Software Patenting: A Huge Blow To Indian Industry

People’s Democracy

Organ of the Communist Party of India (Marxist)


No. 05

January 30,

Patenting: A Huge Blow To Indian Industry




latest Patent ordinance has already raised strong protests from the people for
favouring global pharmaceutical MNCs. What has gone relatively unnoticed is its
attack on the software industry, where computer programmes (read software) can
now be patented. The new ordinance has supposedly been brought in to make the
Indian Patent Act TRIPS compliant. The Old Act (modified in 2002) has exactly
the language given in TRIPS on this count, so it was fully TRIPS compliant.
Therefore, the attempt to sneak in software patenting under the guise of meeting
the TRIPS deadline is completely mala fide. Even worse, this major step
has been taken bypassing the parliament and without any debate in the country.


Sibal, the minister for science and technology is reported to have said that
patenting of software is due to the demand of the Indian software industry whom
it will help. We understand from government sources that Nasscom is supposed to
have supported this measure. Considering that India is known to have very few
software products, a highly protective Intellectual Property regime in software,
which includes even patent protection, can only harm the Indian industry. For
this reason, no developed country except the US has provided for patent
protection in software. In view of this, the only conclusion is that the
government of India has given in to the pressure of the US government and US
companies, with Nasscom acting at their behest.


Indian Patent Act, as modified in 2002 had made non patentable the following:


mathematical method or a business method or a computer prgramme per se or


recent amendment states instead:


computer programme per se other than its technical application to

industry or a combination with hardware; a mathematical method or a business
method or algorithms;”



we go beyond the legalese, the amendment means that while a mathematical or a
business method or an algorithm cannot be patented, a computer programme which
has a technical application in any industry or which can be incorporated in
hardware can be patented. Since any commercial software has some industry
application and all applications can be construed as technical applications,
obviously it opens all software to patenting. That the government would even
contemplate bringing an entire industry under patenting without any semblance of
a debate or without it being placed in the parliament must rank as an act of
betrayal of the Indian people. By government’s own admission, the only issue
on which there was a time constraint was to bring in the product patent regime
and make it TRIPS compliant by end 2004. There was no such pressure on the
software patenting where we were already fully TRIPS compliant. So why was this
added to the Patents Ordinance? Under whose pressure?
Or was Steve
Ballmer’s (president of Microsoft) presence in India in this period merely a
co-incidence? Is it also a co-incidence that Microsoft and Nasscom co-hosted
some programmes together?


is patenting a problem for the software industry? After patenting was allowed in
the US, smaller developers and independent software companies have been under
severe attack. Large companies have the ability to buy up patents, keep on
filing patents and can tie up smaller companies in costly law suits for years.
Therefore, moving from a copyright regime to a software patenting one, simply
makes the cost of developing new software many times higher.
Copyright is
virtually automatic, there are no costs associated with copyrights; patents have
to be filed and filing imposes fairly high costs. If they have to be filed in a
number of countries, the costs multiply.


India has very little of software products, its industry supplying “bodies”
(body shopping) to develop software for global giants, such a regime would push
up the costs of the users of software as a whole and also make it almost
impossible for Indian companies in the future to break into the global software
market with its own products. Indian software industry would be much better
served by taking the Free/Open Source route. This would not only make the costs
to the user much smaller, but also make it possible to generate innovative
products without being shut out by debilitating patent battles.


is software patenting so dangerous? Software patents do not patent programmes;
if they did only that, it would be a minor irritant. What they do is to
patent the idea on which the software is developed. And if ideas can be
patented, then a range of applications can be claimed to have infringed some
idea or the other.
Unlike copyright, which only protects the code as
written, patents protect the idea underpinning the code. Thus, copyright
protection protects what we write; others can copy the idea but not the actual
code. Thus we can copy Shakespeare’s plots (which is also what Shakespeare
did) but not his language.



protection is much broader. It carves out an entire area within which others can
stray at their peril. Quite often, neither the patent holder nor the others know
the extent of the area which it covers. This is what leads to litigation and can
be used by large companies to drive out competition. Richard Stallman, the
co-developer of the GNU-Linux operating system and proponent of Free Software
says, “Software patents are patents which cover software ideas, ideas which
you would use in developing software. That is what makes them a dangerous
obstacle to all software development.” It is then possible for companies such
IBM, (who held 9,000 patents in 1990 and probably hold many times that number
today) that any product violates an idea contained in any of these patents. As
neither the patent office nor the judicial system understands the concepts and
ideas on which software is built, they then tie-up smaller companies for years.
Even if a completely novel idea is used by a company, IBM (or Microsoft) could
say that the package as a whole violates some other patents that it holds and
therefore the smaller company should cross-license its idea with IBM in lieu of
IBM allowing them to use these patents. Both tactics have used by companies
against its rivals, with the large and well-heeled companies wielding an obvious


of the classic patent cases was the data compression technique used in reducing
the size of data files. The LZW compression algorithm was granted a patent in
1984, well after a number of companies had introduced into their products. They
had either to re-engineer their product or pay high license fees. Even today,
all software using the GIF format has to pay royalties. Public Encryption key
software could not be used again for similar reasons.
US-based holds a patent on ‘one-click shopping’; any company that wants to use
a similar idea can be sued.
zipping of files to implementing an automatic recalculation function in spread
sheets, all have come under attack for violating an idea contained in some
patent One can go on to a long list of such patents and patent cases, all of
which hinge on the US law allowing software patenting. It obviously creates
enormous hurdles for software developers. There is no way a developer can even
figure out what has been patented and only finds it out after some company takes
him to court. As long as the software is not successful, nobody bothers. But if
it succeeds in the market place, it would be sure to face challenges from major
software companies.



those who are suggesting that patent protection helps innovators, a look at
India’s own development of its software industry would be of help. India
started its software industry only after IBM was driven out of the country.
Before that, there was no software industry worth the name, with software and
hardware being imported from IBM. Once IBM left, Indian computer companies
developed computers using the Unix operating system, which was in the public
domain. This led to developing a large number of skilled software professionals
with Unix experience and were also writing high-level applications for making
the entire computer system work. With companies such as HP and Sun challenging
IBM, Unix became the de facto operating system platform for such companies. The
demand in the Silicon Valley for Unix programming skills stemmed from this turn
of events. This led to Indians establishing a major market presence there, with
companies such as Wipro opening Unix support teams. If either of the two
conditions did not exist, Unix being available in the public domain and IBM
having been kicked out, the Indian software industry may have well followed the
path of the Indian hardware industry.



Europe, there is a huge opposition to software patenting, with small business
organisations, leading scientists, economists opposing this measure. The
European Parliament has been forced to defer software patenting several times.
The European Commission put forward a proposal in February 2002 for a Directive
on the Patentability of Computer-implemented inventions, also referred to as the
Software Patents Directive. The directive aims to clarify what is patentable and
what is not at a European level, given the many different national laws on
patenting.  In this Directive, only
software, which is embedded in hardware, is sought to be opened for patent


should be noted that the directive does not aim to make it possible to patent
pure computer programmes: it would only apply to computer software
integrated into an appliance. This makes it much more restrictive than the
amended Indian Patent Act, which opens out any technical application of a
programme to industry or its realisation in hardware for patenting. Even with
this restriction, the critics of the EU directive have pointed out that a patent
on software is in effect a patent on an idea, while traditionally patents have
been restricted to concrete physical inventions only. By making this amendment,
it is possible to implement algorithms in hardware and then claim patent
protection for this. Once an idea can be patented if it is burnt in to hardware,
the argument for extending it to a software implementation gains ground. In
fact, the first breach in the US for making software patentable came through
this route.


small business organisations in EU have opposed the directive, as in their view
this would favour large companies over small, innovative ones. The software
community, particularly the EU Open Linux community, have said that it would
have massive ramifications for developments such as open source software. A
number of countries have opposed the directive, the latest being Poland. At
present, even this limited patenting of software in EU is under hold. That
India, which has a much greater stake in software should put in its statuettes
something so retrogressive does not speak well of this government. That it
should do so without even a semblance of debate is doubly unfortunate. We hope
that good sense will prevail and it will take out software patenting clause from
the Act that it puts before the parliament.