Microsoft Technology Licensing LLC v Assistant Controller of Patents and Designs (2023)

Summary

“This appeal is focused on the controversy surrounding the” ... “interpretation of the phrase ‘computer program per se’ in the exclusionary Section” ... “3(k) of the Patent Act, 1970” (para 1). Microsoft “filed an Indian Patent Application No. 1373/DEL/2003 on 07th November, 2003 for registration of an invention relating to ‘METHODS AND SYSTEMS FOR AUTHENTICATION OF A USER FOR SUB-LOCATIONS OF A NETWORK LOCATION’” (para 2), and “the Controller remained convinced and issued the order dated 11 th April, 2019” ... “rejecting Microsoft’s application under Section 15 of Act, finding the claimed invention to be non-patentable under Section 3(k) of the Act” (para 3). “It involves a two-tier authentication by way of two different cookies.” (para 7) “The Controller concludes that the invention is merely a set of computer executable instructions or algorithms, constituting a ‘computer program per se’.” (para 11)

After tracing the legislative history, the Court held that “if a computer program is used in conjunction with a hardware or results in a technical effect/ solves a technical problem, it may be eligible for patent protection.” (para 29) It held that “The Controller has entirely missed the point and his approach is misguided” (para 39), that “The technical effect is the improved security of the authentication process for accessing sub-locations of a network” (para 40), and that “it would be incorrect to exclude the claimed invention on the basis that it is limited to user-interface.” (para 41) “The findings in the impugned order on Section 3(k) of the Act are not sustained and the impugned order is set-aside.” (para 43) “With the above directions, the present petition is allowed.” (para 44)

What the court decided

1. The meaning of ‘per se’. “The aforenoted legislative history of the provision, Statement of Objects and Reasons to the Patents (Amendment) Act, 2005, the Report of Joint Parliamentary Committee on Patents (Second Amendment) Bill, 1999, the parliamentary debates, et al. point towards the shift in relation to grant of patent protection for CRIs” (“computer-related inventions”). “The said term was added to make it clear that ‘computer programs as such’ are non-patentable. The intent of the amendment was to allow grant of patents to CRIs that involve a novel hardware component or provide a technical contribution to the prior art(s) beyond the program itself. In other words, if a computer program is used in conjunction with a hardware or results in a technical effect/ solves a technical problem, it may be eligible for patent protection.” (para 29)
2. The 2017 CRI guidelines. “In response to these concerns, 2017 CRI guidelines were issued which aimed to provide greater clarity and consistency in the examination process of CRIs.” “The revised 2017 CRI guidelines have done away with the three-step test laid down in the 2016 CRI guidelines and requirement of a novel hardware in conjunction with a computer program (software)” (para 31)
3. Technical effect or contribution. “The Court would thus reinforce the views expressed in Ferid Allani (supra) concerning the meaning of the term ‘computer program per se’ in Section 3(k) of the Act.” “If a computer-based invention provides a technical effect or contribution, it may still be patentable. The technical effect or contribution can be demonstrated by showing that the invention solves a technical problem, enhances a technical process, or has some other technical benefit. The mere fact that an invention involves a mathematical or computer- based method does not automatically exclude it from being patentable.” (para 34)
4. Substance over form. “To determine whether an invention falls within the excluded categories, examiners must analyse the substance of the invention, rather than focusing solely on the form of the claims. This requires looking beyond the literal wording of the claims.” (para 35)
5. Signposts for examiners. “The Indian Patent Office must also undertake the exercise of providing indicators to the examiners by citing exhaustive list of worked examples, relating to patent eligibility.” “Counsels have implored this Court to venture into this arena, however, the Court has chosen to stay away and rather, considers it appropriate to direct the Patent Office to undertake this exercise.” “The CGPDTM” (“Office of Controller General of Patents, Designs and Trade Marks”) “is therefore, instructed to examine this issue and take appropriate action thereon, expeditiously.” (para 37)
6. Execution on a general-purpose computer. “The Court opines that the Controller has entirely missed the point and his approach is misguided. Mere conclusion that Claims 1-28 are implemented on computer and are computer-executable instructions/ algorithms performed on a general-purpose computing device is not the correct approach for rejecting a patent application.” “If the subject matter is implemented on a general-purpose computer, but results in a technical effect that improves the computer system’s functionality and effectiveness, the claimed invention cannot be rejected on non-patentability as ‘computer program per se’.” (para 39)
7. The two-cookie invention. “The claimed invention’s technical effect/ contribution is to prevent unauthorized access to sub-locations within the network location by using two different cookies and effectively foiling the attempts of a malicious user to gain access to network sub-locations by illegally obtaining cookies from another user. The technical effect is the improved security of the authentication process for accessing sub-locations of a network” (para 40)
8. The user-interface objection. “This is because the subject patent’s technical effect and contribution goes beyond the user-interface level.” “Furthermore, the fact that the invention improves the user experience does not necessarily mean that it is limited to the user-interface.” “Therefore, it would be incorrect to exclude the claimed invention on the basis that it is limited to user-interface.” (para 41)
9. Set aside and remand. “The findings in the impugned order on Section 3(k) of the Act are not sustained and the impugned order is set-aside. The subject patent passes the first step and does not fall within the excluded categories. The next step is to assess novelty and inventive step (non-obviousness) of the claimed invention.” “Microsoft’s patent application shall be re-examined on objections regarding lack of novelty, and inventive step in view of other cited prior arts.” “Considering the fact that the term of the patent would be ending in November 2023, it is directed that the decision on the subject patent shall be taken within one (01) month from today, after granting a hearing to Microsoft.” (para 43) “With the above directions, the present petition is allowed.” (paras 43–44)
10. Obiter. Postscript. “An invention should not be deemed a computer program per se merely because it involves algorithms and computer-executable instructions; rather, it should be assessed based on the technical advancements it offers and its practical application in solving real-world problems.” (para 45)

Subsequent treatment

• Followed — In Raytheon Company v Controller General of Patents and Designs (2023) the Delhi High Court, citing this judgment as 2023 SCC OnLine Del 2772, held that “The manner in which such applications are to be examined and the interpretation of Section 3(k) is now settled by this Court in Ferid Allani (supra) and Microsoft (supra).” (para 20)
• Explained — In Ab Initio Technology v Controller of Patents (2025) the Madras High Court, citing this judgment as 2023 SCC OnLine Del 2772, recorded that “in the context of an user authentication system in a network, the Delhi High Court held that the two-tier authentication solves a technical problem.” (para 39)
• Followed — In Microsoft Technology Licensing v Assistant Controller of Patents and Designs (Delhi, 16 April 2024) the Delhi High Court, the appellant having relied on this judgment as 2023:DHC:3342 (para 10), held that “The ld. Controller has clearly erred in applying the novel hardware criteria by following guidelines which were already replaced i.e., 2016 CRI” (“Computer Related Invention”) “Guidelines” and that “This has been discussed in detail in the decision of the Coordinate Bench of this Court in Microsoft (supra)” (para 31).