Computer Related Inventions – Indian IPO Guidelines and its Impact

The Indian Intellectual Property Office has issued fresh guidelines for examination of Computer Related Inventions (CRIs) on 19th February 2016. The guidelines had been kept in abeyance since 14th December 2015 by an official order of the Indian IPO. The aim of the guidelines is to foster uniformity and consistency in the examination of patent applications relating to CRIs, especially since Section 3(k) of the Indian Patents Act provides an explicit exclusion of a mathematical or business method or a computer programme per se or algorithms from the subject matter of patentability.

The guidelines serve the purpose of providing a holistic framework of the procedure to be adopted by the Indian Patent Office while examining CRIs. According to the guidelines CRIs are inventions, which involve the use of computers, computer networks or other programmable apparatus and include such inventions having one or more features of which are realized wholly or partially by means of a computer programme or programmes. The guidelines have provided definitions of various legal terminologies relevant for examination of CRIs along with the present jurisprudence in India and numerous case laws relating to CRIs. The Indian Patent Office has clarified that these guidelines do not constitute rule making. And, in case of any conflict between the guidelines and the Indian Patents Act or Rules, the latter would prevail. The Indian IPO will revise the guidelines in future, if required, based on interpretations by Courts of law, statutory amendments and valuable inputs from the stakeholders.

Challenges for Startups and Tech Companies

In substance, the guidelines have confirmed the exclusion of software programmes provided under Section 3(k) of the Indian Patents Act. On the other hand, the Indian Patent Office has categorically reaffirmed that if the substance of a patent claims relating to CRIs, taken as a whole do not fall into any of the excluded categories then CRIs will not be denied a patent. This is a setback to tech giants like Google, Facebook, Twitter and other US companies, which rely on software patents for competitive edge in a market economy.

Absence of software patents will provide an incentive to Indian companies and developers to innovate and develop new software and technologies without fear of any patent litigation. Ironically, the incentive that allows creation of software programme in the first instance, takes away the benefit of crucial legal protection to protect their software, which seems to be fair because if you can copy others then all sense of proportion would imply that it is fair that others are allowed to copy your creation. Of course, the software companies and developers can fall back on copyright to protect their intellectual creation. However, copyright law does not provide a strong legal protection as compared to patent law. Copyright law protects only the expression not the idea.

The only possible way of extending patent protection to software programmes in India is through a statutory amendment in the Indian Patents Act because Section 3(k) explicitly excludes a mathematical or business method or a computer programme per se or algorithms from the subject matter of patentability. It is unconceivable that Indian judiciary will override the express prohibition provided under the Indian Patents Act.

Thus, it is good news for Indian startups to innovate and develop new software without any threat of potential patent infringement suits. But, it puts them in a quandary as to how to protect and leverage their ideas in an open market without patent protection. Indian startups and tech companies will have to be very diligent in protecting their confidential information. This can be achieved by an effective non-disclosure agreement. However, the biggest challenge a startup would face in absence of a patent protection is at the stage when they pitch for funds to an investor. It is very rare that an investor would agree to sign a non-disclosure agreement to make an early stage investment.

The official order of the Indian IPO (link) and the guidelines (link) are available online.

Read More

Indian IPR Policy- Review 2015

2015 started with the controversial ‘first draft’ of the ‘National IPR Policy’ of India. It was prepared by a government panel and was issued for public circulation in November 2014. There was much hope and optimism that for the first time the Government of India will lay down a path which will not only help in resolving the IPR policy issues that have plagued the Indian market but also quell international pressures. Neither objective has been achieved by the ‘first draft’; various stakeholders (both domestic and foreign) have in fact criticised it. Most of the IPR policy issues, like compulsory licensing, efficient prosecution of patent applications, photocopying of academic books and effective functioning of copyright collecting societies are yet being shaped. Additionally, there has been no traction in geographical indications and traditional knowledge. India continues to be a low producer of IP. The only definitive policy decision that can be extrapolated from the ‘first draft’ is the fact that India has refused to accept TRIPS plus obligations. Therefore, the contentious provision of section 3(d) of the Indian Patents Act is here to stay along with a strong compulsory licensing regime. In fact, the government has affirmed that India comply with international standards.

‘First draft’ – National IPR Policy

The ‘first draft’ provides in detail various measures to improve the IP culture and production in India. Emphasis is on promoting IP through educational programmes. The intent is to include IP education as part of our education system at all levels and incorporate IP culture within our industry. There is no conclusive evidence that merely transmitting IP education will make India and Indians producers of IP, as we require more than just IP education for making Indians producers of IP. There is also a long list of targeted programs to encourage large pools of scientific and technological talent of India to produce IP. With respect to legal framework of IP the ‘first draft’ categorically states that IP laws will be reviewed to remove anomalies and inconsistencies based on an objective and analytical studies. To meet the constant request of foreign IP owners, the government has also detailed measures to make Intellectual Property Offices (IPOs) more efficient. There is also a promise to set up an IP Promotion & Development Council (IPPDC) as a nodal organization for the promotion, creation and commercialization of IP assets and establishment of a national level Institute of Excellence to provide leadership in IP. For combating IP violations there are suggestions for strengthening the enforcement and adjudicatory mechanism.

Unfortunately, it’s been over one year since the ‘first draft’ was published and very little has been put into action. In fact, after flak from various stakeholders, the Department of Industrial Policy & Promotion in April 2015 had informed a leading newspaper that the final version of the policy had been finalised but is yet to be approved by the Cabinet. The year 2015 is long gone and we are still waiting for a reformulated IPR policy from the Government of India.

Future of IPR Policy of India-

The Government of India had announced in August 2015 that they will be coming out with a new IPR policy in about two months. We are in January 2016 and are still waiting for the new policy document. Therefore, it is very difficult to predict when the government will issue the new IPR policy document in the public domain. Without a clear IPR policy, there will be very few changes in the present IPR culture and regime of India.

Read More

Why care about Intellectual Property?

“The answer is simple. The new drivers of wealth in our society are knowledge, not hard asset, based. Generally, we manage what we measure. Knowledge assets are new drivers of wealth production must be managed. If they can’t be measured well, how do we know we’re managing them well? If they can’t be measured well, how do we know how many resources to allocate to them.”

By Steven M. H. Wallman, Foreword (In pursuit of intellectual capital), Hidden Value, Profiting from the intellectual property economy, Edited by Bruce Berman.

Read More

Will a stronger IPR metamorphose Indians into Inventors & Innovators?

It’s been almost one year since the song, ‘India needs a stronger IPR law and policy’ was first published after the grand Indian election of 2014. It has remained the number one song even in 2015 and there is no sign of its fading away in the near future. Till date there have been several versions of the song, ‘India needs a stronger IPR law and policy’. All the versions claim that a stronger IPR regime will benefit India in 3 possible ways:

  1. A stronger IPR law & policy will make India an attractive destination for investment.
  2. A stronger IPR law & policy will lead to greater R&D investment both by foreign as well Indian firms and therefore create more intellectual property in India.
  3. A stronger IPR law & policy will metamorphose Indians (people & firms) into inventors & innovators.

If benefits are so obvious then why hasn’t India adopted a stronger IPR law and policy? It would seem a win-win situation to everyone.

The obvious reason might be that India already has a stronger intellectual property regime. India has incorporated all the obligations under the TRIPS Agreement (Agreement on Trade Related Aspects of Intellectual Property Rights, 1994) that provides for global ‘minimum standards’ for every form of intellectual property. ‘Minimum standards’ should not be read as a weak IPR regime because for countries alien to these standards before 1994, they almost qualify as ‘maximum standards’.

Back to the benefits that India will supposedly gain by adopting a stronger IPR law and policy.

  1. A stronger IPR law & policy will make India an attractive destination for investment.

It’s true that an IP intensive firm investing in India would feel safe if they were sure that their IP would be protected in a time-bound legal system. In January 2005, India adopted all the mandatory IP norms under the TRIPS agreement but still there has been no surge of investments in India by IP intensive firms.

The problem, therefore, lies more in the enforcement of IP laws, which can be attributed to an extremely slow legal process and lack of understanding of IP nuances. The temporary injunction cases can easily last up to a couple of years and rarely do we find any finality to IP cases.

Imagine the horror of a technological firm protecting IP in an Indian court; by the time the temporary injunction is settled, the technology would become obsolete and useless in some cases. One solution often recommended is the establishment of fast track IP courts with specialized judges.

Therefore, the biggest problem is the absence of an effective and time-bound legal resolution. Delay in legal resolution results in an ineffective enforcement of IP rights. Unfortunately such delays are, however, a bigger Indian problem and not just limited to IP laws. If a stronger IPR law and policy could change India’s legal system then we should not wait another day to adopt them.

  1. A stronger IPR law & policy will lead to greater R&D investment by foreign and Indian firms and therefore create more intellectual property in India.

Again, if IP intensive firms feel safe that their legal rights are protected in a secured time, then even with the present IPR laws there should have been more IP investment in India since January 2005. However, the change did not see a surge in investment by IP intensive firms. What it did manage to do is lead to market and social problems and the resultant increase in number of IP litigation in India.

Absence of an efficient time-bound judicial system is one of the biggest issue for investors looking to invest in India. Uncertainty and long legal delays have never attracted investors. When you add bureaucratic red tape for getting approvals from the government, it certainly deters them further. And, finally the relationship based business practices confuse investors so much that they start looking at other countries in Asia. Therefore, it appears that a change in IPR law and policy will not cause any real change unless we address other challenges in India.

Additionally, a change in IPR law and policy will not result in any substantial increase in R&D by Indian firms either. Few big Indian firms have substantially raised their R&D expenditure in last decade but majority do not invest in R&D. This has more to do with the absence of spirit of inventiveness and capacity to take risk both at the level of the firm and the individual. The absence of spirit of inventiveness and capacity to take risk will explain that stronger IPR alone will not metamorphose Indians (people and firms) into inventors & innovators.

  1. A stronger IPR law & policy will metamorphose Indians into inventors & innovators.  

Mere change in the law will not metamorphose Indians (people & firms) into inventors or innovators. There is no doubt that Indians are creative and intelligent but we have failed in last seventy years to come up with a path breaking invention or innovation in the country. However, Indians have contributed significantly in inventions and innovations outside India. Have we ever wondered what is the reason that Indians become inventors and innovators outside India? Is it merely the presence of a stronger IPR law and policy?

No. It’s much more than just having stronger IPR law and policy. It has to do with the spirit of inventiveness and risk taking capacity of the individuals within the society. The spirit of inventiveness requires an education that promotes critical thinking and allows challenging the old norms. It can only spring in a society that has basic human right of free speech and expression. The basic human rights are quintessential for invention or innovation because they allow everyone to participate in an entrepreneurial activity and try a new idea.

Even after the existence of an inventive spirit and capacity to take risk, it is essential to have an ecosystem, which supports the transformation of ideas into finished products and services. And, this is not possible without proper state support and a system based on meritocracy rather than personal relationships and social status.

Read More

‘I lay no claim to originality’- M.K. Gandhi

“I have written twenty chapters on the subject of Indian Home Rule which I venture to place before the readers of Indian Opinion. I have read much, I have pondered much. During the stay for four months in London of the Transvaal Indian deputation I discussed things with as many of my countrymen as I could. I met, too, as many Englishmen as it was possible for me to meet. I consider it my duty now to place before the readers of Indian Opinion the conclusions, which appear to me to be final. The Gujarati subscribers of Indian Opinion number about 800. I am aware that, for every subscriber, there are at least ten persons who read the paper with zest. Those who cannot read Gujarati have the paper read to them. Such persons have often questioned me about the conditions of India. Similar questions were addressed to me in London. I felt, therefore, that it might not be improper for me to ventilate publicly the views expressed by me in private.

These views are mine, and yet not mine. They are mine because I hope to act according to them. They are almost a part of my being. But, yet, they are not mine, because I lay no claim to originality. They have been formed after reading several books. That which I dimly felt received support from these books.”

(Excerpt from the Foreword of the book Hind Swaraj, M.K. Gandhi).

Read More

Indian Patent Policy- Issues & Challenge

Indian Patent Policy- Issues & Challenge

It’s been over two decades since India adopted an evolved patent system under the TRIPS Agreement. However, there is no consistent patent and public health policy framework even when there are obvious social and market problems in the country. Numerous cases involving issue of compulsory licensing have been litigated. At present there is no long-term policy framework to deal with social and market problems, which scuttles innovation and economic growth in India. The patent and public health policy issues are complicated because of the public health challenges that the country is facing with its large population.

Issues

(i)     Compulsory License

The issue of compulsory license is the most controversial issue in India and is still unresolved even after the ruling of Supreme Court of India on 13 December 2014. The Supreme Court ruled against Bayer, which in a last ditch attempt tried to block the sale of a cheap generic version of its cancer drug Nexavar in India. The Supreme Court dismissed Bayer’s claim that no compulsory license should be issued, however, the court did not rule on any questions of law and have left all questions of law open. Compulsory license has been used regularly in India to meet public health demands of cheap medicines. However, excessive licensing hampers growth and development. It impacts not only the foreign direct investment (FDI) but provides little incentive to Indian pharmaceutical companies to spend considerable energy in drug discovery research.

(ii)    Section 3 (d) of the Indian Patent Act

India has incorporated Section 3 (d) in the Indian Patent Act, which prevents firms from extending patents on their products by making slight changes to a compound, a practice known as “evergreening”. In 2013, the Supreme Court of India upheld the rejection of patent application for Glivec (Novartis) on the grounds that it is not a new medicine, but an amended version of a known compound. Indian courts have in recent years also revoked patents granted to other international drugmakers, including Pfizer, Roche and Merck.  Experts are concerned that this provision prevents pharmaceutical companies from supporting continued research and development of new medicines.

(iii)    Access to Medicine

Access to medicines is one of the biggest challenge and by far the most important issue in India. In last few months, the Government of India has put hundreds of medicines under price control to make medicines more affordable for its citizens. A long-term patent policy framework has to take into account the public health interest of India and balance it with the interest of patent owners.

(iv)    Patent Litigation

Continuous patent litigation on the issues of life saving drugs is a result of absence of any policy framework to deal with the issue of life saving drugs. In absence of any clear policy framework, patent disputes are used as a tool to provide solution to the public health challenges because there is no consistent policy to address the issue of life saving drugs.

Challenge

Since the time an evolved patent system was superimposed on the Indian legal system, the policy issues have perplexed policy experts. Most of the policy issues have being litigated in Indian courts. The unresolved policy issues have long-term implications on the market economy, the deadweight loss to the society and economic growth & innovation. It is imperative that India should address these policy issues with an objective framework based on an empirical socio-economic analysis.

Read More

Intellectual Property sans Human Rights in India

Intellectual property laws in India have been around since colonial times. However, like many other developing countries, as an importer of technology, India continued with a weak patent model. In contrast to patents, the country made constant changes in its copyright law in consonance with international developments after independence in 1947.

India had to make significant changes in its patent law after adopting the TRIPs agreement in 1994. Yet, it had to make very few changes in its copyright law to meet its obligation under the TRIPs Agreement. However, two decades since adoption, the copyright industry has not evolved unlike United Kingdom and United States of America. And, it has been 10 years since India adopted a new patent system and still we are waiting for a major discovery or invention in India.

One of the reasons for lack of production of intellectual property from India can be attributed to a rote education system that does not encourage critical thinking. However, a more glaring reason is the fact that till date there are no real and effective human rights enforcement  in India. Without any real freedom of speech and expression it is almost impossible to create anything from our minds. If the mind is not free to think and express then how do we expect to create any intellectual property? After all, intellectual property is a creation of our mind.

Read More

Controversy of IPR Think Tank & Intellectual Property policy- INDIA

The Government of India on 24th October 2014 constituted an IPR Think Tank to draft the national intellectual property rights policy and to advice the Department of Industrial Policy and Promotion (DIPP) on IPR issues. The IPR Think Tank has following six members:

  1. Justice (Retd) Prabha Sridevan, Chairperson, IPR Think Tank;
  2. Ms. Pratibha M Singh, Sr.Advocate, Singh & Singh Law Firm, Member;
  3. Ms. Punita Bhargava, Advocate, Inventure IP, Member;
  4. Dr. Unnat Pandit, Cadila Pharmaceuticals Limited, Member;
  5. Shri Rajeev Srinivasan, Director, Asian School of Business, Thiruvananthapuram, Member;
  6. Shri Narendra K. Sabarwal, Retired DDG, WIPO, Member and Convener.

IPR Think Tank Controversy

Since, its composition the IPR Think Tank was shrouded in controversies, with following allegations:

(i) Arbitrariness and ad hoc approach in policy making.

(ii) Conflict of interest.

(iii) Lack of relevant expertise of some of the members.

(iv) Lack of representation of all stakeholders.

The Frontline magazine article, Breach of promise on IPR Policy? provides a detailed account of the issues involved. However, the problem in Intellectual Property policy framework is far more complex than the controversies on the constitution of IPR Think Tank.

Why India lacks a Consistent Intellectual Property Right Framework?

Intellectual Property framework in India went a drastic change in 1994 when the Government of India, like most of the world, accepted an evolved Intellectual Property system through TRIPs Agreement mandated by the World Trade Organisation (WTO). It was obvious that adopting an evolved system in an underdeveloped market would create social and market problems in future. This is a reason why India still doesn’t have a consistent Intellectual Property policy framework, even though it’s been two decades since its adoption. Intellectual Property laws of India were fully compliant with the TRIPs requirement on 1st January, 2005. Since then, numerous cases involving policy issues in the field of patent and copyright have been litigated in various courts across the country.

Potential Solution

One of the main reasons for a non-existent long term Intellectual Property policy framework in India is the fact that legal experts have been framing Intellectual Property policy using legal tools without any aid of economic analysis or empirical research. Whereas, social and market problems that have arisen as a result of adopting an evolved system require an economic analysis and empirical research, as well as inputs from various other disciplines. Therefore Industry associations in India should, on behalf of their members develop new IP policies which can serve as a roadmap for IP monetization, IP protection and IP based growth to overcome these social and market problems.

Read More