Leveraging Through Software Patents

Leveraging through Software Patents

The question of whether software is patentable dates back to the 1970s. The United States Patent and Trade Mark Office (USPTO) historically had been reluctant to grant patents on inventions relating to computer software. Their rationale was that patents could only be granted to processes, machines, and articles of manufacture and compositions of matter. Patents could not be granted to scientific truths or mathematical expressions of it. The USPTO viewed computer programs and inventions containing or relating to computer programs as mere mathematical algorithms, and not processes or machines.

In the 1980s the United States Supreme Court forced the USPTO to change it's position. Diamond vs. Diehr, decided in 1981, provided the first instance in which the US Supreme Court ordered the USPTO to grant a patent on invention related to Computer Software. In this case, the invention related to a method for determining how rubber should be heated in order to be best "cured". The invention utilized a computer to calculate and control the heating times for the rubber. However, the invention (as defined by the claims) included not only the computer program, but also included steps to heating rubber, and removing the rubber from the heat. The Supreme Court stated that in this case, the invention was not merely a mathematical algorithm, but was a process of molding rubber, and hence was patentable. This was true even though the only "novel" feature of this invention was the timing process being controlled by the computer.

In the early 1990s, the Federal Circuit Court in the United States, which is the highest court for Patent Matters other than the Supreme Court stated that, if the invention utilizes the computer to manipulate numbers that represent concrete, real world values (such as a program that interprets electrocardiograph signals to predict arrhythmia or a program that analyzes seismic measurements), then the inventions relating to those real world concepts is patentable.

In 1995, the U.S.P.T.O. decided it was time to develop guidelines for patent examiners that reflect these recent court decisions. After releasing draft versions of the guidelines for comment, the U.S.P.T.O. adopted guidelines for U.S.P.T.O. examiners to determine when a  software related invention is statutory and therefore patentable.

Bitlaw a comprehensive website on Intellectual Property states that the primary benefit of protecting computer software through the patent system is the strength of protection provided by the patent laws. An owner of a patent may prevent all others from making, using, or selling the patented invention. In connection with software, an issued patent may prevent others from utilizing a certain algorithm (such as the GIF image compression algorithm) without permission, or may prevent others from creating software programs that perform a function in a certain way.

In contrast, copyright law can only prevent the copying of a particular expression of an idea. In connection with computer software, copyright law can be used to prevent the total duplication of a software program, as well as the copying of a portion of software code (both of which are examples of "literal infringement"). In addition, copyright does provide some protection against non-literal infringement, such as the near duplication of screen displays, and the creation of "cloned" software. However, courts have recently been reluctant to interpret copyright protection of computer software in a broad manner. In addition, the basic tenet of copyright law is that copyright will protect only the expression of an idea, and not the idea itself. Consequently, copyright law will not prevent the creation of a competing program that utilizes the same ideas as an existing program.

In recent years, the United States Patent and Trademark Office (USPTO) has granted a rapidly increasing number of patents for software-related inventions.

In recent years, the United States Patent and Trademark Office (USPTO) has granted a rapidly increasing number of patents for software-related inventions. According to the Software Patents Institute in the United States, thousands of "true software patents" are issued every year, covering such areas as business software, expert systems, compiling functions, operating system techniques, and editing functions. At the same time, software technology has continued to advance, using combinations of previous advances in order to create new goods, services, and production processes.

Regardless of one's opinion on the issue of whether software-related patents are good or bad for society, the fact remains that a rapidly increasing number of software companies are filing software-related patent applications every day. This creates a need for software companies to begin developing programs and procedures to protect their intellectual property through the patent system.

India is emerging as a world leader in the field of software technology. The IT software and services industry in India grossed an annual revenue of Rs. 37,760 crore (US$ 8.26 billion) during 2000-01, according to the annual industry survey released by the National Association of Software and Service Companies (NASSCOM), the apex body of software, e-commerce and IT services industry in India.

Mr. Phiroz Vandrevala, Chairman, NASSCOM while releasing the highlights of Nasscom's survey said, "the interesting highlight of 2000-01 was that one out of every four global giants, outsourced their `mission critical software requirements' to India". Mr. Phiroz Vandrevala further said, "The Indian software industry still requires moving faster on the value chain ladder and getting more involved in strategic consulting, brand management, Research & Development and providing more web based and e-commerce kind of interactive services to the customers".

Hence the need to protect our Intellectual Property Rights will be more keenly felt once the Indian Software Industry is well on its way to creating a niche as a mature developer of hi-tech software products.

The Indian Patents Act, 1970 does not explicitly exclude patenting in computer programs. Section 2(1)(j) of the Indian Patents Act, 1970 defines "invention" as any new and useful

i)                    art, process, method or manner of manufacture;

ii)                   machine, apparatus or other article;

iii)                 substance produced by the manufacture

As per the present legal interpretation of the above definition of the invention, the patentable subject matter in addition to being novel and useful, should be about manner of manufacture and it must result in a non-living and tangible thing. From this explanation, it can be inferred that software, as such, in the form of a mathematical algorithm may not be a patentable subject matter as it is not about manner of manufacture and it does not result in a tangible thing.

This situation changes when software is combined with a machine/computer and the machine/computer under the influence of the software, becomes a 'novel' machine/computer and this becomes patentable subject matter.

Contrary to popularly held belief that software related patents are not permitted by Indian Patent Office; there are several instances where software related patents have been granted by the Indian Patent Office. One example is the Software related patent no 176178 granted to IBM, USA for "System for Creating an Application Program Package'" by the Indian Patent Office.

Proposed Changes in the Law

The Patents (Second Amendment) Bill, 1999 to the Indian Patents Act, 1970 has been brought out in the light of the TRIPS Agreement and to make the Act a modern, harmonised and user-friendly legislation. However as far as Software Patenting is concerned, the proposed amendments to the act may be considered a retrograde step as it explicitly excludes computer programs from patentability.

This becomes evident if we consider the non-patentable subject matter, which have been specifically included by way of addition to Section 3 (of Indian Patents Act, 1970), which deals with non-patentable inventions. The proposed bill in addition to other non-patentable subject matter excludes "a mathematical or business method or a computer program or algorithms" from patentability.

Once these amendments are affected into the Act, patenting in software will become impossible as compared to the present legal position where the Indian Patents Act does not exclude, explicitly, computer programs from patenting.

Leveraging through Patents

Among companies with patent portfolios, it is a very common practice for one company to offer to cross-license one or more patents of its own when accused of infringing a patent belonging to another company. Through this practice, the patent assets of both companies are increased.

Small and medium software companies can benefit from patenting in software by reaping profits through licensing their patents to bigger corporations. In fact, lack of patent protection makes it easier for bigger corporations to copy ideas from the software developed independently by small and medium software companies.

Thus, software companies should begin evaluating the best internal procedures for identifying potentially patentable ideas and pursuing patent protection for such ideas. Since software-related patent applications are often relatively expensive and time-consuming, appropriate business decisions should also be made to support such an endeavor.

Urgent Needs

While making provisions for patenting in some form in the Indian Patents Act, we must also address the procedural realities of the Indian Patent Office. The facilities at four branches of the Indian Patent Office must be strengthened so that examiners are able to conduct an effective search while deciding the novelty and inventiveness of Software related inventions. The Patent Office should have an Examiner's Manual, as is done in the USPTO, providing clear cut guidelines regarding patentability of software related inventions. Examiners at four branch offices of the Indian Patent Office should be made fully conversant with the technicalities of software related inventions. Additionally an awareness drive should be vigorously launched to make the software industry fully aware of the issues involved with patenting software in India as well as abroad.

All these needs have to be addressed in right earnest before the nation really benefits from the Great Indian Software Story!

Bibliography

1. Dr. Ganguli Prabhudda - 'Gearing Up for Patents - The Indian Scenario', Orient Longman, 1998


2. Parulekar Ajit and D'Souza Sarita - Indian Patent Law : Legal and Business Implications , 1st Edition 2006


3. IPR journal 'World patent Information' published by Elsevier Science Limited, UK


4. Patents Law Manual, 1st Edition, 2005


5. Website : www.patentmatics.org