Computer Programmes Per Se

Introduction

Sometime back the software industry in the developing countries like India, China, Brazil etc, created very little new and valuable intellectual property, with the development of the intellectual property not being essential to the development and growth of this industry. However, in the last decade the growth in IT industry in these countries has overshadowed the growth in even the developed countries like US, UK and Japan. The software houses are investing billions of dollars in research and development and the rate of patenting and copyrighting has accelerated dramatically.

Therefore the need for the evolution of the intellectual property law in this industry has become more important than ever and it has become paramount that the law in these developing countries is updated to match the law prevalent in the developed countries to protect the intellectual property so created.

A central feature of the IT industry is the creation, protection and exploitation of intellectual capital by companies and other organisations, in order to gain a competitive advantage, improve services or reduce costs.

Intellectual property may take several manifestations such as Contract, Copyright, Trade Secret, Patents, Trademarks, Layout Designs (Topographies) of integrated circuits and it is important for the companies to obtain the protection most suited to the type of intellectual capital (software program, websites, databases etc. ) E.g. the first four IPR’s have an impact on computer software with copyright and patent considered to be more vital than the others. The fifth one and the sixth one are more relevant to the internet and to computer hardware, respectively rather than to the computer software.

Copyright As Means Of Protecting Software

The Berne Convention for the protection of literary and artistic works in 1986 provided that the Computer software/ programme (object code and the source code) and the compilation of the data should be protected under the Copyright Acts. TRIPS have proceeded from the Berne Convention and asked for the nations to amend their IP laws accordingly. Since then, we, along with other nations, have amended the Copyright Act, 1957 in 1994 and 1999 with the definition of literary work amended to include computer programme and computer database.

However, there have been conflicting views on the ability of copyright to protect exploitation of computer programme and there is an international debate over whether software programs are most effectively protected by copyright laws. Copyright laws which generally protect original literary, dramatic, musical, and artistic works, generally protect ideas and not so much their expressions. Though copyright protection impedes wholesale duplication of computer software and codes, certain problems remain unresolved. It appears to do little to prevent production of similar or functionally equivalent variations by third parties through reverse engineering or other forms of independent creations, particularly unprotectable functional components of software like databases.

Aggrieved by the insufficiency of copyright to protect piracy of computer software, computer giants like Oracle and Microsoft have been lobbying for patenting of computer software as the answer to their problems.

Patenting Software

Patents are considered to be one of the most powerful of all intellectual property rights even though they aim to provide protection for only 20 years. They can prevent a process or the manufacture of the product. It is an exclusive right given by law to the inventors to make use of and exploit their inventions for a limited period in exchange for a full description of how to perform the invention.

Patenting of computer software is one of the most important and even one of the most problematic parts of software intellectual property discourse. It is currently a hotly debated issue throughout the world, be it United States, Europe, or developing countries such as India and China. Some argue for the patentability of the software while some argue against it citing copyright as the most appropriate form of IPR for prevention of computer software exploitation.

Lobbyists in favour of the patenting of computer software argue that Patent law aims to eliminate the loophole created by copyright law by providing protection irrespective of whether the invention was copied. Any use of the patented device would tantamount to infringement irrespective of the knowledge of the existence of the device thereby preventing reverse engineering.

In Computer Associates v. Altai Inc the court speaking on the benefits of patent protection to software’s held that

Generally we think that copyright registration with its indiscriminating availability is not ideally suited to deal with the highly dynamic technology of computer science. Patent registration with its exacting up front novelty and non obviousness requirements might be a more appropriate rubric of protection for intellectual property of this kind.

Moreover, patent protection may be accordingly favoured over copyright given the certainty afforded to it by registration and the attractiveness of the monopoly right it conveys.

However, their opponents argue against patentability because of three reasons. First, computer program cannot be considered to be a patentable subject matter as they are nothing more than scientific discoveries, laws of nature or mathematical formulae. They are a representation in form of instructions, of a mathematical formula or a relationship which could be applied in a number of ways, sometimes also referred to as algorithms. Therefore in majority of the countries around the globe software’s per se have not been considered to be a patentable subject matter. Secondly, they argue that granting patents to software would enable the computer giants like IBM, Microsoft, Oracle to muscle out the not so big players in the market by using monetary advantage thereby stalling the development of the industry. In words of Richard Stallman, co-developer of the GNU Linux patenting software would be ‘like saying be the greatest genius in history or don’t even try’. Thirdly, some argue that software patents relate to trivial and obvious inventions.  A patent on an invention that many people would easily develop independently of one another should not, it is argued, be granted since this impedes development.

Granting patents to computer software is a grey area with the law relating to it not being uniform across all jurisdictions. To discuss the prevailing law it becomes important to draw a comparison between some of the most important jurisdictions such as USA, Europe, and India.

US Regime

The United States Patent act does not specifically deal with software patent. Section 101 describes the inventions which are patentable and provides that “whoever invents or discovers any new and useful process, machine, and manufacture of composition of matters or any new or useful improvement thereof may obtain a patent therefor, subject to the conditions and requirements of this title”. With the statute being silent on patentability of software the legal principles governing the patenting of computer software have been developed through case laws.

Initially the US authorities were reluctant in granting patents to computer software. In the 1960s, the P.T.O. avoided granting any patent if the invention utilized a calculation made by a computer. In fact, in 1968, the PTO created formal guidelines which stated that a computer program, whether claimed as an apparatus or as a process, was unpatentable. The PTO structured its guidelines on the basis of ‘mental step doctrine’and viewed computer programs and inventions containing or relating to computer programs as unpatentable ‘mental steps’, and not patentable processes or machines. Software was linked with “algorithms” which are mathematical truths like principles of nature and therefore patenting them would be strangling innovation in conception, a software program being essentially an algorithm hits the bar of patentable subject matter.

However, these guidelines were later withdrawn with the decision of the Court of Customs and Patent Appeals (CCPA) in several judgements. For instance, in In Re prater the CCPA held that the doctrine of mental act does not prevent patenting of software. This era marked the difference in the approaches of the government authorities towards patenting of software with the PTO fighting to reject most, if not all patents and the CCPA on the other hand pushing for less stringent restrictions.

Finally in the year 1972 in the case of Gottschalk v. Benson the US Supreme court intervened to settle the position and resolve the existing ambiguity. The court observed that the subject matter in this case was nothing more than an algorithm and held that

the mathematical formula in the instant case had no practical application except in connection with a digital computer, which means that if the judgement below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.

This position was later affirmed and in Parker v. Flook where the court rejected the argument of post solution activity (some possible physical transformation) and held that all software did was generated numerical value even if the values brought about a physical result and held that the claim was unpatentable. This case did little in eliminating the confusion with respect to the mathematical algorithm confusion which arose in Benson case.

Three years later, in 1981, the US Supreme court in Diamond v. Diehr eased the availability of computer programs by finally recognising a computer related invention as patentable subject matter thus placing the computer related invention in the mainstream of law. The Supreme Court held that in this case the invention not merely a computer program but also included the ways to mould rubber and hence there was something more than a computer program alone. This was irrespective of the fact that the novelty lied only in the timing process controlled by the computer.

The US courts took this decision as a green signal to extend patentability to algorithms with some end use. Thus by the 1990s, obstacles to patent protection for software had begun to erode and there was substantial clarity in the field of computer-related inventions that was patentable. A series of decisions of the U.S. Court of Appeals for the Federal Circuit from 1992-94 effectively held that while a computer program alone is not protectable, a machine, such as a computer, whose operations are reconfigured by a computer program constitutes statutory subject matter.

However, it was clarified later that it does not imply that an excluded item can be patented merely by combining it with a non excluded item. Something further is necessary. What needs to be looked into is the technical contribution the invention makes to known art.

In 1998, the Federal Circuit in State Street Bank & Trust v. Signature Financial Group court held that a business method can be held patentable provided that the invention yields a useful, concrete and tangible result.

Therefore after the State Street Bank decision there is little doubt that computer software and data structures can be considered patentable subject matter in the United States. Certain steps are required to ensure that the software meets the examination guidelines of the USPTO, such as ensuring that the software or data structure is operated upon by a computer processor, or is stored on a computer readable media. However, these requirements are easy to meet when drafting the patent claims, and therefore are not a significant impediment to patentability.

On October 30, 2008, the Federal Circuit came down with their In re Bilski decision. The majority ruled on the patentability of processes where the process steps are not necessarily performed on a computer. The majority decision has set forth a single test for determining the patentability of processes. This test holds that a process is patentable if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”

This test could have major implications for the patentability of computer implemented business methods specifically, and computer software in general. Unfortunately, the majority opinion decided not to determine whether a software process operating on a general purpose computer is considered to be tied to a “particular machine or apparatus.” In other words, the decision as to whether a general purpose computer is a “particular machine” is to be left for another day. If a general purpose computer is not a particular machine, then many software implemented process patent claims could be invalid. A further question to be determined is what effect this would have on “apparatus” claims for computer implemented software.

European Regime

The fundamental provisions of the European Patent Conventions (EPC) are found in Article 52(1) which states that ‘European patents shall be granted for any inventions which are susceptible of industrial application. Article 52(2) provides exclusions to patentability and under sub article (c) includes programs for computers. The explanation to this article provides that the provisions of this paragraph shall exclude patentability of the subject matter of activities referred to in that provision only to the extent to which a European patent application of a European Patent relates to such subject matter or activities ‘as such’.

The words ‘as such’ can be considered to be similar to the phrase per se used in the US statutes. Under the European regime it is well established that a computer program prima facie remains unpatentable which is expressed purely in terms of abstract numerical or logical inputs and outputs and can be performed through mental acts. However, if it can be shown that the subject matter makes a ‘technical contribution’ to the known art, patentability would not be denied merely on the ground that the computer program is involved in its implementation.

Where the courts have believed that the program lacked the technical character and claim was for the patentability of the software alone, the court has rejected the application. For example in IBM/ document abstracting and retrieving case, the court in refusing to grant the patent for a system held that the claims were unpatentable by reason of lack of a technical character and more particularly as falling within the category of scheme, rules and methods for performing mental acts. The fact that technical means were used in carrying out the abstracting process did not make the process patentable, because the contribution made to the art by the invention was not technical but purely associated with set of rules whereby the abstracting process was carried out.

Similarly in IBM/semantically related expressions case the court held that claim dealing with a system for automatically generating a list of expressions semantically related to an input linguistic expression are not technical matters and can be performed through mental acts. Moreover, in IBM’s application case the court affirmed the unreported decision of ATT/system for generating software code. The court laid down ‘the mental act’ test to determine the patentability of the computer programmes.

However, this should not imply that all computer programmes are unpatentable. As stated earlier, the programmes which result in a technical effect fall outside the purview of computer programmes as such and hence patentable.

Vicom/ Computer related invention is the leading decision on computer related inventions. The Technical Board of appeal reversing the decision of the Examining division held that just because the claims might be drafted in terms of algorithm that did not make them unpatentable if the invention related to a technical process. The distinction was drawn between claims for a digitally filtering data (which would be a mere mathematical method and hence unpatentable) and the invention as claimed. In the former case no physical entity is represented by the data and hence abstract and whereas in the latter it is an image. Moreover, a claim to a technical process carried out under the control of a computer program is not a claim to a computer program as such.

Another important case in this regard is the Koch and Sterzel case/ X Ray apparatus case where the claim was for a X Ray apparatus being controlled by a computer with the help of a computer program. The court upholding the patentability of the claim decided that when determining the patentability of the subject matter involving a computer program, one is not concerned only with the computer program. One needs to look at the invention as a whole. The novelty in some cases may only reside in the computer program but the real contribution to the ‘state of the art’ may be made by the invention as a whole in this case the way of operating an X ray machine. This invention gave the community something which was not available to them before and which is ultimately useful to them.

Two relatively recent developments have changed this basic position as laid down in Koch and Sterzel case and Vicom case. Until the 1999, it was the position that the claims relating to computer programs were allowed only when coupled with hardware such as a computer of a method of doing something using a computer. Claims to the program itself or programs when recorded on a carrier were claims to a computer program ‘as such’ and therefore not patentable. In the case of IBM’s application the technical board found that it was not consistent with the reasoning in cases such as Vicom and Koch and Sterzel to limit claims to computer programs in this way and observed that

“ in view of the board, a computer program claimed by itself is not excluded from patentability if the program, when running on a computer or loaded into a computer brings about or is capable of bringing about a ‘technical effect’ which goes beyond the normal physical interactions between the software and the hardware on which it is run.

The decision of the Technical Board of Appeal in the Bosch/Electric computer components decision also deserves mention since it recast computer programs as technical creations. Same with the In re Sohei decision, where the Board held that an otherwise patentable computer program would not lose its patentability merely because additional features fall within subject matter excluded under §52(2).

By the late 90s, the European Patent Office had opened the way to software receiving patentable status. In the last twenty years the EPO has granted over 30,000 patents to software inventions that satisfy their criterion of producing a technical contribution. However, the policy on the patentability of software has diverged across the European Union, with national patent regimes taking greater or lesser notice of the reinterpretations of the 1973 Convention that the EPO has engaged in. This in turn has led to uncertainty about the robustness and EU-wide enforceability of patents that include software granted by the EPO and by national patent offices.

So in 2002, the European Commission drafted a European Directive on the Patentability of Computer-Implemented Inventions which aims to clarify what is patentable and what is not at a European level, and thus bring about a harmonization of the many different national laws on patenting. It was also intended to harmonize European states’ patent policies with the requirements of the World Trade Organisation’s TRIPS agreement.

Indian Regime

The Patent Act, 1970 does not contain any express provision, which specifically enumerates the items on which a patent grant may be obtained but section 2(j) of the Act defines what constitutes an invention so as to qualify for a patent grant under the Act. Section 2(j) contemplates that “invention means a new product or process involving an inventive step and capable of industrial application.”

Section 3 of the Act imposes embargo upon a list of inventions which are expressly declared to be unpatentable. By the Patents (Second Amendment) Act in 2002, the scope of non-patentable subject matter in this section was amended to include the following: “mathematical method or a business method or a computer programme per se or algorithms”. Prior to its amendment section 3 kept ‘the mere discovery of a scientific principle or the formulation of an abstract theory’ outside the purview of patents and there existed no express limitation so far as the patentability of the computer program or algorithm was concerned.

The Patent (Amendment) Act, 2002 was first introduced as the Patents (Second Amendment) Bill, 1999, in Parliament. The expression ‘per se’ was not present in the proposed amendment but was suggested by the Joint committee to whom the bill was referred. The Joint Committee in its report stated that their deliberations were motivated by an abiding concern to balance and calibrate intellectual property protection with national and public interest. According to the report the Joint committee felt that the exclusion should be only restricted to computer programs alone and should not be applicable when it includes other ancillary elements.

Then later in 2005, the Patent Amendment Ordinance, with the intention of clarifying the law patentability of softwares proposed to introduce patents on software by qualifying the bar on computer programs as patentable subject matter; “a computer programme per se other than its technical application to industry or a combination with hardware; a mathematical method or a business method or algorithms.” However under fierce opposition such ordinance was not enacted leaving the existing ambiguity unresolved.

With the withdrawal of the amendment it is still unclear whether softwares are patentable subject matter under the Indian Patent law. Some argue that the expression per se implies that the patent cannot be claimed for the computer program alone. However, if the program is coupled with hardware then patent can be granted. This approach has been derived from the approach adopted by the US authorities in the late 1970’s. This viewpoint has been extended and some argue that software is developed from a computer program and is something ancillary and not a computer program per se. Therefore software can be considered to be patentable and does not fall under the purview of Section 3(k) provided it satisfies the requirement of novelty, inventive step and industrial application. While other proponents of software patents, basing their arguments on the European and the liberal approach adopted by the US authorities, argue that if it can be shown that the softwares in question have a technical effect then it can be patented and it is unnecessary to establish any link with any sort of hardware.

It is apprehended that as India has very little of software products, its industry supplying “bodies” to develop software for global giants, any regime of software patents would push up the costs of the users of software as a whole and also make it almost impossible for Indian companies in the future to break into the global software market with its own products.

It is also argued that the Indian software industry would be much better served without patents on software as it would be possible to generate innovative products without being shut out by debilitating patent battles. Also, it may not be wrong to say that our patent office, the judicial set up and the entire machinery involved in grant and protection of patents is at present not in a position to take this challenge. The legal fraternity may find it difficult to handle the number of disputes which may arise because of the grey area of software and its application. We need trained personnel to handle these issues at each and every step.

However, if at all India wishes to grant software patents, it must do so explicitly through a parliamentary amendment to its patent law. Needless to state, any such amendment ought to come about only after carefully weighing the pros and cons of granting such patents. But till such time as the software patent exclusion remains on our statute book, it ought to be adhered to and respected. India must avoid buying into the complicated and confusing interpretative process that has characterized American and European jurisprudence on this count.

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