India has recently
prepared itself for providing Patent registrations on Software. This is
considered a welcome development since the Intellectual Wealth of the Country
can be preserved and nurtured. The patent regime for "Software" will naturally
progress to cover "Web Utilities" also in the days to come.
In providing a protection for Intellectual property on software,
particularly constituting a "Way of Doing Business" on the Net, it has
been observed that the
international trend is to seek Patent rights even on fundamental ways of doing
business. The patent claim on "Hyperlinking" by British Telecom, "Network based
Business (E-Commerce)" by Open Market are some examples that make us wonder
whether we are protecting the Inventor or creating barriers to the use of
technology.
Recently, divine Inc, a Chicago based company which has bought over Open
Market seems to have started legal battles to enforce the E-Commerce patent
which hitherto belonged to Open Market and revived the debate on the
patentability of certain web based processes. Web based patents create more
problem than other product patents because of its global impact.
Imagine a physical world businessman who has a system of receiving and
fulfilling telephone orders. There are innumerable number of businessmen who are
using the same mechanism and living happily. But Cyberspace is not the
same. If there is a similar mechanism on the Net for which a Patent
is granted, any person using it without a license can be hauled to the Courts.
Quite often, due to the international nature of the Patents and the existence of
the Patent
Cooperation Treaty, businessmen in one country get affected by patents granted
in another country.
While the purpose of introducing a law on Patents for Software and Web Utilities
was to provide a protection to the Inventors and promote technology, in actual
practice, whenever Patents are granted on "Fundamental Way of Doing Business"
Patents have been a hindrance to development.
While a Patent on a Car Tyre composition is very much desirable, a Patent on the
use of "Circular devices made of a soft material attached to a power source and
supporting a super structure..etc" is an objectionable Patent. Here in lies
the subtle difference between what should be patented and what should not.
Also the impact could be different if the Patent holder provides "Free" or
a "Nominal Cost" licensing of his patent. Some times the issue of patent itself
may not be with a bad intention but its usage could be. This raises the issue of
whether the patent regime should also take into consideration the intended means
of exploitation. For example, if the inventor agrees to make his invention
available free
then there should be no objection for the patent to be issued whatever be its
nature. (Will any inventor do so? after spending money and effort in getting the
patent?.. Certainly, if there are alternate means of commercial exploitation of
the Invention)
Obviously, what is a "Fundamental Way of Doing Business" and what is an
"Innovative Software" is a matter of subjective evaluation. Even though the
USPTO has recognized that they have often granted Patents to fundamental
technology components and introduced an improved system of evaluation, one
cannot rule out the continued issue of Patents which may be classified as
"Restrictive Business Practices".
One of the methods by which this type of problem can be overcome is to apply the
principle of "Compulsory Licensing" where the jurisdictional authority will take
a selective decision to make the invention available for compulsory licensing at
a reasonable or no fee basis.
The Problem is Now At Our Doors
Now that divine Inc has started filing suits on some of the users of E-Commerce
applications, what should the Indian E-Commerce community do?. Should they
ignore the fact and continue to flout the Patent in the hope that they are too
small for divine Inc to worry about?
Obviously, this would be an unprofessional approach. If a "Cyber Law
Compliancy Audit" is done on such Companies, the audit will have to make adverse
comments which may be unnerving for the Company, its Financiers and its
Shareholders.
The preferable option would be to get a Court in India declare that the said
patent is either not applicable in India or is under a "Free Compulsory
Licensing".
Again we cannot expect the Courts to take suo-moto action on this
problem. Some authority should therefore take the responsibility for bringing the problem
to the attention of the Courts and get a suitable decision.
As a long term measure, we need to redefine the Patent regime and introduce a
"Patent Monitoring Authority of India" which will act as an
interpreter in case of any dispute on Patents between an Indian Citizen and a
foreign Patent holder and provide its won opinion for the Courts to take a legal
view. Such an authority will act as a "Security Umbrella" against nuisance
patents.
This is an essential input to the growth of E-Commerce in India and every
promotional body including Nasscom should take note of this need.
Naavi
October 30, 2002
Related Article:
E-Commerce Patent Disputes Erupt
