INTRODUCTION

The post-internet world has developed at an unprecedented speed. Innovation in fields such as artificial intelligence, blockchain technologies, healthcare, fintech, and digital products is heavily supported by complex softwares; the core of any software is computer programmes. Computer Programmes, therefore, generally connote software under the patent landscape. The Indian Intellectual Property legal landscape offers protection to computer programmes (the written code) under the Copyright Act, 1957. However, the patent scenario for software or computer-related inventions (herein referred to as CRI) is somewhat complex and ambiguous, which this blog aims to clarify. 

HISTORY OF SECTION 3(k)

The Indian Patent Act, 1970, initially did not mention ‘computer programmes’ as mostly methods or processes of manufacture were patented. However, to comply with the TRIPS agreement, the Patents (Second Amendment) Bill, 1999, introduced the term as one of the things that cannot be patented. The Joint Parliamentary Committee later recommended adding ‘per se’ to the term ‘Computer Programmes’. This addition was made to acknowledge that computer programmes in their pure form (software itself) are outside the scope of patentability, but if they are part of a bigger invention, they could be patented. This thereby expands the scope of patent protection under Indian law. The bill was later passed under the Patents (Second Amendment) Act, 2002, incorporating the committee’s recommendations. Therefore, section 3(k) was introduced to read as “a mathematical or business method or a computer programme per se or algorithms”.

Despite a definitive purpose by the Joint Committee, there was a lack of a clear definition of the term. The government attempted to clear the air by passing an ordinance. The ordinance was passed to amend Section 3 (k) of the Patent Act, 1970. The section was now to be read as “a computer programme per se other than its technical application to industry or a combination with hardware”. The effect was that any software with a technical application in an industry or embedded in the hardware had a scope for obtaining patent protection. However, confusion and criticism followed. Because every software has a technical application in the desired industry. So, does the scope now extend to all the software? But this could not have been the intention of this addition, as it would make section 3(k) futile. It also raised severe concerns and criticisms that the provision could favour only a handful of multinationals at the cost of the larger objective of promoting innovation among the general public. Due to strong backlash, the parliament repealed the new addition to the section. 

‘PER SE’ THROUGH THE LENS OF MULTIPLE GUIDELINES

The repeal, though it eliminated the risk of profit for the few, the legal lacuna surrounding the meaning of ‘per se’ reappeared. However, the legislature took a backseat, and the Patent Office took charge of the situation. The Patent Office issued a Draft Manual, 2008, which introduced the concept of ‘technical character’. It was interpreted that software has a technical effect if it can solve an existing technical problem in the intended industry; it may be patentable. It also included a ‘hardware limitation’, which meant that the software must be linked to hardware, and cannot be granted protection in a standalone manner. However, the manual was heavily reliant on examples and interpretations, and not explicit definitions. The 2008 manual was highly influenced by the European Patent Office model of technical character. Although this was the first step in moving away from ambiguity to a more concrete understanding, it was still a somewhat blurry attempt. 

However, this draft was soon replaced by the 2011 Manual. This manual had a complex requirement. If the software was embedded with the hardware, it was not enough to pass through the patent process, because the patentability criteria were not only applied to the software but also to the related hardware. For example, if a software was invented to improve the memory management of a computer, not only does the software need to be novel and have an inventive step and industrial application, but also the hardware. The intention of the patent office with this provision was to prevent loopholes in the application, specifically combining software with generic hardware to circumvent section 3(k). However, it is a well-established legal principle that manuals are intended only as a guide and are not legally binding; therefore, such interpretations were entirely dependent on the discretion of the patent officers. This was problematic, as officers around the country had their own interpretations of this new rule, and there was an uneven application of these interpretations. 

The Indian Patent Office issued a new guideline- The 2013 Draft Computer-Related Inventions Guidelines. It defined ‘technical effect’ in respect of software for the first time as a solution to a technical problem or error, and not mere routine computing. High-speed processing, efficient data search, improved reception, and other technical enhancements were among the many examples of having a technical effect. The guideline also included software leading to ‘technical advancement’ as an exception to section 3(k). The guideline specified the distinction between technical effect and technical advancement. When software facilitates technical advancement, it enhances the existing state of technology, i.e., it surpasses what already exists. Every technical advancement has a technical effect, but a technical effect does not necessarily lead to a technical advancement. The 2013 guideline required a ‘novel hardware’. If a software is linked to generic hardware, such as a simple computer, it cannot be granted a patent. Only if the computer itself qualifies the patentability criteria, along with the software, is there a scope of patent protection. 

These guidelines were heavily criticised, as they went beyond their legal scope. The guidelines are intended solely to interpret the existing law and not to impose additional conditions. It created impractical restrictions. It is common knowledge that software has a relatively short shelf life, typically 3-5 years at most, and new software often operates on generic hardware components. Moreover, these guidelines were against the legislative intent of the Act. The 2004 ordinance was repealed due to a strong backlash on the hardware component of the amendment, and the guideline reinstated it. Additionally, the term ‘novel hardware’ was not explained, specifically whether the novel requirement applies to the entire hardware, only the configuration parts of the hardware, or both. 

There was a series of new guidelines post the 2013 ones. The 2015 guidelines became overly relaxed and deviated from the legislative intent. It allowed patents for business methods if claimed in conjunction with novel hardware, and mathematical models if they had a technical application. Any computer-related invention was eligible for patent protection, contrary to the purpose of section 3(k), which had a blanket exclusion for mathematical models and business methods. Again, these guidelines were severely criticised and were replaced by the 2016 guidelines. However, these became extremely restricted, reintroducing the novel hardware requirement. After multiple criticisms, the 2017 guidelines were issued. They completely removed the novel hardware requirement, removed the definition of ‘technical effect’, and software was presumed to be patentable, unless proven otherwise. 

JUDGMENTS TO THE RESCUE

While Section 3(k) was in an identity crisis, a landmark judgment was passed in Ferid Alani v. Union of India, 2019. The case held that computer programmes that have a technical effect or a technical contribution are patent eligible. It highlighted the purpose of adding ‘per se’. It was not to exclude software from the patent ambit in an ever-evolving technology era. The judgment aligned Indian law with the international trend, where inventions are granted a patent, regardless of whether they are based on a computer programme, provided they demonstrate a technical effect or a technical contribution. The ‘technical effect’ included that if the invention solves a technical error or problem, it could be patented. This judgment also criticised the restrictive approach adopted by the Indian Patent Office in interpreting Section 3(k), ignoring the relevance that software inventions hold today. 

Ferid v Alani was a landmark judgment, which was further upheld by various other judgments. The court in Ericson v. Lava (2024) reiterated that software with a technical effect or technical contribution is patentable. Microsoft v. Assistant Controller focused on the aspect of solving a technical problem. The court held that two-factor authentication, which addresses a security problem, is considered to have a technical effect; thus, the invention is patentable.

CURRENT STATUS

Ultimately, the current status is as declared by the courts. Any invention based on a computer programme, essentially a software, can be granted a patent if it clearly contributes to technical advancement, either in the technology itself or in the functioning of the hardware. The 2017 guidelines have been superseded by the 2025 guidelines. The 2025 guidelines are a step ahead of the 2017 guidelines, as they include comprehensive examples of what can be considered a technical effect and what cannot be. The current guidelines shift from a principle-based understanding to a more practical guide for the patent officers. 

CONCLUSION

The Indian patent landscape has undeniably evolved from a rigid, exclusion-heavy approach to a more technologically accommodating one. While Section 3(k) initially signalled a near blanket prohibition on patenting computer programs, continuous policy debates, revised CRI guidelines and judicial interventions have shaped a more nuanced understanding that the restriction applies only to computer programmes per se, and not to software demonstrating a technical effect or technical contribution.

However, one criticism remains pertinent. Despite the textual bar under Section 3(k) and the absence of interpretative clarity in the early years, a considerable number of foreign companies secured software-related patents in India, often through technical claim structuring or examiner discretion. This raises a valid policy concern: if the provision was introduced partly to encourage domestic software capability, did lenient early grants inadvertently favour foreign players over emerging Indian developers? The ambiguity surrounding Section 3(k) led to inconsistent, subjective, and sometimes seemingly misaligned patent decisions, which were at odds with the legislative intent. While calling these grants ‘illegal’ may be too strong a characterisation, they certainly raise questions of compliance and uniformity of application.

Today, the position is much clearer thanks to Ferid Alani, where the stance is clear on technical effect and technical contribution. Yet, the past illustrates how a lack of definitional certainty can distort outcomes and policy objectives.

Going forward, India must continue to refine examination standards, especially in emerging areas such as AI, machine learning, blockchain, and data-driven innovation. Clearer statutory guidance would reduce subjective interpretation, ensure fairness between foreign and domestic applicants, and better align our patent regime with innovation goals.

REFERENCES

Case laws-

1. Ferid Allani v Union of India (2019) 263 (2019) DLT 1 (Delhi High Court)
2. Telefonaktiebolaget LM Ericsson v Lava International Ltd (2020) 2020 (82) PTC 1 (Del) (Delhi High Court)
3. Microsoft Technology Licensing LLC v Assistant Controller of Patents and Designs (2024) Delhi High Court, C.A. (COMM.IPD-PAT) 155/2023

Statutes-

1. Patents Act, 1970

Online Sources-

1. SpicyIP, ‘Patent Office Reboots CRI Guidelines Yet Again: Removes “Novel Hardware” Requirement’ (17 July 2017)
2. Managing IP, ‘Evolution of the Patenting of Computer-Related Inventions in India’ (14 September 2023)
3. Mondaq, ‘Section 3(k) of Indian Patent Act: Case Study’ 

Government Reports-

1. Joint Parliamentary Committee Report on the Patents (Second Amendment) Bill, 1999 (19 December 2001).