Comviva Technologies v Assistant Controller of Patents (2024)

Summary

“The present appeal filed under Section 117A of the Patents Act, 1970” ... “is directed against the order dated 25th August, 2022 passed by the Assistant Controller of Patents and Designs” ... “under Section 15 of the Patents Act.” (para 1) “By way of the impugned order, the Patent Application filed on behalf of the appellant vide Application No. 201611000234, titled as ‘Methods and Devices for Authentication of an Electronic Payment Card using Electronic Token’” ... “has been refused on the ground that Claims in the application are in the nature of a ‘business method’ and ‘computer programme per se’ and hence not patentable under Section 3(k)” (para 2). The Controller had held that “The actual contribution lies purely in the software part of performing electronic payment” and that “the server and the device are used to implement methods vide claims 1-10 and 11-16 without any specific hardware.” (para 4) The appellant submitted that “The subject application relates to authentication of financial transaction and not financial transaction.” (para 7.2)

The Court held that “the Claims shall be treated as ‘business method’ only if they are essentially about carrying out business/ trade/ financial activity/ transaction.” (para 12) It found that “the subject application is not addressing a business problem but addressing the security of the transaction” and that “The authentication in the invention finishes before the actual financial transaction begins.” (para 17) On the second ground it held that the appellant had provided “a technical solution to a technical problem i.e., how to prevent unauthorised transactions using electronic payment cards. Therefore, in my view, it would not be a ‘computer program per se’.” (para 19) “In view of the above, the impugned order dated 25th August 2022 is set aside and the Patent Office shall proceed to grant patent for the subject application, subject to any other objections in accordance with the provisions of the Patents Act.” (para 21)

What the court decided

1. Business method under the CRI Guidelines. After setting out “Clause 4.5.2” of the “Guidelines for Examination of Computer Related Inventions, 2017” (para 11), the Court held: “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)
2. The OpenTV questions. Recording that “a Coordinate Bench in Opentv INC v. The Controller of Patents and Designs, has made the following observations”, the Court set out that “the only question that the Court or the Patent Office while dealing with patent applications involving a business method, needs consider is whether the patent application addresses a business or administrative problem and provides a solution for the same” and the aspects “(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; (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 13)
3. Substance in e-commerce claims. “In Priya Randolf (supra), similar view was taken by a Single bench of the High Court of Madras, holding that in e-commerce transactions, a claim would be construed as a ‘business method’ only if in substance it is for a ‘business method’.” (para 14)
4. The per se test. “While assessing the patentability of ‘computer software per se’ under Section 3(k) of the Patents Act, the Controller has to see whether the invention results in a technical effect or a technical advancement.” The Court relied on “Ferid Allani v. Union of India”, which held that “The bar on patenting is in respect of ‘computer programs per se....’ and not all inventions based on computer programs” and that “If the invention demonstrates a ’technical effect’ or a ’technical contribution’ it is patentable even though it may be based on a computer program.” (para 15)
5. The claimed system. “The Claims of the subject application collectively define a highly secure, token-based authentication system for electronic payment transactions that leverages proximity, encryption, and multi-layer verification.” “The invention improves security by ensuring that only authorised tokens, generated in close proximity and valid for a limited time, are accepted for transactions and unauthorized transactions with an invalid token are eliminated.” (para 16)
6. Authentication, not the transaction. “After examining the Complete Patent Specification along with the Claims, I am of the view 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)
7. Refusal on the words used. “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)
8. Technical problem and solution. “The impugned order fails to take into account that the subject application, even if based on computer programme and communication, would be patentable as it has resulted in a technical advancement in contactless payments, where the contactless payments were vulnerable to unauthorised transactions when a transaction card got stolen or compromised. Existing solutions, like one-time passwords (OTPs) or dynamic security codes, are susceptible to problems such as mobile phone cloning, visibility of security codes, etc. The appellant, through the subject application, has tried to overcome such limitations by providing a technical solution to a technical problem i.e., how to prevent unauthorised transactions using electronic payment cards. Therefore, in my view, it would not be a ‘computer program per se’.” (para 19)
9. Procedure. Disposition. “In my opinion, the Controller has overlooked the aforesaid aspects in the subject application and has wrongly come to the conclusion that it would be non-patentable under Section 3(k) of the Patents Act as it would fall into the category of ‘business method’ and ‘computer programme per se’.” (para 20) “In view of the above, the impugned order dated 25th August 2022 is set aside and the Patent Office shall proceed to grant patent for the subject application, subject to any other objections in accordance with the provisions of the Patents Act.” (paras 20–21)

Subsequent treatment

No later judicial treatment and no further appeal traced as of 16 October 2026.