Indian Patent Law: A Better Way?

The GNU General Public License (“GPL”) was instrumental in popularizing the concept of copyleft software licensing which provides end-users the freedom to share and modify programs written under the license. Indeed it is still one of the most commonly used open-source licenses more than 25-years after its creation. Yet while the GPL and free software generally have emerged as successful alternatives to proprietary code copyrighted and kept secret under the Library of Congress’ Circular 63, software patents have become an increasingly powerful tool to restrict the usage of not just specific code but broadly defined methods of achieving tasks utilizing computers. Despite Supreme Court decisions such as Alice v. CLS Bank, which sought to rein in the greatest excesses of software patents via stricter rules on what constitutes an abstract idea, by the end of 2015 software patent filings nearly rebounded to prior highs in sharp contrast to the continued decline of copyrights.

Thus the question - is there a better way to protect user rights in an era of increasing software patent litigation without significantly harming industry, the economy, and by extension the people? A potential answer, posed both by advocacy groups such as the EFF as well as recently affirmed in the world’s largest democracy is elegant in its simplicity – abolish software patents entirely.

Before analyzing the impact of India’s patent laws, an appreciation for the current legal and philosophical framework of Indian law relevant to software and pharmaceuticals is required (the latter of which shares much of the same philosophical rationale while providing a historical comparison). The Indian Patent Act of 1970 established a modern system of patents administered by the Indian Patent Office, with patentable inventions being required to have “a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.” This standard criteria encompassing the elements of novelty, non-obviousness, and utility is common throughout the developed world.

Yet the list of inventions that while meeting these criteria were not patentable deviated from international norms under Indian law. Specifically, the Indian Patent Act excluded “processes for the medicinal or other treatment of human beings and animals”, which in conjunction with Section V of the act banned the patenting of pharmaceuticals. This banning of otherwise internationally patentable inventions was expanded upon in the 2002 Second Amendment to the act, which added computer programs that were not related to technical applications in industry or in combination with hardware. This broad ban on software patents was subsequently reversed in 2005 by the Third Amendment to the patent act, leaving the status of computer software and algorithms in limbo for a decade while allowing for the first time the patenting of pharmaceuticals (with significant restrictions). A final decision on algorithms only appeared in the IPO’s 2016 Guidelines rejecting the patentability of software entirely, stating a “computer programme in itself is never patentable.”

Both the initial banning of pharmaceutical patents and the new total ban on software patents were enacted to benefit India economically, and in the case of biotech proved successful in giving pharmaceutical companies legal space to grow. The pharmaceutical industry benefited from the ability to produce drugs without regard to patents as, “by deliberately excluding pharmaceutical products from patent protection for the previous 34 years, India became a world leader in high-quality generic drug manufacturing.” Likewise the decision to bar software and algorithm patents was taken in light of the burgeoning Indian IT sector, meant to remove hindrances to Indian technical innovation brought by patent wars and the prohibitive expense of patent suits. Said Venkatesh Hariharan, member of the Indian Software Product Industry Round Table (“iSPIRIT”), “It is estimated that the US has around 4,000 patents on e-commerce and around 11,000 patents on online shopping. This is a minefield for start-ups who cannot afford the cost of litigation.” While it remains to be seen if this newest, definitive stance against software patents will spur the same level of growth as the Indian Patent Acts exclusion of pharmaceuticals for thirty-four years did, iSPIRIT has called the move a “victory for small startups and independent developers.”

India’s booming pharmaceutical growth despite the total abolition of pharmaceutical patents for over three decades is now being followed by a burgeoning IT sector that flourished in the wake of the weakening and subsequent abolishment of software patents from 2002 to early 2016. Combined, the pharmaceutical and IT sectors accounted for more than $150 billion in fiscal year 2015, proving that businesses can thrive in intellectual property regimes wary of granting property rights. This provides strong support for the EFF’s new arguments for the abolishment of software patents – namely that instead of seeing their removal solely as a means of ensuring freedom for the user at the expense of the economy such abolition can in fact stimulate growth in the very industries it affects. Moving forward the discourse on software patents must not restrict itself to well-worn albeit true arguments about the importance of personal freedom and the creativity of the commons over proprietary programs. Instead economic examples such as India as well as other countries where industries have thrived because of, not in spite of, restrictive IP laws should be noted alongside more philosophical rationales.