While Part 1 of the Ericsson vs. Lava post series covered the summary of the court’s judgement, this post discusses the principles reiterated by the Court recently in the Ericsson vs. Lava case, for analyzing inventions in the context of Section 3(k) of the Patents Act, 1970. Lava filed a counterclaim against Ericsson’s patents in which Lava challenged that the inventions claimed by Ericsson fell under Section 3(k) of the Patents Act, 1970. In particular, Lava had pleaded in its counterclaim that all the patents of the suit were mere algorithms.
The Court cited relevant portions from various recent orders, such as Microsoft Technology1, Ferrid Allani2, and Open TV3, and a general reading of Section 3(k) of the Act and the revised CRI guidelines, 2017. The Court stated that the question of whether an invention falls under the purview of algorithms should be analyzed based on whether the algorithms are directed at enhancing the functionality of a system or a hardware component. The Court elaborated this by taking an example of a smart thermostat algorithm.
Talking about the patentability of a smart thermostat algorithm, the Court stated the following:
“…consider the example of a smart thermostat algorithm that dynamically adjusts the heating or cooling of a room in a building based on real-time weather data, occupancy patterns and energy prices. This algorithm, by itself, is a series of computational steps and may not be patentable. However, the implementation of this algorithm within a device, even if the said device is a general-purpose computer, in such a way that it transforms the computer’s capabilities and leads to tangible benefits like reduced energy consumption, cost savings and improved comfort levels for occupants can be considered as a patentable subject matter.”
‘Per se’ in Section 3(k):
Further, the Court clarified the intent behind the qualifier ‘per se’ with respect to “computer program per se” as used in Section 3(k) of the Patents Act, 1970. Citing portions from the press release issued by the Press Information Bureau dated 27th December 2004, the Court opined that, inventions based on algorithms and computer-executable instructions cannot be rejected if the subject matter offers a practical application in solving technical problems and provides technical advancements. Additionally, the Court opined that, if the invention is implemented on a general-purpose computer and provides a technical effect that improves the computer system’s functionality and effectiveness, the claimed invention cannot be rejected.
Key takeaways:
The key takeaways from the judgment can be summarized as follows:
If an invention is an algorithm, or computer-executable instructions, that are implemented on a device, such as a general-purpose computer, the invention is to be assessed based on:
(i) whether there is a practical application in solving technical problems and whether the invention provides technical advancements; and
(ii) whether the subject matter results in further technical effect that improves the functionality of the computer and its effectiveness.
Relevant paragraphs:
“65. In this section, the relevant decisions on patentability of inventions, particularly focusing on the interpretations and applications of Section 3(k) of the Patents Act are discussed. By analysing the recent decisions, I delve into the nuances of how patentability of inventions relating to or involving computer programs, algorithms, and business methods are treated under the Indian patent regime. Additionally, I shall also consider the legislative intent behind the patentability of software-related inventions, as discussed in the judicial precedents.
- In Microsoft Technology (supra), an appeal was filed on behalf of Microsoft against the order of the Controller rejecting the grant of patent based on Section 3(k) of the Patents Act. The appeal was allowed and the order of the Controller was set aside. It was the case of Microsoft that its claim relates to a technical process that solves a technical problem and provides a technical solution/advancement relating to security of the data accessed on a network. The relevant observations from the aforesaid judgment are set out below:
“50. In conclusion, the Controller’s rejection stems from misinterpretation of Section 3(k) of the Act, and an oversight of technical effect and contribution of the claimed invention, resulting in erroneous determination that the subject patent constitutes “computer program per se”. By focusing solely on the implementation of the invention using computer-executable instructions and algorithms on a general purpose computing device, the Controller has failed to consider the true technical nature and advancements provided by the invention. The claimed invention offers a novel and inventive technical solution to a security problem related to the authentication of users for accessing sub-location(s) within a network location. It not only provides for a two-tier authentication process but also improves user experience, which is vital in the field of computer networks.
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- It is essential for the Indian Patent Office to adopt a more comprehensive approach when assessing CRIs, taking into account technical effects and contributions provided by the invention rather than solely focusing on the implementation of algorithms and computer-executable instructions. An invention should not be deemed a computer program per se merely because it involves algorithms and computer-executable instructions; rather, it should be assessed based on the technical advancements it offers and its practical application in solving real-world problems. A more thorough and accurate assessment of the invention’s eligibility for patent protection should be conducted to ensure that deserving inventions are granted the protection they merit under the Act.”
(Emphasis supplied)
- In Ferid Allani (supra), the Coordinate Bench of this Court has observed that in today’s digital world, when most inventions are based on computer programmes, it would be retrograde to argue that all such inventions would not be patentable. The relevant observations are set out below:
“10…..The bar on patenting is in respect of `computer programs per se….’ and not all inventions based on computer programs. In today’s digital world, when most inventions are based on computer programs, it would be retrograde to argue that all such inventions would not be patentable. Innovation in the field of artificial intelligence, blockchain technologies and other digital products would be based on computer programs, however the same would not become nonpatentable inventions – simply for that reason. It is rare to see a product which is not based on a computer program. Whether they are cars and other automobiles, microwave ovens, washing machines, refrigerators, they all have some sort of computer programs in-built in them. Thus, the effect that such programs produce including in digital and electronic products is crucial in determining the test of patentability.” (Emphasis supplied)
- A reading of Section 3(k) of the Patents Act makes it clear that the qualifier ‘per se’ is applicable only in respect of ‘computer programmes’ and not in respect of ‘algorithms’, ‘business methods’ and ‘mathematical methods.’ This view has also been affirmed by a Coordinate Bench of this Court in Open TV (supra). While analysing the patentability of ‘business methods’ under Section 3(k), the Coordinate Bench has made the following observations:
“74. The qualifier `as such’ thus applies in both U.K. and Europe to all categories of excluded inventions including business methods. Thus the bar is not absolute and if there is something more than the business method itself, patenting could be permissible. However, in India, the phrase ‘per se’ does not qualify business methods. Thus, the patentability of inventions based on methods of doing business or financial transactions, raised on the basis of decisions from the U.K. and European Patent Office which analyse the technical effect of a business method invention would not be squarely applicable in India. The bar in India to grant of business method patents has to be read as an absolute bar without analysing issues relating to technical effect, implementation, technical advancement or technical contribution.
- Thus, the only question that the Court or the Patent Office while dealing with patent applications involving a business method, needs to consider is whether the patent application addresses a business or administrative problem and provides a solution for the same.
- In order to judge as to whether a particular patent application seeks to patent business methods or not, at the outset, the following aspects, ought to be considered –
(i) whether the invention is primarily for enabling conduct or administration of a particular business i.e., sale or purchase of goods or services;
(ii) whether the purpose of the invention is for claiming exclusivity or monopoly over a manner of doing business;
(iv) whether the invention relates to a method of sale or purchase of goods or services or is in fact a computer program producing a technical effect or exhibiting technical advancement. If it is the latter, it would be patentable but not if it is the former.” (Emphasis supplied)
- After analysing the CRI Guidelines and the aforementioned judgments, I am of the view that the inventions that are solely directed towards algorithms, mathematical methods, business methods or are computer programmes per se, would not satisfy the test of patentability and would consequently, not be inventions. However, an invention that merely incorporates algorithms, sets of instructions, mathematical or business methods within a method or system, and satisfies all the criteria for patentability, is not inherently non-patentable. Therefore, what has to be seen is that if the algorithms are directed at enhancing the functionality of a system or a hardware component, the effect or the functionality derived by the system or the hardware component is a patentable subject matter However, the algorithm itself is not a patentable subject matter. To illustrate, we may consider the example of a smart thermostat algorithm that dynamically adjusts the heating or cooling of a room in a building based on real-time weather data, occupancy patterns and energy prices. This algorithm, by itself, is a series of computational steps and may not be patentable. However, the implementation of this algorithm within a device, even if the said device is a general-purpose computer, in such a way that it transforms the computer’s capabilities and leads to tangible benefits like reduced energy consumption, cost savings and improved comfort levels for occupants can be considered as a patentable subject matter.
- It is clear that an invention should not be deemed a ‘computer programme per se’ merely because it incorporates algorithms and computer-executable instructions. In fact, the patentability should be assessed based on its practical application in solving technical problems and the technical advancements it offers. Furthermore, if the subject matter is implemented on a general-purpose computer, but results in a further technical effect that improves the computer system’s functionality and effectiveness, the claimed invention cannot be rejected as non-patentable for being a ‘computer programme per se’. This aligns with the intent behind the qualifier ‘per se’, introduced by the legislature in the Patent (Amendment) Act of 2002 for computer programmes. Further, the said approach also aligns with the legislative intent behind the patentability of software related inventions, which is evident from the press release issued by the Press Information Bureau dated 27th December, 2004 titled – ‘Kamal Nath’s statement on the Ordinance relating to Patents (Third) Amendment’. The relevant extracts from the said press release are set out below:
“8. In IT, the trend is to have software in combination with or embedded in hardware – such as in computers or cell phones or a variety of other gadgets. Software as such has no patent protection (the protection available is by way of copyright), but the changing technological environment has made it necessary to provide for patents when software has technical applications in industry in combination with hardware. This has been a demand of NASSCOM.
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- The ordinance is the same as the Bill introduced last year with improvements in some significant respects. We have introduced for patenting of software that is embedded in hardware […]” (Emphasis supplied).”
Cases cited by the court:
- Microsoft Technology Licensing LLC v. The Assistant Controller of Patents and Design, 2023 SCC OnLine Del 2772.
- Ferid Allani v Union of India & Others, 2019 SCC OnLine Del 11867.
- OpenTV Inc. v. The Controller of Patents and Designs & Anr., 2023 SCC OnLine Del 2771
Citation: Lava International Limited v. Telefonaktiebolaget LM Ericsson, High Court of Delhi, 28th March, 2024, CS(COMM) 65/2016, CS(COMM) 1148/2016 and CC(COMM) 14/2017.
Authored by Sowmya Murthy, Patents Team, BananaIP Counsels
Disclaimer
The case note/s in this blog post have been written by IP Attorneys at BananaIP Counsels based on their review and understanding of the Judgments. It may be noted that other IP attorneys and experts in the field may have different opinions about the cases or arrive at different conclusions therefrom. It is advisable to read the Judgments before making any decisions based on the case notes.
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