Delhi High Court to Union Govt: Must Re-Look at Patent Law’s Provision on Exclusions in View of Growing Innovations

Delhi High Court to Union Govt: Must Re-Look at Patent Law’s Provision on Exclusions in View of Growing Innovations

The Delhi High Court has significantly emphasized that the Union Government ought to have a re-look at Section 3(k) of the Patents Act, 1970, in view of growing innovations.

The single judge Justice Prathuba M Singh, noted that a large number of inventions in emerging technologies including small and medium-sized enterprises, start-ups and educational institutions could be in be in the field of business methods or application of computing and digital technologies.

In this regard the judge observed, “There is a need to have a re-look at the exclusions in Section 3(k) of the Patents Act, 1970, in view of the growing innovations in this space. As the Parliamentary Committee Report referred to above recommends, the need to consider the march of technology in the digital space, is an urgent one, so that patent law is not outpaced and patenting itself does not become irrelevant in the years to come.”

Section 3(k) states that a mathematical or business method or computer program per se or algorithms will be excluded from patentability under the Patents Act.

In the present case, an appeal was preferred by an USA based entity, OpenTV Inc, challenging the order passed by Controller of Patents and Designs on 31 May, 2021, refusing its application for grant of patent titled “System and method to provide gift media” under Section 15 of Patents Act.

The patent application was for a network architecture to enable the exchange of interactive media content distribution of any type of digital or tangible media. The subject patent application was refused on the ground that the scope of the claimed subject matter of the subject patent falls within Section 3(k) of the Act and therefore, was not patentable, as also on the ground that the amendment of Claims dated 10th December, 2020 does not met the criteria of Section 59 of the Act.

The present appeal raised the following three broad aspects for consideration:

(i) Whether amendment of claims in a patent specification can be permitted at the appellate stage, at the instance of the Applicant?

(ii) Whether the subject invention is non-patentable in view of Section 3(k) of the Act?

(iii) Whether the subject invention satisfies the other tests of novelty, inventive step and industrial application and is entitled to patent?

The Court for the first issue held that the fundamental principle governing amendment of Claims was therefore, that amendments are permissible in the Claims so long as the said amendments are within the scope of the originally filed Claims as filed and do not expand the said Claims. Thus, reduction or narrowing down a Claim is permissible, but broadening, widening or expansion of Claims is not permissible, opined the judge.

“Thus, amendments having been held to be permissible at the appellate stage, this Court is of the opinion that irrespective of whether the amendment is directed by the Court or is at the instance of Patent Applicant, so long as the requirements as laid down under Section 59 of the Act are fulfilled such that the amended claims are within the scope of original claims, is not breached, the amendment is permissible,” the Court observed.

Therefore, the Court held that though there is no embargo on permitting a Patent Applicant to amend claims even at the appellate stage, the amendment sought in this particular case intends to widen the scope of the original claims as filed.

In connection to the second issue, the judge was of the view that the question as to whether a particular invention or a business method or not, is not dependent on the date of the application but on the wording of the claims and the subject matter of the invention.

The Court clarified that the grant of monopoly on a method for giving media as a gift would in effect mean that any system architecture which enabled such giving would fall foul of the invention and in effect therefore, the monopoly relates to a method of giving a gift and hence a business method.

Averting to the present case, the Court noted a computer program was involved in the implementation of the invention which involved the use of various software applications. However, it was not the computer program or the software which was the claimed invention, it was the method in which it was put into application for giving of a gift which was sought to be patented.

Denying relief to the entity, the Court said that the exclusion in respect of business methods in section 3(k) is absolute and not restricted by the words ‘per se’ as in the case of computer programs.

“In the case of computer programs, the use of the phrase ‘per se’ in effect means that a program per se is not patentable but when the same exhibits a technical effect or an advancement, or a technical contribution, the invention could become patentable,” the Court said.

The Court further observed that the bar in India to grant of business method patents has to be read as an absolute bar without analyzing issues relating to technical effect, implementation, technical advancement or technical contribution.

The Court noted in the present case that subject invention was directed purely towards a method of giving a media as a gift which was nothing but a method of selling a media for gift purposes and was concluded to be a business method.

The Court discerned, “the subject invention is attracted by the exclusion from patentability under Section 3(k) of the Act. Since the patent is being rejected on the ground of patentability under Section 3(k) of the Act itself, the issue of novelty and inventive step is not being gone into.”

Lastly, the Court while taking note of the 161st Report of the “Review of the Intellectual Property Rights Regime in India” presented by Parliamentary Standing Committee, said that a concern is expressed that a large number of inventions may be excluded from patentability in view of Section 3(k).

The Court remarked that, the modification of this provision would, in the context of the said report clearly be one in legislative domain. In terms of the statute as it stands, business method inventions are not patentable.

Accordingly, the Court directed that a copy of the order be sent to the Secretary, DPIIT, Ministry of Commerce and Industry for necessary consideration.