Investors who see India as a software powerhouse will need to start focussing on the brewing issue of software patents which has opened up new wounds.

Should software be patented in a country of over a billion people? This question lies at the heart of an ongoing issue questioning the whole idea of patenting software.

The Indian Patent Office has issued fresh guidelines for Computer Related Inventions , which had put on hold the modifications announced last August.

In February this year, the Indian Patent Office called stakeholders in the Indian software ecosystem, including IPR lawyers; and multinational companies represented by industry body BSA, among others, felt let down that after clarity, now comes ambiguity.

“IT is a trans-border issue and post these guidelines, enforcement becomes an issue,” says Ravi Bhola, an attorney at K&S Partner, an IPR firm. Bhola, along with others in the industry, cite a laundry list of problems due to these recently drafted guidelines (refer box).

The guidelines do not make sense considering that innovation happens in software and clubbing it with hardware is not feasible at this point, he says. His rationale stems from the fact that as there is not much of hardware manufacturing in the country, enforcement will be an issue.

An IPR head from a multinational firm, on condition of anonymity, points out that other problems crop up due to these guidelines. “Investments into the country will slow down and India will be bracketed along with China when it comes to software IP.” Others point out that this is not in line with the global practice, especially the US. While that is debatable as the US is looking to move software out of the patent preview. “Even in the US, this is under severe criticism,” argues Venkatesh Hariharan, member of iSPIRT’s expert group on software patents.

Start-up boon? Others in the industry, such as Infosys CEO Vishal Sikka, think tank iSPIRIT, Software Freedom Law Centre (SFLC) and start-ups, welcome this development. It is estimated the US has around 4,000 patents on e-commerce and around 11,000 patents on online shopping.

“Software development is based on logic and people can think along similar lines,” says Hariharan.

Industry watchers say that it is like saying mathematics can be patented. It can be a minefield for start-ups that will end up battling litigation. That is precisely the reason, free software movement has attracted many programmers around the world. It spurred giants such as Google and Facebook, and seems to be the way forward.

Innovation According to Pradeep Agarwal, COO, hSenid Business Solutions, software patent will clearly spur more innovation, but we have to be careful that for every innovation there can be copycats.

SFLC in its blog has said such a test will ensure that applications for patents in the field of software will be rejected and only genuine applications claiming a novel hardware component along with software will be eligible for patent protection.

The industry also points out that the guidelines help in resolving issues such as the Micromax-Ericsson issue. A couple of years back, phone-maker Micromax was sued by Ericsson for patent infringement charges.

Entities that favour software patenting point out that the patent system in itself has been designed to spur innovation and has sufficient checks and balances — especially in the Indian patent law. “The law states that it is not the code, but the application of the software to solve a technical problem that can be patented,” explains Bhola. He believes thousands of patents will be not granted due to this guideline.

Advocates of free software movement say these grey areas, as to who owns the right to software in cases that involve multi-dimensional aspects such as telecom networks, data centre location or jurisdiction, will hinder a lot of innovation, which comes from start-ups.

What is the issue all about?

The Indian Patents Act excludes computer programmes from patenting.

In 2004, attempts were made at expanding what forms of software could be patentable. This was rejected and subsequently, the Patent Act was amended in 2005, which rejected any form of patenting.

In 2013, the Indian Patent Office started stakeholder consultations for bringing uniformity and consistency regarding the patent granting process.

In August 2015, a set of guidelines were issued that said: “software could be patented in case of a technical contribution on a process which is carried on outside the computer.” In other words, what was rejected earlier were issued as new guidelines.

A new head of patents appointed.

An NGO wrote to the PMO citing concerns around the guidelines. PMO sends the letter to the new head who upturned it after consultations and new guidelines introduced in February telling patent examiners not grant a patent if the contribution lies only in the algorithm. If, however, the application is claimed in conjunction with a novel hardware, authorities can proceed to grant a patent.

Sections of the industry say this is causing more confusion.