The Long, Drawn-Out Fight to Regulate Software Patents in India

Multinational software companies are naturally displeased with the Indian patent office’s new guidelines disallowing patents for computer programs.

While intellectual property must be respected, software patents have been shown to stifle innovation and promote monopolies. Credit: Libby Levi/Open Source

While intellectual property must be respected, software patents have been shown to stifle innovation and promote monopolies. Credit: Libby Levi/Open Source

New Delhi: Much like the recent tussle over net neutrality, the struggle to regulate software patents in letter and spirit in India has witnessed multiple ups and downs, the presence of stiff corporate lobbying and a largely positive public consultation process.

Last week, however, the Indian patent office made its strongest-ever  pitch for restricting software patents, quietly issuing a new set of guidelines for official patent examiners, asking them to adhere to a 2002 amendment to the Patents Act that explicitly excludes “mathematical methods, business methods, computer programmes per se and algorithms from the realm of patentable subject matter”.

More importantly, the Controller General of Patents, Designs and Trademarks – as the patent authority is  formally known as – in its new guidelines has also laid down a three-criteria test that, when applied, would strictly regulate what sort of software patents can be granted in the future.

By doing so, the patent office has also conducted a remarkable about-face: just a few months ago, in August, 2015, it had issued a drastically different set of guidelines that would have expanded the conditions under which software patents could be issued.

“This government initially with its approach towards net neutrality and now with its stand on software patents has shown it is betting big on the innovation economy… We hope to continue to work with the government and the Patent Office to limit the grant of irregular patents,” said Mishi Choudhary, executive director at the Software Freedom Law Centre (SFLC), an organisation that has participated in the consultation process for the past few years and pushed for limits on the patenting of software.

A short history

The history of software patents – a notorious form of patent that has empirically been shown to be better at stifling and not incentivising innovation worldwide – in India has been rather curious.  Unlike other socio-economic situations that involve technological innovation and the digital economy, India has been mostly solid on the legislative front when it comes to the patenting of algorithms and other bits of code.

An amendment to the 1970 Patents Act in 2002 laid the foundation for disallowing software patents, after it explicitly included from patentability a “computer programme [sic] per se or algorithms”. This effectively meant that during the period that IT and technology companies really took off in India, software patents have not been allowed.

A number of people believe that the enactment of the Patents Amendment Act in 2005, which included the changes proposed in 2002, has been a major factor in the success of India’s software industry and its booming entrepreneurial ecosystem.

This isn’t to say that there have been no challenges. The first attempt at expanding what forms of software could be patentable was in 2004, when an ordinance was promulgated that would allow the patenting of any computer program that “had industrial/technical application” or those “used in combination with hardware”.

This ordinance was rejected, however, due to strong opposition both within and outside parliament and never found its way into the 2005 Act. When rejecting the ordinance, the Ministry of Commerce and Industry stated: “The clarification was objected to on the ground that this may give rise to monopoly of multinationals.”

“After that, a patent manual was also introduced in 2008. While it makes it very clear that it can’t be considered as official rule-making, there were a lot of consultations and the final version came out in 2011. This [the final patent manual] was clearly in tune with the Act of 2002 and disallowed software patents,” Prasanth Sugathan, Counsel at SFLC, told The Wire.

Despite this legislative foundation, the Indian patent office in 2013, kicked off a series of stakeholder consultations that was ostensibly centred around bringing uniformity and consistency in the patent granting process. During these consultations, however, as the SFLC notes, there was a concerted effort to “re-ignite discussion on the patentability of software”.

The SFLC  note on these consultations is a must-read: discussions were dominated by foreign and multinational software and technology companies, with scant representation from smaller and local players. Intellectual property lawyers, “whose interests could only be to ensure more patent filing and litigation” projected themselves as de-facto industry representatives.

These stakeholder consultations eventually resulted in a set of guidelines in 2015 that was put out by the patent office: guidelines that stated that a piece of software could be patented if it had a “technical contribution on a process which is carried on outside the computer” or in other words if the software had some sort of industrial application.

This wording is crucial because the idea of allowing software patents  for programs that have a technical application or contribution was specifically rejected back in 2005 — as technology lawyer Amlan Mohanty notes astutely here.

After some protests, these guidelines were put on hold and another round of public consultation and discussion took place, in which the relatively new software product lobby iSPIRT participated. This consultation resulted in the  2015 guidelines being reversed and replaced with a new set of recommendations that fully endorse the spirit of the Patent Act.

Under the new guidelines, patent examiners have been asked to not grant a patent if the “contribution lies only in the algorithm”. If however the application is claimed in “conjunction with a novel hardware”, authorities can proceed to the next set of steps in order to determine whether a patent can be granted.

Multinational software companies are naturally displeased with this turnaround by the Indian patent office. In a statementBSA (also known as the ‘Software Alliance’) – an industry lobby group whose members include Apple, Microsoft, Dell and IBM – has noted its displeasure, saying that “ it will continue to work with the government to ensure that software inventions continue to be eligible for patent protection.”

A number of BSA members that The Wire spoke to were quite surprised that the guidelines had been reversed in a matter of four-to-five months. One high-ranking member of an American graphic software product company, who had participated in the consultation process, said that while they would continue their lobbying efforts, “Prime Minister Modi’s start-up and ‘Make-in-India’ plans [in which strict regulation of software patents is important] are a hell of thing to lobby against”.

Current scenario

The new guidelines, which are not a set of actual enforceable rules, seem to comply with the spirit of Indian legislation. Does this mean everything’s okay? Sadly, not. As with most other things in India, at the level of implementation, a number of methods are used to get around the law.

While most types of software patents are disallowed, one SFLC investigation showed that between 2009-2010 and 2010-2011, over 350 patents were granted “in the area of computer related inventions”.

Out of this total, less than six per cent of these patents were granted to Indian companies. While this number is natural – as larger and older multinational companies tend to have a greater amount of intellectual property – it does illustrate how the deck sometimes gets stacked against domestic and younger technology companies.

“Some of the patents that are applied for are obfuscated by using difficult language. They are loaded with terminology that makes it appear that as if it is not a software patent, even though it actually is,” Sugathan said.

While the new guidelines won’t help in retroactively withdrawing patents that have already been given – as this is a long and drawn-out process according to Sugathan – it could help out in a few ongoing cases and will certainly help in future decisions taken by the country’s various patent offices.

One of the more public cases of a multinational company suing smaller Indian companies over technology patents is the case of Swedish telecommunications firm Ericsson, which has sued Micromax and four other Indian smartphone companies over the last three years.

While most of these are over telecommunication-specific patents, the Ericsson versus Intex lawsuit, as SpicyIP has noted in great detail, has a number of issues that concern software patents. As they note, while smartphone maker Intex may be in the wrong, the Delhi high court’s judgment implements a “different and contested interpretation of the existing [software patent] law” that seems contradictory to the 2005 Patent (Amendments) Act

It is here that the new guidelines will help in bringing about not just uniformity, but also making sure that India’s software companies can thrive while still respecting global intellectual property laws. In this regard, the new guidelines can only be seen as a victory; a development that could even serve as a global standard for the confused global Gordian knot that is computer software patentability.

  • Justin

    The Indian rules are quite strict and in my opinion go to far. In the US and Australia, for example, there is a separation between software that solves a technical problem, and computer implemented business methods. I think this is a better approach. See what is happing in the US and Australia here:

  • Mr Lokesh

    Section 3(k) of Indian patent act,1970 is creating a havoc among young developers and software startups. It is very difficult to understand the patentability of software in crucial marketplace.

    In India, software program per se are not patentable. According to a recent notice by patent office in feb 2016, Computer programs having technical applications and innovative step are only patentable in india