Guest Post: Arguments against Software Patents in India


The Centre for Internet and Society (CIS) is a name familiar to many owing to its engagement with matters concerning digital pluralism, public accountability and pedagogic practices in the field of Internet and Society, with particular emphasis on South-South dialogues and exchange. The organization seeks to influence the form of internet and its relation with the contemporary political, cultural, and social environment, by way of research, intervention, and collaboration.

The Spicy IP team is glad to bring forth to the readers the opinion on software patents in India, recently voiced by Pranesh Prakash, who is a programme manager with CIS and a graduate of the National Law School of India University, Bangalore. The post, which had originally been put up in the CIS blog (see here) is being reproduced verbatim below:

Arguments Against Software Patents in India

“CIS believes that software patents are harmful for the software industry and for consumers. In this post, Pranesh Prakash looks at the philosophical, legal and practical reasons for holding such a position in India. This is a slightly modified version of a presentation made by Pranesh Prakash at the iTechLaw conference in Bangalore on February 5, 2010, as part of a panel discussing software patents in India, the United States, and the European Union.

This blog post is based on a presentation made at the iTechLaw conference held on February 5, 2010. The audience consisted of lawyers from various corporations and corporate law firms. As is their wont, most lawyers when dealing with software patents get straight to an analysis of law governing the patenting of computer programmes in India and elsewhere, and seeing whether any loopholes exist and can be exploited to patent software. It was refreshing to see at least some lawyers actually going into questions of the need for patents to cover computer programs. In my presentation, I made a multi-pronged case against software patents: (1) philosophical justification against software patents based on the nature of software; (2) legal case against software patents; (3) practical reasons against software patents.

Preamble

Through these arguments, it is sought to be shown that patentability of software is not some arcane, technical question of law, but is a real issue that affect the continued production of new software and the everyday life of the coder/hacker/software programmer/engineer as well as consumers of software (which is, I may remind you, everywhere from your pacemaker to your phone). A preamble to the arguments would note that the main question to ask is: why should we allow for patenting of software? Answering this question will lead us to ask: who benefits from patenting of software. The conclusion that I come to is that patenting of software helps three categories of people: (1) those large software corporations that already have a large number of software patents; (2) those corporations that do not create software, but only trade in patents / sue on the basis of patents (“patent trolls”); (3) patent lawyers. How they don’t help small and medium enterprises nor society at large (since they deter, rather than further invention) will be borne out by the rest of these arguments, especially the section on practical reasons against software patents.

What are Patents?

Patents are a twenty-year monopoly granted by the State on any invention. An invention has to have at least four characteristics: (0) patentable subject matter; (1) novelty (it has to be new); (2) inventive step / non-obviousness (even if new, it should not be obvious); (3) application to industry. A monopoly over that invention, thus means that if person X has invented something, then I may not use the core parts of that invention (“the essential claims”) in my own invention. This prohibition applies even if I have come upon my invention without having known about X’s invention. (Thus, independent creation is not a defence to patent infringement. This distinguishes it, for instance, from copyright law in which two people who created the same work independently of each other can both assert copyright.) Patents cover non-abstract ideas/functionality while copyright covers specific expressions of ideas. To clarify: imagine I make a drawing of a particular machine and describe the procedure of making it. Under patent law, no one else can make that particular machine, while under copyright law, no one can copy that drawing.

Philosophical Justification Against Software Patents

Even without going into the case against patents per se (lack of independent creation as a defence; lack of ‘harm’ as a criterion leading to internalization of all positive externalities; lack of effective disclosure and publication; etc.), which has been done much more ably by others like Bessen & Meurer (especially in their book Patent Failure) and Boldrin & Levine (in their book Against Intellectual Monopoly, the full text of which is available online).

But there is one essentially philosophical argument against software as subject matter of a patent. Software/computer programs (“instructions for a computer”), as any software engineer would tell you, are merely algorithms (“an effective method for solving a problem using a finite sequence of instructions”) that are meant to be understood by a computer or a human who knows how to read that code.

Algorithms are not patentable subject matter, as they are mere expressions of abstract ideas, and not inventions in themselves. Computer programs, similarly, are abstract ideas. They only stop being abstract ideas when embodied in a machine or a process in which it is the machine/process that is the essential claim and not the software. That machine or process being patented would not grant protection to the software itself, but to the whole machine or process. Thus the abstract part of that machine/process (i.e., the computer program) could be used in any other machine/process, as it it is not the subject matter of the patent. Importantly, just because software is required to operate some machine would then not mean that the machine itself is not patentable, just that the software cannot be patented in guise of patenting a machine.

Legal Case Against Software Patents

In India, section 3(k) of the Patent Act reads:

(3) The following are not inventions within the meaning of this Act: (k) a mathematical or business method or computer programme (sic) per se or algorithms.

As one can see, computer programs are place in the same category as “mathematical methods”, “algorithms”, and “business methods”, hence giving legal validity to the idea propounded in the previous section that computer programs are a kind of algorithms (just as algorithms are a kind of mathematical method).

Be that as it may, the best legal minds in India have had to work hard at understanding what exactly “computer programme per se” means. They have cited U.S. case law, U.K. case law, E.U. precedents, and sought to arrive at an understanding of how per se should be understood. While understanding what per se means might be a difficult job, it is much easier to see what it does not mean. For that, we can look at the 2004 Patent Ordinance that Parliament rejected in 2005. In that ordinance, sections 3(k) and (ka) read as follows:

(3) The following are not inventions within the meaning of this Act: (k) a computer programme per se other than its technical application to industry or a combination with hardware; (ka) a mathematical method or a business method or algorithms.

Thus, it is clear that the interpretation that “computer programme per se” excludes “a computer programme that has technical application to industry” and “a computer programme in combination with hardware” is wrong. By rejecting the 2004 Ordinance wording, Parliament has clearly shown that “technical application to industry” and “combination with hardware” do not make a computer programme patentable subject matter.

Indeed, what exactly is “technical application to industry”? “Technical” has various definitions, and a perusal through those definitions would show that barely any computer program can be said not to relate to a technique, not involve “specialized knowledge of applied arts and sciences” (it is code, after all; not everyone can write good algorithms), or not relate to “a practical subject that is organized according to scientific principles” or is “technological”. Similarly, all software is, by definition, meant to be used in combination with hardware. Thus, it being used in combination with hardware must not, as argued above, give rise to patentability of otherwise unpatentable subject matter category.

In 2008, the Patent Office published a new ‘Draft Manual Of Patent Practice And Procedure’ in which it sought to allow patenting of certain method claims for software inventions (while earlier the Patent Office objected to method claims, allowing only device claims with hardware components). This Draft Manual was withdrawn from circulation, with Shri N.N. Prasad (then Joint Secretary of DIPP, the department administering the Patent Office) noting that the parts of the Manual on sections 3(d) and 3(k) had generated a lot of controversy, and were ultra vires the scope of the Manual (which could not override the Patent Act). He promised that those parts would be dropped and the Manual would be re-written. A revised draft of the Manual has not yet been released. Thus the interpretation provided in the Draft Manual (which was based heavily on the interpretation of the U.K. courts) cannot not be relied upon as a basis for arguments in favour of the patentability of software in India.

In October 2008, CIS helped organize a National Public Meeting on Software Patents in which Indian academics, industry, scientists, and FOSS enthusiasts all came to the conclusion that software patents are harmful for both the industry as well as consumers.

Practical Reasons Against Software Patents

This is going to be an attempt at distilling and simplifying some of the main practical arguments against patenting of software.

There are traditionally four incentives that the patent system caters to: (1) incentive to invent; (2) incentive to disclose; (3) incentive to commercialize; and (4) incentive to invent substitutes. Apart from the last, patenting of software does not really aid any of them.

1. Patent Landmines / Submarine Patents / Patent Gridlocks / No Exception for Independent Creation

Given that computer programs are algorithms, having monopolies over such abstract ideas is detrimental to innovation. Just the metaphors say a lot about software patents: landmines (they cannot be seen/predicted); submarines (they surface out of the blue); gridlocks (because there are so many software patents around the same area of computing, they prevent further innovation in that area, since no program can be written without violating one patent or the other).

Imagine the madness that would have ensued had patents been granted when computer programming was in its infancy. Imagine different methods of sorting (quick sort, bubble sort) that are part of Computer Science 101 had been patented. While those particular instances aren’t, similar algorithms, such as data compression algorithms (including the infamous LZW compression method), have been granted patents. Most importantly, even if one codes certain functionality into software independently of the patent holder, that is still violative of the patent. Computer programs being granted patents makes it extremely difficult to create other computer programs that are based on the same abstract ideas. Thus incentives # (1) and (3) are not fulfilled, and indeed, they are harmed. There is no incentive to invent, as one would always be violating one patent or the other. Given that, there is no incentive to commercialize what one has invented, because of fear of patent infringement suits.

An apt illustration of this is the current difficulty of choosing a royalty-free video format for HTML 5, as it shows, in practical terms, how difficult it is to create a video format without violating one patent or the other. While the PNG image format was created to side-step the patent over the LZW compression method used in the GIF image format, bringing Ogg Theora or Dirac (both patent-free video format) to surpass the levels of H.264/MPEG-4 AVC or VC-1 will be very difficult without infringing dozens if not hundreds of software patents. Chris DiBona of Google, while talking about improving Ogg Theora as part of its inclusion in HTML 5 specifications said, “Here’s the challenge: Can Theora move forward without infringing on the other video compression patents?” Just the number of companies and organization that hold patents over H.264 is astounding, and includes: Columbia University, Electronics and Telecommunications Research Institute of Korea (ETRI), France Télécom, Fujitsu, LG Electronics, Matsushita, Mitsubishi, Microsoft, Motorola, Nokia, Philips, Robert Bosch GmbH, Samsung, Sharp, Sony, Toshiba, and Victor Company of Japan (JVC). As is the amount of royalties to be paid (“[t]he maximum royalty for these rights payable by an Enterprise (company and greater than 50% owned subsidiaries) is $3.5 million per year in 2005-2006, $4.25 million per year in 2007-08 and $5 million per year in 2009-10″; with royalty per unit of a decoder-encoder costing upto USD 0.20.)

Indeed, even the most diligent companies cannot guard themselves against software patents. FFII estimates that a very simple online shopping website would violate twenty different patents at the very least. Microsoft recently lost a case against i4i when i4i surfaced with a patent covering custom XML as implemented in MS Office 2003 and MS Office 2007. As a result Microsoft had to ship patches to its millions of customers, to disable the functionality and bypass that patent. The manufacturers of BlackBerry, the Canadian company Research in Motion, had to shell out USD 617 million as settlement to NTP over wireless push e-mail, as it was otherwise faced with the possibility of the court shutting down the BlackBerry service in the U.S. This happened despite there being a well-known method of doing so pre-dating the NTP patents. NTP has also filed cases against AT&T, Sprint Nextel, T-Mobile, Verizon Wireless, and Palm Inc. Microsoft was also hit by Visto Corporation over those same NTP patents, which had been licensed to Visto (a startup).

o Don’t These Cases Show How Software Patents Help Small Companies?

The astute reader might be tempted to ask: are not all of these examples of small companies getting their dues from larger companies? Doesn’t all of this show that software patents actually help small and medium enterprises (SMEs)? The answer to that is: no. To see why, we need to note the common thread binding i4i, NTP, and Visto. None of them were, at the time of their lawsuits, actually creating new software, and NTP was an out-and-out “non-practising entity”/”patent holding company” AKA, patent troll. i4i was in the process of closing shop, and Visto had just started up. None of these were actually practising the patent. None of these were producing any other software. Thus, none of these companies had anything to lose by going after big companies. In other words, the likes of Microsoft, RIM, Verizon, AT&T, etc., could not file counter-suits of patent infringement, which is normally what happens when SMEs try to assert patent rights against larger corporations. For every patent that the large corporation violates of the smaller corporation, the smaler corporation would be violating at least ten of the larger corporation’s. Software patents are more helpful for software companies as a tool for cross-licensing rather than as a way of earning royalties. Even this does not work as a strategy against patent trolls.

Thus, the assertion that was made at the beginning is borne out: software patents help only patent trolls, large corporations that already have large software patent portfolios, and the lawyers who draft these patents and later argue them out in court.

2. Term of Patents

Twenty years of monopoly rights is outright ludicrous in an industry where the rate of turnover of technology is much faster — anywhere between two years and five months.

3. Software Industry Progressed Greatly Without Patents

In India, software patents have never been asserted in courts (even though many have been illegally granted), yet the software industry in India is growing in leaps and bounds. Similarly, most of the big (American) giants of the software industry today grew to their stature by using copyright to “protect” their software, and not patents.

4. Copyright Exists for Software

As noted above, the code/expression of any software is internationally protected by copyright law. There is no reason to protect the ideas/functionality of that software as well.

5. Insufficient Disclosure

When ordinary computer programmers cannot understand what a particular software patent covers (which is the overwhelming case), then the patent is of no use. One of the main incentives of the patent system is to encourage gifted inventors to share their genius with the world. It is not about gifted inventors paying equally gifted lawyers to obfuscate their inventions into gobbledygook so that other gifted inventors can at best hazard a guess as to precisely what is and is not covered by that patent. Thus, this incentive (#2) is not fulfilled by the current system of patents either — not unless there is a major overhaul of the system. This ties in with the impossibility of ensuring that one is not violating a software patent. If a reasonably smart software developer (who are often working as individuals, and as part of SMEs) cannot quickly ascertain whether one is violating patents, then there is a huge disincentive against developing software in that area at all.

6. Software Patents Work Against Free/Libre/Open Source Software

Software patents hinder the development of software and FOSS licences, as the licensee is not allowed to restrict the rights of the sub-licensees over and above the restrictions that the licensee has to observe. Thus, all patent clearances obtained by the licensee must be passed on to the sub-licensees. Thus, patented software, though most countries around the world do not recognize them, are generally not included in the default builds of many FOSS operating systems. This inhabits the general adoption of FOSS, since many of the software patents, even though not enforceable in India, are paid heed to by the software that Indians download, and the MP3 and DivX formats are not enabled by default in standard installations of a Linux OS such as Ubuntu.

Conclusion

Currently, the U.S. patent system is being reviewed at the administrative level, the legislative level, as well as the judicial level. At the judicial level, the question of business method patents (and, by extension, software patents) is before the Supreme Court of the United States of America in the form of Bilski v. Kappos. Judge Mayer of the Court of Appeals for the Federal Circuit (CAFC, which heard In re Bilksi) noted that “the patent system has run amok”. The Free Software Foundation submitted a most extensive amicus curiae brief to the U.S. Supreme Court, filled with brilliant analysis of software patents and arguments against the patentability of software that is well worth a read.

The Spicy IP team thanks Pranesh for agreeing to share his opinion with the team as well as the readers and to invites comments from the readers to develop this issue into a raging and lively debate.

Shouvik Kumar Guha

Shouvik is at present employed as a Research Associate and a Teaching Assistant at The W.B. National University of Juridical Sciences, Kolkata. He has obtained his B.A. LL.B. (Hons.) degree from NUJS itself and is also currently pursuing his LL.M. degree from the same university. From his very year at law school, he had been attracted towards the discipline of Intellectual Property and that interest has been kindled further in course of time. The interface between IP and other disciplines such as Economics, Anti-trust Law, Human Rights, World Trade Law and the technological developments relating thereto, has especially caught his attention since then. He’s authored several papers on issues relating to IP and other legal disciplines for journals, books, magazines and conferences in national as well as international levels. He is also currently co-heading an organization called Lexbiosis, which is an endeavor meant to facilitate the collaboration between the legal industry and academia.

8 comments.

  1. Utsab Banerjee

    Hi,
    I would like to counter the arguments that you have put forward against software patents. The arguments are derived from my practical experience in software industry and legal knowledge that I have acquired while studying law.

    1) Patent Landmines / Submarine Patents / Patent Gridlocks / No Exception for Independent Creation—–Just because software are algorithm based they can not be denied patent protection. Hardware implementation is a stringent rule followed by Europe and India. Post Bilski US is also moving towards a stringent grant regime. All the other tests of doctrine of equivalents and point of novelty tests are quiet efficient for proving(or disproving) infringement(many EU cases may be cited in this context). Moreover patent land mines are present in many fields of technology(There are almost 20000 patents on OLEDs itself).

    2. Term of Patents—–If the technology develops fast it is obvious patents become outdated earlier. The grantee or assignor of a software patent would obviously stop paying annual fees for outdated patents and hence effectively they would be lapsed. What is the need to reduce the 20 year span.

    3. Software Industry Progressed Greatly Without Patents—-This is a huge mis concept. Indian software industry is mainly service based. There is hardly any product company in India which has more than $1 billion annual turn over(NASSCOM specifically has set a target on this). The global software majors however voraciously file patent as evident from the no of patents granted to HP, Microsoft, IBM etc. On the other hand software major like Infosys has only one successful product-finnacle. They maintain patent on it. The bitter truth is that Indian software majors hardly invest money in R & D (The size of patent cell of TCS and Wipro corroborates this fact).

    4. Copyright Exists for Software—TRIPS mandates for software copyright. But again copyright can never protect functionality.The only test used globally for determination of software copyright infringement is Abstraction-filtration-comparison test as laid down in the Computer Associates case. This test mandates for removal of functional components from copyrightable subject matter. Thus the protection does not encompass functionally important code snippets which otherwise should have been the heart of the protection.

    5. Insufficient Disclosure—Person having ordinary skill in the art is not just any software developer. The difference of software from other fields of technology is that huge number of employees work on software development whereas in other field only scientists invent new things. Hardly any of these developers is a software architect, who can visualise the total product. The architects are the visionaries, the developers only develop their respective modules and have hardly any idea of the product as a whole.These software developers are mere workers and should not be confused as a PHOSITA. Otherwise no invention would be debarred by the inventive step requirement. The standard of PHOSITA in this field should be made higher to remove this difficulty(which is exactly what US PTO does).

    6. Software Patents Work Against Free/Libre/Open Source Software—Most the software industry today is proprietary and not free source(How many of the readers use Linux and not Windows as OS). The impact of open source software on the economy is unknown. Moreover software security is also an issue(mainly for banks and financial institutions)for open source softwares.

    So based on all this discussion I believe that a patent regime for softwares is efficient in providing effective protection. Only the standard for patentability may be set a bit higher.

    Reply
  2. Anonymous

    How about TRIPs compliance?

    Patentability:
    TRIPS says that any inventions in all fields of technology must be patentable, provided that the usual criteria of novelty, inventive step and industrial applicability are met (see Article 27), as well as the requirement of sufficient disclosure (see Article 29).
    So, whenever there is a technical invention, patents must be granted when the usual criteria have been met.

    I would thus believe that it no longer makes sense to debate whether software patents should be allowed, as the question has already been answered: for technical inventions meeting the criteria, patents must be granted, while for subject-matter that is not a technical invention meeting the usual criteria, no patents should be granted.

    Please note that a lot of software falls outside the category of subject-matter that is non-obvious as a result of some technical measure, so that only for the limited category of software that overlaps with a patented technical invention there may be a conflict.
    When there is a conflict, a later software author has to respect the rights of an earlier inventor.

    Patent term:
    TRIPs (Article 33) says that patents have a term of up to 20 years (provided that the fees are paid).
    Please note that if a patented invention is outdated, the patentee will stop paying fees, and the patent expires. If a patented invention is not outdated, there is no need to complain about the maximum term of protection that is available.

    Anyway, any discussion about the patent term does not make sense in an environment where software is automatically protected by copyright for at least 50 years.

    Open source software:
    A software author who implements somebody else’s earlier-invented patent should not expect to be able to determine the distribution conditions for his software without respecting the earlier inventor’s rights.

    Reply
  3. Sachin Verma

    Good take Utsab. Its better if the authors look beyond the ‘text book’ approach to legal research and enter into the ‘practical’ world of software where learning is by doing. I don’t think the definition of ‘technical’ can be find in books and research papers!

    Unfortunately, the author lacks any formal education in CS engineering as stated.

    Reply
  4. Pranesh Prakash

    @Utsab
    Thanks for you very detailed criticisms, and it was indeed this kind of dialogue that I had hoped to spark. It is a pity that I have come upon your comments this late, though. I shall attempt to rebut your arguments point-by-point.

    1. Patent gridlocks.
    You say: “just because software are algorithm-based they cannot be denied patent protection”. Why not? After all, that is precisely the reason you cannot patent mathematics.

    As for hardware implementation, it is true that all software can instead take the form of hardware (of differing levels of complexity, technical and financial feasibility). And I most definitely do not have the same sort of vehement objections to hardware patents as I do of software patents (that is not to say that I do not have objections against the patent system per se: I do).

    Patent landmines being present in other fields is hardly an argument *for* software patents. It is indeed an argument against excessive patenting and patent gridlocks in those fields as well. This is precisely what Michael Heller (of the ‘Tragedy of the Anticommons’ fame) looks at in his ‘Gridlock Economy’.

    2. Term of patents.
    I do not follow your line of reasoning, and am led to believe that one of your assumptions is wrong. You assume that the costs imposed on me as a patent-holder by the annual fees would be greater than the benefits I derive out of a state-granted monopoly over a particular functionality. And I don’t see how that works out in practice, since it is usually untrue.

    3. Software Industry Progressed Greatly.
    I harbour no such misconceptions. My point on the software industry is two-fold: 1. The *global* software industry has done magnificently without patents; 2. The *Indian* software industry which is migrating from services to products will find it a problem if software patents are being granted since the global patent giants have that very large part of the pie cornered via priority of filings, etc. Indeed, if you look at the *pure software* patents that have been granted in India, the majority have been to MNCs for “inventions” (in quotes since they don’t satisfy s.3(k)) made outside of India.

    Reply
  5. Pranesh Prakash

    @utsab

    4. Copyrights exists for software.
    “Copyright can never protect functionality” you note as a failing, while I believe that is a *good thing*.

    Facebook has recently been granted a pretty wide patent on data streams. And if you recall, streams were a functionality that they themselves copied from Twitter (and from Friendfeed before it, and from the idea of “lifestreams” that was floating around since the mid-90s), to compete with it!

    Functionality should not be reduced to a monopoly, especially one which does not allow for multiple concurrent inventions.

    5. Insufficient disclosure.
    We agree that the inventive step requirement should be set high. And just as all persons trained in law are not good lawyers, not all persons trained in computer science are good “architects”. But I would disagree with your terminology because it is based on narrow area. Coders and hackers (used in its original sense) are software developers, engineers, and architects rolled into one.

    6. S/w patents work against FLOSS
    Sure, you could ask how many readers use Linux instead of Windows, and the percentage would be small. But if you ask instead: how many readers use Firefox instead of Internet Explorer, the answer would be a bit higher. If you asked: how many readers visit sites hosted on Apache servers? The answer would be higher still (around 70%, even though they might not know about it). If you asked: how many readers use ISPs that use FOSS DNS resolvers (like BIND9), the answer would probably be 100%. As you well know (and point out in the case of the Indian software industry) consumer software isn’t the only kind of software in the world. Most of the WWW and the Internet are based on Free/Open Source Software.

    Reply
  6. Pranesh Prakash

    @Anonymous:
    1. On TRIPS and Art. 27:
    What we are debating is not only what the law *is* but also what it *should be*. That lawyers often do not deal with the latter question is one of my pet peeves.

    On the issues of whether TRIPS requires software patents:
    http://web.archive.org/web/20010608115154/http://www.patent.gov.uk/about/ippd/softpat/1000.htm

    http://eupat.ffii.org/stidi/trips/

    2. Patent term.
    Patents cover functionality, which copyright doesn’t, and hence the terms for patents and copyright cannot be directly compared. It is my belief (as it is of many Nobel prize-winning economists and many excellent lawyers) that the terms for both of them are way to high.

    3. Open source software.
    The issue is not “stealing” or “respecting the earlier inventor’s rights”. I beg you to go and read my essay again. Concurrent inventions are not allowed by the patent system. It is not a question of implementing someone else’s invention and wanting to determine what I want to do with it.

    I would be a much happier person if concurrent independent ideas were allowed to thrive without one having the power to curb another through a state-granted monopoly.

    Reply
  7. Pranesh Prakash

    Whoops, sorry for that mangled comment.

    @Sachin Verma
    That’s criticism well taken, but I believe misplaced. The definition of technical *needs* to be found in legal books and research papers, because that is the basis on which patents are often granted (and @Anonymous (9:14 PM) argues is the test set up in Art.27). You don’t expect all patent examiners and judges in courts to be “doers”, do you? If that is your case, I might even agree with you!

    Reply

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