Business Methods

1In OpenTV v Controller of Patents and Designs (2023) the Delhi High Court held that “the exclusion in respect of business methods is an absolute one and is not restricted by the words ‘per se’ as in the case of computer programs.” (para 67) It recorded that the exclusion in the United Kingdom and Europe “is subject to the proviso in Section 1(2) and Article 52(3) to such subject matter or activities ‘as such’.” (para 71) and held that “Thus the bar is not absolute and if there is something more than the business method itself, patenting could be permissible. However, in India, the phrase ‘per se’ does not qualify business methods.” (para 72)

Absolute bar on business methods

2OpenTV held that “The bar in India to grant of business method patents has to be read as an absolute bar without analysing issues relating to technical effect, implementation, technical advancement or technical contribution.” (para 72) It held that “the four-step test laid down in Aerotel (supra) and the five signposts given in AT&T (supra) would not be of assistance in the Indian context inasmuch as they deal with the issues of technical effect which may have a bearing under Article 52 of the European Patent Convention but not while considering an objection under Section 3(k) of the Act.” (para 76)

3The Court held that “the only question that the Court or the Patent Office while dealing with patent applications involving a business method, needs to consider is whether the patent application addresses a business or administrative problem and provides a solution for the same.” (para 73) It held that in applications seeking patents for business methods, the following aspects need to be considered, (i) whether the invention is primarily for enabling conduct or administration of a particular business i.e., sale or purchase of goods or services;" “(ii) whether the purpose of the invention is for claiming exclusivity or monopoly over a manner of doing business;” and “(iii) whether the invention relates to a method of sale or purchase of goods or services or is in fact a computer program producing a technical effect or exhibiting technical advancement. If it is the latter, it would be patentable but not if it is the former.” (para 74)

4The Court held that “In adjudging whether a particular invention is a business method patent or not, regard can be had to the kind of modifications being carried out in a system, if any, which may involve greater convenience to a consumer by change of the architecture, elimination of a physical step and similar tests.” (para 75) It held that “The question as to whether a particular invention or a business method or not, is not dependent on the date of the application but on the wording of the claims and the subject matter of the invention.” (para 65)

Reliance on CRI Guidelines

5In Priya Randolph v Deputy Controller of Patents and Designs (2023) the Madras High Court held that “The CRI Guidelines” (“Guidelines for Examination of Computer Related Inventions”), “which provide guidance but should not be construed as providing an authoritative interpretation of Section 3(k), indicate that a claim would be construed as a business method if the claim is, in substance, for a business method.” (para 8) It found that “the claims are directed at concealing the physical address of the purchaser of goods in e-commerce transactions by deploying software, hardware and firmware for such purpose” and held that “While it is possible that the conduct of e-commerce in this manner may be part of the business method of an enterprise if the claimed invention were to be put to use, the monopoly claim is not in respect of a business method but in respect of a claimed invention deploying hardware, software and firmware for purposes of data privacy and protection. Therefore, the conclusion that the claimed invention relates to a business method is untenable.” (para 8) It added that “Except for the conclusion with regard to business method, it is made clear that no opinion is expressed herein on the merits of the application.” (para 9)

6In Microsoft Technology Licensing v Assistant Controller of Patents (Madras, 3 July 2024) the High Court held that “A business method is a method of operating a business enterprise or part thereof.” It asked “What if a computer related invention” (“CRI”) “is used in a business method? In my view, it would not fall within the business method exclusion because the monopoly claim is being sought for the CRI and not for the business method. The patent eligibility of such CRI may, nonetheless, be tested against the computer programme per se or algorithms exclusions” (para 23)

7On a system for giving media as a gift, the Court held that “The grant of monopoly on a method for giving media as a gift would in effect mean that any system architecture which enabled such giving would fall foul of the invention and in effect therefore, the monopoly relates to a method of giving a gift and hence a business method.” (para 65) It held that “Such a giving of a media irrespective of whether is worded as a method or as a system would be nothing but a method for doing a particular business i.e., for giving of a media as a gift.” (para 79) and that “The subject invention is therefore directed purely towards a method of giving a media as a gift which is nothing but a method of selling a media for gift purposes and is hence a business method. The subject invention is attracted by the exclusion from patentability under Section 3(k) of the Act.” (para 81)

8In Yahoo v Assistant Controller of Patents and Designs (2011) the Intellectual Property Appellate Board held that the inventive step “must be a feature which is not an excluded subject itself. Otherwise, the patentee by citing economic significance or technical advance in relation to any of the excluded subjects can insist upon grant of patent thereto.” (para 26) It held that “the invention appears to us to be still a method of doing business, even if it is a technically smarter way of doing business.” (para 35) and that “In contrast, in India, the law specifically excludes business methods. There is clear statutory language excluding business method patents and no administrative acceptance of them.” (para 38) It held that “if the technical advancement is itself only a business method, then the mere fact that there is a technical advance will not give any advantage to the appellant” (para 46), and that “This is nothing but doing the advertisement business electronically. Even the technical advance that is claimed over the existing art is only an improvement in the method of doing business and S.3(k) is clear that business method cannot be patented, the fact that there is an advance has not improved the case.” (para 48)

9In Comviva Technologies v Assistant Controller of Patents (2024) the Delhi High Court held that “A perusal of the aforesaid clause from the CRI Guidelines, 2017 clearly shows that the term ‘business method’ would apply where the activity is in relation to the transaction of goods or services. However, where the subject matter of the application specifies an apparatus and/or a technical process for carrying out the invention, even partly, the Claims have to be examined as a whole. In other words, the Claims shall be treated as ‘business method’ only if they are essentially about carrying out business/ trade/ financial activity/ transaction. The use of words such as ‘business’, ‘sales’, ’transaction’ ‘payment’ by themselves are not relevant to conclude that the invention is the business method.” (paras 11–12) It held that “the subject application is not addressing a business problem but addressing the security of the transaction. The inventive step in the subject application does not lie in the business concept but rather lies in the technical process, as disclosed in the application. The authentication in the invention finishes before the actual financial transaction begins. Therefore, the aforesaid subject application would not relate to a financial transaction.” (para 17) and observed that “The Controller appears to have refused the application as being a ‘business method’ only on the ground that the Specification as well as the Claims have used terms such as ‘payment’, ’transactions’ and ‘financial transaction’.” (para 18)