CAN INDIA’S PATENT LAW KEEP PACE WITH AI-DRIVEN SMART GRIDS?
INTRODUCTION
AI is the hidden force behind India’s smart grid revolution as it works towards the ambitious goal of reaching 500 GW of renewable energy generation by 2030. AI is now forecasting energy needs, real-time voltage adjustment, and smoothly integrating solar and wind into the national grid. But a legal tangle lurks beneath the surface of each of these innovations: can these breakthroughs be patented?
According to Section 3(k) of the Indian Patents Act, 1970, computer programs, algorithms and mathematical methods are specifically excluded. Concurrently, judicial precedent and the recently published CRI Guidelines open a very limited, yet traversable, avenue, which depends exclusively on the demonstration of a “technical effect” of an invention. In an AI-powered smart grid system, the product of the algorithm is not just the product of the machine, but a smaller loss of energy and more stable physical systems, and the legal question is anything but simple. This is the Technical Effect and it’s at the crossroads of patent law, sustainable energy and the future of innovation in India.
SMART GRIDS AS THE BACKBONE OF GREEN ENERGY
Smart grids go beyond the upgraded power lines. They are the digital enhanced electrical networks, consisting of IoT sensors, real-time analytics and AI-powered decision making to dynamically manage energy flow across a whole grid ecosystem. By processing vast amounts of data in real-time using AI algorithms, it can identify patterns, forecast potential system issues, and facilitate predictive maintenance to ensure optimal uptime. AI not only helps with diagnosis but also predicts energy generation from weather forecasts such as wind direction and strength, sunlight levels, and more, helping to harness renewable energy and decrease reliance on fossil fuels.
It’s an amazing commercial momentum in this space. The number of patent applications related to the grid has increased by sevenfold in 20 years, with almost all the increase coming from the power delivery and reliability aspects of AI innovations. India’s contribution to this field is growing fast, with about 75% of recent patent filings for Smart Home Energy Management Systems (SHEMS) from India, of which six patents have been published in 2025 and two in 2026 from Indian jurisdictions only.
For instance, the 2025 patent application by KIIT University, spearheaded by researcher Roshan Nayak, introduces an intelligent energy grid management system using AI, which not only forecasts energy consumption but also actively integrates renewable resources for smart energy grid management. Another indication of such filings is that Indian academic institutions are not just observers but are actively engaged in this activity. But the problem is not the innovation, it’s the legal protection of the innovation.
THE TECHNICALl EFFECT AND SECTION 3(k)
The Indian Patents Act, §3(k) makes it clear that “mathematical or business methods or computer programs per se or algorithms” are not subject to patent protection. The key word is per se, that is, if a computer program is claimed by itself, with no physical or technical contribution, it will not pass the test.
It is a legal circumvention of this exclusion based on the “technical effect” argument. The Guidelines for CRI 2025 (issued 29th July 2025) state that “A technical effect should be tangible”. These can be examples such as higher speed of processing, lower computing resources, better security, better network communication, or operational gains in real-time. More importantly, if an invention uses a general purpose computer and provides a specific and credible technical effect over and above general computing, then it passes the Section 3(k) bar.
The Delhi HC’s ruling in the landmark Microsoft Technology Licensing LLC judgement reinforced this approach. Improvements which lead to a better working and effectiveness of the system, in this case, a “technical effect” on the hardware are seen. This decision is directly applicable to smart grid patents: A system that can measurably decrease load, stabilize voltage or increase the efficiency of the hardware itself is not just running an abstract algorithm, but creating a real result on the real infrastructure.
The CRI Guidelines for 2025 further demand that AI and machine learning inventions be clearly described in terms of architecture of the network, training data and algorithmic procedures. Not all AI-assisted inventions are excluded as a class, but abstract AI models still don’t work. The difference lies between an algorithm that is an idea in the conceptual space and an algorithm that is technically oriented with a concrete result.
SHOULD INDIA HAVE A SPECIAL PATENT GUIDANCE FOR GREEN AI?
The case for specific guidance is strongly recommended. In fact, between 2016-17 and 2021-22, the Indian Patent Office has issued 61,186 patents for green technologies, demonstrating that institutional infrastructure for green technological innovations is already in place. Green AI patents increased 35% in 2023, and AI is now a key technology to optimize and predict the energy use of smart power grid systems.
The difference is this: The current CRI guidelines are technology neutral. They don’t mention the special qualities of green AI innovations, which aim to decrease energy waste or carbon emissions, not optimize computer systems. The European Patent Office has started to accept “environmental technical effect” as a new category, directly making the category more clear for any applicant who wants to file a patent in the field of green technology. India hasn’t taken that step yet.
This matters strategically. Academic patent applications are dominated by India for smart energy systems, while commercially validated architectures are still dominated by US and EU utility operators. Tailored advice based on national climate targets may help fill that gap not just in academic submissions, but in commercially viable and legally viable innovations.
CONCLUSION
The Technical Effect Conundrum is not a hypothetical legal conundrum but has real-life implications on the patentability of India’s energy innovations powered by AI. The 2025 CRI Guidelines have shifted the bar, with more precise guidance as to what constitutes a patentable technical effect. However, there is a lot of ambiguity, especially when it comes to inventions in which the algorithmic part of the invention and the physical part are so intertwined like in smart grid systems.
The road ahead is straightforward in its essence: India needs to introduce specific patent guidance, acknowledging that environmental and physical energy effects are different types of technical effects. This would make patent laws more in keeping with the national climate commitments, encourage commercial grade innovations and enable India to become a country of not only patent filings but also of patent defence. The smart grid could well be the litmus test for how well India’s patent law keeps pace with the 21st century.
References
Invntree — The Section 3(k) AI Patentability Master Guide for India: Strategy, Case Law, Drafting and Global Alignment https://www.invntree.com/blog/the-section-3k-ai-patentability-master-guide-for-india-strategy-case-law-drafting-and-global-alignment
Mirandah Asia — India’s 2025 CRI Guidelines: A New Era for Software and AI Patent Examination https://www.mirandah.com/indias-2025-cri-guidelines-a-new-era-for-software-and-ai-patent-examination/
Energy Oil & Gas — How AI Patents Are Shaping the Future of Energy Grids https://energy-oil-gas.com/news/how-ai-patents-are-shaping-the-future-of-energy-grids/
IP India (Official) — Guidelines for Examination of Computer Related Inventions (CRIs) – 2025 https://ipindia.gov.in/frontend/pdf/patents/guidelines/GUIDELINES%20FOR%20EXAMINATION%20OF%20COMPUTER%20RELATED%20INVENTIONS%20(CRIs)%20-%202025.pdf
PatSnap — Smart Home Energy Management 2026 Patent Trends https://www.patsnap.com/resources/blog/articles/smart-home-energy-management-2026-patent-trends/
IJIRL — AI-Generated Green Inventions: Who Owns the IP for AI-Driven Sustainability Solutions? https://ijirl.com/wp-content/uploads/2025/04/AI-GENERATED-GREEN-INVENTIONS-WHO-OWNS-THE-IP-FOR-AI-DRIVEN-SUSTAINABILITY-SOLUTIONS.pdf
Scribd — Patent Application No. 202541004939-A (KIIT University, Roshan Nayak) https://www.scribd.com/document/823090868/202541004939-A