In updated guidelines for computer related inventions (CRI) released on February 19, the Indian patent office announced that it will continue to disallow patents for software. The decisions follows up a stay placed in December by the patents office on an August 2015 revision of the guidelines which allowed software to be patented if it demonstrated 'technical advancement'. Multinational companies have long been campaigning for software to be eligible for patent protection in India. However, the decision to formally reinstate the ban has been welcomed by smaller Indian software start-ups and policy stakeholders, who feared that a patent system for new software innovations would shut smaller tech players out of the local market.

'A minefield for start-ups'

In general, only larger companies are able to foot the high costs associated with filing for a patent. Moreover, there are fears that allowing software patents in India would give rise IP 'hoarders' who stake-out ownership of crucial software patents in order to make money from lawsuits—a significant problem facing markets like the United States where software patenting is permitted. According to Venkatesh Hariharan, a member of the Indian Software Product Industry Round Table, there are approximately 4,000 patents on e-commerce software and 11,000 patents on online shopping currently registered in the US. 'This is a minefield for start-ups who cannot afford the cost of litigation,' he commented, adding that India's decision to keep software outside the patent system may inspire other markets to follow suit.

Protecting innovation

Software can still be protected by copyright law, and can still be included in patent filings if in direct conjunction with a 'novel hardware'. However, many stakeholders consider the decision to disallow patenting for software as stand-alone products a significant win for software innovation in India. 'The legislature by limiting the scope of patentable subject matter in the field of software wanted our software professionals and industry to innovate and not be stifled by companies holding a stockpile of patents,' commented Prasanth Sugathan, legal counsel at the Software Freedom Law Centre think tank. Sources: Business Standard; Economic Times