Centre for Internet and Society

Guidelines for Examination of Computer Related Inventions: Mapping the Stakeholders' Response

nehaa — 2015-01-05T17:01:50Z

The procedure and tests surrounding software patenting in India have remained ambiguous since the Parliament introduced the term “per se” through the Patent (Amendment) Act, 2002. In 2013, the Indian Patent Office released Draft Guidelines for the Examination of Computer Related Inventions, in an effort to clarify some of the ambiguity. Through this post, CIS intern, Shashank Singh, analyses the various responses by the stakeholders to these Guidelines and highlights the various issues put forth in the responses.

I. Introduction

In June, 2013 the Office of Controller General of Patents, Designs and Trademarks ('IPO'), released the Draft Guidelines for Examination of Computer Related Inventions ('Guidelines'). The aim of the Guidelines was to provide some much needed clarity around patentability of Computer Related Inventions ('CRI'). The Guidelines discuss the procedure to be adopted by the examiners while examining CRI patent applications. In response to the Guidelines, several stakeholders submitted their comments to either accept, reject or modify the interpretation provided by the IPO. Most of the comments circled around the phraseology of Section 3(k), Patents Act, 1970 ('Act'). In its current form, Section 3(k) reads as "a mathematical or business method or a computer programme per se or algorithms", and comes under Chapter III of the Act which lists inventions that are not patentable. Simply put, this means that software cannot be patented in India, unless it is embedded/combined in with some hardware. While this is the most widely accepted interpretation of this Section 3(k), there have been contradictory interpretations as well.

In this note, I shall look at the various ambiguities surrounding patent application for CRIs. The note has been divided into five parts. Part II briefly reiterates the legislative history behind Section 3(k) and CRI patenting. Part III would briefly summarize the various parts of the Guidelines where the IPO has given their interpretation and opinion on the various issues surrounding CRI patenting. Part IV would then map the position of the stakeholders on each ambiguous point. Lastly, Part V would give the conclusion.

II. Legislative History

Under the Patent Act, 1970, prior to the 2002 Amendment, there was no specific provision under which software could be patented. Nonetheless, there was no explicit embargo on software patenting either. For an invention to be patentable, under Section 2(1) (j) of the Act, which defines an invention, general criteria of novelty, non-obviousness and usefulness must be applied. Software is generally in the form of a mathematical formula or algorithm, both of which are not patentable under the Act as they do not produce anything tangible. However, if combined or embedded in a machine or a computer, the resultant product can be patented as it would pass the aforementioned criteria.

The Parliament, in 1999, sought to amend the Act to bring it in conformity with the changing technological landscape. Consequently, the Patent (Second Amendment) Bill, 1999 was introduced in the Parliament which was then referred to a Joint Parliamentary Committee ('JPC'). The ensuing Bill proposed Section 3(k) in its current phraseology. It reasoned that:

" In the new proposed clause (k) the words ''per se" have been inserted. This change has been proposed because sometimes the computer programme may include certain other things, ancillary thereto or developed thereon. The intention here is not to reject them for grant of patent if they are inventions. However, the computer programmes as such are not intended to be granted patent. This amendment has been proposed to clarify the purpose. "

The Bill was then enacted as the Patent (Amendment) Act, 2002 and reads in its current form as:

Section 3(k) - "a mathematical or business method or a computer programme per se or algorithm"

This created some ambiguity with respect to the interpretation of the term "per se". It was interpreted to mean that software cannot be patented unless it is combined with some hardware. This combination would then have to comply with all the tests of patentability under the Act.

In December, 2004 the Patent (Amendment) Ordinance, 2004 ('Ordinance') was enacted which amended Section 3(k) to divide it into two parts, namely Section 3(k) and Section 3(ka).

"(k) a computer programme per se other than its technical application to industry or a combination with hardware;

(ka) a mathematical method or a business method or algorithms; ".

In February, 2005 the Ordinance was introduced in the Parliament as the Patent (Amendment) Bill, 2005.This included the amendment to Section 3(k) as under the Ordinance. In the Objects and Reasons it clarified that the intention behind the amendment was to " modify and clarify the provisions relating to patenting of software related inventions when they have technical application to industry or in combination with hardware ". However, the final amending Act did not divide Section 3(k) as proposed by the Ordinance. In the press note, by the Ministry of Commerce and Industry it was noted that:

"It is proposed to omit the clarification relating to patenting of software related inventions introduced by the Ordinance as Section 3(k) and 3 (ka). The clarification was objected to on the ground that this may give rise to monopoly of multinationals."

Later, in the same year the IPO release a Manual of Patent Office Practice and Procedure, 2005. Here, it noted that "a computer readable storage medium having a program recorded thereon…irrespective of the medium of its storage are not patentable". This did nothing to clarify the ambiguity that existed.

Similarly, the Parliamentary Standing Committee on Commerce, 88^th Report on the Patent and Trademark System in India (2008) noted the uncertainty surrounding the term 'per se' and said that there was a need to clarify the same. It did not do anything in furtherance of pointing this out.

The 2011 Manual of Patent Office and Procedure, 2011 tried to elaborately deal with the ambiguity. Nonetheless, substantively it did not change the uncertainty. It stated that:

"If the claimed subject matter in a patent application is only a computer programme, it is considered as a computer programme per se and hence not patentable. Claims directed at computer programme products' are computer programmes per se stored in a computer readable medium and as such are not allowable. Even if the claims, inter alia, contain a subject matter which is not a computer programme, it is examined whether such subject matter is sufficiently disclosed in the specification and forms an essential part of the invention."

III. Draft Guidelines for Examination of Computer Related Inventions, 2013

The Draft Guidelines were released on June 28, 2013, following which stakeholders were invited to give comments.

Terms/ Definitions used while dealing with CRIs

At the outset, the IPO put a caveat to say that the Guidelines do not constitute 'rule making'. Consequently, in case of a conflict between the Guidelines and the Act, the Act shall prevail. After the Introduction and Background, in Part I and Part II respectively, the Guidelines looked at the various definitions/terms that correspond to CRI patent claims in Part III. In all, there were 21 such definitions/terms that were sought to be clarified. These definitions can be branched into three categories.

Category I- Where the definition/term was borrowed from some other Indian stature.
Category II- Where the definition/term was construed according to the plain dictionary meaning. Category III- Where the Guidelines tried to give their interpretation to the term/definition.

Under Category I, there were seven definitions whose meaning was derived from some other stature. The meaning of Computer Network, Computer System, Data, Information and Function were derived from Information Technology Act, 2000 ('IT Act'). The definition of Computer Programme was taken from Copyright Act, 1957. Lastly, the definition of Computer was taken from both Copyright Act and IT Act.

Under Category II, the Guidelines underscored five definitions whose meaning was to be borrowed from the Oxford Dictionary. These were algorithm, software, per se, firm ware and hardware. Importantly, it was noted that these definitions have not been defined anywhere in Indian legislations. Lastly, under Category III the Guidelines tried to interpret certain terms according to their understanding. These terms included, Embedded Systems, Technical Effects, Technical Advancement, Mathematical Methods, Business Methods etc.

Categorization of CRI claims

In Part IV, the Guidelines tried to broadly group the various CRI patent applications under four heads. These categorizations tried to give an insight into what the patent examiners look for while rejecting a patent application.

Method/process:

Without defining what a method or process would entail, the Guidelines stated that any claim carrying a preamble with "method/process for..." shall not be patentable. It clarified that claims relating to mathematical methods, business methods, computer programme per se, algorithm or mental act are cannot be patented as they are prime illustrations of claims under this category. Further, the Guidelines gave specific examples of each of the aforementioned claims.

Apparatus/system

The second category consisted of claims whose preamble stated that the patent application was for an "apparatus/system". Under this, the patent application must not only comply with the standard tests of patentability- novelty, inventive step and industrial applicability, but also define the inventive constructional or hardware feature of the CRI. However, in contradictory statements, the Guidelines try to narrow down the prerequisites for a claim under this category, only to state that such claims cannot be patented.

Computer readable medium

While stating this as a category, the Guidelines do not elaborate on what this exactly means and what types of claims would be rejected being under this category.

Computer program product

This category includes computer programs that are expressed on a computer readable medium (CD, DVD, Signal etc.). Further, infusing ambiguity to the debate, the Guidelines failed to differentiate between Computer Readable Medium and Computer Program Product.

Examination Procedure used by IPO

The examination procedure for CRI patent application in the Guidelines is similar to other patent applications which look at novelty, inventive step and industrial applicability. However, claims relating to determination of specific subject matter under the excluded categories (Method/Process, Computer Readable Medium, Apparatus/system, and Computer Program Product) require specific examination skills from the examiner.

Under the excluded category itself, Method/Process requires subjective judgement by the examiner as to whether such a claim qualifies to be classified under this category or not. For investigating the inventive step involved in the 'method/process', the technical advancement over existing knowledge in the technological field has to be analyzed. Any patent claim from a non-technological field shall not be considered.

The Guidelines then tried to clarify the controversial Section 3(k) which eliminates the patenting of computer programmes per se. While previously stating that the definition of the term 'per se' as borrowed from the Oxford dictionary meant 'by itself', the Guidelines stated that computer programme loaded on a general purpose computer or related device cannot be patented. Nonetheless, while filing patent application for a novel hardware, with a loaded computer programme, the likelihood patenting the combination cannot be ruled out. Further, the stated hardware must be something more than a general purpose machine. Essentially, a patent for a novel computer programme combined with a novel hardware, which must be more than a general purpose machine, may be considered for patenting. It then gave several examples which were followed by flowcharts to further clarify ambiguities surrounding CRI patentability. Interestingly, all these examples and flowcharts only listed the inventions that are not patentable.

IV. Response by Stakeholders

Many and various comments were received from 36 stakeholders that including lawyers, civil society members, law firms, students, global and national trade bodies and industry representatives.

Our compilation (and the first level of analysis) of the Stakeholders' Responses is available here.

While all the stakeholders' applauded the much needed transparency in the IPO, substantively they differed considerably on various issues and highlighted some inconsistencies. In this part, I shall map the responses of the various stakeholders'. While doing so, I shall also try and find specific patterns to the responses corresponding to the following segments:

1. Civil Society

2. Law Firm/Advocates ('law Firms')

3. Industry/ Industry Representatives/Global Trade Body (Industry)

4. Students

These segments have been created on the assumption that each of the aforementioned segment would lobby for similar kind of policy.

Interpretation of Section 3(k)

One of the major points of deviation between the stakeholders was regarding the interpretation of Section 3(k) which encapsulates the term "computer programme per se".

The industry responded by critiquing the current CRI patenting regime in India as being "restrictive" ( FICCI , NASSCOM, US India Business Council and Bosch ). While some industry representatives sought clarifications due to uncertain phraseology, there was no industry representative that favored restricted interpretation to exclude software patenting altogether. While opposing the Guidelines, they sought assistance from the legislative history behind introduction of Section 3(k). It was pointed out that the term 'per se' was included to raise the threshold of patentability to something higher than the previous patentability standard, but it did not explicitly exclude patent protection for software.

The general perception of the stakeholders, keeping in mind the current Guidelines, was that for patenting software it had to be combined with some hardware. This combination would then be scrutinized against the triple test of novelty, inventive step and industrial application.

While the Guidelines noted that the hardware involved must not be general purpose hardware and that the chances of software patentability would increase significantly if novelty resides in the hardware; however, most of the industry and global trade bodies disagreed with this interpretation. They argued that if software in combination of hardware technically advances the existing technology, then such an innovation must be patentable, despite being combined with a general purpose machine (Bosch). Another explanation supporting expanded interpretation was that much of the technological innovation is accomplished through software development as compared to hardware innovation and novel software can achieve technical effect without the hardware developments ( BSA- The Software Alliance ). Consequently, software development that allows a general purpose machine to perform tasks that were once performed by a special machine must be incentivized. Some stakeholders interpreted the Guidelines to reason that hardware must be completely disregarded while examining patentability of software (Majumdar & Co. ).

Most of the responses from the civil society argued for a restricted interpretation of Section 3(k) ( Centre for Internet & Society). They concurred with the interpretation provided by the IPO to exclude software patentability. Most of the stakeholders responded seeking further clarification on the subject (Software Freedom Law Centre , K&S Partners and Xellect IP Solutions).

However, within each segments itself there was difference of opinion on the interpretation of Section 3(k). For instance, out of the five civil society members, four wanted to restrictive interpretation while one of them favoured expansive interpretation to include software patenting. Similarly, 13 law firms sought further clarification on the subject matter, while seven argued for expansive interpretation and one of them argued for restricted interpretation. The most consistent response was from the industry that clearly favoured software patenting and called the Guidelines "restrictive". Seven out of the nine industry representatives supported expansive interpretation and the other two sought further clarifications on the subject.

Section 5.4.6- Hardware

The interpretation of Section 3(k) until the release of the Guidelines was that software in combination with some hardware could be considered for patenting. However, the Guidelines increased the threshold stating that this hardware must be "something more than a general purpose machine". A stakeholder pointed out that increasing this threshold would go against the legislative intent as the requirement of a novel hardware has not been mentioned anywhere in the Act ( Anand & Anand ).

The industry's perspective on this matter was largely uniform. They pointed out the large technological field that would be eliminated from the scope of patentability if the interpretation provided by the Guidelines is adopted ( Bosch). Also, the investigation of novelty in the hardware would disincentives inventors in the field of CRIs ( Kan & Krishme ). Most of the stakeholders, across segments, sought more clarification on the role of hardware under Section 3(k) (Majumdar & Co. Centre for Internet & Society).

Comparative Analysis

Much of the criticism surrounding CRI patenting policy in India is based on the comparative inconsistency with similar laws in other jurisdictions. Comparative analysis on the subject has only been provided by the stakeholders that support software patentability. They point out that most countries like US, UK, Japan and the European Patent Convention allow patenting of software, and India must also do the same in order to comply with its international obligations under the TRIPs Agreement. Paradoxically, stakeholders who supported the current practice chose not to comparatively analyze CRI policy of other jurisdictions. While most of the stakeholders simply jumped to analyze comparative jurisprudence on the subject, only one of them gave a reasonable explanation for such a comparison ( LKS). It was noted that the Supreme Court of India and the Intellectual Property Appellate Board regularly borrow from foreign decisions to either accept or deny patents. Therefore, while formulating any policy on the matter, the position in other jurisdictions must be considered.

It was reasoned that the term 'per se' used in the Act, is similar to the European Patent Convention and UK Patent Act, 1977 where the term 'as such' has been used. Therefore, while juxtaposing both the terms, the interpretation of 'per se' must be similar to 'as such'. Consequently, software patenting must be allowed subject to the tests evolved by the courts. Similarly, the term 'as such' has been used by several Asian countries including China, Taiwan, South Korea and Japan. In these countries, software in concert with a specific hardware that resolves a technical problem thereby achieving a technical result can be patented ( Krishna and Saurastri Associates ).

Likewise, while comparing the jurisprudence of US, the landmark case Diamond vs. Diehr, which marked the beginning of software patenting was cited ( Subhojeet Ghosh and US India Business Council ). Several others argued that India must align their laws with global standards ( Bosch, Phillips Intellectual Property and Standards , Sun Smart IP Services , United Overseas Patent Firm).

Business Method

The Guidelines tried to narrow down the definition of 'Business Method' to clarify that such claims cannot be patented. It was urged that the Guidelines reconsider such a blanket embargo ( Legasis Partners- Advocates and Solicitors, Anand & Anand ). While judging patentability, a patent must not be rejected simply because it mentions business method or business method related terminology. What must be examined is whether the inventive step resides in the technical or non-technical part of the claim ( Legasis Partners- Advocates and Solicitors). A distinction must be made differentiating as to what software implementing business method and a software relating to the technical aspect of the transaction ( Anand & Anand ). While the former can be rejected, the latter must be accepted subject to the triple test of patenting.

It was pointed out that reevaluating a business method claim apart from a method involving financial transaction; monopoly claim over trade and new business strategies; monopoly claim over new types of carrying out business and method of increasing revenue; must be rejected (Law Offices of Mohan Associates , Remfry and Sagar, FICCI ). The more overarching opinion of the stakeholders was there is no objection to the exclusion of business method patents, but what constitutes business methods need more clarity (D. Moses Jeyakaran, Law Firm of Naren Thappeta , Japan Intellectual Property Association ).

Critique of Examples and Flowcharts

The Guidelines provided for several examples and flowcharts to foster a better understanding of the subject matter. However, a notable feature of each of these was that they only gave examples of what claims would be rejected. This was sufficiently pointed out by most of the stakeholders who sought more positive examples (Bosch, BSA- The Software Alliance , K&S Partners , FICCI , Xellect IP Solutions, Japan Intellectual Property Association , In-House Intellectual Property Professional Forum, NASSCOM , Obhan & Associates , Remfry & Sagar, Tata Consultancy Services ). It was pointed out that the examples have not sufficiently elaborated on their relation with Section 3(k) ( FICCI ), and some of them are "weak, obscure and incorrect" ( Software Freedom Law Centre). These examples also fail to elaborate on the tests that have previously been applied by the Patent Office ( LKS). Overall, the general perception was that, the examples were confusing and greater clarity along with positive examples was needed ( LKS, Anand & Anand ).

Interestingly, out of the 25 stakeholders' who commented on the illustrations, 16 sought positive examples. Further, most of the positive examples were sought by industry representatives and law firms who supported software patenting.

V. Conclusion

It has been over a year since IPO released the CRI Guidelines. On release, it invited suggestions in order to revise the Guidelines, but the revised version has still not been released by the IPO. The Guidelines were authored from a patent examiner's perspective; however, while doing so it obscured the matter further. It was argued that in totality the application of the Guidelines would now make the patentability of software stricter. It was also pointed out that the Guidelines have not taken into account the legislative history and the specific rejection of the Ordinance in the 2005 Amendment.

The responses received by IPO gave conflicting opinion on the same issue. In general, it can be concluded that the industry and law firms were in favour of allowing software patenting. They sought removal of the hardware requirement for software patentability. Most of the stakeholder's who favoured software patenting also undertook a comparative study of jurisdictions like US, UK, EU and Japan to point out the difference in the software patenting policy. Further, they also wanted the Guidelines to give positive examples wherein CRIs patenting has previously been allowed.

Admittedly, the Guidelines have no legal standing and much like the Patent Manual, they serve merely to guide the patent applicants and provide transparency patent examination. Overall, the Guidelines failed to explain the previous inconsistencies surrounding the subject matter. In conclusion the Guidelines mention that it would periodically release and update the Guidelines incorporating the stakeholder's comments. Considering the diverse set of opinions received by the IPO, it now needs to be seen which suggestions are accepted until the next round of comments.

For more details visit https://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions

Guidelines for Examination of Computer Related Inventions in abeyance

sinha — 2015-12-23T10:06:53Z

The CRI Guidelines were heavily criticised for their failure to address the ambiguities created by Section 3(k) and for expanding the scope of software patent eligibile subject-matter, inter alia. Following several representations and submissions by interested stakeholders, the Controller General has moved the Guidelines into abeyance, until discussions with stakeholders are complete and contentious issues are resolved, and is a welcome step.

CIS has consistently made submissions to the Indian Patent Office on the issue of software patenting( 2015, 2013, 2010). The latest submission was made in September 2015, in response to the Guidelines for Examination of Computer Related Inventions, 2015(“CRI Guidelines/ Guidelines”) in which we highlighted several concerns and presented solutions, and also proposed a definition of "computer programme per se".

In view of the representations made to the Patent Office, on 14th December 2015, the Controller General issued an order to keep the Guidelines in abeyance. Till the issues therein are resolved, the existing provisions on S. 3(k) of chapter 08.03.05.10 of the Manual of Patent Practice and Procedure will continue to be applicable.

The primary fault with the Guidelines lay in the fact that, legally, its scope of was in excess of section 3(k) of the Indian Patent's Act, 1970 (parent statute). The Controller General's order acknowledging the representations and submissions made in response to the Guidelines, and consequently keeping the Guidelines in abeyance is a welcome step.

You may access the order here.

For more details visit https://cis-india.org/a2k/blogs/guidelines-for-examination-of-computer-related-inventions-in-abeyance

Comments on the Guidelines for Examination of Computer Related Inventions (CRIs)

sinha — 2015-10-27T14:46:24Z

Recently, the Indian Patents Office released the Guidelines for Examination of Computer Related Inventions (“2015 Guidelines/ Guidelines”) in an attempt to clarify examination of software related patents in India. This post is a pure analysis of the 2015 Guidelines. The new Guidelines, essentially, narrow the exclusions of secttion 3(k), thereby enlarging the scope of software related applications eligible for a patent grant. More alarmingly, there is low emphasis on the application of the subject matter test, increased ambiguity on the nature of subject matter and an exclusionary list of examples appended to the document. In the following post, CIS highlights these concerns and presents solutions, and also proposes a definition of "computer programme per se". Read on to understand how the new guidelines will potentially lead to an increase in software patenting activity by expanding the scope of patentable subject matter – in negation of the legislative intent of section 3(k) of the Indian Patents Act, 1970.

(Prepared with comments from Pranesh Prakash)

The 2015 Guidelines were stuck in the pipeline for a long time. The first draft was released in 2013 and a round of public consultation later, it paved the way for the current guidelines. The guidelines exist to supplement the practices and procedures followed by the Patent Office (as prescribed in the Indian 'Manual of Patent Office Practice and Procedure')[1], with the specific objective of ensuring consistent and uniform examination of CRI applications.

To begin with, the Guidelines have been significantly trimmed down from their draft version. CIS had commented on the Draft Guidelines in 2013 and broadly observed/recommended the following:

That the explanation to section 3(k) (Para 2.4) include the subject matter test.
That the Guidelines clarify that section 3(k) intending to exclude “computer programs per se” means excluding computer programs by themselves.
Supplying clarifications to the meaning of Inventive Step

Para 5.3 stated: (ja) "inventive step" means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art;

Ambiguity around the terms “technical advance” and “person skilled in the art” persists.

The Guidelines place CRIs in the same pool as other inventions, to the extent of suggesting that CRIs be evaluated on same standards of novelty, non-obviousness and industrial applicability as other inventions. This is problematic, because CRIs are inventions with features such as obsolence and being largely incremental innovations.
That the guidelines prescribing dictionary meanings for undefined terms (in Indian statutes) – was a dangerous prescription to make because the words “firmware”, “software”, “hardware” and “algorithm” have different meanings in different contexts.
That the guidelines had a misguided sense of ordering the paragraphs. The subject matter test (which should be undertaken first) was mentioned after the narrower test for computer programs per se. To ensure correct examination re CRIs the application of the subject matter test should precede all other patent criterion evaluations.[2]

All the above observations/recommendations still hold true – unfortunately, none of them have been incorporated into the 2015 Guidelines. The few unwanted changes that eventually made their way have nullified the progress the 2013 draft made in terms of providing clarity to section 3(k) and narrowing down the scope of software patents. For instance-

Instead of supplying clarity to terms such as “technical effect”, “technical advancement”, the 2015 Guidelines removethe definition of these terms. However, section 6 lists six questions that must be addressed by the examiner to determine the technical advancement of the invention.
Similarly, the explanation to section 3(k) has been deleted in the 2015 text.
The explanation to “inventive step” made reference to the Enercon case (thereby Windsurfing International Inc. and Pozzoli case), for the determination of inventive step. The explanation has also been discarded in the 2015 Guidelines.
Other changes include providing better definition of Algorithms, making thescope of mathematical model and business method claims under section 3(k) more expansive.

Narrowing down excluded subject matter relating to CRIs

Under the crucial section “Determination of excluded subject matter relating to CRIs” (section 5.4 in the draft Guidelines; section 4.5 in 2015 Guidelines), the 2013 draft deemed inventions consisting of computer programmes combined with general purpose computers as non-patentable. However, a computer programme couple with novel hardware was deemed possibly patentable subject matter. That version stated “5.4.6....In cases where the novelty resides in the device, machine or apparatus and if such devices are claimed in combination with the novel or known computer programmes to make their functionality definitive, the claims to these devices may be considered patentable, if the invention has passed the triple test of novelty, inventive step and industrial applicability. ” In the 2015 Guidelines, however, section 4.5 does not shed substantive light on the matter of patentability of software combined with novel hardware. Instead a new section titled “Determinants” has been introduced:

5. Determinants

5.1 For being considered patentable, the subject matter should involve either

- a novel hardware, or

-a novel hardware with a novel computer programme, or

-a novel computer programme with a known hardware which goes beyond the normal interaction with such hardware and affects a change in the functionality and/or performance of the existing hardware.

A computer program, when running on or loaded into a computer, going beyond the “normal” physical interactions between the software and the hardware on which it is run, and is capable of bringing further technical effect may not be considered as exclusion under these provisions.

And,

6. Indicators to determine technical advancement

6.1 While examining CRI applications, the examiner shall confirm that the claims have the requisite technical advancement. The following questions should be addressed by the examiner while determining the technical advancement of the inventions concerning CRIs:

(i) whether the claimed technical feature has a technical contribution on a process which is carried on outside the computer;

(ii) whether the claimed technical feature operates at the level of the architecture of the computer;

(iii) whether the technical contribution is by way of change in the hardware or the functionality of hardware.

(iv) whether the claimed technical contribution results in the computer being

made to operate in a new way;

(v) in case of a computer programme linked with hardware, whether the programme makes the computer a better computer in the sense of running more efficiently and effectively as a computer;

(vi) whether the change in the hardware or the functionality of hardware amounts to technical advancement.

If answer to ANY of the above questions is in affirmative, the invention may not be considered as exclusion under section 3 (k) of the Patents Act, 1970.

It is evident from section 5 that the Patent Office intends to expand the scope of patentable subject matter, and narrow down applicability of section 3(k). The clause “a novel computer programme with a known hardware which goes beyond the normal interaction with such hardware and affects a change in the functionality and/or performance of the existing hardware.” contributes to the expansion. There is no definition as to what will constitute“...normal interaction with such hardware...” Neither do the Guidelines set a standard for assessment of “normal interaction.” Should “normal interaction” be determined from the definition/perspective supplied by the vendor, or from the known universe of interactions possible from that device?

Further, as a stakeholder (Anand and Anand) in their comments on the 2013 draft pointed out, increasing the threshold to a novel hardware (and not just a general purpose computing machine) would go against the legislative intent as the requirement of a novel hardware was not mentioned anywhere in the Act.

These gaps may pave the path for a rather broad scope of patentable software inventions.

Secondary application of the subject matter test

“...Therefore, if a computer programme is not claimed by “in itself” rather, it has been claimed in such manner so as to establish industrial applicability of the invention and fulfills all other criterion of patentability, the patent should not be denied. In such a scenario, the claims in question shall have to be considered taking in to account whole of the claims. ”

The way 3(k) functions is that it's a subject matter test for what an invention is (with non-inventions excluded, since an application that has not been found to be in order may not be granted a patent
under s.43, and to be 'in order', the application has to be "for an invention" (s.6, s.10, etc.)). The tests for novelty, inventive step, and industrial applicability have to in any case be applied, regardless of the subject matter test. So what the above-quoted sentence does is removes the subject matter test, as it uses "in itself" to mean to the exclusion of patentability tests other than subject matter.

Proposed definition of “computer programme per se”

Further, CIS suggests a definition to "computer programme per se":

"Computer programme per se in the relevant clause means (a) any computer programme in the abstract, (b) any computer programme expressed in source code form, including source code recorded on an information storage medium, or (c) any computer programme that can be executed or executes on a general purpose computer, including computer programme object code designed for execution on a general purpose computer that is recorded on an information storage medium."

Furthermore, since the inclusion of computer programmes in a broader application should not render the application ineligible subject matter, CIS previously proposed an addition to the test:

"We propose a new part to the above test to make the clause clearer. The Manual should specify that “the computer programme portions of any claimed invention should be treated as if it were covered by prior art and patentability should thus be determined with respect to the other features of the invention”. This way, we can ensure that an invention which merely uses or implements a computer programme is not granted patent on the basis of the inventiveness of the computer programme per se."

Issues with illustrative examples

CIS observes that most of the examples provided in the document are things that should *not* be awarded patents as per section 3(k).

8.2 describes a computer programme per se, and awarding a patent to this would (additionally has no novelty, no inventive step)
8.4 describes a computer programme per se. General Purpose Computer. (additionally has no novelty, no inventive step)
8.5 describes a computer programme per se. The "repeaters", etc., are software. General Purpose Computer. (additionally has no novelty, no inventive step)
8.6 describes a computer programme per se. (additionally has no novelty, no inventive step)
8.8 describes a computer programme per se. It can be implemented on any general purpose computer. (additionally has no novelty, no inventive step)
8.1 is a simple algorithm, and forms the basis of parallel processing in a computer, of which a wireless device is a subset. (additionally has no novelty, no inventive step)
8.1, 8.3, 8.7 have no novelty, no inventive step, despite not being computer programmes per se.

This issue was also raised by stakeholders in their comments to the IPO on the 2013 draft.

Conclusion

The 2015 Guidelines have narrowed the exclusions in section 3(k) – which does not bode well for innovation, especially innovation by startup enterprises. The new guidelines will permit a larger scope of applications to be granted, which will lead to bigger players in the market amassing huger patent portfolios. There is also an urgent need for clarification on “ novel hardware”.

On a broader level, CIS has repeatedly argued for discarding patent protection for software inventions, because of the unique nature of such inventions and the repercussions software patenting has on subsequent innovative activity. The 2015 Guidelines disappoint on rolling back and clarifying software patenting in India.

[1]Chapter 08.03.05.10 of the Manual, containing provisions pertaining to section 3(k) of the Patents Act, 1970 shall stand deleted with coming into force of these Guidelines for examination of CRIs.

[2]The flow chart in the 2013 draft guidelines show a step by step process of examining CRIs. However, the subject matter determination is done towards the end. There is debate on whether there should be a set order for examining patents. However, in the case of CRIs there must be an exception as the statute explicitly prohibits certain types of patents (business method, algorithm etc). As argued earlier, in order to reduce transaction costs, the subject matter test must be made at the very beginning. There should at least be a preliminary determination as to Section 3(k) to reject patent applications for those inventions that can easily be classified under this provision.

For more details visit https://cis-india.org/a2k/blogs/comments-on-the-guidelines-for-examination-of-computer-related-inventions-cris

CIS Submission on Draft Patent Manual 2010

pranesh — 2014-05-29T06:47:32Z

The patent office has released a revised version of the Draft Manual of Patent Practice and Procedure. Section 8.03.06.10 of the Manual deals with patenting of computer programmes. CIS is happy to note the many improvements in this draft of the Manual from the previous version. CIS made its submission along with a few suggestions that it thinks would make the document even better.

The section has been entirely reformulated and a few of the changes made to the previous version are welcome.

Positive changes in the Manual

The provisions relating to making software with “technological features” and “technical applications” which were present in the previous version have been completely eliminated. Thus, the “technical applications”of a computer programme will not make an otherwise unpatentable computer programme patentable subject matter. This also eliminates the need to arrive at a definition of “technical applications” or “technological features”.
The term “computer implemented inventions” which found no place in the Patent Act, 1970 but was introduced in the previous version of the manual without proper explanation or definition has been eliminated.
The Manual expressly states that mathematical methods (8.03.06.10.b) and business methods (8.03.06.10.c) are not patentable irrespective of the language in which they claims are couched or the form in which they are claimed.
Computer programme products which were considered to be patentable subject matter in the previous version of the manual are considered to be unpatentable subject matter in the new version. The Manual clearly explains computer programme products to be nothing but computer programme per se stored in a computer readable medium. (8.03.06.10.d)
The Manual recognises that no computer programme can be functional without hardware to execute the programme. This means that any computer programme cannot become patentable subject matter merely because it is associated with some hardware. (8.03.06.10.g)
A computer programme which runs on a general purpose known computer is expressly held to be unpatentable subject matter. This is undoubtedly a welcome inclusion since it helps eliminate claims relating to a mere computer programme which may have been considered patentable simply because such computer programme is run using a general purpose computer. This is one of the common ways in which Section 3(k) is circumvented to obtain patent for claims which are for a computer programme per se.

Contentious provisions of the Manual which require amendment/explanation are as follows:

Clause 8.03.06.10.a

Under this provision, mathematical methods, business methods, computer programmes per se and algorithms are not considered as patentable inventions. In relation to computer programs, the law provides a qualification that what is not patentable is only computer program per se.

While this restates the statute correctly, it does so without offering any explanation, which would be preferable. The Manual should explain the scope of the term “per se” and clear the ambiguity surrounding it. The Manual should clearly provide reasons for any computer programme to fall in either category.

We suggest using the following definition of computer programme per se, which has previously been submitted to the Patent Office1:

Computer programme per se in the relevant clause means (a) any computer programme in the abstract, (b) any computer programme expressed in source code form, including source code recorded on an information storage medium, or (c) any computer programme that can be executed or executes on a general purpose computer,2 including computer programme object code designed for execution on a general purpose computer that is recorded on an information storage medium.3

Clause 8.03.06.10.e

If a claim in a patent application is not directed at a computer programme per se it could be patentable, if all other patentability conditions are met. This provision thus necessitates distinguishing computer programmes per se from other types of inventions that use or implement computer programmes.

The clause, while seeking to distinguish computer programmes per se from inventions which use or implement computer programmes, does make clear what “implement computer programmes” means, nor does it clarify what “computer programme per se” is. A relevant suggestion for a definition for “computer programme per se” has been provided above, which would address this problem.

Clause 8.03.06.10.f

The computer programmes are often claimed in the form of algorithms as method claims or system claims with some ‘means’ indicating the function of flow charts or process steps. The algorithm related claims may be even wider than the computer programme claimed by itself, for a programme represents a particular set, the algorithm expresses the principles .

We find that this clause has no relevance to explaining patentability of computer programmes and thus suggest that the same be deleted from the Manual. The Manual should however make it clear that in algorithm-related claims, if the function claimed to be performed by the invention can be done only by means of a computer programme, such claims are not patentable.

Clause 8.03.06.10.g

Essentially, all computer programmes need a combination with some hardware for their functionality. In an application for patent for a new hardware system, the possibility of a computer programme forming part of the claims cannot be ruled out. It has to be carefully considered as to how integrated is the novel hardware with the computer programme. Further, it is also to be considered whether the machine is programme specific or the programme is machine specific. A computer programme which may work on any general purpose known computer does not meet the requirement of patentability.

With regard to cases of computer programmes being combined with hardware, the Manual seems to suggest that the patentability of the combination is dependent on “how integrated the novel hardware [is] with the computer programme.” This language is very vague and ambiguous. In case of an application for patent for a new hardware system, the Manual should make it clear that such claim is eligible only if the inventive conribution resides entirely in the hardware. The Manual should also require the patent applicant to demonstrate exactly how the inventive step resides in the hardware separable from the computer programme.
We propose a new part to the above test to make the clause clearer. The Manual should specify that “the computer programme portions of any claimed invention should be treated as if it were covered by prior art and patentability should thus be determined with respect to the other features of the invention”. This way, we can ensure that an invention which merely uses or implements a computer programme is not granted patent on the basis of the inventiveness of the computer programme per se.
It is indeed laudable that the Manual makes it clear that a computer programme which may work on any general purpose known computer does not meet the requirement of patentability. This should make it clear that a computer programme cannot be patentable simply because it is executed by a special purpose computer as long as a general purpose computer can also execute the same. We suggest the following definition of a general purpose computer, which has already been proposed to the Patent Office, be used:4

A general-purpose computer here means a device capable of running multiple unrelated programs, often simultaneously for different purposes. It will comprise at least of: (1) one or more central processing units, (2) one or more input devices that are not specific to any one program, (3) memory, (4) one or more non volatile mass storage devices, and (5) one or more output devices. However, a general-purpose computer does not include a device that itself represents an inventive contribution to the art.

Clause 8.03.06.10.h

Method claims, whether independent or dependent, reciting computer programs without process limitations in the form of hardware features are not allowable. For a method reciting computer programme to be patentable, it must clearly recite into it limiting hardware integers that enable the program to function .

The Clause dilutes the standard set in the previous clauses. It seems to suggest that any method claim is patentable as long as it is connected to hardware which enable the program to function and define its limitations/scope. This position is untenable since no method claim can be purely a computer programme and use of computer programmes for any specific task would necessarily require hardware to implement the same. Therefore the requirement of hardware limitation to make a computer programme patentable is essentially allowing for any computer programme to be patentable. Not only is such a limitation redundant but it also renders the “per se” requirement in Section 3(k) meaningless. Further, the meaning of the term “hardware integers” in the Clause is unclear. For the purpose of this comment, we assume that it refers to hardware features. The Manual should ensure that the method claim has significant per or post processing activity and is not merely combined with hardware to be patent-eligible. This ensures that any computer programme is not granted patent merely because it has certain trivial pre or post processing activities associated with it.

Clause 8.03.06.10.i

Claims directed at computer programs coupled to hardware, enabling the hardware to perform a certain function may be allowable, if such an invention meets all other conditions of patentability.

The Clause is restating the content of Clause 8.03.06.10.e and our comments on this Clause remain the same as our comments for Clause 8.03.06.10.e.

Requirement of Disclosure

We suggest that the Manual require that an application claiming patent for a computer programme (which does not constitute computer programme per se) necessarily disclose the entire source code. This ensures that the invention can perform exactly all those functions that are described in the patent application. Since different computer programmes can be written (with each having different source code) to perform the same function, it is of utmost importance that the applicant demonstrate the workability of the invention described in the application and such proof can be provided only by disclosing the source code.

Purpose of the Manual

There is no clarity on the purpose and authority of the Manual. We do not know if the Manual attempts to explain the provisions of the Patent Act, 1970 to an applicant or is meant to provide guidance to patent examiners or be binding upon them. If a patent official acts in a manner contradictory to the Manual, the consequences of such action is unclear. The Manual should clarify these questions.

This definition was formulated and submitted by Knowledge Commons, Delhi to the Indian Patent Office in response to the earlier version of the draft manual. The definition was formulated through the collective efforts of Prabir Purkayastha, Richard Fontana of Red Hat, Venkatesh Hariharan, Tahir Amin, Mishi Chowdhury of Software Freedom Law Centre and Jaijit Bhattacharya. See http://osindia.blogspot.com/2009/04/computer-programme-per-se-conundrum.html
We propose the following definition of a general purpose computer - A general-purpose computer here means a device capable of running multiple unrelated programs, often simultaneously for different purposes. It will comprise at least of: (1) one or more central processing units, (2) one or more input devices that are not specific to any one program, (3) memory, (4) one or more non volatile mass storage devices, and (5) one or more output devices. However, a general-purpose computer does not include a device that itself represents an inventive contribution to the art. See also Infra n. 3.
An information storage medium means any disc, tape, perforated media or other information storage device, which, if fed into or located in a computer or computer based equipment is capable of reproducing any information, other than an information storage medium that itself represents an inventive contribution to the art.
This definition was formulated and submitted by Knowledge Commons, Delhi to the Indian Patent Office in response to the earlier version of the draft manual. See http://osindia.blogspot.com/2009/04/computer-programme-per-se-conundrum.html

For more details visit https://cis-india.org/a2k/blogs/cis-submission-draft-patent-manual-2010

Arguments Against Software Patents in India

pranesh — 2012-03-13T10:43:12Z

CIS believes that software patents are harmful for the software industry and for consumers. In this post, Pranesh Prakash looks at the philosophical, legal and practical reasons for holding such a position in India. This is a slightly modified version of a presentation made by Pranesh Prakash at the iTechLaw conference in Bangalore on February 5, 2010, as part of a panel discussing software patents in India, the United States, and the European Union.

This blog post is based on a presentation made at the iTechLaw conference held on February 5, 2010. The audience consisted of lawyers from various corporations and corporate law firms. As is their wont, most lawyers when dealing with software patents get straight to an analysis of law governing the patenting of computer programmes in India and elsewhere, and seeing whether any loopholes exist and can be exploited to patent software. It was refreshing to see at least some lawyers actually going into questions of the need for patents to cover computer programs. In my presentation, I made a multi-pronged case against software patents: (1) philosophical justification against software patents based on the nature of software; (2) legal case against software patents; (3) practical reasons against software patents.

Preamble

Through these arguments, it is sought to be shown that patentability of software is not some arcane, technical question of law, but is a real issue that affect the continued production of new software and the everyday life of the coder/hacker/software programmer/engineer as well as consumers of software (which is, I may remind you, everywhere from your pacemaker to your phone). A preamble to the arguments would note that the main question to ask is: why should we allow for patenting of software? Answering this question will lead us to ask: who benefits from patenting of software. The conclusion that I come to is that patenting of software helps three categories of people: (1) those large software corporations that already have a large number of software patents; (2) those corporations that do not create software, but only trade in patents / sue on the basis of patents ("patent trolls"); (3) patent lawyers. How they don't help small and medium enterprises nor society at large (since they deter, rather than further invention) will be borne out by the rest of these arguments, especially the section on practical reasons against software patents.

What are Patents?

Patents are a twenty-year monopoly granted by the State on any invention. An invention has to have at least four characteristics: (0) patentable subject matter; (1) novelty (it has to be new); (2) inventive step / non-obviousness (even if new, it should not be obvious); (3) application to industry. A monopoly over that invention, thus means that if person X has invented something, then I may not use the core parts of that invention ("the essential claims") in my own invention. This prohibition applies even if I have come upon my invention without having known about X's invention. (Thus, independent creation is not a defence to patent infringement. This distinguishes it, for instance, from copyright law in which two people who created the same work independently of each other can both assert copyright.) Patents cover non-abstract ideas/functionality while copyright covers specific expressions of ideas. To clarify: imagine I make a drawing of a particular machine and describe the procedure of making it. Under patent law, no one else can make that particular machine, while under copyright law, no one can copy that drawing.

Philosophical Justification Against Software Patents

Even without going into the case against patents per se (lack of independent creation as a defence; lack of 'harm' as a criterion leading to internalization of all positive externalities; lack of effective disclosure and publication; etc.), which has been done much more ably by others like Bessen & Meurer (especially in their book Patent Failure) and Boldrin & Levine (in their book Against Intellectual Monopoly, the full text of which is available online).

But there is one essentially philosophical argument against software as subject matter of a patent. Software/computer programs ("instructions for a computer"), as any software engineer would tell you, are merely algorithms ("an effective method for solving a problem using a finite sequence of instructions") that are meant to be understood by a computer or a human who knows how to read that code.

Algorithms are not patentable subject matter, as they are mere expressions of abstract ideas, and not inventions in themselves. Computer programs, similarly, are abstract ideas. They only stop being abstract ideas when embodied in a machine or a process in which it is the machine/process that is the essential claim and not the software. That machine or process being patented would not grant protection to the software itself, but to the whole machine or process. Thus the abstract part of that machine/process (i.e., the computer program) could be used in any other machine/process, as it it is not the subject matter of the patent. Importantly, just because software is required to operate some machine would then not mean that the machine itself is not patentable, just that the software cannot be patented in guise of patenting a machine.

Legal Case Against Software Patents

In India, section 3(k) of the Patent Act reads:

(3) The following are not inventions within the meaning of this Act: (k) a mathematical or business method or computer programme (sic) per se or algorithms.

As one can see, computer programs are place in the same category as "mathematical methods", "algorithms", and "business methods", hence giving legal validity to the idea propounded in the previous section that computer programs are a kind of algorithms (just as algorithms are a kind of mathematical method).

Be that as it may, the best legal minds in India have had to work hard at understanding what exactly "computer programme per se" means. They have cited U.S. case law, U.K. case law, E.U. precedents, and sought to arrive at an understanding of how per se should be understood. While understanding what per se means might be a difficult job, it is much easier to see what it does not mean. For that, we can look at the 2004 Patent Ordinance that Parliament rejected in 2005. In that ordinance, sections 3(k) and (ka) read as follows:

(3) The following are not inventions within the meaning of this Act: (k) a computer programme per se other than its technical application to industry or a combination with hardware; (ka) a mathematical method or a business method or algorithms.

Thus, it is clear that the interpretation that "computer programme per se" excludes "a computer programme that has technical application to industry" and "a computer programme in combination with hardware" is wrong. By rejecting the 2004 Ordinance wording, Parliament has clearly shown that "technical application to industry" and "combination with hardware" do not make a computer programme patentable subject matter.

Indeed, what exactly is "technical application to industry"? "Technical" has various definitions, and a perusal through those definitions would show that barely any computer program can be said not to relate to a technique, not involve "specialized knowledge of applied arts and sciences" (it is code, after all; not everyone can write good algorithms), or not relate to "a practical subject that is organized according to scientific principles" or is "technological". Similarly, all software is, by definition, meant to be used in combination with hardware. Thus, it being used in combination with hardware must not, as argued above, give rise to patentability of otherwise unpatentable subject matter category.

In 2008, the Patent Office published a new 'Draft Manual Of Patent Practice And Procedure' in which it sought to allow patenting of certain method claims for software inventions (while earlier the Patent Office objected to method claims, allowing only device claims with hardware components). This Draft Manual was withdrawn from circulation, with Shri N.N. Prasad (then Joint Secretary of DIPP, the department administering the Patent Office) noting that the parts of the Manual on sections 3(d) and 3(k) had generated a lot of controversy, and were ultra vires the scope of the Manual (which could not override the Patent Act). He promised that those parts would be dropped and the Manual would be re-written. A revised draft of the Manual has not yet been released. Thus the interpretation provided in the Draft Manual (which was based heavily on the interpretation of the U.K. courts) cannot not be relied upon as a basis for arguments in favour of the patentability of software in India.

In October 2008, CIS helped organize a National Public Meeting on Software Patents in which Indian academics, industry, scientists, and FOSS enthusiasts all came to the conclusion that software patents are harmful for both the industry as well as consumers.

Practical Reasons Against Software Patents

This is going to be an attempt at distilling and simplifying some of the main practical arguments against patenting of software.

There are traditionally four incentives that the patent system caters to: (1) incentive to invent; (2) incentive to disclose; (3) incentive to commercialize; and (4) incentive to invent substitutes. Apart from the last, patenting of software does not really aid any of them.

Patent Landmines / Submarine Patents / Patent Gridlocks / No Exception for Independent Creation

Given that computer programs are algorithms, having monopolies over such abstract ideas is detrimental to innovation. Just the metaphors say a lot about software patents: landmines (they cannot be seen/predicted); submarines (they surface out of the blue); gridlocks (because there are so many software patents around the same area of computing, they prevent further innovation in that area, since no program can be written without violating one patent or the other).

Imagine the madness that would have ensued had patents been granted when computer programming was in its infancy. Imagine different methods of sorting (quick sort, bubble sort) that are part of Computer Science 101 had been patented. While those particular instances aren't, similar algorithms, such as data compression algorithms (including the infamous LZW compression method), have been granted patents. Most importantly, even if one codes certain functionality into software independently of the patent holder, that is still violative of the patent. Computer programs being granted patents makes it extremely difficult to create other computer programs that are based on the same abstract ideas. Thus incentives # (1) and (3) are not fulfilled, and indeed, they are harmed. There is no incentive to invent, as one would always be violating one patent or the other. Given that, there is no incentive to commercialize what one has invented, because of fear of patent infringement suits.

An apt illustration of this is the current difficulty of choosing a royalty-free video format for HTML 5, as it shows, in practical terms, how difficult it is to create a video format without violating one patent or the other. While the PNG image format was created to side-step the patent over the LZW compression method used in the GIF image format, bringing Ogg Theora or Dirac (both patent-free video format) to surpass the levels of H.264/MPEG-4 AVC or VC-1 will be very difficult without infringing dozens if not hundreds of software patents. Chris DiBona of Google, while talking about improving Ogg Theora as part of its inclusion in HTML 5 specifications said, "Here’s the challenge: Can Theora move forward without infringing on the other video compression patents?" Just the number of companies and organization that hold patents over H.264 is astounding, and includes: Columbia University, Electronics and Telecommunications Research Institute of Korea (ETRI), France Télécom, Fujitsu, LG Electronics, Matsushita, Mitsubishi, Microsoft, Motorola, Nokia, Philips, Robert Bosch GmbH, Samsung, Sharp, Sony, Toshiba, and Victor Company of Japan (JVC). As is the amount of royalties to be paid ("[t]he maximum royalty for these rights payable by an Enterprise (company and greater than 50% owned subsidiaries) is $3.5 million per year in 2005-2006, $4.25 million per year in 2007-08 and $5 million per year in 2009-10"; with royalty per unit of a decoder-encoder costing upto USD 0.20.)

Indeed, even the most diligent companies cannot guard themselves against software patents. FFII estimates that a very simple online shopping website would violate twenty different patents at the very least. Microsoft recently lost a case against i4i when i4i surfaced with a patent covering custom XML as implemented in MS Office 2003 and MS Office 2007. As a result Microsoft had to ship patches to its millions of customers, to disable the functionality and bypass that patent. The manufacturers of BlackBerry, the Canadian company Research in Motion, had to shell out USD 617 million as settlement to NTP over wireless push e-mail, as it was otherwise faced with the possibility of the court shutting down the BlackBerry service in the U.S. This happened despite there being a well-known method of doing so pre-dating the NTP patents. NTP has also filed cases against AT&T, Sprint Nextel, T-Mobile, Verizon Wireless, and Palm Inc. Microsoft was also hit by Visto Corporation over those same NTP patents, which had been licensed to Visto (a startup).
- Don't These Cases Show How Software Patents Help Small Companies?
  
  The astute reader might be tempted to ask: are not all of these examples of small companies getting their dues from larger companies? Doesn't all of this show that software patents actually help small and medium enterprises (SMEs)? The answer to that is: no. To see why, we need to note the common thread binding i4i, NTP, and Visto. None of them were, at the time of their lawsuits, actually creating new software, and NTP was an out-and-out "non-practising entity"/"patent holding company" AKA, patent troll. i4i was in the process of closing shop, and Visto had just started up. None of these were actually practising the patent. None of these were producing any other software. Thus, none of these companies had anything to lose by going after big companies. In other words, the likes of Microsoft, RIM, Verizon, AT&T, etc., could not file counter-suits of patent infringement, which is normally what happens when SMEs try to assert patent rights against larger corporations. For every patent that the large corporation violates of the smaller corporation, the smaler corporation would be violating at least ten of the larger corporation's. Software patents are more helpful for software companies as a tool for cross-licensing rather than as a way of earning royalties. Even this does not work as a strategy against patent trolls.
Thus, the assertion that was made at the beginning is borne out: software patents help only patent trolls, large corporations that already have large software patent portfolios, and the lawyers who draft these patents and later argue them out in court.
Term of Patents

Twenty years of monopoly rights is outright ludicrous in an industry where the rate of turnover of technology is much faster -- anywhere between two years and five months.
Software Industry Progressed Greatly Without Patents

In India, software patents have never been asserted in courts (even though many have been illegally granted), yet the software industry in India is growing in leaps and bounds. Similarly, most of the big (American) giants of the software industry today grew to their stature by using copyright to "protect" their software, and not patents.
Copyright Exists for Software

As noted above, the code/expression of any software is internationally protected by copyright law. There is no reason to protect the ideas/functionality of that software as well.
Insufficient Disclosure

When ordinary computer programmers cannot understand what a particular software patent covers (which is the overwhelming case), then the patent is of no use. One of the main incentives of the patent system is to encourage gifted inventors to share their genius with the world. It is not about gifted inventors paying equally gifted lawyers to obfuscate their inventions into gobbledygook so that other gifted inventors can at best hazard a guess as to precisely what is and is not covered by that patent. Thus, this incentive (#2) is not fulfilled by the current system of patents either -- not unless there is a major overhaul of the system. This ties in with the impossibility of ensuring that one is not violating a software patent. If a reasonably smart software developer (who are often working as individuals, and as part of SMEs) cannot quickly ascertain whether one is violating patents, then there is a huge disincentive against developing software in that area at all.
Software Patents Work Against Free/Libre/Open Source Software

Software patents hinder the development of software and FOSS licences, as the licensee is not allowed to restrict the rights of the sub-licensees over and above the restrictions that the licensee has to observe. Thus, all patent clearances obtained by the licensee must be passed on to the sub-licensees. Thus, patented software, though most countries around the world do not recognize them, are generally not included in the default builds of many FOSS operating systems. This inhabits the general adoption of FOSS, since many of the software patents, even though not enforceable in India, are paid heed to by the software that Indians download, and the MP3 and DivX formats are not enabled by default in standard installations of a Linux OS such as Ubuntu.

Conclusion

Currently, the U.S. patent system is being reviewed at the administrative level, the legislative level, as well as the judicial level. At the judicial level, the question of business method patents (and, by extension, software patents) is before the Supreme Court of the United States of America in the form of Bilski v. Kappos. Judge Mayer of the Court of Appeals for the Federal Circuit (CAFC, which heard In re Bilksi) noted that "the patent system has run amok". The Free Software Foundation submitted a most extensive amicus curiae brief to the U.S. Supreme Court, filled with brilliant analysis of software patents and arguments against the patentability of software that is well worth a read.

For more details visit https://cis-india.org/a2k/blogs/arguments-against-software-patents

Analysing Alice Corporation Pty Ltd v CLS Bank International Et Al

sinha — 2014-08-01T19:09:05Z

The US Supreme Court delivered a unanimous decision in Alice Corporation Pty Ltd v CLS Bank International Et Al last month. The decision concerning software related inventions (with respect to carving an exception to “abstract ideas” patent eligibility category) was the most awaited and the final patent ruling of the US’ Supreme Court’s term. This post presents an analysis of the decision and a timeline of landmark US judicial decisions on software patents.

The Court declared Alice Corporation’s patent claims to be invalid by applying the tests and frameworks propounded in Mayo Collaborative Services v. Prometheus Laboratories Inc.(“Mayo”) and Bilski v. Kappos[1] (“Bilski”). You may read CIS’ analysis of the Bilski decision here and its impact here. A timeline of landmark decisions on software patents is inserted at the end of the analysis.

Background

Section 101 of 35 U. S. Code, 1952 (US Patent Act, 1952) provides that: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent thereof, subject to the conditions and requirements of this title.”

However, there exist certain judicially recognised exceptions to this section, namely, laws of nature, natural phenomena and abstract ideas.[2] Any claims wholly falling under any of these exceptions shall be ineligible for patent protection. [3]

Facts of the case

Alice Corporation’s software related inventions concerned a computer system which helped close financial transactions by avoiding a settlement risk. Specifically, the patent claims (granted by US Patents and Trademarks Office (“USPTO”)) involved, inter alia (1) a method for exchanging financial obligations, (2) a computer system as a third-party intermediary, and (3) a computer-readable medium (“CRM”) containing program code for performing the method of exchanging obligations.

CLS Bank filed for a declaratory judgment action seeking non-infringement, invalidity, and unenforceability of the patents. The district court granted a summary judgment[4] rendering the impugned patents invalid. Alice appealed in the Federal Circuit which reversed[5] the district court decision and found that the patent claims were not directed to an “abstract idea”, therefore were patent-eligible subject matter. Consequently CLS Bank appealed for an en banc hearing, which led to the Federal Circuit reversing its decision and ruling that the patents were indeed directed to patent-ineligible subject matter.[6] This decision was rather fragmented consisting of seven opinions without any clear majority[7], and did not address any of the unanswered issues pertaining to software patenting in wake of the Mayo and Bilski rulings.

Alice filed a certiorari writ at the Supreme Court which was granted in 2013, and the Court in the instant ruling affirmed the Federal Circuit’s decision by invalidating the patents. The opinion was authored by Justice Clarence Thomas. Relying on Bilski, the Court held that the claims were not patent eligible under section 101 since they were drawn to an “abstract idea”. It expressed the importance of pre-empting patenting of concepts fundamental to scientific and technological progress.

Determination of patent-worthiness of the subject matter

To ensure the openness of fundamental scientific concepts the Court highlighted the pressing need to “distinguish between patents that claim the ‘building blocks’ of human ingenuity and those that integrate the building blocks into something more.” The latter would qualify as a patent-eligible invention after the said transformation. However, instead of formulating a test to distinguish between the two kinds of claims, it went ahead and applied the framework devised in Mayo Collaborative Services v Prometheus. In the instant case, the Court elucidated on section 101, stating that:

“Section 101 framework has two parts: (1) determine if the claim at issue is directed towards an abstract idea; and (2) examine the elements of the claim to determine whether it contains an inventive “concept” sufficient to transform the abstract idea into a patent-eligible application.”

The Court applied the first part by turning to its recent decision in Bilski v. Kappos and held that the patent claims were indeed directed towards an abstract idea. The Court explained, illustratively, that in Bilski v. Kappos the claim consisted of a method for hedging against financial risk and in the instant case the claim consists of the concept of intermediated settlement. “Like the hedging risk in Bilski, the concept of intermediated settlement is “a fundamental economic practice long prevalent in our system of commerce.” The Court squarely rejected Alice’s argument that an “abstract idea” is merely confined to “pre-existing, fundamental truths which exist in principle apart from any human action.” It refrained from setting any definitive limitations on the “abstract idea” category.

Applying the second part of the framework, the Court concluded that Alice’s claims merely involved implementing a method on a generic computer which was insufficient to transform an abstract idea into a patent-eligible invention. The implementation of a method on a generic computer did not qualify as an “additional (inventive) element.” The Court reiterated Bilski v. Kappos at this point, stating (in the instant case) “..none of the hardware recited by the system claims "offers a meaningful limitation beyond generally linking 'the use of the [method] to a particular technological environment,' that is, implementation via computers."

Observations and Implications

1. Reiterated focus on substance of claim - The Court concentrated on substance of the claim and not form thereof. It “warned” against interpretation of section 101 in ways that make patent eligibility depend simply on the draftsman’s art. The Court noted that the CRM and apparatus/system claims were only “transformed method claims”. This highlighted the prevalent style of drafting claim sets (CRM, apparatus/system, method) when the hardware/apparatus used was generic.

2. USPTO soon thereafter issued “Preliminary Examination Instructions [8]” – As per the memorandum, this decision "neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods." Further, examiners have been instructed to apply the framework set forth in the Mayo case, “to analyze all claims directed to laws of nature, natural phenomena, and abstract ideas for subject matter eligibility under 35 U.S.C. § 101.”

This instruction has had twofold implications –

The Bilski standard was followed to determine the eligibility of “abstract ideas”[9], and Mayo was applied in the “laws of nature” category[10]. Now Mayo shall be uniformly applicable to both categories, and also all statutory classes of claims, not just method claims.

The memorandum also has illustrated the theoretical exposition of the Court on “abstract ideas” by stating that abstract ideas include:

· Fundamental economic practices;

· Certain methods of organizing human activities;

· An idea of itself; and,

· Mathematical relationships / formulas.

It also exemplifies the limitations which may allow patent eligibility of an “abstract idea”:

· Improvements to another technology or technical fields;

· Improvements to the functioning of the computer itself; and

· Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment.

What can you patent after Alice Corporation v CLS Bank?

Evidently, the Court did not seize the opportunity to plug gaps in the framework propounded by it in an earlier decision (Mayo Collaborative Services v. Prometheus Laboratories Inc.[11]]). It refrained from pronouncing a definitive test (to the extent avoided mentioning software patent in the judgment). Instead it relied on its recent decisions, inter alia, Mayo Collaborative Services v. Prometheus Laboratories Inc.(“Mayo”) and Bilski v. Kappos[12]. In consideration of the illustrative reasoning provided by the Court, and it declining from delving into setting of any parameters to define an “abstract idea” and to not clarify the second prong in the Mayo test; the decision completely deals with the rejection of Alice’s patents. A few aspects have emerged to be applicable precedents-wise. However, the decision is bound to limit poor quality software related inventions, at both appeals and prosecution stage. To conclude, the Supreme Court has narrowed the scope of software related inventions, without addressing pressing issues on the existing framework.

Timeline of US Court decisions on software patents

2014

Alice Corporation v CLS Bank [13]

SCOTUS declared Alice Corporation’s patent claims invalid by applying tests previously held in the cases of Mayo Medical Laboratories v Prometheus Laboratories [14] and Bilski v Kappos [15]. The principle question in the instant case was whether the claims spoke directly to an abstract idea- which would render the claims invalid on the basis of being patent ineligible subject matter.
The Court elucidated on section 101, stating that:

2012

Mayo Medical Laboratories v Prometheus Laboratories [16]

SCOTUS ruled that Prometheus Laboratories’ process patent which provided correlations between blood test results and the patient’s health in determining an appropriate dosage of a specific medication for the patient, was essentially a correlation of that of a law of nature, which was a judicially recognised exception to patentable subject matter.

2010

Bilski v Kappos [17]

SCOTUS upheld the U.S. Court of Appeals for the Federal Circuit decision in In re Bilski. It however, rejected the lower court’s holding that “machine-or-transformation test” was the sole test for patent subject matter eligibility.

2008

In re Bilski [18]

U.S. Court of Appeals for the Federal Circuit narrowed the scope for patenting software and business methods and declared the “machine-or-transformation test” as the sole determinative test to decide the patent eligibility of subject matter. The claim in question consisted of a method for hedging against financial risk.

1998

State Street Bank v. Signature Financial Group [19]

U.S. Court of Appeals for the Federal Circuit upheld a software patent granted to Signature Financial Group. The case is widely quoted as one of the first judicially recognised software patents- it set the stage for a deluge of software patent grants in the US.[20] The invention in question was a business method.
The Court held that an invention was patentable if it involved some practical application and produced a “useful, concrete and tangible result.”

1995

In Re Beauregard [21]

A claim which includes a manufactured article containing a Computer Readable Medium and instructions anointed as a “Beauregard claim”. Illustratively, floppy disks, CD-ROMS, etc would include a Beauregard claim.

1980s

Diamond v. Diehr [22] (1981)

SCOTUS held that a physical machine or a process making use of a mathematical algorithm which involves “transforming or reducing an article to a different state or thing” is patent eligible subject matter even if it includes a software component.

1970s

Parker v. Flook [23] (1978)

The Court held that unless the implementation of an algorithm was novel and non-obvious, the algorithm shall be regarded as prior-art, hence would be patent ineligible subject matter.

Gottschalk v. Benson [24] (1972)

SCOTUS addressed the patentability of software for the first time. The Court rejected a “process” patent for a method to convert binary-coded decimal numerals into pure binary numerals on a general purpose digital computer since it was solely directed to an algorithm (patent ineligible subject matter).

[1] 561 U.S. __, 130 S. Ct. 3218, 95 U.S.P.Q.2d 1001 (2010).

[2] Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980).

[3] ibid.

[4] 768 F.Supp.2d 221, 252 (D.D.C. 2011).

[5] 685 F.3d 1341 (Fed. Cir. 2012).

[6] 717 F.3d 1269 (Fed. Cir. 2013)

[7] ibid.

[8] USPTO, Memo to the Patent Examining Corps, “Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Ply. Ltd. v. CLS Bank International, et al”, 2014.

[9] USPTO, “Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos”, 2010.

[10] USPTO, Memo to the Patent Examining Corps,“2012 Interim Procedure for Subject Matter Eligibility of Process Claims Involving Laws of Nature”, 2012.

[11] 566 U.S. ___ ,132 S. Ct. 1289, 101 U.S.P.Q.2d 1961 (2012).

[12] 561 U.S. __, 130 S. Ct. 3218, 95 U.S.P.Q.2d 1001 (2010).

[13] 573 U.S. __ (2014); 110 U.S.P.Q.2d 1976, 2014 ILRC 2109 (U.S. 2014) [2014 BL 170103].

[14] 566 U.S. ___ ,132 S. Ct. 1289, 101 U.S.P.Q.2d 1961 (2012)

[15] 561 U. S. 593 (2010)

[16] 566 U.S. ___ ,132 S. Ct. 1289, 101 U.S.P.Q.2d 1961 (2012)

[17] 561 U. S. 593 (2010)

[18] 545 f.3d 943 (2008)

[19] 149 F.3d 1368; 47 U.S.P.Q.2D (BNA) 1596

[20] “1998 July The State Street software patents decision” available at <http://www.thomasalspaugh.org/pub/fnd/ipswd-timeline.html#y1998-StateStreet> (last accessed July 29, 2014)

[21] 53 F.3d 1583 (Fed. Cir. 1995)

[22] 450 U.S. 175 (1981)

[23] 437 U.S. 584 (1978)

[24] 409 U.S. 63 (1972)

For more details visit https://cis-india.org/a2k/analysing-alice-corporation-pty-ltd-v-cls-bank-international-et-al

Centre for Internet and Society

Guidelines for Examination of Computer Related Inventions: Mapping the Stakeholders' Response

Guidelines for Examination of Computer Related Inventions in abeyance

Comments on the Guidelines for Examination of Computer Related Inventions (CRIs)

Narrowing down excluded subject matter relating to CRIs

Secondary application of the subject matter test

Proposed definition of “computer programme per se”

Issues with illustrative examples

Conclusion

CIS Submission on Draft Patent Manual 2010

Positive changes in the Manual

Arguments Against Software Patents in India

Preamble

What are Patents?

Philosophical Justification Against Software Patents

Legal Case Against Software Patents

Practical Reasons Against Software Patents

Patent Landmines / Submarine Patents / Patent Gridlocks / No Exception for Independent Creation

Don't These Cases Show How Software Patents Help Small Companies?

Term of Patents

Software Industry Progressed Greatly Without Patents

Copyright Exists for Software

Insufficient Disclosure

Software Patents Work Against Free/Libre/Open Source Software

Conclusion

Analysing Alice Corporation Pty Ltd v CLS Bank International Et Al