Revised CRI guidelines and patentability of algorithms

The patentability of computer-related inventions (CRIs) has long been a fervently discussed issue worldwide. The Delhi High Court, the Intellectual Property Appellate Board (IPAB) and the Indian Patent Office (IPO) have drafted various additional requirements for the exclusions under Section 3(k) of the computer-related invention (CRI) guidelines. In its amendments, the IPO has removed the requirement of linking CRIs to novel hardware in order to avoid being excluded under Section 3(k). In view of many stakeholder objections, an effort has been made to clarify the official position of the IPO.

In Yahoo v Rediff the IPAB settled the different positions taken by the IPO on business method-related cases. Similarly, in Enercon (224/2010; see Paragraph 79) the IPAB held that the mere presence of an algorithm in a claim would not vitiate the grant of the patent. Further, in Ericsson v Intex (see Paragraphs 119 and 120) and Ericsson v Lava (see Paragraphs 89-94), the Delhi High Court ruled that inventions which result in technical advancement and have practical implementation or physical representation are patentable.

Removal of linkage with novel hardware
In February 2016 the IPO issued interim guidelines for the examination of patent applications relating to CRIs, particularly those specifying the existence of novel hardware as a pre-conditions for patentable subject matter in such inventions. While the amended guidelines remove the novel hardware requirement, new concepts have been added.

The matter is not as complex as the IPO guidelines suggest. Rather, by offering these guidelines as administrative instructions, the IPO has added certain non-statutory definitions and overcomplicated what should be a simple question of Section 3(k) exclusions.

Through these definitions, the IPO has once again implemented a non-statutory form and substance analysis designed for CRIs to seek subject-matter rejections as a way to avoid practical issues that should be handled through other means. Cases remanded by the IPAB in respect of IPO rejections, particularly those involving CRIs under Section 3(k), demonstrate that they were merely proxies for detailed inquiries required under separate exclusions that should have been more appropriately made.

Technical nature and technical advancement inquiries
Even now, the requirement of separate inquiries regarding the ‘technical nature’ and ‘technical advancement’ criteria in Paragraph 4.5 of the guidelines would complicate the examination process, which in fact requires the CRI to fall under the definition of ‘invention’ as defined under Section 2(1)(j). ‘Invention’ under Section 2(1)(j) is defined as “a new product or process involving an inventive step and capable of industrial application”. ‘Inventive step’ is further defined under Section 2(1)(j) as:

“a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.”

However, Paragraph 4.5 of the guidelines states that examiners must “ascertain from the nature of the claimed CR invention ‘whether it is of a technical nature involving technical advancement’ and then determine that it is not subject to exclusion under section 3”.

Technical nature of claimed invention
In order to obtain a patent on a CRI, the claimed invention must fulfil two criteria:

• it must have a technical nature; and
• its claimed technical nature must involve technical advancement as compared to existing knowledge.

Applicants must now draft the claims to indicate the technical nature of the invention and what the invention covers as per Section 10(c) (“end with a claim or claims defining the scope of the invention for which protection is claimed”) with the understanding that such claims are not subject to the exclusions under Section 3(k).

Therefore, a patent for a software invention or algorithms would be denied, provided that there was a reason for it to be exempted from exclusions under Section 3(k). It is now an examiner’s responsibility to show that the CRI falls under the category of explicit exclusions under Section 3(k). This could change the IPO’s stance on the fact that CRIs are not patentable unless the applicant can show patentability. It also provides enough leeway for the CRI inventors to sidestep the explicit exclusions. While claiming a novel article will be easy, claiming a method or process will not; and converting the method or process claims to a novel article or system will be harder still.

Per se rule analysis – a flawed approach
Paragraph 2.1 of the guidelines states that examiner’s should use the dictionary definition of ‘algorithm’, which is accordingly defined as “a set of rules that must be followed when solving a particular problem”. This definition binds the examiner to the premise of per se rule analysis, which should be based on extensive case law precedent.

In the absence of case law on algorithms, the examiner must have sufficient experience and familiarity with the subject matter to ascertain whether the subject matter of the claim per se falls under the category of “set of rules that must be followed when solving a particular problem”. Per se rule analysis is being adopted as a matter of administrative convenience because a case-by-case analysis would be difficult to implement.

This flawed approach not only gives the examiner a reason to preclude the establishment of a case-by-case analysis for any algorithm which can be similarly categorised, it is also unsupported by the statute, as the term ‘algorithm’ has not been defined in Section 2. Equating the claims with the Paragraph 3.1 definition (ie, a set of rules that must be followed when solving a particular problem) and then concluding that algorithms are not patentable would fail to cover all of the claimed CRIs. At best, this approach can resolve the issue of standalone, isolated or naked algorithm patentability. Its exclusivity is reinforced by the negative (ie, non-patentable) examples in Paragraph 4.5.3, which states that: 

“Algorithms in all forms including but not limited to, a set of rules or procedures or any sequence of steps or any method expressed by way of a finite list of defined instructions, whether for solving a problem or otherwise, and whether employing a logical, arithmetical or computational method, recursive or otherwise, are excluded from patentability.”

Algorithms as processes
Section 2(1)(j) establishes a presumption that algorithms are processes. Notwithstanding any included algorithm(s), examiners must now ascertain whether the claimed process or method contains patentable subject matter ‒ provided that the claimed invention has a technical nature involving technical advancement. An important issue here is the proper interpretation of the term ‘process’ in Section 2(1)(j). It means that the process itself can be patented ‒ not merely the algorithm ‒ as an inventive step which is capable of industrial application. Section 3(d) provides a clue to the patentability of known processes where the transformation and reduction of an article to a different state or thing is the primary requirement for patentability of a process claim that does not include a particular machine. Therefore, unless it is proved to involve isolated or standalone algorithms, a process linked by algorithms where the proper application of algorithms to that process leads to transformation and reduction of an article to a different state or thing can be patented.

Rule of reason analysis – a better alternative
This inquiry by the examiner supports a rule of reason analysis and determines whether a particular process linked by algorithms falls under the category of excluded isolated algorithms. This is what has been stated as preemptions in Paragraph 4.5 of the guidelines under “Determination of excluded subject matter relating to CRIs” of the guidelines, which directs the examiner to do the following:

“judge the substance of claims taking whole of the claim together. If any claim in any form such as method/process, apparatus/system/device, computer program product/ computer readable medium falls under the said excluded categories, such a claim would not be patentable. However, if in substance, the claim, taken as whole, does not fall in any of the excluded categories, the patent should not be denied.”

However, the CRI guidelines fall short of specifying what would make the invention patentable in addition to an algorithm. Nevertheless, this rule of reason approach points towards the development of an analytical structure for evaluating claims containing algorithms.

Comment
Every denial of patentability in cases involving algorithms should be properly justified using a rule of reason analysis, rather than refusal as a category of excluded subject matter being based on a per se rule analysis. This would necessitate claim drafting by restricting an algorithm to a particular application and its use as applied in any manner to physical elements or process steps which should result in the transformation and reduction of an article to a different state or thing.

As a precaution, drafters should avoid reciting algorithms directly or indirectly and refrain from using the term ‘calculate’ in claims. Where algorithms are found to be recited in claims, the invention should be structured and claimed in a manner which makes them an integral part of a larger process, apparatus or device, affecting physical changes or producing a transformed or new physical product ‒ thereby overcoming the IPO’s exclusionary evaluations under Section 3(k). Whether an algorithm as part of a method or process can be patented and how the IPO will treat algorithm-related inventions under Section 3(k) in light of the new guidelines remain to be seen.