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.