What is the Role of Intellectual Property Rights in Protection of Software?

Introduction

The creation of software involves authoring a text that not only defines but also implements functionality. This text, referred to as code, enables communication with computers through executable instructions. The extension of intellectual property rights (IPR), particularly in the form of patent protection for computer programs, has been a contentious issue. It was not until the early 1990s that software patenting gained significant traction and legitimacy. Court decisions and studies from the Department of Commerce catalysed academic debates about the benefits and drawbacks of software patenting. These debates also became a platform for the open-source community to express concerns about potential threats to their development model and the progress of coding.

Open-source programs emphasize the availability of source code to all, empowering skilled programmers to modify and resolve issues in the software. Unlike proprietary software, open-source programs are not licensed to single users or corporations and can be freely shared. Since open-source platforms encourage imitation and aim to distribute knowledge in the public domain, they face challenges in environments where intellectual property laws are designed to prevent imitation. This paper examines the concept of open-source programming, the role of IPR in protecting source code, and the current Indian scenario regarding software patenting. Additionally, it acknowledges the arguments against software patenting and underscores its importance for fostering innovation.

Software Patenting in India

Software can be defined as a set of instructions or programs that direct a computer to execute specific tasks. In the digital era, software has become essential for automating routine tasks, improving efficiency, and saving time. Given its significance, the protection of software creators' efforts has become a pressing concern. Programmers invest substantial time and effort in developing software, and recognizing this value is imperative for legal protection.

Under the Indian Copyright Act of 1957, Section 2(ffc)[1] defines a computer program as "a set of instructions expressed in words, codes, schemes, or any other form, including a machine-readable medium, capable of causing a computer to perform a particular task or achieve a particular result." Additionally, Section 2(o)[2] classifies computer programs as "literary works," thereby extending copyright protection to them. Copyright protects the creative expression of the source code. When applying for copyright, applicants must provide copies of the source and object code, which are considered protected expressions under Rule 70(5)[3] of the Copyright Rules, 2013.

A common misconception about copyright protection is that it allows third parties to make minor modifications to copyrighted work and claim a new copyright. However, copyright protection extends to the creative expression within the source code, and modifications lacking sufficient creativity may still constitute infringement. This ensures robust protection for copyrighted software in India.

Under the Indian Patents Act of 1970, Section 2(1)(l)[4] defines a "new invention" as any technology not anticipated by prior publication or use before the filing date. However, Section 3(k)[5] states that "a mathematical or business technique, a computer program per se, or algorithms are not innovations and hence not patentable." The legislative intent behind "per se" is clarified in the Joint Committee Report, which notes that while computer programs alone are not patentable, inventions with technical effects ancillary to software may qualify for patents.

For software or computer programs to be patented, they must meet the following criteria:

• The invention must consist of patentable subject matter.
• It must have industrial application.
• It must be new (novel).
• It must involve an inventive step (be non-obvious).
• The disclosure of the invention in the patent application must meet formal and substantive standards.

Arguments Against Software Patenting

1. Patents Are Issued for Obvious, Non-Original, and Trivial Reasons Critics argue that software patents are often granted for trivial or obvious innovations. Unlike fields like physics or chemistry, where prior art is well-documented in academic journals, software lacks accessible prior art. This makes it challenging for patent examiners to assess originality, leading to the issuance of patents for non-innovative solutions.
2. Software Patents Hold the Industry Hostage Patents can hinder industry standards essential for ensuring interoperability and compatibility. In sectors like computing, strong standards are vital for ensuring that products from different manufacturers work together. However, proprietary technology incorporated into standards can allow a single entity to control critical technology, holding the entire industry "hostage."

"Secret or submarine patents" exacerbate this issue. For example, Unisys’ patent on the LZW compression algorithm led to widespread use of the GIF format before Unisys demanded license fees, creating controversy and economic strain.

Critics also argue that the computing industry has thrived as one of the most innovative sectors even before the advent of software patents. They contend that the industry can continue to innovate without them, questioning the need to change an effective system.

Why Software Patenting Should Be Permitted

Open-source advocates claim that software patents restrict the software "commons," limiting the incorporation of patented ideas into open-source projects. While this argument appears reasonable, it ignores the dynamic nature of innovation. The removal of software patents could inadvertently reduce long-term innovation by disincentivizing new software development.

Alternative mechanisms, such as relying solely on copyrights and trade secrets, may not be sufficient to protect proprietary software. Without patents, small businesses may struggle to compete with larger corporations. Studies have shown that patents play a crucial role in securing early-stage venture capital funding. Research by Josh Lerner demonstrates that patent scope positively impacts a company's ability to secure funding. Similarly, Mann and Sager found that patents facilitate multiple funding rounds for small businesses. Patents provide small entities with negotiating power and a safeguard against exploitation by larger players.

While patents can pose challenges for small businesses, such as entry barriers and legal disputes, they also offer significant benefits. Empirical evidence does not conclusively support claims that patents hinder innovation or reduce the software commons. Theoretical arguments against patents are often speculative and lack robust data.

The software industry has mechanisms, such as patent pools and cross-licensing agreements, to mitigate the exclusionary effects of patents. These tools allow companies to share patented technology while preserving competition. Thus, abolishing software patents would be an extreme and unwarranted measure. Instead, reforming the patent system to address specific concerns would be a more balanced approach.

Conclusion

Intellectual property rights play a pivotal role in fostering innovation and protecting creative works in the software industry. By safeguarding the efforts of programmers, IPR ensures economic growth and promotes technological advancement. However, the challenges associated with software patents, such as trivial claims and industry monopolization, highlight the need for reforms. Balancing the benefits of patents with their potential drawbacks is essential for sustaining innovation in the digital era.

In a world increasingly connected through networks, protecting intellectual property has become critical for national and individual interests. Stringent laws and effective enforcement mechanisms are necessary to prevent the unauthorized use of intellectual property. By addressing the concerns surrounding software patents, policymakers can create an environment that encourages innovation while maintaining fair competition, ultimately benefiting society as a whole.

[1] The Indian Copyright Act, 1957, s. 2(ffc).

[2] Id. at s. 2(o).

[3] Rule 70(5) of the Copyright Rules, 2013.

[4] The Indian Patents Act of 1970, s. 2(1)(1).

[5] Id. at s. 3(k).