By Akshay Shah

The reliance of modern society on technology has reached an unprecedented scale in the last two decades. This is due to the recent developments in the field of information technology coupled with the expansion of market for such technological products. One of the vital reasons for this development is the massive investment in technology sector start-ups, some of which have completely disrupted the existing market. The investors in these start-ups as well as the developers prefer to protect their inventions under the intellectual property regime. Traditionally, software was distributed freely with hardware.[i] However, with the emergence of software as a commodity independent of the hardware, the intense competition within the software industry and the substantial reliance of businesses on software, intellectual property protection has become crucial for software inventions.[ii]

            The extent of intellectual property (IP) protection provided to a computer software has been highly debated nationally and internationally. The issue arises as to the most appropriate intellectual property mechanism to protect it. This is because while most jurisdictions provide for copyright protection to software as a form of expression, certain jurisdictions are providing patent protection due to its industrial nature.[iii] The issue gains significance due to the massive costs (an estimated $11.2 Billion) in software infringement suits borne by companies for their use of standard software necessary for running a modern business.[iv] It is fundamental to understand what a computer software is before discussing the extent and nature of intellectual property protection accorded to it.

            Software is the term usually used to describe a set of programmes, procedures, rules and all associated documentation pertaining to the operation of a computerised system. There are different types of software which includes system software also called operating system, utility software for performing routine tasks, application software for performing specialized functions.[v] It can also be divided in different groups like Commercial software, shareware, freeware and public domain software. It is protected according to different intellectual property mechanisms based on its industrial application, new and inventive step, originality, etc. Commercial software, shareware and freeware are copyrighted and the code cannot be modified or used in another program without the permission of the copyright holder.[vi] However, in case of a public domain software no such restrictions apply.

            The issue with protecting software with a copyright is that it only protects expression. Thus substantial modification to the original work to provide the same functionality will not be protected by a copyright. On the other hand, a patent protects functionality.[vii] This is where the biggest distinction in terms of protection arises. Literary art which is predominantly protected by copyright does not involve any aspect with regard to functionality while each software depends on the end user experience of the software. Thus there may be similar experiences from two differently coded software which will not be prevented by a copyright. With the advent of advanced software based applications, competitive developers and strategic investors it has become imperative to provide a better protection to software. Therefore, although traditionally software was protected by copyright, with the growth in its industrial and other advanced application it can also be protected under the patent system.[viii]

            Different jurisdictions have different levels of intellectual property protection given to software. For instance in the United States, Software and computer programs are both copyrightable and patentable. The US Congress has stated that “anything under the sun made by man deserves patent protection.[ix] The US Supreme Court in Diamond v. Diehr[x] ordered the patent office to grant patent to an invention even though the invention involved utilization of computer software.[xi] The Bilski v. Kappos[xii] decision of the United States Supreme Court has created uncertainty with regard to patentability of “process” claims which includes software[xiii] and it also laid down the ‘machine or transformation test’ which requires that a process to be patentable must be tied to a particular machine or apparatus, or transform an article into a different state or thing.[xiv]  However, the position in the US jurisdiction largely remains in favour of patentability of software.

            In the European Union, the European Commission’s (EC) Proposal for a Directive on patentability for computer implemented inventions[xv] was a proposal for the European Union to harmonize the national laws and practices relating to granting of patents to computer related inventions provided they meet certain criteria. It was a positive step to minimize the confusion due to the idea/expression dichotomy. There is always a debate as to whether software is an idea or a form of expressing the idea. An overlap easily occurs because a computer program may be new, inventive and industrially applicable and at the same time be original.[xvi] This way it is patentable as an idea as well as copyrightable in the form of an original expression of an idea. The EC’s proposal sought to reduce this overlap. However, after years of debate the European Parliament rejected the proposal.[xvii]

The current position is that software is patentable in EU, provided they make a technical effect; although the requirement of inventive step which is found in Europe is more stringent as compared to US approach.[xviii]

The scenario in India, when it comes to patentability of software implemented inventions is murkier than its global counterparts. This is ironic given India’s rapidly growing Information Technology Industry, growing number of technology start-ups and policy status to such businesses by way of start-up policy of the Government.

In India, according to the Patent Act, computer software per se is not patentable. The Patent Amendment Act, 2005 aimed at introducing software patents in India by amending Clause 3(K) of the Patent Act was rejected by the Indian Parliament.[xix] Later, a ‘Draft Manual for Patent Practice and Procedure’ was published by the Patent Office in 2008 in which ‘certain method claims for software inventions were allowed to be patented’. However, this draft was withdrawn from circulation after certain parts created controversy. The manual heavily relied on the interpretation by U.K. courts regarding software patentability.[xx] Thus although the patent law in India is largely harmonized, uncertainties and ambiguities do exist with regard to software patentability.

Protecting the code but not its functionality will deprive the inventors of their due monetary benefit. At the same time, monopoly over an invention while impairing further innovation is certainly not the way forward. The present mechanism for protection of software related inventions, which presently exists in the United States or the European Union or Japan or for that matter in India is definitely not adequate enough to strike the balance between adequate protection and innovation. The problem may lay in the inability of the existing intellectual property mechanisms to encompass the developments in the field of information and technology. A new and globalized solution to this contentious issue is the urgent need of the hour. But for now, it is just wait and watch.

[i] M Schellekens, ‘Free and Open Source Software: An Answer to Commodification?’ in L. Guibault and B Hugenholtz, The future of the public domain: identifying the commons in information law (Netherlands, Kluwer Law International, 2006) 309

[ii] Patenting Software, World Intellectual Property Organization. Available at http://www.wipo.int/sme/en/documents/software_patents_fulltext.html,

[iii] Free and Open Source Software Policy, Law, and Practice (Oxford), Edited by Noam Shemtov & Ian Welden.

[iv] 2008 State Of Softpatents, End Software Patents. Available at: http://endsoftpatents.org/pages/2008-state-of-softpatents/,

[v] Copyright and Software, European Space Agency. Available at http://www.esa.int/About_Us/Law_at_ESA/Intellectual_Property_Rights/Copyright_and_software,

[vi] Ravindra Chingale and Srikrishna Deva Rao, Software Patent in India: A Comparative Judicial and Empirical Overview. (Journal of Intellectual Property Rights – Vol 20, July 2015, pp. 210-222) 211

[vii] Software Patent Debate, World Public Library. Available at: http://www.worldlibrary.org/articles/software_patent_debate#Copyright_limitations,

[viii] Supra  Software Patent in India: A Comparative Judicial and Empirical Overview (p. 212)

[ix] Diamond v. Chakrabarty. 447 U.S. 303 (1980)

[x] 450 U.S. 175 (1981), Diamond v. Diehr

[xi] Considering Patentability Of Software, Mondaq. Available at http://www.mondaq.com/india/x/365840/Patent/Considering+Patentability+Of+Software,

[xii] In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc)

[xiii] Augustine and Malaney, Bilski v. Kappos: Summary And Implications, Patent Law Practice Centre. Available at http://patentlawcenter.pli.edu/2010/09/29/bilski-v-kappos-summary-and-implications/,

[xiv] Gene Quinn, A Guide to Patenting Software: Getting Started, IPWatchdog. Available at http://www.ipwatchdog.com/2013/02/16/a-guide-to-patenting-software-getting-started/id=35629/,

[xv] Proposal for a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions, (Commission proposal COM(2002) 92), procedure number 2002/0047 (COD). Available at: http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52002PC0092,

[xvi] Supra Software Patent in India: A Comparative Judicial and Empirical Overview (p. 212)

[xvii] EU Parliament bins software patent bill, The Register. Available at http://www.theregister.co.uk/2005/07/06/eu_bins_swpat/,

[xviii] Supra Considering Patentability Of Software, Mondaq

[xix] Supra  Software Patent in India: A Comparative Judicial and Empirical Overview (p. 212)

[xx] Supra Considering Patentability Of Software, Mondaq

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