US Court verdict on software process patent stirs debate

A US Federal Court judgment disallowing business method (or
process) patenting, may have a direct impact on the ongoing debate over
amendments to the Indian patents manual. The US judgment could help in
interpreting whether business processes or software written in India can be
patented or not.

While large IT players like Microsoft, IBM have given a
thumbs up to the Bilski judgment, Indian companies like Infosys had been
lobbying for patents on software systems and methods. A US Federal Court for
appeals in Washington ruled against Bernard Bilski, who wanted to patent a
method for managing weather-related risk through commodities trading. The Court
said that business methods (like Amazon.com Inc’s one-click to buy goods on the
Internet, which was quashed later) cannot be patented.

Sun Microsystems’s director, Jaijit Bhattacharya said that it
was a positive move towards an appropriate interpretation of innovation and
patentability of software. “It would allow a more open regime and would help in
wider access to computing technologies,” he said.

Companies like IBM, Microsoft lobbied against business method
patenting. But companies like Accenture, Royal Philips Electronics NV, Bain
Capital LC were asking for more protection for business method patenting.

However, the ruling does not significantly impact large
Indian IT services companies, as none are majorly into product development and
patenting, at least at present. India’s largest IT services company TCS said
that it’s reviewing its stand on software patenting in the light of the current
judgment.

“The ideas and frameworks for business processes should not
be patentable but the content written within those frameworks should be allowed
to be copyrighted. Indian law is also within boundaries of the US Court
judgment,” said Nasscom President Som Mittal. There are few world famous Indian
IT products — like Flexcube and Finacle. But the judgment may affect smaller
companies which want to innovate, but were earlier being strangled by large
corporations on account of patenting of a process.
The judgment may also be used in the larger debate on software patenting in the
country. Venkatesh Hariharan, founding member of Knowledge Commons, an NGO,
said : “Business method patents are seven times more likely to be litigated as
compared to other patents, because it’s difficult to determine the boundaries of
abstract patents categories like business method and software patents. Indian
law is against software patents, but in practice, several software and business
method patents have been granted and these will need to be weeded out to prevent
future litigation. Overall, this is a good decision because it will reduce the
risk of litigation that hangs over users and developers of software.” Knowledge
Commons is lobbying for ‘no patents on software in India’ if it (the software)
is not tied to a specific hardware.

According to S. 3(k) of the Indian Patent Act : “A
mathematical or business method or a computer programme per se or
algorithms are not patentable.” But software in conjunction with hardware is
patentable in accordance with Indian law, which is giving rise to ambiguity. The
Bilski judgment may however be used as a reference for drafting the amendments
to the Indian Patents Manual and will also help in interpretation of the Indian
Patent Act. While rulings over the years have used different methods to
determine if a process is patentable, the Federal Court ruling said the sole
analysis should be the ‘machine-or-transformation’ test — which requires showing
that the claimed invention is either tied to a particular machine or that it
transforms an ‘article’ (such as a substance or data).

(Source : The Economic Times, dated 1-11-2008)