Evolution of the Patent System

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Software and Business Method Patenting

Computers and other advance technologies are being used by modern societies who rely heavily upon it. Software is an essential part of a computer system without which it cannot work. The hardware and software department in the technology field is a vast and much explored area these days. Therefore the inventor should be rewarded with the protection of his intellectual property for putting all efforts in making/ building the software. Patent System

A patent for the invention of software is a protection to the technique used in programming of the software. The Foundation for a Free Information Infrastructure (FFII) has defined a software patent as being a ‘patent on any performance of a computer realized by means of a computer program.’

Some of the important factors that should be considered for patenting software are as follows:

  1. Can the software be patented and what can be the line of demarcation to decide what software can be patented and what software cannot be patented?
  2. Whether the software patenting is a step forward to promote innovation?
  3. What should be the determining factor and scale of determination for the novel, industrial application and non obviousness of the software?

In United Kingdom in 1962, the patent application was instituted titled ‘A Computer Arranged for the Automatic Solution of Linear Programming Problems.’ The invention dealt with the efficient memory management and the patent was granted in this case. In case where the software contributes towards some technical advances and forms a new result it can be patented.[1] Therefore, unless there is some technical use with novel results, the invention cannot be patented. To get an invention patent there has to be a technical effect and thus the bar under Article 52 of European Patent Convention is not applicable in such cases.[2]

In United States, there is a limitation placed upon software patent. The patent law of US excludes the abstract ideas that are related to software patent.[3] In 1982, the US congress established a special Court namely United States Court of Appeals for the Federal Circuit (CAFC) that deals only with patent cases.

Similarly in Europe, the patent laws restrict those inventions which cannot be further utilized in any kind of technical effect. In simple words, if any software seems like a pseudo software, does not have any industrial use and is restricted only to software and hardware use than such inventions are not patentable. Therefore, any software is patentable only if it has a technical effect to it. In July 2005, the European Parliament rejected the Computer Implemented Inventions Directive.

Several Countries like USA, Australia and Singapore have laws that provide patent to software. However countries like India and European countries have very strict laws concerning software patents.

In Japan, the patent is granted. However, the invention should have the technical utilization to get patented. This requirement is frequently accepted when the software is used by the use of a hardware resource. Hence, the patent of software is allowed when it has technical utilization by using any hardware resources.

The German Parliament has jointly moved a motion where the patent to the software program was disallowed. Also in Australia, if by use of any computer system the business method is implemented then it can be patented.

In South Africa, a program for computer is excluded from being patented and is considered as a non patentable invention. On the contrary in South Korea, the patent is granted to the software.

In India non patentable inventions are:

  1. A mathematical or business method
  2. Computer program
  3. Algorithm.

The patent is granted to all eligible inventions i.e. it should be novel, of utility and of industrial application and should not fall under non-patentable subject matter. The Patents Act 1970 (the ‘Act’) lists the non-patentable subject matters.[4] Section 3 (k) of the Act deals with exclusion of “a mathematical or business method or a computer program per se or algorithms” from being patented.[5] This issue has been extensively deliberated in various judicial decisions in Yahoo v. Controller and Rediff[6] and Accenture Global Service Switzerland v. Assistant Controller of patents and Design New Delhi and Another.[7]

In 2004, the patent amendment ordinance was introduced to extend the scope of granting patent to software and computer program using computer hardware and having industrial application. Currently, there is no recognition of granting patent to the software program if they are a mathematical or business method or a computer program or algorithms. In India, patent was granted for an electronic device, such as a computer, which may be adapted for self-monitoring[8] and for an invention titled “A System Facilitating a Computer Object Access Control” which related to a system facilitating a computer object, access control for controlling access to the computer objects.[9]

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Business Method Patent

There is no clear definition of business method but it can be understood as any process, technique and means of computing or processing data used for conducting particular types of commerce.[10] In Japan, the patent has been granted to, running an automated business,[11]advertising on internet[12]. In Europe, it has been granted to computerized tourism[13]and the other most prominent example is “one click” patent of Amazon.com.[14] Bhatarmtrimony.com[15] is an example from India.

Read about Preparation of Patent Document here

Patentable Inventions in Biotechnology

The growth in biotechnology is increasingly recognized these days. The newly explored area of information technology has a wide field including pharmaceuticals, agrochemicals, environment and energy sectors. Therefore in the field of molecular biology, biotechnology and molecular medicine has brought before the world a new field and development of ‘biotechnology’ for pharmaceutical industries. This has resulted in research and development all over the world.

Biotechnology also includes the technical applications of biological process in micro-organisms plants or animals. Microorganism includes those which can be seen through microscope like bacteria, fungi, virus, and other prokaryotes as well as some microscopic plants (phytoplankton) and animals (zooplankton). Biotechnology helps in various sectors like the food industry, medicines and agriculture. The EU parliament in 1998 adopted the Biotechnology Directive to specify and create a law describing what is patentable in within Biotechnology

As per 11th Annual Indian Biotechnology Industry survey of Bio-spectrum, the Indian biotechnology industry grew by 15.1% from 2012-2013. The revenue too rose to $11.6 billion by 2017. The Annual Report of the Indian Patent Office, 2014 reflected that approximately 2,300 biotechnology related patent applications were filed between April 2013 and March 2014.

In order to secure patent under the Act, the invention should:

  • Not fall any of the categories mentioned in section 3 of the Act; and
  • Pass the three limbs of the test namely the novelty, inventive step and industrial applicability.

The notion was that micro-organisms already exist in nature and hence are considered not to be patentable as per the provisions of the Section 3(d) of the Act. However, ff they are genetically modified versions of the same microorganisms that result in enhancement of its known efficacies then they can be patented.

The United States has allowed the patent of the crude oil (spilling bacterium)[16] also known as the Anand Chakrabarty case which has been a subject of a lot of debate. The US Supreme Court has further detailed that the micro organism are patentable when:

  1. They were man made;
  2. They were products of human manipulation which render it to be an invention;
  3. They had industrial application .i.e. they have utility.

With this judgment the patent over the microorganism flourished in other fields of plant verities as well. The patent was later granted to transgenic fish, mice etc. Thus, US has taken a step forward in expanding the scope of the patent act and Europe has followed suit.

The international instruments that deal with the patent of the microorganisms are Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement that obliges to patent microorganism.[17] WTO also allows its member states to exclude certain classes from patentability,[18] like:

  1. diagnostic, therapeutic, and surgical methods for the treatment of humans or animals; and
  2. Plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non biological and microbiological processes.

In the light of these international instruments, in 2005 India permitted the patent of the microorganisms by an amendment in the Act. Therefore, now the Patent Act has a specific provision[19] regarding the patent to the microorganisms and the micro-biological processes and the product deriving from them. The Calcutta High Court for the first time allowed the patent to the inventions that included living organism.[20] It held that new and useful art or process is an invention and where the end product contains the living organism then it is a new product.

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In India, patent is not granted to those that are naturally formed micro organisms as they are not considered as discoveries and therefore are not patentable.[21] The loophole in the Act is that it does not stipulate any condition or procedure to meet the requirement of sufficiency of disclosure in the case of inventions involving use of biological material and thus it is difficult to describe the same. In March 2013 the Office of The Comptroller General of Patent, Designs and Trade Marks issued guidelines for examination of biotechnology applications for patent.

The Budapest Convention 1973 (the ‘TBC’) is an international convention that governs the recognition of deposits for the purpose of patent applications in any country party who is a signatory to the treaty. TBC was modified and amended in 1980. India became its member in 2001. It has been the practice of the patent office to have a depository institution to satisfy the requirement of sufficiency of disclosure of the invention desired to be patented. The Institute of Microbial Technology Chandigarh was the first Indian depository set up under the Budapest Treaty.

Section 10(4)[22] states that if the invention is done with biological material which is new and not available to the public, and cannot be described according to the provisions of the Act, then the applicant must deposit the same to the International Depository Authority (the ‘IDA’) prior to filing the application. The description in the specification should contain the name and address of the IDA and date and number of deposition of biological material. In case the biological material is already known, then it is not necessary to deposit the same. The complete specification must describe “an embodiment”[23] of the invention claimed in each of the claims and the description and it must be fair i.e. it must not be difficult to follow.[24]A reference of the deposition should be made in the specification. In the specification there should be clear and correct identification of the biological material. It is necessary to disclose the source and geographical origin of the material.


The grant of patent for micro-organisms and invention for software are giant steps taken in intellectual property rights. The object of patent is to award exclusive rights to the inventor. This will motivate other inventors which will help develop newer inventions. Consequently, we will see a rise in industrial growth, development of the country and overall betterment of the human race.

Read about Preparation of Patent Document here

[1] Merril Lynch’s Application CA, (1989) RPC 561.

[2]Symbian Ltd. v. Comptroller General of Patents, [2008] EWHC 518 (Pat).

[3]Parkser v. Flook, 437(1978) 584-589(US).

[4]The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), §3 &§4.

[5]The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), §3(K).

[6]Intellectual Appellate Board in Yahoo v. Controller & Rediff,OA/22/2010/PT/CH.

[7]Accenture Global Service Switzerland v. Assistant Controller of patents and Design New Delhi, OA/22/2009/PT/DEL.

[8]Indian patent application no. 3803/CHENP/2008.

[9]Indian patent application no. 5992/DELNP/2005.

[10] ACIP, Report on a Review of Patent in Business System,Also available at http://www.acip.gov.au/library /bsreport.pdf (Last accessed on 13/4/2020).

[11] Japan Patent No. 2,804,933 (Issued July 24, 1998).

[12]Japan Patent No. 2,756,483(Issued March 13, 1998).

[13] European Patent No. 846,301 (Issued June 10, 1998).

[14]Amazon.com Inc. v. Branesandnoble.com Inc., 73 F. Supp. 2d 1228 (W.D. Was 1999).

[15] Suchitra Saigal, Patent Protection for Marriage Portal, October 29 2008, available at http://spicyindia.blogspot.in /2008/10/patent-protection-for-marriage-portal.html (Last accessed on 13/4/2020).

[16]Diamond v. Chakrabarty, 1980 U.S. LEXIS 112.

[17]TRIPS Agreement: Agreement on Trade-Related Intellectual Property Rights, April 15 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1868 U.N.T.S. 186.

[18]Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154, Art. 27.3.

[19]The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India).

[20] Dimminaco AG v. Controller of Patent and Designs, (2002) I.P.L.R. 255 (Cal).

[21]The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), §3(d).

[22]The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), §10(4).

[23] Farbewerke Hoechst Aktiengesellschaft Vormals Meister Lucius& Bruning a Corp. etc. v. Unichem Laboratories, AIR 1969 Bom 225.

[24] Raj Prrakash v. Mangatram Chowdhary, AIR 1978 Del 1.