Yahoo Inc v Assistant Controller of Patents and Designs (2011)

Summary

“One Overture Services Inc. (original patent applicant) applied on 14.05.2004 for patent of its invention titled in respect of ‘System and method for influencing a position on a search result listing generated by a computer network search engine’ which was later amended to ‘A method of operating a computer network search apparatus’.” (para 1) “M/s Rediff.com India Ltd., filed a pre-grant opposition under S.25(1) on 22.10.2007.” and “On 30.03.2009, the appellant was informed that the invention did not pass the novelty and patentability test.” (para 1) “This Appellate Board passed an order holding that the impugned order could not be treated as a refusal order u/s 15 of the Act and therefore, the appeal was not maintainable. Against that the appellant filed W.P.No.4462 of 2010 before the Hon’ble Madras High Court. The Division Bench held that the appeal was maintainable against the refusal of a patent under S.25 (1) of the Act since it is relatable to an order passed under S.15 of the Act” and directed “this Board to number the appeal and to decide the matter on merits” (para 2).

The Board held that the finding “that D9 anticipates the instant invention is flawed and it is set aside” (para 12), and “In the absence of evidence that D10 was in fact on the website before 27.05.1998 we accept the defence of the appellant that the D10 is protected by S.32.” (para 13) On section 3(k), “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) “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) “All the findings except the objection under S. 3(k) are found in favour of the appellant. But since the invention falls under S.3(k) and is not patentable, the appeal is dismissed.” (para 49) “For the reasons given above, the appeal is dismissed with costs.” (para 51)

What the court decided

1. Anticipation by Buck. “The appellant contended that Buck patent was published on 20.06.2000, whereas the priority date of the impugned invention was dated 28.05.1999. The Controller, therefore, rejected the objection that Buck patent anticipated the invention. We confirm this finding. The ground of anticipation by Buck is rejected.” (para 10)
2. Comparison of disclosures. “The question whether the distinctive features had technical character is not relevant to determine whether D9 anticipates the present invention. For the purpose of established anticipation the Controller ought to have compared the disclosure in the prior document i.e.D9 with the disclosure in the present invention and decided whether on such comparison the prior document discloses the present invention.” “Without such comparison, the impugned order had held that it was anticipated because the distinctive features had no technical character. Therefore, this finding that D9 anticipates the instant invention is flawed and it is set aside.” (para 12)
3. The reasonable trial period. “The word ‘much earlier’ are not sufficient to take away the protection which S.32 gives to the patentee who is admitting anticipation of the claimed invention. There ought to have been a categorical finding that the trial version was working in public before the 12 month period for citing this D10 as a novelty destroying document. Any provision which operates as a rule of limitation must be construed strictly, for the rules of limitation take away a legal right.” “The date from which the period of limitation starts is definite and unchangeable. It is fixed.” “In the absence of evidence that D10 was in fact on the website before 27.05.1998 we accept the defence of the appellant that the D10 is protected by S.32.” (para 13)
4. Procedure. Grounds not pressed. “The grounds raised on priority claims were rejected by the Controller and no submissions were made before us challenging the rejection. Therefore this finding is confirmed.” (para 14) Of obviousness, “Without any evidence we cannot interfere with this finding. This finding is confirmed.” (para 15)
5. Prior public knowledge on the internet. “There is no mention in the impugned order of the specific documents or any other evidence to show this invention was used on the internet in India before the priority date. To hold that this was public working, there must be clear evidence of public knowledge. Without such evidence of public knowledge just by using a catch-all phrase like ‘frequently used tool’ the patent cannot be rejected on this ground. Any finding which is not based on reason cannot be accepted and is set aside.” (para 16)
6. Patentability first. “If the claimed subject matter is not an invention or if the invention is not patentable or if it is excluded by S.3 of the Act, then none of the other objections need to be considered. Only if the claimed subject matter is a patentable invention we need to look at anticipation, obviousness etc.” (para 17) “So the first test is the patentability test. If what is submitted falls within the S.3 subjects, then we need not explore further.” (para 19)
7. Inventive step and excluded subjects. The Board held that section 3(k) “has to be read so that there is no conflict between S.2(j), 2 (ja) and S.3 (k)”, and 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. Therefore, this technical advance comparison, should be done with the subject matter of invention and it should be found it is not related to any of the excluded subjects.” (para 26)
8. Reading the prior document. Of D10, “We have held that it does not anticipate the invention because there is no evidence to show that it was ’tried’ earlier to the 12 month period i.e. before 12.05.1998. But we can look at D10 to see what is the invention.” (para 30)
9. A technically smarter business method. “When we look at the broad explanations of business method extracted above, the expert evidence , D10 and the appellant’s own response dated 28-12-2005, the invention appears to us to be still a method of doing business, even if it is a technically smarter way of doing business. It increases the chance of the higher bidders being closer to the top.” (para 35) “Even if we go back in time to 1998 the nature of invention is still a method of doing business. That does not change. There are huge innovations in the computers themselves, but the invention claimed is not for the machine but for the method.” (para 36)
10. The Indian exclusion. After surveying the law of the United States, the Board held “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)
11. Obiter. Incentive and business methods. “For inventing business methods no incentive is required because better business methods are necessary ingredients of the art of doing business and further the need for making more money is inexorable. Secondly the exclusion of competition may really be counter-productive to the technological prosperity of the society.” (para 41)
12. An excluded technical advance. “If the present case is tested by these views, and 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.” “Similarly we too have a difficulty in explaining what exactly is a business method. It has not been defined. But in this case one thing is clear. In the invention there is an exchange of business viz., bid amount, bidder’s account and position of advertisement.” (para 46)
13. The claimed method. “Even if we use the description employed by the learned counsel for the appellant that it is an auction combined with the Yellow Pages, all happening in real time it is still a method of doing business, by providing service to advertisers who want to have the prime place in the selected page and for which they bid and their account is debited accordingly.” “This is nothing but doing the advertisement business electronically.” “Therefore, we affirm that this ground alone is sufficient to reject the present application. The impugned order could have been more clear while giving the conclusion regarding patentability. But the conclusion is correct and is affirmed.” (para 48)
14. Obiter. Grants made to others. The appellant having “referred to several patents granted for business methods to Google and cited the” Dimminaco v Controller of Patents and Designs (2002), the Board held “We are not going into the question whether Google ought to have been granted patent or not.” “However, it cannot be disputed that there should be a uniform practice, when similar inventions come up for grant of patent. There cannot be conflicting positions.” “But we cannot allow this appeal, ignoring the patentability bar merely because it is alleged that in other cases erroneous decisions have been issued.” (para 50)

Subsequent treatment

No later judicial treatment and no further appeal traced as of 12 October 2026.