In Priya Randolph Vs Deputy Controller of Patent and Design,[order dated December 20, 2023],the Madras High Court set aside a refusal order passed by the Deputy Controller of Patents and Designs in appeal proceedings. The Court held that mere involvement of a business method in an invention doesn’t render it unpatentable under Section 3(k) of the Indian Patents Act, 1970. The Court observed that the invention involved hardware, software and firmware and that all these components put together, improve data privacy and protection mechanisms.
According to Section 3(k)[1] of the Indian Patents Act, a mathematical or business method or a computer programme per se or algorithms are not patentable.
In the present case, the appellant had filed a patent application before the Indian patent office and the patent application was rejected by the Controller under Section 15 of the Indian Patents Act, 1970. Claims [2] of the patent application were related to a system for selectively concealing physical address information while enabling transactions connected to physical addresses. Thus, the invention solved the objective technical problem of concealing the physical address of the user during an online transaction in respect of purchase of a product. The Controller held that the invention relates to the completion of a transaction, which is purely a business activity and hence the subject matter of claims related to a business method.
The High Court examined the subject matter under the appeal and considered Guidelines for Examination of Computer Related Inventions of 2017 (CRI Guidelines) with respect to business method. The High Court construed from the CRI Guidelines that merely because claims are related to e-commerce in some way, doesn’t automatically categorise the invention as business method. The claimed invention, in substance, is required to be a business method for exclusion from patentability under Section 3(k). It was held that the nature and the essence of the invention is pivotal in such cases. It was noted by the High Court that the claims are aimed at solving the aforesaid technical problem by employing the components as claimed in claim 1, that is, software, hardware and firmware. It was concluded that the invention provides technical contribution to improve data privacy and cannot be held as being merely a business method. Consequently, the impugned refusal order was set aside and remanded for reconsideration.
Earlier, in Opentv Inc vs The Controller of Patents and Designs [order dated May 11, 2023],the Delhi High Court dismissed the appeal against a refusal order passed by the Controller of Patents and Designs under Section 15 of the Indian Patents Act, 1970. The Court held that the impugned invention is aimed at a system for data processing for carrying out a specific business, that is, making a trading market in securities. Thus, the invention results simply in “a method of doing business”.
The appellant, in the instant matter, filed an appeal, challenging the Controller’s refusal order in respect of the patent application titled “System and method to provide gift media”. Claims [3] of the impugned invention relate to a system and method based on a network architecture for providing a media item as a gift. According to the appellant, the objective technical problem solved by the impugned invention is that conventional media distribution systems such as audio cassette tapes, compact disc and other media storage devices are incapable of providing two-way communication between the broadcasting server and the connecting user device, while exchanging the selected media item with the other user device. The appellant submitted that the impugned invention solves the above technical problem through a network architecture-based system and method, which allows the source system to communicate data with the receiver system over a distribution network and also allows the receiver system to communicate with the source system over a return channel formed by a network.
The High Court held that the impugned invention is directed purely towards a method of giving a media as a gift, which is nothing but a method of selling a media for gift purposes and is hence a business method. An impugned invention is subject to exclusion from patentability under Section 3(k) of the Act and therefore, the impugned invention is not entitled for patent grant.
It was further stated by the High Court that “there is a need to review the provisions of the legislation on the patenting of business methods, computer programmes and algorithms” under the current Patent Act. In this sense, the Court closes its decision by stating that “many inventions in emerging technologies, including by SMEs, start-ups and educational institutions, could be in the field of business methods or application of computing and digital technologies. There is a need to have a re-look at the exclusions in Section 3(k) of the Patents Act in view of the growing innovations in this space.”
CONCLUSION
The cases discussed above had different outcomes, that is, in Priya Randolph Vs Deputy Controller of Patent and Design, the appeal was allowed, whereas in Opentv Inc vs The Controller of Patents and Designs, the appeal was dismissed. However, both the cases, directly or indirectly, point to the same teaching: ‘if claimed invention, in substance, is a business method, it cannot be considered patentable under Section 3(k).’ Also, it can be asserted that both the cases will probably play a role in jurisprudence of Section 3(k) in relation to business methods.
For further information, please contact:
Swati Sharma, Partner, Cyril Amarchand Mangaldas
swati.sharma@cyrilshroff.com
[1] Section 3(k), Indian Patents Act-
a mathematical or business method or a computer programme per se or algorithms;.
[2] A system (100) for selectively concealing physical address information while enabling transactions connected to physical addresses, the system (100) comprising at least one server, the at least one server comprising at least one processing module (12), at least one memory module (14) and at least one communication interface (20), the at least one server configured to:
associate the physical address information with a code, wherein,
the code is communicated to a first user (102) who provided the physical address information; and
usage of the code is controlled by the first user (102);
receive a request corresponding to the physical address from a first requester system (104), wherein the request comprises a request code; and
provide only a portion of the physical address information to the first requester system (104) if:
at least the request code corresponds to the code; and
the first requester system (104) is authorized to receive only said portion, thereby selectively concealing rest of the physical address information from the first requester system (104);
generate a transaction code corresponding to the code;
receive the transaction code from a device of a natural person (108), wherein the natural person (108) is supposed to visit the physical address; and communicate the physical address information to the device if:
the server is authorized to communicate the physical address information to the device; and
the device of the natural person (108) is within a preconfigured distance from the physical address.
[3] A method for providing a media item as a gift, the method comprising:
causing, by a headend system (114), presentation of a media item on a user interface of a device of a user over a distribution network (104);
receiving, while the media item is being presented on the user interface by the headend system (114), an indication to gift a version of the media item from the user over a network (126) which forms a return channel;
in response to the receiving of the indication, causing, by the headend system (114), display of a list of a plurality of different versions of the media item over the distribution network (104);
receiving, by the headend system (114), a selection of a version of the media item from the list of the plurality of different versions of the media item over the network (126);
receiving, by the headend system (114), a selection of the at least one recipient for the version of the media item from a list of potential recipients that is caused to be displayed on the user interface from the user device over the network (126);
processing, by the headend system (114), a purchase transaction based on the selection of the version of the media item and the at least one recipient; and
triggering, delivery of the version of the media item to the at least one recipient over the distribution network (104).
A system to provide a media item as a gift, the system comprising:
a processor of machine;
at least one selection module of a headend system(114), wherein the at least one selection module configured to:
cause presentation of a media item on a user interface of a device of a user over a distribution network (104);
receive, while the media item is being presented on the user interface, an indication to gift a version of the media item from the user over a network (126) which forms a return channel;
in response to receipt of the indication, cause display of a list of a plurality of different versions of the media item on the user interface over the distribution network (104);
receive a selection of a version of the media item from the list of the plurality of different versions of the media item over the network (126);
receive a selection of at least one recipient for the media item from a list of potential recipients that is caused to be displayed on the user interface from the user device over the network (126);
a transaction module configured to process a purchase transaction based on the selection of the version of the media item and the at least one recipient; and
a delivery module configured to trigger delivery of the version of the media item to the at least one recipient over the distribution network (104).
