Print Friendly, PDF & Email

Insights into Editorial: Tying up Innovation in Legal Knots

Insights into Editorial: Tying up Innovation in Legal Knots

16 October 2015


Paper 3 Topic: Issues relating to intellectual property rights.


The Patent Office in August this year released a new set of Guidelines for the Examination of Computer Related Inventions. However, these new set of guidelines were not widely welcomed. It is being said that these new rules completely change the extant interpretation of the Patents Act, 1970 and the legislative intent behind certain provisions of the Act.

Quick look at Section 3(k) of the patents act and its significance:

Section 3(k) of the Patents Act was introduced in 2002, following a Joint Parliamentary Committee (JPC) report on various amendments to the Act proposed initially in 1999.

  • This provision was originally intended as a blanket ban on patenting of all mathematical/business methods, computer programmes and algorithms.
  • However, following the recommendations of the JPC, the exclusion on software was narrowed by the insertion of the words “per se” to qualify “computer programme”.

What did “per se” mean?

  • By using “per se”, the JPC did not mean that the software be granted patent protection. It was only narrowing the exclusion made by Section 3(k) to permit patents for those innovations comprising both hardware and software, where the entire device was worthy of patent protection and not merely the software portion
  • The JPC was clear in its intent to only permit protections for those inventions where the novelty being protected did not reside exclusively in the software portion of the invention.

The final provision in the Patents Act, 1970 therefore specified that a patent could not be granted for “a mathematical or business method or a computer programme per se or algorithms”, while limiting the scope of patenting of software to certain specific circumstances.

What the new guidelines say?

  • The new Guidelines provide that if a claim specifies an apparatus in connection with or a technical process for carrying out a business method or demonstrates a practical application for a mathematical method, it can be considered an invention (i.e. could be the subject of patenting if it meets the other tests of patentability). However, this violates the letter and spirit of Section 3(k) of the Patents Act.
  • The Guidelines lay down that a patent should not be denied if a claim directed primarily at software also establishes industrial applicability of the invention.
  • The Guidelines also permit patents to be granted where a claim shows novel software with known hardware that goes beyond the normal interaction with that hardware and that affects a change in functionality of the hardware.


  • The new Guidelines go directly against the previous statutory provision.
  • “Laws of nature and abstract ideas are considered the basic tools of scientific and technological work.” However, the new rules are against these globally accepted principles of patenting law, which recognise that abstract ideas, mathematical models and the like all occur naturally/are found in nature and as such are not ‘invented’, but merely ‘discovered’.
  • There is also an allegation that by making these changes, the Patent Office has given in to the demands of the pro-patenting lobby, thereby putting innovation in India at serious risk.
  • Many leaders from the Indian IT industry have stated that software patents are a “scourge” to the Indian software industry.

Current problems:

  • In so far as software patents are concerned, it is being said that the new Guidelines have misinterpreted the earlier comments of the JPC and have also ignored certain critical changes made by Parliament to the Patents (Amendment) Ordinance of 2004, when finally enacted as the Patents (Amendment) Act of 2005.
  • In the 2005 amendment to the Patent Act, Parliament specifically rejected proposed amendments to Section 3(k) that would have the effect of further narrowing the exception created by the section (thereby increasing the scope of patenting software).
  • Parliament also specifically rejected proposals to permit software to be patented when industrial or technical application was demonstrated or when in a combination with hardware.

Why software patents should not be encouraged?

  • Software patents restrict technological progress and encourage monopolisation.
  • They also massively enhance costs through the creation of patent thickets and through the diversion of funds from productive R&D towards litigation and discovery/licenses.
  • They lead to stunting of technical progress and innovation.

The U.S. Supreme Court in Alice Corporation v. CLS Bank has also reaffirmed that, “monopolisation of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of intellectual property law.”

India should also learn from countries like New Zealand and Germany which have already moved to reconfigure their patent regimes to abolish software patents.