DR.

RAM MANOHAR LOHIYA

Intellectual Property Rights II Rough Draft

Implications of Granting Patent Protection to

Submitted to – Submitted by –

Mr P.K. Pandey Upasana Dasgupta

Faculty, IPR II Semester VII (Sec B)

Roll no. 144

The importance of computer software in today's society, as well as the great expense in
producing it, has spurred the current interest by the computer industry in the availability of
legal protection for computer software. The patent system, developed to advance science and
technology, appears to be the ideal system for such computer software protection. This
system, however, has not sufficiently protected programmers' rights to computer software.
The insufficiencies arise out of judicial exclusion of mathematical algorithms from patentable
statutory subject matter. However, softwares per se are also declared as non-patentable in
India.1

Computer software programmers now enjoy a broadly based commercial market for their
software inventions. Unfortunately, software competitors can appropriate software
innovations very easily. Software programmers, therefore, looking for some way to protect
their original programs, have sought patent protection to establish legally recognizable and
protectable rights in their innovations. The Patent Offices and courts in India, however,
consistently have denied applications for patent protection of innovative software programs,
reasoning that the computer algorithm, the foundational element of computer software, is an
unpatentable scientific principle.

The primary objective of patent laws is to advance the sciences. The patenting of an
invention essentially is an exchange between an inventor and society 2-- the inventor receives
the exclusive right to make, use, or sell an invention for a certain period of time, and society
receives the benefit of using the invention3 and of receiving full disclosure of the invention's
underlying idea. Thus, deciding whether an invention deserves patent protection requires an
inquiry into whether the work will deliver benefits to society in excess of the costs that
society must bear by granting the inventor exclusive property rights in the invention.

Because a patent is a legal monopoly, the requirements for receiving a patent grant are
very strict. The work an inventor seeks to patent must fall within the scope of subject matter
1
Section 3(k) of The Patents Act 1970.
2
See J. PARKER, THE ECONOMICS OF INNOVATION 303 (1978).
3
A lively debate persists about a patentee's right to suppress a patent. Courts currently hold that a patentee's
"title is exclusive . . . and that he is neither bound to use his discovery himself, nor to permit others to use it."
Heaton-Peninsular Button-Fastener Co. V. Eureka Specialty Co., 77 F. 288, 295 (1896), adopted in Continental
Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 425 (1908). Justice Douglas, dissenting in Special
Equipment Co. v. Coe, 342 U.S. 370, 380 (1945), recommended abandoning the Continental Paper Bag rule and
returning to the rule that a patentee "is bound to use the patent himself or allow others to use it on
reasonable . . . terms."
 4
that the patent laws protect. This subject matter requirement persists as the major bar to
patent law protection of computer software. The Patent Act does not protect natural
phenomena, also known as the "laws of nature," and descriptions of these phenomena. The
descriptions of algorithms that computer scientists have accepted 5 and the manner in which
these scientists have incorporated algorithms into the production of computer programs
reveal that algorithms conceptually are not equivalent to these laws of nature. Nevertheless,
the Courts at different countries have consistently has erred in its interpretation of computer
software algorithms by equating them with mathematical laws.

Courts also must consider the difficult policy questions concerning whether the patent
system should protect innovations in software technology. The patent system is a mechanism
that the federal government has sponsored to achieve social welfare goals. Thus, the
government must identify and assess the relationship between a new technology and the
purposes and policies of the patent system before allowing patents to protect works in this
area. Identification and assessment of this relationship requires an inquiry into the
relationship between computer technology, public policy, economic theory, and legal
doctrine.

Overview

This project analyzes the propriety of granting patent law protection to computer software
by viewing this problem from economic, legal, public and technological policy perspectives.
It also explains the relationship between computer hardware and software, discusses the role
of algorithms in software development, and traces the development of the computer software
industry in Chapter II. Chapter III identifies the law in India regarding patentability of
softwares and also identify the patent law principles that are relevant to the software
patentability issue and discusses their underlying policy foundations. Chapter IV examines
the opinion of the courts in other countries on software patenting . Chapter VI of this project
analyzes the benefits and costs of granting patent protection to computer software and

4
35 U.S.C. § 101 (1976) states in pertinent part: "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 therefor . . ."

5
An algorithm is simply a detailed process for solving a specific problem. See T. WALKER,
FUNDAMENTALS OF COMPUTER SCIENCE 8 (1975). See infra notes 31-37 for a discussion of software
algorithms.
demonstrates the compelling societal need for this protection. Finally, the researcher comes
up with suggestions on this topic.

Topics explored

Nature of Softwares
Software programs are the heart of computers. They contain logical sequences of
instructions that direct computers to perform various tasks. The complexity of computer
programs makes it difficult to be understood by any one person.

The law and Courts decisions refusing to accept software patentability are premised on
certain basic misunderstandings. First, the law limited its definition of algorithms to
procedures that solve mathematical problems. Second, not all computer software algorithms
are equivalent to unpatentable natural laws.

Intellectual Property Fundamentals: Can An Idea Be Owned?

Property is the de jure right to exclude others from use of its subject matter. Under the
common law only tangible stuff was the subject of property; that is, you could exclude others
from using your stuff but had no right to interfere with the use of other people's stuff.

Ideas in the form of technical know-how, information, inventions, and unique product
designs are products of mental activity that often have substantial value. Allowing plaintiff to
have property rights in idea would amount to removal of the idea from the public domain.
This result is contrary to one of the underlying purposes of intellectual property law, which
is to secure the benefits of products of the mind for the public. Therefore, the idea was
generally held to be incapable of being property.6 However, there has been shifts in the
thought regarding this aspect.

Why is software patenting so dangerous? Software patents do not patent programmes; if they
did only that, it would be a minor irritant. What they do is to patent the idea on which the
software is developed. 7

Law in India on Software Patentability

6
Are Ideas Within the Traditional Definition of Property?: A Jurisprudential Analysis, 47
Ark. L. Rev. 603 (1994).
7
Ibid
Unlike many countries computes software still are not included in the definitions of
patentable inventions in India. In other words computer softwares are still including in the
definition of not patentable invention under Indian Patent Law. Though Indian Govt. in April
2005 brought an ordinance to include computer softwares imbedded in hardware like
computer, mobile, televisions etc. and having industrial application under the definition of
patentable invention by amending the clause (k) of section 3 under chapter II of Indian Patent
Act, 1970 but under pressure of the software professional lobby did not enacted the same. But
still a number of applications relating to inventions pertaining to the computer software are
filed every year in India and by clever camouflaging of the words these applications are
successfully proceeded to the stage of grant of patents.

Situation in other countries

Most of the jurisprudence relating to software patents emanate from US, which is considered
as the cradle of software patents. Beginning with the landmark decision of US Supreme Court
in Diamond v. Diehr, which ordered the Patent office to grant a patent on an invention even
though a computer software was utilized in it, the US Supreme Court has travelled a long
distance with regard to software patents. Today there is hardly any doubt about the scope of
patenting of computer software and data structures in the US.

When we look at the European Union we see that software is patentable in EU, provided they
make a technical effect. Though the European Parliament rejected the Computer
Implemented Inventions Directive in July 2005, the position with regard to software
patenting remains more or less the same in EU member states.

The position on software patents in India is close to that of EU member countries. If we are to
search the definition of the term ‘software’ or ‘computer programe’ under the Patent laws in
India, we shall not succeed. But the Copyright Act, 1957 defines a computer program under
Sec.2 of the Act as "a set of instructions expressed in words, codes, schemes or in any other
form, including a machine readable medium, capable of causing a computer to perform a
particular task or achieve a particular result".

Conceptual difference between Copyright and Patent

A study by Oz (1998) shows that copyright protection is used more often than patent
protection even in the USA where there are no limitations on software patenting.

Bibliography
 V K Ahuja, Law relating to Intellectual Property Rights, Lexis Nexis Butterworths,
New Delhi, 2007

 Justice P.S. Narayana, Intellectual Property Law In India, Gogia Law Agency, Ed.
4th, Hyderabad, 2007

 P. Narayanan, Patent law, Eastern Law House, Ed. 4th, New Delhi, 2007.

 Draft Manual Of Patent Practice And Procedure, Ed. 3rd, Patent Office India, 2008

 http://www.mondaq.in/article.asp?articleid=36364