Delhi High Court highlights Business Methods exclusions need to be reconsidered

The Delhi High Court, in a recent order, while dealing with an appeal by OPENTV INC for refusal of its patent (by the Indian Patent Office), highlighted the need to re-visit the blanket exclusions set out in section 3(k) in relation to “business methods.” The Court observed that “a large number of 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, 1970, in view of the growing innovations in this space”.

Facts of the case:

  1. The Indian Patent Office refused the application for the grant of a patent titled ‘System and method to provide gift media’ bearing Application No. 2564/DELNP/2012. The patent application is related to a network architecture and a method implemented to enable the exchange of interactive media content distribution of any type of digital or tangible media.
  2. The patent application was refused on the ground that the scope of the claimed subject matter of the application falls within Section 3(k) of the Act and, therefore, is not patentable, and also on the ground that the amendment of Claims does not meet the criteria of Section 59 of the Act.

The Court dealt with the following three aspects while deciding the appeal:

  • Whether amendment of claims in a patent specification can be permitted at the appellate stage, at the instance of the applicant?

The Court opined that irrespective of whether the Court directs the amendment or is at the instance of the 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.

Though there is no embargo on permitting a Patent Applicant to amend claims even at the appellate stage, the amendment sought in this case intends to widen the scope of the original claims as filed. It is due to this reason that the same cannot be allowed.

  • Is the subject invention non-patentable in Section 3(k) of the Act?

The Court observed that the bar in India to grant business method patents has to be read as an absolute bar without analyzing 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.

The Court further stated that to judge whether a particular patent application seeks to patent business methods or not, at the outset, the following aspects ought to be considered.

  1. whether the invention is primarily for enabling conduct or administration of a particular business, i.e., sale or purchase of goods or services;
  2. whether the purpose of the invention is to claim exclusivity or monopoly over a manner of doing business;
  3. 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.

The Court also noted that the applicant abandoned the corresponding patent applications in several jurisdictions. In the present case, the Court held that the patent application is directed purely toward a method of giving media as a gift which is nothing but a method of selling media for gift purposes and is hence a business method which 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 novelty and inventive step is not being explored.

In conclusion, the Court, while recommending a re-look at the embargo on “business method” Patents, noted that the Parliamentary Standing Committee (One Hundred and Sixty First Report of the “Review of the Intellectual Property Rights Regime in India”) recommended 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.

















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