Patent Law-III: Software and Business Method Patents

Software patents concern a piece of software i.e. computer program, user interface or algorithm while business method patent concern new methods of doing a business, for example a new method of marketing of product. Both, software and business method are excluded from granting patent under Indian Patent Act. Section 3(k) of the act states that a mathematical or business method or a computer program or algorithms are not patentable. The reason for this exclusion is that the period of 20 years is no applicable on software and business methods as their innovation cycle is very less.

In the case of Truveos Web-crawler by Facebook, the application was filed for patent but the claim was not allowed under sections 2(1) (j), 3(k) and 10(4) of the Patent Act. It was held that the claims for the same were not clear and the lack of hardware limitation shows that the invention lay only in the software or algorithm and the same is excluded from patent under section 3(k) of the Patent Act. Similarly in the case of Yahoo vs. Controller of Patent, the Intellectual Property Appellate Board (IPAB) invalidated Yahoo’s claim and held that the claimed ‘invention’ “is nothing but doing the advertisement business electronically. Even the technical advance that is claimed over the existing art is only an improvement in the method of doing business and Section 3(k) is clear that business method cannot be patented, the fact that there is an advance has not improved the case”.

Historically, software patents were allowed in US and Europe with a lot of restrictions and recently there has been rise in application for software patents even in India. The case of Ericson vs. Intex, came up as a ray of hope for software patents in India. In this case, the Delhi High Court held that, “any invention, which has a technical contribution or has a technical effect and is not merely a computer program, is patentable”. Technical contribution or technical effect is what that enables the computer to do something it was unable to do before, both quantitatively and/or qualitatively resulting in better performance and performing of previously unknown computing processes.

Subsequently, the government of India issued guideline on 21st August, 2015 in which software were allowed patent as long as they produce a ‘further technical effect’ which was to be decided by the patent office, but this very term was not defined which created confusion. Therefore on 19th February, 2016 the government issued new guidelines stating that software can be patented only in combination with new hardware i.e. the invention should include both, novel software as well as novel hardware.

As USA has incorporated software patent, it has also changed its policies for business method patents and Japan has also moved on the same path. However for India, business method patent is still a long dream, although some improvements have been seen in software patent. Software and business method patents are the order of the day and it is hoped the government would find a way to incorporate them under Indian Patent Act.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at

We also have a Facebook Group Restarter Moms for Mothers or Women who would like to rejoin their careers post a career break or women who are enterpreneurs.

We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.