Author: Harsh Kashyap, School of Law, Forensic Justice and Policy Studies, National Forensic Sciences University, Gandhinagar
TO THE POINT
The patentability of algorithms and software is still a hot topic among policymakers, creators and legal professionals in India. Section 3(k) of the Patents Act, 1970, doesn’t allow patent protection for mathematical methods, business methods, computer programs, and algorithms. However, the growing digital economy needs to adopt a more sophisticated negotiation between protection and innovation. This paper aims to address and present the legal framework for software patents in India by examining statutory and judicial considerations, and the progressive border of software patentability in India.
ABSTRACT
The Indian patent regime struggles with the challenge of finding a balance between innovation and accessibility in the area of software and algorithms. The language of Section 3(k) of the Patents Act delineates what is not patentable, including computer programmes per se, business methods and algorithms, which demonstrates some caution to prevent monopolising abstract ideas. A judicial tendency has emerged recognising the patentability of inventions that demonstrate a technical effect or are applied in an industrial realm, and which are then distinguishable from pure business methods and algorithms. This article will be a fully developed and thorough analysis of Section 3(k), simplifying technical issues, reviewing legal developments and analysing and evaluating any policy implications. The important tension and related issue is determining boundaries that appropriately serve public interest while promoting technological advancement.
SECTION 3(K) OF THE PATENTS ACT, 1970
Section 3(k) states:
“A mathematical or business method or a computer program per se or algorithms” are not inventions for the purposes of this Act.
JARGONS SIMPLIFIED
Computer Program per se – This is a computer program “per se”, or in its purest form (the code itself). In India, the law does not allow for a patent just for the program without it having any actual technical application to the real world.
Technical Effect – The practical effect from an invention, such as decreased processing time, increased resolution of what you see on a screen, or enhanced data security. The effect tends to make software patentable.
Technical Contribution – The technical improvement offered by a program. For instance, a program that aids in making mobile networks more efficient is a “contribution” to telecom technology, not simply computing.
Business Method – A method for conducting business, such as a checkout process for online shopping. These are inherently excluded from patentability as business methods and are not inventions.
Abstract Idea Doctrine – The notion that you cannot patent a regular idea of science, a regular idea in maths, or laws of nature.
Patentable Subject Matter – The categories of things that the law will allow you to patent. In India, software per se is excluded, but software that shows a technical effect will be patentable.
Computer-Implemented Invention (CII) – Where a computer program is a critical part of the invention, like navigation software improving GPS.
THE PROOF
The controversy surrounding algorithms and software patentability in India is not simply a legal question of statutory interpretation, but also a larger example of tension between innovation, public and private use, and monopoly. Patent law has typically rewarded tangible, industrially applicable, and process-changing inventions. When patents were first conceptualised for their current form, they applied to mechanical inventions- machines, chemical compounds, and industrial processes, which were individually characterised in or through physical, material contexts. When computers came along and software became the traditional idea of knowledge systems or of ideas embodied in operations was torn away, and instead there are now (internally- and potentially) abstract, intangible examples without the traditional and necessary labouring or material apparatus that constituted a traditional invention. This opens up an important question: should a line of code of some kind, novel or not, have the same legal consequences as a new chemical drug or a mechanical engine?
The Indian legislature responded to this by Section 3(k) of the Patents Act, 1970, which explicitly excludes mathematical methods, business methods, computer programs per se, and algorithms from patentable subject matter. This reflects caution, because lawmakers were concerned that abstract ideas would be monopolised, hindering access, and limiting the free exchange of commonplace computational. By excluding computer programs per se, India was preventing the establishment of an ownership paradigm where multinationals could control, effectively, the local IT industry with broad software patents.
However, the term per se was intentionally used to prompt some discretion. The understanding was that if a software program embodied a technical effect, or contributed to the resolution of a real-world technical problem, that software program should not be excluded simply because the invention was implemented in code. This drafting allowed Indian jurisprudence to evolve via gradual increments; the distinction balanced exclusion with the possibility of inclusion depending on the nature of the invention.
In recent times, the balance delineated by Indian courts and the Patent Office has evolved. The element that courts have relied upon is the separation between pure abstraction and technical contributions. While an algorithm is defined as nothing more than a mathematical process and is therefore unpatentable, an algorithm executed within a program that achieves a technical improvement (a more efficient digital communication, better encryption, reduced data storage) will at least have an argument for being patentable subject matter. This concept is consistent with what is happening internationally and in Europe with the European Patent Convention, which states that computer programs “as such” are unpatentable but will permit patents when the program shows a “further technical effect”.
In practice, the difficulty has been in establishing the difference between pure abstraction and the mere presence of a “technical effect”. A program to automate the calculation of taxes is simply a method of conducting business in digital form that is still unpatentable. A program that increases image recognition in medical diagnostics is a technical contribution to healthcare technology. So a lot of the case law has not been contingent on whether software was actually before the court or patent office, but solely on the effective result produced by software in the real world.
This continual evolution of the standard has been fortified by the sequence of interventions from the courts. The IPAB and subsequently the High Courts have pointed out that it is primarily the merit and substance of the claims that need to be assessed, not the manner in which the claim has been articulated. Applicants may frame the inventive elements of their applications in any number of creative ways (label them “systems” or “appliances”, etc.) in order to gloss over what might simply be a software program. The courts have said that import into a technical field is important, and have used the doctrine of pith and substance to assess whether the claimed invention actually adds to the technical field.
However, this doctrinal flexibility has resulted in a degree of uncertainty developing. The Patent Office has released multiple guidelines on processing computer-related inventions, notably in 2013, 2016 and 2017. Each of these guidelines has been put on paper on how they wanted to process computer-related inventions, and each has tweaked the guidance towards a hard exclusionary or a more supportive treatment of inventions related to software, etc. This has resulted in confusion for the applicant or practitioner as to which format of assessment or evaluation they will be subjected to.
Notwithstanding, some principles have crystallised since then. In order to be patentable, a software-related invention must demonstrate that it has been made in the industry, must not simply automate an old process, and must provide a technical effect beyond the computer program itself. These criteria have become the backbone of Indian jurisprudence. The decision of the Delhi High Court in Ferid Allani v. Union of India (2019) crystallised this position, affirming that the exclusion of computer programs per se should not foreclose the giving of patents to legitimate inventions that provide a technical effect or contribution. This case also marked a turning point that demonstrated that Indian courts are open to aligning themselves with international standards, which incentivise innovation but also accept statutory exclusions.
The discussion surrounding Section 3(k) is also about more practical policy considerations. Enhancement of software patent protection has been motivated by an understanding that India must respond to the realities of the global digital economy. As India seeks to become a global cricketing centre for artificial intelligence, machine learning, blockchain, and other cutting-edge technologies, the lack of patent protection may result in a loss of incentive to invest in innovation, signalling to innovators to take their innovations to a country or jurisdiction that offers a more sustainable software patent regime. Conversely, some scholars contend that issuing overly broad software patents will limit competition, entrench monopolies, and undermine the open-source movement that is the backbone of India’s IT sector. In their view, patents should be awarded for technical contributions, not for ownership of abstract logical ideas that are the underpinnings of digital inventions.
The tension is increasing with the emergence of nexus technologies. Artificial intelligence for instance, relies on a vast assortment of algorithms and machine learning models. Should these models be patentable in India? If yes, to what extent? Patent protection may encourage AI innovation, but it may also limit access to basic resources that researchers and developers produce in creating their new products. Blockchain technology presents similar issues: while new developments in blockchain technology may be potentially transformative, the technology itself is not a novel algorithm, but merely established mathematical and abstract principles. Similarly, the issues associated with acquiring patents on disruptive quantum computing advances indicate that many novel failures also involved exploiting the realities of manipulating mathematical properties. As such, the interpretation of Section 3(k) will need to find meaningful and relevant ways to consistently reinterpret, to account for the constant flux of innovations.
A way ahead may be, for a more reliable and meaningful framework for consideration of patentability of software-based inventions and the associated exclusions, to focus less on unnecessary exclusions and engage in consideration of whether the invention makes a genuine technical contribution to a field of technology. For this task the Indian Patent Office could use the European Patent Office’s “further technical effect” test, which has been developed by Courts over many decades of case law, and with this (and perhaps with additional clear statutory or policy guidance) it could be easier to create and apply consistently to provide certainty for the innovator. Without this certainty, it is likely that India will either lag behind in protecting its innovators or intentionally create monopoly situations that limit access.
In reality, at the very least, the one salient fact that can be acknowledged is that algorithms and software sit at the centre of the modern innovation economy, and their patentability should be carefully regulated. Section 3(k) signifies India’s attempt to balance out the exclusion of abstract ideas while reasonably allowing for the application by inventors to the use of software for technology-related contributions. The interpretation of Section 3(k) must continue to develop with the application of good judicial reasoning, legislative intent and policy rationales.
CASE LAWS
The jurisprudential and administrative interpretation of Section 3(k) has changed meaningfully over time. Early rulings took an exclusionary, black-letter interpretation of the section, which did not recognise any “technical effect” or “industrial application,” while subsequent rulings began to recognise that genuine innovations could cross the patentability threshold. The following rulings outline the movement from an exclusionary view of Section 3(k) to a more balanced approach that counterbalances the exclusions of Section 3(k) with the necessity to foster innovative development.
Tata Consultancy Services v. State of Andhra Pradesh (2005)
Although this case does not directly concern Section 3(k), it provides an important starting point for understanding how Indian courts first started looking at software. The question for the Supreme Court was whether computer software was “goods” for the purpose of taxation. The Court ruled that software is capable of being bought and sold and transmitted when it was on a medium like a CD, and therefore it qualifies as “goods.” The judgment did not concern patentability; however, it recognised that software has a marketable, tangible value. This conclusion planted early seeds that software could not be said to be simply abstract. By recognizing it possessed commercial significance, the decision indirectly affected later debates about whether software could be considered inventive subject matter that is entitled to patent protection.
IBM v. Controller of Patents (2011)
IBM sought patent protection on methods for accessing and retrieving web services. The Patent Office rejected the claims on the basis that they were simply computer programs per se and were straight up excluded in Section 3(k). The case showed the rigidity with which the Patent Office was applying the exclusion, with little latitude for recognising the existence of a technical effect or contribution. The IBM case illustrated the initial conservatism of Indian patent examiners and their general distrust of software-related inventions which were often rejected outright. Furthermore, the IBM case demonstrated the uncertainty that all inventors, in particular the global technology firms, faced with Indian patent legal interpretations.
Yahoo v. Controller of Patents (2011)
Yahoo attempted to secure a patent for a method of operating a browser. The patent was again rejected, claiming simply that it was just a computer program per se. The significance of this case was that careful claim drafting would not have the effect of changing the essence of the invention. It may be that the essence of the invention is software and by simply dressing it in another language, it will not escape the exclusion under Section 3(k). It was a warning shot to the applicants who should understand the focus would never be on the words that were used to formulate the claims, but instead on the essence of the invention.”
Electronic Navigation Research Institute v. Controller of Patents (2013)
The IPAB in this case indicated a considerable shift. It noted that you cannot treat all of the computer programmes the same way. If a computer program shows a “technical effect,” or does provide a “technical contribution”, it may fall outside of the prohibition under Section 3(k). The case established the important test of the technical effect and advanced Indian jurisprudence towards European precedents. This looms promising for the ability to make a software-related patent claim. More importantly, it means that if the innovation or invention basis provides a tangible technical solution or advancement, it could be patentable, even though the invention is carried out by use of a software program.
Ferid Allani v. Union of India (2019, Delhi High Court)
This case represents a major shift for Indian jurisprudence. Ferid Allani’s patent application for a method of facilitating efficient access to web content was initially denied under Section 3(k). The Delhi High Court, in addressing the appeal, emphasised that legitimate inventions in the software space must never be precluded from patentability. The Delhi High Court stated that “technical effect” and “technical contribution” are both requirements to be considered in regard to the assessability of patentability. The decision stated clearly that Section 3(k) was not intended to deny patent protection to all computer-related inventions but to prevent the monopolised use of abstract algorithms. The decision brought Indian law in line with global trends and clarified that inventions should consider the queries on industrial applicability and technical development.
Microsoft Technology Licensing v. Assistant Controller of Patents (2021)
The Delhi High Court revisited the Section 3(k) debate and reiterated the earlier principles of Ferid Allani. It held that inventions should not be rejected simply because they are implemented by way of software. Rather, examiners have to determine whether they exhibit a technical effect or, at the very least, a technical advancement as compared to what may be regarded as the prior art. The judgment stressed the importance of a cautious approach – balancing the prohibition necessarily imposed by Section 3(k) in the Examiner’s decision from any encouragement that we should move towards genuine technological advancement. Microsoft’s case established that Indian jurisprudence was moving towards harmonisation with the rest of international norms, where the focal point would no longer be the medium of expression, but the inventive contribution outlined in a patent application.
These cases together trace India’s transition from rigid exclusion to flexible assessment. While IBM and Yahoo led to early denials, Electronic Navigation Research Institute took a different, and perhaps far more balanced, approach that ended with the more progressive view of Ferid Allani and Microsoft. Today, Section 3(k) is not as much a blanket bar as a filter, allowing protection for software innovations that provide a tangible or concrete technical contribution while leaving abstract ideas to the public domain.
CONCLUSION
Early reading of the law by the Patent Office was excessively conservative, as software was seen as worthy of protection if it had any industrial connection at all, regardless of actual utility. The judiciary has intervened in specific cases, such as Ferid Allani, and later in Microsoft Technology Licensing, to clarify that the law does not want to unduly reject genuine technological advances just because they are implemented in a “software” layer. Case law, which defined “technical effect” and “technical contribution” as the standard, has also allowed for a definition of patentable software that has balanced the objective of offering only patent protection for inventions that contribute to the advancement of technology and have industrial applicability, while still excluding something ‘abstract’ as an ‘algorithm’.
Furthermore, India is encouraging innovation, but seeks to protect the general public from monopoly so that the fundamental ideas are not exclusively owned by separate companies. In addition, India has recognised software as valuable “goods”, noting that patents for software have been enforced in the standards context as “essential”. That meaningful contributions of the software layer have economic significance cannot be understated and there is also increasingly more industrial relevance in terms of economic growth. Most importantly, adopting a consistent approach, typically referencing a “technical effect” test moving forward, as well as clear Patent Office guidelines on the topic, will be critical in aligning Indian practice with the benefits and trends of contemporary worldwide. Section 3(k) can no longer be deemed a barrier, but rather a filter through which patent applicants can only be afforded protection to those meaningful advancements and those innovations that can arguably be termed inventions.
