(Image taken from here)
Those familiar with the Indian Patent Act, 1970 are doubtless aware of the ubiquitous and controversial provision of S. 3(k) that excludes from the realms of patentability any business method. While A. 27 of TRIPS advocates patentability in all “fields of technology”, nonetheless, India as a developing country can also avail itself of the alternate paths laid out in Articles 70.8 and 70.9, which it has done by such exclusion as per S. 3(k). A business method patent confers upon its holder a set of exclusive rights with respect to a particular manner in which a business operation can be carried out. However, the same is not available in India owing to aforementioned S. 3(k). Moreover, by virtue of S. 3(m), a mere scheme or rule or method of performing mental act or method of playing game is not invention within the meaning of the 1970 Act. In other words, a mere abstract idea is not subject to patent unless the same is actually implementable. Further, the Act also excludes a presentation of information from the purview of patentability by treating it as non-invention under S. 3(n). While there are many fields to which business method patents have been linked to, traditionally, software inventions have shared the closest linkage with them.
It would interest the readers, therefore, to look upon the following patent application that has recently been brought to the notice of the Spicy IP team by the kind efforts of Dr. Gopakumar G. Nair, an IP attorney of repute. The application (Application No.40/DEL/2010 A) has been filed by the NATIONAL SMALL INDUSTRIES CORPORATION LIMITED on January 7, 2010 and published on July 8, 2011 and has the rather grand-sounding title of “RAPID INCUBATION FOR SMALL ENTERPRISE ESTABLISHMENT THROUGH NSIC-TRAINING CUM INCUBATION CENTRES (NSIC-TICS)”.
The abstract describing the invention has been reproduced below:
“Unemployment is a colossal problem in India and most of developing countries have similar troubles. Self-employment generation is perhaps the fastest process by which one gets employed also employs other unemployed youths in their small enterprises. We, the claimant, have invented an innovative process that envisages Rapid Incubation for Small Enterprise Establishment in just three months time, whereby an unemployed youth is incubated and transformed into budding entrepreneur. The major components of the Incubation process are Entrepreneur Skill Development, Project/Product selection and opportunity guidance, Hands-on practical training on working projects/training modules, Facilitation of funds through banks, Facilitation on setting up an enterprise, Support services to run small business. The technology used in this incubation process is low cost, appropriate any easy to maintain. This process can incubate any youth / person aged between 18-60 years. The process is applicable to all parts of the country and suitable for addressing unemployment issues of many least developed and developing countries. A private partner can also become an incubator under this process.”
Prima facie, the process mentioned above, along with the flow-chart accompanying it, seem indistinguishable from a business method, which by virtue of the aforementioned provisions of the 1970 Act, ought to belong outside the purview of patentable subject matter in the first place. The question is, given the Indian position on business methods patents is pretty clear-cut, albeit not perceived as the ideal one by everybody, what could have been the possible motives behind the applicant having filed such an application in the first place?
One can come up with feasible conjectures, although they may very well fall short of the mark in reality. Can the applicant be seeking to obtain a priority date by filing an application under the comparatively less expensive Indian patent regime? That would signify subsequent possibilities of the applicant seeking to obtain such a patent in patent regimes such as the U.S. perhaps. While cases such as In re, Bilski, (on which, discussions have carried in this blog previously, here, here and here) had exhibited the US Federal judiciary rejecting applications for business method patents, there are decisions like Bilski v. Kappos, which have succeeded in making the waters more rather than less murky, by not rejecting the possibility of excluding business methods from patentability altogether and by holding the Machine-or-Transformation Test not to be exhaustive. Under such circumstances, it may be presumptuous to decide what the fate of such an application is going to be in US, but if the Indian filing is only intended to provide a cheap priority date to the applicant, questions may arise as to the ethical validity of such practice, on which the Spicy IP team will like to throw open the floor for discussions and debates.
Trade secret provides some kind of protection to innovative business administrative techniques. new draft bill national innovation Act also recognizes the same.
Point well raised. On a personal front I am not a great fan of Business method patents, but that matters the least, as the best interest of law and subjects of law must be the fundamental fulcrum of actions.
I believe as long as any act or omission is within the boundaries drawn out by the law, it should be fine and I see nothing wrong in the practice. Nothing in the act prohibits an applicant to apply for a patent for subject matter U/S 3.
One always has a rare chance that the law be amended to include business methods, which may have a retrospective effect if specifically laid down to form a part of matter of substantive law. Less likely but theoretically possible.
On a separate note, if the law has to be modified to discourage such practice as mentioned in the post, clear provisions will have to be laid down as to what subject matter can’t even be applied for to seek patent rights. That will do more harm than good as it will create a restrictive effect and a barrier for the patent applicants.
Note:
The above comments are based on my personal views and not that of my firm and ought not to be linked to the professional practices or clients of closer2patents.
I can think of at least one reason to file this application in India – for the the purposes of getting a priority date so that you can then file the application in the US or elsewhere. Giving the filed the benefit of a doubt thaty they are not actually wasting their money, there may be no intention to maintain this application in India – maybe it’s just a stepping-stone to a US application. Maybe.
Personally speaking, I believe a lot of Companies file patents, knowing fully well that they wont result in grant, but at least for strategic reasons or for showcasing their patent pending portfolio, they file the same.
A strong strategic reason being trying to keep as much competition away as possible for 3-4 years of Patent Examination and showing the Application as Patent Pending. Its better to file and showcase rather than commercialize and let it be free for replication. Ethically correct or not..is surely a personal opinion.
Tarun Khurana
Hi Shamnad,
I do not see any ethical problems here. Pure software inventions are also excluded from patentability under the patent act. However, a lot of Indian software companies would like to pursue there cases in patent jurisdictions where software patents are granted. Won’t it be unfair for them if we stop them from seeking priority for their software inventions as soon as possible? Practically, finding the right attorney in foreign countries is a herculean task. Ask me, I have had many troubles collaborating with foreign attorneys. Also, there is a FFL requirement under the patent act, which is time consuming again. In fact I believe the essence of sec 39 to an extent is to enable applicants to file in foreign countries if they do not see their patents have a chance of seeing the light of the day.
I see this practice to be absolutely ethical on the part of both applicants and their attorney/agents. Counter opinions most welcome.
Cheers.
Kshitij
Of course, cases, where foreign applicants try to take advantages by first filing in India and seeking priority, can be countered as just like India most of the foreign jurisdictions have Foreign Filing License requirements, which is a costly affair.