of the hardware are to be provided. This will bring out the relevance of the combination of the hardware with the software, thus preventing attempts to obtain a patent for software ‘per se’ by falsely combining it with hardware.

The substance of the claim will be considered, not the form

Claims in the patent applications are often drafted in a way which can mislead the examiner as to the real substance of the claim. For example, a software program performing a certain function is claimed in the patent application as a ‘method’ for performing that function’, as against a ‘software’ for performing that function. Regulation 4.4.4 requires examiners to focus on the substance of the claim as a whole, without relying on the specific form or type of the claim.

Internationally, there have been great diversions as to the approach to be taken towards software patenting. Basic clarity as to factors like ‘further technical effect’ are absent there as well. The previous guidelines attempted to follow the international approach to software patenting, which allows patenting of software in itself which shows a ‘further technical effect’. The ill-effects of this confused approach can be seen in the frequent smartphone patent wars, the ongoing patent litigations and the patent troll phenomenon seen internationally. Until a better solution is found, India’s current approach appears to be preferable.

The author is a lawyer with a specialisation in cyber laws and has co-authored books on the subject.

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