Google Play Billing Policy: Whether Anti-Competitive In Nature

ABSTRACT:

The goals of both, namely the maximization of public welfare, can be compared in terms of how competition law and policy handle the process as well as to those of political democracy.[1] But because of the quick rise of e-commerce and the digital market, it has grown increasingly complex. The paper describes the entire situation by the way of taking an example of the contemporary Indian problem that occurred in relation to the Google Play billing system, contextualize it with the competition law and its current state, and draws attention to the shortcomings in the ruling itself.

INTRODUCTION:

Due to the rapid growth in field of e-commerce and digital market place there has been an insurgence of platform to facilitate the process and in turn gaining power from it. This new field is governed by multiple laws but the focus of the article is on the competition law which keeps the power of the platforms in check in order to preserve the right of freedom of choice and welfare of the consumer by keeping in check the competition in the marketplace.

The Google Play Billing System (hereinafter “GPBS”) in context to the digital market place of Google Play have been in spotlight as was fined for anti-competitive practice which was been followed. The GPBS has been rightfully charged by Competition Commission of India (hereinafter (CCI) and in this article after critically analyzing the facts, issues will lay down the judgement of the court, then point out the Main Factors which the Commission took aid in order to reach an ultimatum as well as substantiating it and then even pointing out the lacunae that even this judgement suffers from.  

ANALYSIS:

India has seen a drastic change in the technology and in the modern times due to increasing availability of electronic devices as smart phones, laptops, etc. with the supplement of the Internet has been the epicenter for the emergence of the e-commerce platform and mobile payment systems. Due to this emergence as the law changes with the change to the society so there has been changes, amendment and even addition of laws or legal provision governing the area of the digital market place. In Businesses operating in the digital market place in India have to comprise with multiple laws such as:

1. The Information Technology Act, 2000,[2]
2. The Indian Contract Act, 1872,[3]
3. The Consumer Protection Act, 2019,[4]
4. The Competition Act, 2002,[5]
5. The Payment and Settlement Systems Act, 2007,[6]
6. The Reserve Bank of India (RBI) regulations on digital payments,[7]
7. The Copyright Act, 1957,[8]
8. The Trademark Act, 1999,[9]
9. The Patents Act, 1970.[10]

But, this article focuses on the aspect of assessing the junction where the interfaces where two domains of completion law and the digital market place meets, in the recent times due to the fine imposed by the CCI against the Google for GPBS being anti-competitive in nature and impugned monetary fine of Rs. 936.44 crores as result of the case of XYZ vs Alpahabet Inc..[11]

XYZ v. ALPHABET INC.:

BACKGROUND:

There was a two-fold allegation made by the informants on Google as recognized by the commission, firstly was the mandatory use of the GPBS for purchasing apps as well as to conduct in-app purchases restricts the choice available to the app developers and also keeping in mind the 30 percent service tax which may be 15 in some cases which is mandatory to be given to Google under the GPBS for any purchasing of the app for the google play store and for ant in-app purchases as well. Secondly, was that the other mobile wallets and UPI apps are not accepted as legitimate payment methods in the Google Play payment system.[12]

Issue arose:

1. Whether making the use of Google Play’s billing system (GPBS), exclusive and mandatory by Google for App developers/owners for processing of payments for App and in-app purchases and charging 15-30% commission is violative of Section 4(2) of the Act?
2. Whether exclusion of other UPI apps/mobile wallets as effective payment options on Play Store is unfair and/or discriminatory as per Section 4(2) of the Act?
3. Whether pre-installation and prominence of Google Pay UPI App (GPay) by Google is in violation of Section 4(2) of the Act?

WHETEHR GPBS PRACTICE IS ANTI-COMETITICE IN NATURE OR NOT:

Yes, the GPBS system was anti-competitive in nature and the commission was right in its approach and holding them liable under 4(2)(a)(i),[13] 4(2)(a)(ii),[14] 4(2)(b)(ii),[15] 4(2)(c),[16] and 4(2)(e) of the Act.[17] and we can analyze each of the aspects discussed by the court while substantiating it even further:

GPBS:

GPBS is the proprietary billing system of the google, in which the app developer makes account with Google, and in this system the Google gets its “service fee” on all the app purchase or in-app purchase. In the due process of creating an account by the app developer with Google they have to agree to the DDA (Developer Distribution Agreement) and the DPP (Developer Program Policies) which clearly mandates the compulsory use of the GPBS.[18] Further, if seen in the Section 4 of the Google Play’s Payment Policy can be clearly inferred that the not only does it mandates the use of GPBS,[19] but in addition it also has an “Anti-steering provisions” which means it also restrict the ability of the app-developer to inform the consumer about in-app purchase from some elsewhere. There were number of factors as to why the GPBS system is anti-competitive in nature such as subsequently discussed.

DISCRIMINATORY PRACTICES:

Then Court finally highlighted the part of discriminatory practice which comes to light when we see that YouTube which is owned by Google does not use GPBS but YouTube is in connection with third-party payment processors directly, Google had given liberty to YouTube but not to the others who still have to follow the GPBS and have to pay the exorbitant rate of 15-30% service fee every time putting them at a disadvantage;[20] (cite) When we say discriminatory practice, we say so in the light of the practices which results in denial of market access in violation of provisions of section 4. (cite para 40 Arshiya Rail Infrastructure Limited Vs. Respondent: Ministry of Railways Arshiya Rail Infrastructure Limited vs. Ministry of Railway: MANU/CO/0076/2012). Also, the Supreme Court itself has interpreted denial of market access under Section 4(2)(c) widely, noting that denial of market access ‘in any manner’ would fall under its ambit, regardless of whether it is a denial of access to competitors or denial of access to players in vertically affected markets.[21] So the denial of market access used in this context is an umbrella term. Here, Google turning a blind eye to the YouTube in turn to increase their revenue allowed them engage with a third-party payment processor and like others they are charged significantly lesser fee then they themselves charge to others which ranges from 15-30%.

ACCESS TO DATA:

All the Google-owned services have access to the all data giving competitive advantage as a result of having access to this downstream competitors’ data set. Google would be able to use this information to enhance its offerings and more effectively target its potential clients. On the other side, the downstream rivals wouldn’t have access to the entire data set, which would hurt their ability to compete;[22] as can be inferred from the clause 9.2 of the DDA,[23] and also from the “Share usage & diagnostics information with Google” as explained on the Google Play’s Support page itself.[24] From the very insurgence of the digital marketplace access to data have been both an enabler and driver of competition and like any tool it serves the competitive as well as the anti-competitive services. There are companies like Google in at this very instance we can see that it misused their data access and companies not being careful not to abuse their control over the data will harm consumer welfare as well as limit the competition.

INNOVATION AND BARRIER TO ENTRY:

The GPBS has an adverse effect on the even though Google argues that GPBS as evident from its averments that it aids in levelling the playing field for app developers and stops monopolistic practices by app shops. On the other hand, while in reality as accepted by the commission as well GPBS stifles innovation by preventing developers from experimenting with fresh business models and sources of income.[25] The same argument is forwarded with respect to barrier to entry as it raises barriers to entry for competitors and inhibits developers’ capacity to provide alternative payment systems, Google’s requirement that app developers utilize its billing system reduces competition and choice for app developers and customers.[26]

UPI

There was another issue of UPI, Google has made only itself available to the intent flow technology while the other UPI only have access to the collect flow technology, to differentiate between in intent flow and collect flow in simple terms would be that, intent flow is a connected chain of steps, user-friendly and simple while collect-flow technology is a broken chain of steps which are disconnected with each other,[27] through this this Google was discriminated between developers of “similarly placed apps, equally placed transactions”.[28] While rejected the last contention as the option of pre-installation is available to all the others just because one utilizes it does not make it abuse of dominant position.

LIMITATION TO THE JUDGEMENT:

The main aim of the competition law is to maintain the following aspects:

1. Prohibition of anti-competitive agreements
2. Prohibition of abuse of dominant position
3. Merger control
4. Consumer protection

When any practice which is in contravention of any of the point and is having an adverse-effect on market competition is an anti-competition practice.[29]

With the rise of the e-commerce and digital marketplace there has been a sharp rise in anti-competitive practice like price-fixing, predatory pricing, Exclusive dealing, tying and bundling, abuse of market power.

As said by Ashok Kumar Gupta, chairman of Competition Commission of India that, “Digital markets are epicenters of technological innovation but lately they have become zones of “entrenched and unchecked dominance”,[30] all this has been possible due to the presence of lacunae in the act of competition law itself. Some of the lacunae are:

LACUANE 1: “RELEVANT MARKET IN DIGITAL MARKET PLACE”

The “relevant market” defined in Indian Competition law,[31] is based on the geographic region as in Section 2(s),[32] and the nature of product or service being offered as in Section 2(t),[33] which is ingenious only in case of the single side transaction, but does not take into account the interconnectedness of the sellers on each other which occurs in a multi-side transaction. There are substantial differences between a multi-side transaction and a single side transaction such as the unlike the traditional market where there was a seller and a buyer, here there can be multiple buyer as well as seller and may at times for one buyer to earn money there has to be involvement of other buyer, all of the people interact through a platform which is to say there is an intermediary role and there is a degree of the network effect, there are pricing models and even risk allocation.[34]

The biggest limitation to Indian Competition Law is the Multi-sided transaction as it is not possible to find the “relevant market” based on the available test, when looking at judicial procurements we see that courts have only recognized multi-sided nature of platform,[35] but have not adopted any means to aid the situation as can be seen from the subsequent judgement including Xyz v. Alphabet Inc.,[36] where to the CCI did not give any weightage to the multi-sided nature of the app store which connects the smartphones users to app developers just applying the tradition test of substitutability and geographic region just gave three separate relevant market and had delineated between market for licensable mobile operating system for smart mobile devices and the market for app store for Android OS.

Keeping in mind the past inconsistent judicial procurements with respect of “relevant market” in competition law ranging from cases such as Matrimony.Com Limited vs Google LLC & Ors,[37] Make My Trip case,[38] to contemporary cases such as Harshita Chawla,[39] Delhi Vyapar Mahasangh cases.[40]

LACUNAE 2: DETERMINATION OF DOMINANT POSITION AND ABUSE OF POWER BASED ON SHARES:

Market share measures the percentage of total sales or revenue in a market that a company controls, but it does not take into account other factors that can affect a company’s ability to exercise market power, such as barriers to entry, network effects, economies of scale, and access to data or other resources. Even though, in the judgement the court while accessing the case of Xyz v. Alphabet Inc.,[41] the court had taken into account other factors such as access to data, entry barriers, etc. but had clearly stated that the Commission is of the view that market share is one of the primary though not determinative parameters to assess dominance in a relevant market.[42] Accepting market share as a dominant factor to access the dominance in the market place can be very misleading in the current age witnessing the rise of e-commerce and digital market place as mentioned above.

CONCLUSION:

To sum up, the key takeaway from this article is that GPBS was anti-competitive in nature and is one of the major accomplishment of the CCI in identifying the issue and then delivering the judgement it in a very detail and a descriptive manner had discussed the issue while shedding light to the aspects of discriminatory practice, access to data and even to the effect of innovation and the barrier on entry, while also highlighting the second clubbed issue of UPI which was discussed then afterwards highlights the lacunae which the decision itself suffers from and through this highlights lacunae we can clearly see the way forward which is, accepting and understanding our own shortcomings which is that unlike other countries with competition law India still falls a bit short, India as a way forward just as a suggestion can take two different ways like:

1. Can pass a similar ruling as the seminal ruling of Ohio v. Amex, the CCI can take into account the feedback effects and competitive constraints in transaction and non- transaction platforms which is unique to the multi-side transaction,[43] or
2. Can either join or create something similar to the Digital Markets Act in the EU,[44] so that the there is a separate legislation to deal with digital market place altogether.

While at the current juncture though there is the Competition (Amendment) Bill, 2022, which a has passed both the Lok Sabha as well as the Rajya Sabha on March 29, 2023 and April, 3 2023 respectively and one of its key issue is analysing digital market, so the India may in the future successfully tackle issues such as which arose at the current instance.[45]

Author : Arkadeep Poddar, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD

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[1] JSTOR: INDIAN COMPETITION LAW: GLOBAL CONTEXT, by B.S. Chauhan, published in Journal of the Indian Law Institute, July-September 2012, Vol. 54, No. 3 (July September 2012), pp. 315-323, at page 315,  available at, https://www.jstor.org/stable/44782475, (last visited 14^th May, 2023).

[2] The Information Technology Act, 2000.

[3] The Indian Contract Act, 1872.

[4] The Consumer Protection Act, 2019.

[5] The Competition Act, 2002.

[6] The Payment and Settlement Systems Act, 2007.

[7] Master Direction on Digital Payment Security Controls, Reserve Bank of India, available at, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12032&Mode=0, (last visited 14^th May 2023).

[8] The Copyright Act, 1957.

[9] The Trademark Act, 1999.

[10] The Patents Act, 1970.

[11] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[12] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[13] The Competition Act, 2002, § 4(2)(a)(i).

[14] The Competition Act, 2002, § 4(2)(a)(ii).

[15] The Competition Act, 2002, § 4(2)(b)(ii).

[16] The Competition Act, 2002, § 4(2)(c).

[17] The Competition Act, 2002, § 4(@)(e).

[18] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 249.

[19] Google Play, Google Play’s payment policy: Google Terms and Services, § 4, Rights and Restrictions, available at, https://play.google.com/about/play-terms/index.html, (last visited on 14^th May, 2023).

[20] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 29.

[21] Competition Commission of India v. Fast Way transmission Pvt. Ltd., Civil Appeal No. 7215 of 2014.

[22] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 282, 284.

[23] Google Play Developer Distribution Agreement, clause 9.2, available at, https://play.google.com/about/developer-distribution-agreement.html, (last visited on 14^th May, 2023).

[24] Google Play Support page: “Share usage & diagnostics information with Google”, available at https://support.google.com/accounts/answer/6078260?hl=en, (last visited at 14^th May, 2023).

[25] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 314.

[26] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 186, 193.

[27] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 354.

[28] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 355.

[29] Competition Commission of India v. Bharati Airtel Limited and Ors. (2018) SCC OnLine SC 2678.

[30] Khurana and Khurana Advocates and IP Attorneys, The Antitrust issues in digital markets – Modifiable anti-competitive conduct of Artificial Intelligence, published at 12^th October, 2021, available at, https://www.khuranaandkhurana.com/2021/10/12/the-antitrust-issues-in-digital-markets-modifiable-anti-competitive-conduct-of-artificial-intelligence/, (last visited at 14^th May, 2023).

[31] The Competition Act, 2002, § 2(r).

[32] The Competition Act, 2002, § 2(s).

[33] The Competition Act, 2002, § 2(t).

[34] Business Model Analyst: Mutisidedx Platform Business Model, available at,  https://businessmodelanalyst.com/multisided-platform-business-model/, (last visited 14^th May, 2023).

[35] Vijay Gopal Vs. Big Tree Entertainment Pvt. Ltd. (BookMyShow) and Ors., 2022 SCC OnLine CCI 36.

[36] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[37] Matrimony.Com Limited vs Google LLC & Ors, 2018 SCC OnLine CCI 1.

[38] Makemytrip India Pvt. Ltd. MMT and Another V. Competition Commission of India and Others, 2022 SCC OnLine Del 4440.

[39] Harshita Chawla (informant) Whatsapp Inc. and Facebook Inc. v. Competition Commission of India, 2020 SCC OnLine CCI 32.

[40] Amazon Seller Services Private Limited, represented by its Authorized Signatory Mr. Rahul Sundaram v. Competition Commission of India, represented by its Secretary and Others, 2021 SCC OnLine Kar 12626.

[41] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63.

[42] Xyz and Ors. V. Alphabet Inc. and Ors., 2022 SCC OnLine CCI 63, ¶ 164.

[43] IndiaCorpLaw: Delineating Relevant Market for Multisided Platforms: Transaction vs Non-Transaction Platforms, by Harshit Upadhyay and Sanigdh Budhia, publishe at October 26, 2022, available at, https://indiacorplaw.in/2022/10/delineating-relevant-market-for-multisided-platforms-transaction-vs-non-transaction-platforms.html, (last visited 14^th May,2023).

[44] European Commission: The Digital Markets Act: ensuring fair and open digital markets, available at https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/digital-markets-act-ensuring-fair-and-open-digital-markets_en, (last visited 14^th May, 2023).

[45] PRS Legislative Research: The Competition (Amendment) Bill, 2022, by the Ministry of Finance, available at, https://prsindia.org/billtrack/the-competition-amendment-bill-2022, (last visited on 14^th May, 2023).

Compulsory Licensing in India –

Navigation Intellectual Property and Access to Essential Medicines during COVID-19

India’s use of compulsory licensing during the COVID-19 pandemic underscored the delicate balance between intellectual property rights and public health emergencies. This approach enabled the government to authorize the production of patented drugs or vaccines, addressing the urgent need for affordable healthcare solutions. The move highlighted the crucial interplay between public health and intellectual property law in times of crisis.

Introduction

Compulsory licensing in simple terms will be described as middle path to maintain a balance between Patent rights and access to live saving mechanism. When a government allows a third person to use the patented product or process without the consent of the patent holder in circumstances enumerated by the government.

To address access challenges in the context of medicines like treatments for HIV/AIDS, hepatitis C, and cancer, governments have turned to compulsory licenses. This legal measure gained prominence when governments sought to overcome patent barriers to facilitate the importation or production of generic antiretroviral treatments for HIV/AIDS in the early 21st century. Over the past two decades, compulsory licenses have been considered or employed by countries almost a hundred times for various medicines.

Fast track patent Grant mechanism

Due to COVID fast track patent grant mechanism was introduced, usually patent applications may take a considerable amount of time to be examined and approved under appropriate circumstances. In India patent grant usually takes 3-6 years from the date of application filling

There are 4 steps in usual process

• Filling and publications
• Searching and examinations
• Filling response to examination report
• Decision of the examiner

As a breakthrough in the fight against the slow moving process of patent grants, the Indian Government brought into force, Patent (Amendments) Rules 2016 and incorporated under Rule 24C of Patent (Amendment) Rules 2019.

The existing provisions of these rules permitted applicants to submit a request for a swift examination of their patent application in accordance with Rule 24C of the Patent Rules 2003.

Only If

The Applicant fell under the category of Startup

        Or

An application had indicated India as the competent International Searching Authority (ISA) or it was elected as an International Preliminary Examination Authority (IPEA) in the corresponding international application

The Main Objective of Compulsory Licensing are

• Dealing with business practices or the disregard of patent regulations especially when they fail to meet the needs of our country.
• Making sure that patients can access patented medicines even if they are too expensive or not readily available.
• Allowing the public to use patents, for commercial purposes.
• Granting permission for licenses in cases where patent holders refuse to license producers, including those within our country.
• Managing the possibility of shortages in stock.
• Protecting health in situations, like emergencies, urgent circumstances and epidemics.

What are the provisions under 84-92 of the Indian patent act 1970.

Under the Indian Patent law, Compulsory Licensing have been dealt with under Chapter XVI of the Indian Patent Act,1970.

Under Sections 84-92 of the Indian Patent Law, it further mentions the Perquisites.

Applying for Grant of Compulsory license

 Section 84 of the Indian Patent Act allows any interested party, including the license holder, to apply to the Controller for a compulsory license after three years from the patent’s grant. This application can be based on the fulfillment of the following conditions:

    (a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or

   (b) that the patented invention is not available to the public at a reasonably affordable price, or

   (c) that the patented invention is not worked in the territory of India

Moreover, license granted on the accountability and ability of the applicant’s work to the public Advantage. Nature of the invention and measures taken by the patentee to make full use of the invention.

Section 92(1) of the Indian Patent Act states that

In situations of national emergency, extreme urgency, or for public non-commercial use, the central government may grant compulsory licenses for sealed inventions by issuing a notification in the Official Gazette.

After the notification has been issued, any interested party may apply to the Controller for a license. The Controller will then grant a license to the applicant, along with appropriate terms and conditions.

Amid the COVID-19 outbreak, MSF has been consistently urging the use of flexibilities provided by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement of the World Trade Organization (WTO). These flexibilities include the use of compulsory licenses and government-use licenses, which can address the ongoing issues. To tackle the severe impacts of the pandemic, MSF has been advocating for additional measures to be adopted by WTO and its member countries. These measures should temporarily halt the enforcement and application of relevant intellectual property (IP) to ensure uninterrupted production and supply of essential COVID-19 health technologies throughout the pandemic, until global herd immunity is achieved.

Article 31(b) waives the need to obtain authorization from the right holder of a patented product

There were certain limitations of Compulsory licensing during pandemic

• It may invite unwanted pressure
• It requires case by case approach
• It does not provide an effective remedy for emerging and evolving patent barriers
• It must be used primarily to supply in domestic market

Conclusion

It is within the authority of countries to issue compulsory licenses for essential health technologies. However, in order to ensure unobstructed access to medical tools for COVID-19, they should consider temporary automatic measures such as the TRIPS waiver proposal initiated by South Africa and India. This proposal temporarily suspends certain obligations related to the granting and enforcement of intellectual property on essential health technologies. It provides a crucial legal option to address monopolies on intellectual property during a pandemic. It is recommended that all governments support and adopt this initiative.

Author : Nishchay Agarwal , in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at IIPRD.

References:

• https://intellectual-property-helpdesk.ec.europa.eu/news-events/news/compulsory-licensing-india-and-changes-brought-it-trips-agreement-2021-10-12_en
• https://www.iisd.org/articles/policy-analysis/trips-waiver-negotiations-mc12
• https://msfaccess.org/compulsory-licenses-trips-waiver-and-access-covid-19-medical-technologies
• https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7242884/

Significant Impact Of Artificial Intelligence On Intellectual Property Rights

INTRODUCTION AND DEVELOPMENT OF AI IN IPR

When compared to other laws, IPR has its significance because it deals with the intellect, creativity, and inventions of a person. There are different kinds of IPR involving, Copyright, patents, trademarks, etc which provide extensive rights for an individual by protecting and safeguarding their inventions and ideologies.

“The capability of a computer program to alleviate a dilemma or make a judgment in a situation is referred to as AI, which is defined as scientific knowledge that intends to comprehend the essence of human intellectual ability through the exercise of a computer program and the capability to visualize intelligent human behavior. AI also refers to the program’s capacity to find the approach that ought to be taken to resolve the problem or make a choice and to recognize similarities among various circumstances and adversities.”[1]

Since John McCarthy first defined artificial intelligence as the technology and science of creating computer intelligence in 1955, he predicted that it might take five to five centuries for it to achieve its conceivable heights.[2] The origin of AI was seen back over the ages, the first that dealt with robotics and artificial intellect is the myths in Greek. From then onwards, there are diverse significant technological advancements in AI. There is the improvement of “Tuning Tests”, which was a significant development by “Alan Turning”. Another major development is “ELIZA”. This is used while making PCs as a characteristic and significant language. As previously mentioned IPR is a crucial tool to safeguard technology as well as ensure financial reward for intellectual invention, whereas AI has emerged as a new dimension. AI falls into three categories: “perception systems, expert systems, and natural language systems.” Specifically, trademark, copyright, as well as patent laws must be reviewed in the context of the expanding and quick adoption of AI.

[Image Source: Shutterstock]

IMPACT OF AI ON IP

With the evolution of technologies and the development of AI, it became quite difficult to safeguard IPR. There was continuous pressure and threat to IPR. This is because of the revolution of the 20^th century digitally and the evolution of the internet as a significant means of communication globally.[3] Further, there are three main reasons for the rapid increase of AI. They are “enabling the convergence of big data, immediate availability of processing power and finally the availability of cost-effective infrastructure.” Further AI can be developed and implemented specifically and differently paving way for issues concerning the IPR. 

In reality, by resembling parts of the human intellect, AIs can produce original works of creativity. Additionally, many AI systems go through training, wherein they create their decision-making techniques and guidelines by making important decisions repeatedly and utilizing the input to get better at making decisions in the long run. Additionally, massive amounts of input data are regularly examined by AI systems to find statistical traits. The majority of intellectual property (IP) is an invention of humans, which is one important factor that may restrict AI in some IP concerns.

Copyright and AI

[Image Source: Blog Loc Gov]

The works that are created by AI aren’t reasonably acknowledged by “Conventional Copyright”. It particularly protects the creation or invention of an individual. To pursue or grant the right of Copyright, there needs to be a fulfillment of two conditions. They are the created work should be “tangible and it should be original”.

The term author is defined under Section 2(d) of the Copyright Act, 1957 as, “the individual who enables the work to be produced” in connection to any literature, theatrical, orchestral, or aesthetic work that is computer-generated.”[4] As above-mentioned, once AI is developed and becomes completely automatic and AI can make its own decision and judgments identifying who will undertake the arrangements required for the creation of work becomes much more challenging. Currently, only human authors are getting protected under Copyright law. Regardless, there was a proposal by some researchers and academics to include non-human authors under the definition of author. In that case, the work developed by AI is debatable and can raise controversies.

The case in the context of the relationship between copyright and AI is Burrow Gilles Lithographic Co. v. Sarony[5]. The question of whether an image might receive copyright protection was at the center of this lawsuit. Since this highlighted the contrast between intellectual and robotic labor, it was a pertinent case. The Court addressed whether a product that is a machine’s output might receive copyright safeguards. The Court limited the range of their protection by ruling that merely mechanical labor isn’t by definition creative. Thus, it would be challenging to assign copyright for works produced by AI systems if a rigid method like this were to be used.

Patent and AI

The immense usage of AI for performing fundamental functions has indeed reduced human labor. Even AI gadgets are replacing calculators and other relevant techniques along with operating in a complex and significant manner. Apart from copyright, there are many challenging problems in patenting due to AI. The work created by AI is nothing but copying or imitating human work. For Instance, the Microsoft Inner Eye project is an AI system that deals with the treatment of cancer. This AI technology analyses neuroimaging scans and differentiates malignancies from healthy bone and cartilage. This can be done through machines. Regardless of this invention, this method was already invented by an oncologist in form of 3D photographs. Now it would be difficult to claim a patent for this invention created by AI claiming that it is a new invention whereas it was already existing.

[Image Source: Shutterstock]

Furthermore, it may be shown from a review of instances involving the patentability of computer programs, etc., that the Court has refused to grant patents to programs simply because the functions they carry out are technical rather than imaginative.[6]

A patent is the sole and absolute right given to an individual for his invention. He will have the making, selling, or using rights of that invention. Likewise, the inventions and ideas of AI technologies should be given equal importance and rights. If AI technologies are left behind, then the operations and functions carried out by AI systems will indeed surpass the intellect of humans leading to arising disputes regarding managing and supervising the very own existence of AI. Through this, it is admitted that AI has a very high quantum of independence and due to this, there is a requisite for extra concentration on patent claims. Due to this transparency, the work done by AI gadgets doesn’t require any involvement of humans anymore.

SUGGESTIONS

To overcome the issues and challenges caused due to AI in IPR there are some suggestive measures, which are as follows:

1. Uniform and standard recognition of AI

Although AIs are a reality everywhere, they are only acknowledged in a few nations, such as the United States, England, and New Zealand. It would be a step in the right direction if all participants in global trade forums started to acknowledge AIs in the same way, for example, by amending TRIPS.

2. Removing confusion in how patent laws are applied

With their extensive use on a big scale, there exists a definite distinction between inventor and invention, therefore protecting against it becomes crucial. Furthermore, granting them total independence now could pose a threat in the future, therefore serious precautions must be made to avoid that.

3. Adopting a Data Protection for Artificial Intelligence Act

Humans today execute all of the operations of artificial intelligence (AI), therefore it wouldn’t be shocking if, shortly, AI might outperform humans and even take choices on their behalf. After all, humans prefer to allow AI-complete freedom and independence. The Artificial Intelligence Data Protection Act[7] should have been developed to retain the world under control and sustain equilibrium. The act may also cover a variety of regulations covering civil as well as criminal violations that AI tends to perform against people.

4. Eliminating the Discrepancies in AI Criminal Liability.

The developer of an AI now has a copyright over its actions. Similarly to this, if any criminal responsibility were to arise, it would also be placed on the creator, who could not have been knowledgeable of the AI’s actions. Such a gap should indeed be filled.

CONCLUSIONS:

To keep pace with the rapidly advancing artificial intelligence, the existing IP regulations require significant improvement. The current rules might no longer be able to meet human requirements as artificial intelligence keeps getting smarter if they were not updated. When combined with IP, AI can facilitate the generation of IP. Businesses that need to handle challenging and complicated problems are currently benefiting significantly from AI. As the amount of data grows, routine IP activities may take a long time for humans to complete. As a result, AI technology gives experts more time to concentrate on making more effective choices. By relying less on human inquiry techniques, it will also promote increased accuracy.

Given how quickly AI is developing at the moment, a framework for its operation, regulation, and accountability is urgently needed. In a summary, AI is highly helpful when it is under the programmer’s regulation, but the moment it begins to operate independently and without outside supervision, it may constitute a menace to not only the realm of IPR rather to everybody in broad.

Author: Keerthi Gandreti, a Intern at Khurana & Khurana, Advocates and IP Attorney., in case of any queries please contact/write back to us at via email chhavi@khuranaandkhurana.com &  IIPRD

[1] Jamal bin Subaih Al-Hamlan Al-Sharari, The Impact of Artificial Intelligence on the Quality of Administrative Decision from the Point of View of Secondary School Leaders in Al-Jouf Educational Region, Volume 8, Part 1, Solouk Magazine, Ibn Badis University Mostaganem, Algeria, 2021, pp. 18-19.

[2] John McCarthy, What Is Artificial Intelligence?, (Computer Science Department, Stanford University, 1956) Revised November 12, 2007

[3] Abbott, F.M., Cottier, T., & Gurry, F. (1999). The international intellectual property system: Commentary and materials, available at https://scholar.google.com/citations?user=OXk1rN4AAAAJ&hl=en, accessed on 18^th March,2021.

[4] Section 2 (d) of the Copyright Act, 1957

[5] Burrow Gilles Lithographic v. Sarony, 111 U.S. 53 (1884)

[6] Bilsk v. Kappos, 561 U.S. 593 (2010)

[7] Artificial  Intelligence  Poses  a  Greater  Risk  to  IP  than  Humans  to, TECHCRUNCH, https://  techcrunch.com/  2015/ 12/31/artificial-intelligence-poses-a-greater-risk-to-ip-than-humans-do/

Concept of Deceptive Similarity under Trademark Law

Intellectual property refers to the creations of the mind,such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. And Intellectual Property Rights usually give the creator an exclusive right over the use of his/her creation for a certain period of time.

Trademark is one of the areas of Intellectual property which helps us to identify a product by distinguishing it from other goods and services belonging to the same class. It is very important to get a trade mark registered for a business or a company to protect its goodwill and brand value but on the other hand it is susceptible of being infringed or misused.

Deceptive Similarity has been a major threat in the world of trade mark. This is how existing trademarks can be infringed or misused. It can be defined as similarity between trademarks that can lead the general public of average intelligence to believe that the mark in question is somehow related to a well-known trademark. As a result, the goodwill and reputation of the true brand owner remain at risk.

DEFINITION AND CONCEPT OF TRADE MARKS:

Trademark is used as an identification mark to distinguish the goods and services of one business from another. It is mark of identity.
Trademark has been defined in Section 2(zb) of the Trade Marks Act, 1999 as:
“A mark that can be represented graphically and that can distinguish one person’s goods/services from another’s goods/services and that can include the shape of the goods and their packaging and combination of colours.”
Quality and brand value of any company or product plays a pivotal role in attracting consumers for purchasing goods. Here, Trade Mark comes into picture. Trade Marks helps the consumers to identify particular goods with a particular trader. Trade Mark can be a label or a picture or combination of colours which is applied to the goods which acts as its identity. It portrays the quality of goods in the minds of the consumers and with the passage of time, that mark may become a well-known name. Trademark serves as a reference to the origin of a product.

MEANING AND SCOPE OF DECEPTIVE SIMILARITY:

According to Section 2(h) of Trade Marks Act, 1999, deceptively similar means “a mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion.
According to Section 11(1) of the Trademark Act, 1999, “a trademark cannot be registered if it is deceptively similar, or identical, with the existing trademark and goods and services, that is likely to create confusion in the mind of the public at large”.
A deceptively similar trademark is one which is very similar to an already registered or well-known trademark and is capable of being deceived and creating confusion in the minds of the consumers, but it is not identical, there’s a very thin line between identical and similar. Identical marks are completely same while deceptive similar marks are not completely similar but a portion of the mark might be similar.

CRITERIA FOR DETERMINING DECEPTIVE SIMILARITY:

In Cadila HealthCare Ltd. Cadila Pharmaceutical Ltd (2001), Supreme Court provided the grounds for testing “Deceptive Similarity” . The factors which are to be taken into consideration for determining deceptive similarity are as follows: –
i. Nature of mark (word, label or composite mark).
ii. The degree of resemblance between the marks.
iii. The nature of goods (services for which the Trade mark is used).
iv. The level of care and intelligence exercised by the purchaser while purchasing goods or services.
v. The mode used by the purchaser to purchase or place the order.
vi. The similarity in the nature, performance and character of goods of the rival traders.

JUDICIAL INTERPRETATION (CASES):

1) Cadila HealthCare Ltd. V. Cadila Pharmaceutical Ltd (2001).
The Supreme Court in this case has prescribed certain guidelines to be followed for adjudicating matters related to Deceptive Similarity. The parties in this case were the successors of Cadila Group. The dispute took place because the Defendant was selling a medicine named ‘Falcitab’ which was very similar to the medicine manufactured by the plaintiff named ‘Falcigo’ and both the drugs were used to cure the same disease. Due to which the plaintiff demanded injunction on the ground that the names are creating confusion among the customers.
Defendant in his defence stated that the prefix “Falci” has been taken from the name of the disease i.e., Falcipharam malaria.
Court stated that it is very necessary that confusion of trademarks related to medicine, pharmaceuticals and drugs shall be strictly prohibited. Further said that the brand names which are phonetically similar shall be considered deceptively similar.

2) M/S Lakme Ltd. M/S Subhash Trading (1996)
In this case the Plaintiff was the seller of cosmetic products selling it under the registered trademark name- ‘Lakme’. The Defendant too was selling products of the same class under the name ‘Likeme’. Thus, the plaintiff filed a case of trademark infringement.
The Delhi High Court held that there is a similarity between the two names. That they are phonetically similar and there are high chances of creating confusion among the customers. Hence injunction was granted.

3) Starbucks Corporation. Sardarbuksh Coffee and Co. & Ors (2018)
In this case the plaintiff ‘Starbucks’ being a very famous brand and the defendant ‘Sardarbuksh’ a new venture. While selling products of the same class.
The Delhi High Court held that the name ‘Sardarbuksh Company’ is phonetically and visually similar to that of the Plaintiff and hence it comes under the category of Deceptive Similarity. Therefore, Sardarbuksh was ordered to change its name and logo.

4) M/S Allied Blenders and Distillers Pvt. Ltd. Govind Yadav & Anr.
In this case the plaintiff claimed that the defendant’s trademark ‘Fauji’ was deceptively similar to that of plaintiff’s ‘Officers Choice’ on the ground that Fauji means a military officer when translated to Hindi.
Both the parties were in the liquor business. Further the packaging of the bottle was also similar. But it was held by the court that there is no deceptive similarity between the words ‘Fauji’ and ‘Officers Choice’ and therefore dismissed the suit for trademark infringement.

CONCLUSION:

Trademark plays a vital role in giving business an identity and goodwill. Thus, it is very important for a business to get its trademark registered. Deceptive similarity is a major threat in the world of trademark because it can lead the general public of average intelligence to believe that the mark in question is somehow related to a well- known name.
Judiciary has shown strictness to save the rights of the genuine trademark holder and has given deceptive similarity a wide scope. Courts have used the Doctrine of deceptive similarity for protection against trademark infringement.

Author: Akash Jindal – a law student Bharati Vidyapeeth New Law College, Pune, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

Secret Prior Art in India

The term “Secret Prior Art” refers to any documentation which, if made public, would create a risk of increasing competition and which the patent holder or applicant has deliberately withheld. These documents might include industry standard information, marketing materials or documents prepared by competitors and filed with the USPTO or other IP offices. If such documentation is disclosed outside of the proceedings in a patent application (e.g., during discussions with an examiner), it may result in challenges to that application as an invalid disclosure of Secret Prior Art under section 102(b) of the Patent Act.

[Picture Credit: gettyimage]

Patents are issued for innovative inventions that take an inventive step. Previous art is any information or material that was made publicly accessible or published prior to the submission of a patent application, and it serves as the foundation for assessing novelty and inventive step. A prior patent application must have been published before the subsequent patent application was submitted in order for it to be taken into account as prior art for that application. Many jurisdictions do not consider a prior patent application to be prior art if it was submitted before the submission of a subsequent patent application but published only after the submission of the subsequent patent application.

Patent applications that are considered previous art in jurisdictions that do so are typically referred to as ‘secret prior art.’ Secret preceding art presents an odd conundrum for both applicants and administrators. On the one hand, the applicant of the next application would be unfairly disadvantaged if secret previous art were accepted as legitimate. The applicant would not have the chance to distinguish their innovation from the prior invention in the application to prevent any potential subject-matter overlap because they would not be aware of the earlier patent application. Threats that covert previous art could invalidate a patent application could discourage innovation.

A patent application is maintained under seal from the time it is submitted until it is published. Therefore, it is likely that two or more patent applications having the same subject matter or claiming the same invention will be submitted between the application date and the publication date of the first filed patent application. The applicants of the later filed applications have no way of learning about the previously filed patent application at the time of their submission. In spite of this, the earlier patent application will have a patent-eliminating impact and could be used as pertinent prior art in the later filed applications. Such earlier works are referred to as secret prior art.Intriguing terms such as “previously filed, afterwards published applications,” “conflicting applications,” and “non-published prior rights” are also used to refer to the concealed prior art.

Why are Secret Prior Art or Non-Published prior rights important?

Secret previous art is used to reward the first individual to submit information, creating a monopoly in this process. Avoiding patenting a topic that has already been revealed. Avoiding the granting of two patents for the same idea is possible by using hidden prior art. Avoid Multiple Infringement Damages: Countries defend their people against multiple lawsuits for infringement or royalties on a single innovation. Preventing unreasonable time period extensions of patents is how nations safeguard their population from the exclusive rights granted by patents.

 Approaches for considering Secret Prior Art:

There are different approaches throughout the world but there are mainly two approaches considered for prior art.

Whole Consent Approach: This strategy is the most generally used one; some of the most significant patenting systems, including USA, Europe, and Japan use this approch. Using this method, the complete text or content of the initial patent application submitted is used to defeat the asserted by earlier art the topic of a later patent applications. Let’s take a hypothetical situation as an example. in which an applicant I submitted a filing a patent with a topic that is disclosed Subject-related matters A and B and claims just subject A. Prior to the release of the first-party applicant’s patent application, yet another patent application that Subject B was submitted by Applicant II. If the patenting authority uses the Whole-content method in this situation, Applicant-later II’s filed patent application will not be deemed new over Applicant-previously I’s filed patent application, and Applicant II will thus not be granted patent rights. This might be attributed to the fact that the claimed subject matter of Applicant-earlier-filed II’s patent application (i.e., B) was previously revealed in the description.

Prior Claimed Approach: This is the less popular method; several patenting regimes, like India, Vietnam, and Switzerland, employ it to take into account unpublished prior art. Only the claimed subject matter of the earlier patent application is used as prior art in this strategy when compared to the claimed subject matter of later patent applications. If the patenting authority uses the Prior-claimed technique in the aforementioned case scenario, Applicant-later-filed II’s patent application will be deemed new over Applicant-earlier-filed I’s patent application, and as a result, Applicant II will be eligible for patent rights. The reason for this is that the claimed subject matter of the patent application submitted by Applicant II (i.e., B) was not asserted in Applicant I’s earlier-filed patent application.

Treatment of Secret Prior Art in India:

India’s handling of secret prior art Indian Patent Act of 1970 has the condition that Section 13 refers to hidden previous art (1) Indian patent law is distinct from other countries’ significant patenting methods in relation to the method for taking into account secrecy previous art Prior-claimed technique in India employed in place of a comprehensive content strategy. As a result, undisclosed previous art is claims of earlier filing but unpublished inventions.

Recent rulings in India show a tendency where the standard for determining non-obviousness, prior-claiming, and usage before the filing date of a patent application is higher when the applications in question are submitted by the same inventors and/or applicants. In AstraZeneca AB & Anr. v. Intas Pharmaceuticals Ltd. [FAO(OS) (COMM) 139/2020, judgement dated July 20, 2021], the Delhi High Court believed that the tests for “obvious to a person skilled in the art,” “anticipation by publication,” and “use before the date of filing of patent application with complete specification” should be taken into account in the context of the “person in the know” in situations where the inventor is the same because It is conceivable that the creator of the first innovation knew about the second one while submitting the first application for a patent. The Court further stated that it might be inferred that both applications reveal the same subject matter if a claim of infringement was made for both the earlier and the later filed applications by the same patentee. The Patentee cannot assert infringement for both applications and then contend that the applications do not cover the same ground in an effort to simply extend the exclusive rights for the same compound, the Court ruled.

Conclusion:

Different jurisdictions approach hidden previous art in different ways along a continuum. These become especially important when submitting multi-jurisdictional applications since various prosecution strategies may be used depending on where the application is submitted. When the same applicant who submitted the hidden prior art application also files the new application, there are divergences. When it comes to prosecuting applications using hidden prior art, India differs from other countries by using the “prior claiming” method (as opposed to the “full contents” approach used in EP, JP, and US). Additionally, India appears to be predisposed to enforce a higher standard for the assessment of obviousness in situations involving self-collision, which might necessitate greater preparation.

Author: Akanksha Chaudhary- a student at Rajiv Gandhi School of Intellectual Property Law (IIT Kharagpur), in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

Algorithms And Intellectual Property— The Complexity In Protection

Introduction

Artificial Intelligence specifically algorithms is transforming the society by presenting better and improved products, processes, and much more, thus paving the way for greater productivity, efficiency, and well-being of humans.

Algorithms have utility in our day-to-day activities and have become integral to our lives. The development of algorithms requires creativity and a lot of effort; therefore, its developers should be given some exclusive rights for its proper utilization. Intellectual Property Rights are the rights generally given for such kind of an intellectual activity. On account of the aforesaid qualities of algorithms coupled with their phenomenal value, there should be some protection mechanisms for ensuring that these works are protected from illegal and unauthorized use, so as to let the creator enjoy its benefits. The blog attempts to figure out some protection mechanisms currently available for algorithms. It further lays down some other possible mechanisms for protection, and lastly draws out the best of these protection mechanism .

Defining Algorithm

Majority of the experts on algorithms do not suggest any definition for the term algorithm, because the same would restrict its scope. One definition cannot cover all the aspects of algorithms considering their rapid development and growing use cases. However, for the purpose of understanding, we will use the definition given by Hill. He defines the term algorithm as, “a finite, abstract, effective, compound control structure, imperatively given, accomplishing a given purpose under given provisions”. Simply stated it is “a step-by-step procedure for solving a problem or accomplishing some end”. Algorithms when incorporated into computer programs guide the computers on how to complete tasks.

IP & Algorithm—The Complication

Algorithms find themselves in a tricky situation when it comes to their IP protection. Firstly, this is because they fulfil essentials of more than one IP protection mechanism such as patents, copyrights, and trade secrets, and so it becomes difficult to accommodate them in one single domain. Secondly, AI, which is the creator of some algorithms, has not been recognised as an intellectual property rights holder, thus complicating the situation further.

There are three major IP protection mechanisms under which Algorithms can be protected. These mechanisms are:

1. Patents,
2. Copyrights, and
3. Trade Secrets

We shall take a look at these one by one.

Patents:  A Patent protects a product or a process which is novel, useful, and non-obvious. It may sound strange but algorithms can be protected as patents. Algorithms are generally excluded from patent protection, however, but technically they do qualify for the same. The reason is that software programs or algorithms fulfil all the essentials of a patent such as novelty, non-obviousness and usefulness. The earlier law on the issue may have completely excluded software programs including algorithms from patent protection. However, the review of the current law on the issue suggests that— “processes that use computers may be patented, but that protection does not extend to software programs themselves,” and that “there continues to be no protection under current patent law for the large number of computer programs that are neither embodied in firmware nor related to a process of production.”

This clearly indicates that protection can be granted to software programs and algorithms if they can be associated with some patentable process. Hence it can be concluded that patent law does not completely exclude software programs from being protected as patents if the same is associated with some patentable invention.  

Copyrights: The second option for protection of algorithms is copyright. Copyrights are the exclusive rights given to the author of an original and creative work. These rights include preventing copying of work, distribution of copies, and preparation of derivative works from the original work. These rights are very much valuable specifically considering that software can be easily copied. Algorithms are creative works in the sense that they present a creative method of doing a task using code. As far as algorithms are concerned, they are sometimes the work of Artificial Intelligence and the problem with copyrights is that it is yet to recognise AI as author for granting exclusive rights. Copyrights can surely protect the human author but not non-human authors such as AI. Second issue with respect to copyrights is that of expression of algorithms. Copyrights protect only the expression of an idea and not the idea itself. Copyrights exclude the following from its protection irrespective of the form of description:

Idea, Procedure, Process, System, Method of operation, Concept, Principle, or Discovery.

This mandates the idea to be presented in some tangible form. For instance, the plot of a novel in a person’s mind cannot be protected unless that plot is written or recorded in some tangible form. Copyright protection, thus, in application to software program or algorithm, would protect only the intellectual property embodied in software as a mode of expression. Algorithms can form part of the computer software after their expression in computer programs and therefore can be protarected.  However, looking at the nature and importance of algorithms or software programs in commercial activity, the author/originator of the program may not want to publish it and instead would like to utilize it without letting others know about the same. These kinds of algorithms which the author does not want to publicize cannot find a proper place for protection under the copyright law. This drawback of copyright protection leads us to the third protection mechanism which is protection by way of Trade Secrets.

Trade Secrets: Algorithms or software programs can be protected by way of trade secrets. Some believe it to be the best and most reliable protection mechanism, for instance, Nirwani says that, “in today’s increasingly complex, highly competitive, hyper-connected world, some things that might ordinarily be protected by traditional IPRs … are best kept secret”.

Trade secret does not require any complicated specifications unlike copyrights and patents. There is no need for the expression of it to be in some tangible form; instead it can be protected once it originates. Given their anonymity and huge commercial value, algorithms are eligible for trade secret protection. However, trade secrets are never meant for IP protection, nor are they always considered as IP rights. There are three essentials for protecting anything under trade secrets. These are:

1. Information must be secret i.e., it should not be known to the public involved in such a domain.
2. Its commercial value should arise from its secrecy.
3. The owner or manager of such information should reasonably keep it confidential.

Algorithms fulfil all these requirements. However, the issue with trade secrets is that they only safeguard information from unfair competition and commercial use; they do not “create any exclusive rights to know-how or information”. The secrets are protected against unlawful acquisition and use, however, when the acquisition or use becomes lawful, such as in the public interest or in exercise of governmental functions, then the trade secret holder does not have any recourse. Simply stated, trade secrets do not confer exclusive intellectual property rights on its holder and instead is a mechanism for ensuring secrecy.

Algorithms need proper protection as they qualify as intellectual property and should get exclusive rights. However, the same is not ensured by trade secrets and this is counterproductive for business and societal interests. In this way, start-ups and entrepreneurs find themselves in a complicated situation while wanting to protect their creative software programs or algorithms.

Indian Jurisprudence on the Issue

Indian law on the issue clearly lays down the scope for software programs and algorithms to be protected by copyrights or Trade Secrets. It excludes protection of software programs and algorithms by way of patents. However, it leaves the discretion on the author of such a work to either apply for copyright protection or protection under trade secrets but not both. Once the work is protected under copyrights, the same cannot be protected as trade secret and vice versa. Under Indian Patent law, the algorithms are completely excluded from protection, as they do not qualify for patent protection.

Conclusion

There is a need to evaluate how IP should protect AI and AI-based systems such as algorithms. This should be done considering business success and best interests of the society. It’s a fact that reliance on trade secrets for the protection of algorithms is the current best option as there is uncertainty in patent and copyright laws.

The rights of individuals and society must be balanced with IP protection. Reliance on trade secrets for long would not be justified as the same would be contrary to the objective of IP rights. The real IP protection is offered by the mainstream IP protection mechanisms such as copyrights and patents, while trade secret is essentially not an IP protection mechanism. Moreover, protection by way of trade secrets lacks transparency and accountability as stated earlier.

In order to address the issue, the IP law needs to pave way for AI to come forward for its protection. Recognizing AI including algorithms as creative or technical art would solve the inherent issues and would pave way for them to become eligible for copyright or patent protection. Switching to copyrights could be better, but it also has numerous issues; for instance, it would restrict technical systems under a framework designed for ‘creative’ works only. Whereas patent protection would be flexible and therefore preferable over copyright protection as AI and algorithms may be too technical for the latter. Moreover, as per experts in this field, the best kind of protection for algorithms is patent protection. For this, the scope of patents has to be widened to incorporate algorithms, algorithmic models, and their bespoke datasets. This would result in better protection of algorithms and ensure transparency and accountability in their use.

Author: Shawaiz Nisar- a student at Rajiv Gandhi National University of Law, Punjab in case of any queries please contact/write back to us via email vidushi@khuranaandkhurana.com or contact us at Khurana & Khurana, Advocates and IP Attorney.

Artificial Intelligence in The World Of IP

Introduction

Artificial Intelligence has taken the world by storm. Currently, AI has laid its foundation in various industries and is set to change the lives of humankind in the upcoming years whether be it socially, economically or even legally. Artificial Intelligence has drastically changed the way humans perform their work by replacing brain power with algorithms for quick and efficient retention and retrieval of data. It is only a matter of time that such a system is adopted to improve the administration of IP.

AI functions on “algorithms.” These algorithms are a step-by-step procedure that commands how the machine can process data. This data can be processed into complex calculations, or generate automated reasoning, it can also further be commanded to develop its own algorithms. Obviously, such an algorithm would be complex and requires heavy research but once the AI processes this command it is free to create its own algorithms. In such a scenario, the AI will have the creative freedom to invent or discover new algorithms, but who can claim patent rights on such creation? The laws on IP currently are not in synchrony with the contemporary issues surrounding the question of whether AI can own IP. 

In this article, we shall discuss the plethora of uncertainties surrounding AI and IP. We will have a look at the future of AI in the world of IP as an administrator, the changes it will bring in its everyday function. We will also reverse the role of AI as an administrator to that of a customer and explore on the possibility of AI owning IP, if so, then will it take the role of the owner or creator of such a possibility. Finally, we will also examine the scope of AI as a legal entity.

Artificial Intelligence and Intellectual Property

The main purpose of granting IP rights is to encourage ‘creations.’ It balances the owner’s right towards claiming an invention but at the same time also ensures that it doesn’t prevent its widespread use. IP as a segment is expanding, in IP Trend Monitor’s Annual Survey 2019 Edition, 71% of the respondents revealed that the industry has started receiving more work in just a span of a year. In the next 5-10 years IPR will grow continuously along with the world and with the advancement in technologies and computational knowledge, the rate of inventions is set to grow at a rapid pace. Management of IP Portfolio will become a mammoth task, for patent searching, researchers will have to use long Booleans and complex word searches to sort through the available data. AI can make this entire process easier, faster and remove the possibilities of error all by applying machine learning methods, modern search can resolve the inherent ambiguities that plague traditional keyword searches.

AI has a huge scope in administrating monotonous and dull jobs like patent searching, trademark clearance and can also reduce costs for customers who can’t afford access to costly legal services and databases. It can also introduce greater transparency towards granting patents and can create a system where accountability can be established.

Impact of AI in the World of IP

A.    Work Distribution

AI is capable of administrating data analytical works like IP profile management, patent searching and trademark clearing. These functions are fairly simple and are performed at a high frequency. By introducing algorithms AI can replace long, unproductive and cost consuming hours of work with just a simple procedure. More functions such as patent filing, trademark filing, drafting agreements and discovery can also be performed by AI however, these will require a certain level of skill sets and judgement which AI is not capable of yet, but might be in the future. The one area where the involvement of AI is highly doubtful would be in court proceedings, gathering evidence and compiling opposition views. These are all complex tasks and cannot be performed by algorithms or computer programs, such skills are inherent to humans and cannot be generated.

B.     Law and Procedure

The introduction of AI into the world of IP will bring changes in the existing laws and statutes related to Intellectual Property.  These laws could redefine concepts of creator, ownership and invention and can include a new dimension where AI is capable of owning IP. Ex: DABUS was recently granted the title of inventor in South Africa. However, the changes that these new dimensions would bring is still uncertain. Countries like Australia, India, North America and organizations like the European Union which follow proper examination procedures before granting an IP contend the legality of AI and its autonomy when it comes to making generations.

There is also a contention that AI would have to come under regulation systems while administrating the field of IP but this discussion is still under talk and not very significant.

C.     Job Segment

AI has massive potential to reform the day-to-day tasks within the IP industry. In a survey conducted by Dennemeyer an IP consultation firm it was found that 27% of the respondents felt AI would substantially change their jobs in the next five years, 39% felt that it would somewhat, 28% felt that it was too soon to say anything and 5% felt that they wouldn’t encounter any change. Hence, from the data, we gauge that there is a substantial chance that jobs would be affected by the introduction of AI in IP for administration processes. These changes could be in the form of a shift in working priorities, removing certain work duties or responsibilities.

D.    Future

AI is expected to make a dramatic entry into the world of IP and it is therefore imperative to realize its importance. Many IP offices have already begun investing heavily in AI research to incorporate it into the daily functions of its activities. WIPO (World Intellectual Property Organization) has even started using AI applications, WIPO Translate and WIPO Brand Image to administer functions related to helpdesk services, machine translation, search engine and automatic classification, examination and formalities check. However, these systems still need to undergo various stages of development to perform advanced functions.

In future, AI will be most useful in developing practical working tools and will develop new trends and open up new market segments.

Can an AI Own an IP?

AI is an omnipotent phenomenon which has indeed become an indispensable part of our development and growth. The development in technology has enabled AI to intersect in almost everything there in the market from films, music tracks, paintings, literature to the defence sector and weaponry, it is almost next to impossible to do a task without the help of AI. The dilemma arises when AI rather than acting as an assistant does the work on its own. Though at this point AI working on its own is not that visible but in future this is inevitable.

This also gives rise to another problem like whether an AI can be called an owner of the particular thing which is created by it, whether IP protection can be granted to the thing which is created by the AI. These remain some unanswered questions on a global scale. There are a plethora of articles on the internet commenting on whether the AI can own an IP or not but none of them lays down a clear understanding of the situation.

The first question which we are trying to understand is – what is the distinction between an owner and an inventor? AI if in case invents something which will be considered as an owner or an inventor?

When Inventorship and ownership are concerned, they are two different things that cannot be used interchangeably. Inventorship refers to the individual(s) who has contributed to the creation of a particular invention while ownership refers to those individual or group of individuals who own the proprietary rights of the invention.

As the distinction between an owner and an inventor is clear we can proceed to the next answer, which is whether an AI can be called an inventor or an owner of an invention. The answer to this is again dicey because the situation is not clear. The problem arises when rather than viewing AI as an inventor of something people view it as an assistant as the distinction is still not clear i.e., if someone is writing a book with the help of the software which keeps on suggesting words during the writing and keeps improving text on its own, in this situation that software cannot be considered as a co-writer it will be considered a mere assistant.

There is no doubt that AI machines are capable of creating subject matter that could be safeguarded by intellectual property. AI machines are capable of effortlessly creating artwork, a work of literature, a design (and perhaps print it in 3D), or a novel brand name. It is even conceivable that a powerful artificial intelligence machine will be in charge of creating innovative technologies or pharmaceutical treatments that would indeed be patent-eligible.

In India the laws pertaining to this subject is very narrow, according to the copyright act, section 2 (d) an ‘author’ refers to a human or a legal person, thus making it restricted towards AI, under Patents Act, section 2(p) and 2(t) a patentee is specifically pointed out to be a human thus, making the scope of AI in India very restrictive.

Recently, an AI was recognized as a co-author, Ankit Sahani an IP lawyer who owns this AI app. In November 2020, RAGHAV (AI associated with this app) and Ankit were granted a copyright for a painting named ‘Suryast.’ Though this is a remarkable achievement we have achieved, it can be struck down.

A similar case of DABUS happened in South Africa, DABUS became the first AI inventor and the patent was granted by the intellectual property commission, South Africa. The invention, which received a patent, was generated by DABUS which was created by Stephen Theller, CEO of Imagination Engines. Additionally, a significant number of patent applications have already been filed in various countries, prompting a variety of responses from authorities. The European Patent Office (EPO) has turned down all such applications, asserting that artificial intelligence does not qualify as a natural person/real entity and therefore cannot be considered an inventor as per their respective laws. Furthermore, legislation is required to grant AI systems and machines legal personality since legislative history indicates that perhaps the European Patent Convention (EPC) legislators believe that the word “creator” applies solely to natural persons. The same can be said about the High Court of England and Wales, which dismissed  DABUS’s application.

The application was similarly dismissed by the United States Patent and Trademark Office (‘USPTO’) on identical grounds, prompting the USPTO to publish a petition clarifying that under the US patent system, only natural persons may be designated as inventors. Although the UK Intellectual Property Office (UKIPO) admitted that DABUS was indeed responsible for the innovation, it instructed the petition to be dropped since DABUS was not a legitimate inventor. However, the UKIPO said that as artificial intelligence technologies are getting ubiquitous, it is necessary to consider these challenges since the existing patent system does not address them.

Interestingly, in the landmark case of Thaler v. Commissioner of Patents (2021), FCA 879, Justice Beach J ruled that Australian law provides no prohibition against an artificial intelligence submitting an application or being named as an inventor in such a patent filing, and therefore that it should be allowed.

In 2016, a coalition of museums and scholars in the Netherlands presented ‘The Next Rembrandt,’ an original art developed by a computer that critically analysed as many as thousands of works by Rembrandt Harmenszoon van Rijn, a 17th-century Dutch artist. In the same year, a Japanese computer programme authored a book that advanced to the 2nd round of a national literary contest. In another instance, a Google-owned artificial intelligence firm – Deep Mind, developed a software capable of generating music just by listening to recordings. In other initiatives, computers have also authored poems, edited pictures, and even created a musical.

The crux of all the discussions is whether an AI can be considered an inventor or a legal entity. The question which is raised here requires a lot of discussion and research. The world where Sophia the humanoid is considered as a citizen of UAE is the same world where this claim has been rejected by a lot of developed countries like the USA, the UK and the European Union. The answer to this same question is discussed in the next part of the article in the context of India.

The second question is – whether AI can be considered a legal entity?

The term ‘intellectual property,’ according to the Supreme Court of India, refers to a class of intangible rights that safeguard commercially valuable creations of human intellect. The World Intellectual Property Organization defines intellectual property as “mind creations.” Courts have also considered IP ownership as a monopoly over the owner’s intellectual creations and a method of excluding non-permitted users from reaping the benefits of another’s intellectual property. As it can be concluded that an IP is a creation of intellect but it is nowhere written that whether that intellect should be of a human or an AI. Even though the requirement of a human element is not specifically addressed by the law, the possibility of a non-human entity being considered as an inventor is open under patent law. As the result, one can safely conclude that, unless otherwise specified, the general principles of IP law do not prohibit providing IPR to AI.

In a landmark judgement, the Supreme Court of India reviewed the idea of the juristic person and concluded that there are no theoretical limitations on the types of legal personality that may be bestowed. According to the court what matters is the purpose for which legal personhood is being conferred. If this purpose is realized, legal personality may also be awarded to an abstract idea. Further, the court observed that through juristic animation, inanimate objects can be given the status of a juristic person if they benefit multiple natural persons.

By considering the above arguments it can be easily argued that if an AI is used by pharma industries for developing a life-saving drug then it would be considered at par with a normal human being.

The dilemma is still uncleared and this still requires a lot of cognizance of high authorities. lawyers have an important role to play in this regard. We are living in a world where AI is omnipresent require more laws to reap benefits out of it.

Conclusion

As we continuously grow to depend on technology and the requirement to produce faster results, we can safety say that AI is set to mark its existence in one’s everyday activities. Even now, AI tools like Siri, Alexa are used as conversational bots to help generate responses as close to normal human speech as possible. The kind of development that AI technology is undergoing right now, it can be concurred that AI will be omnipresent in the next 5-10 years.

With respect to IP, it is set to establish its presence in the world of IP. It will ease daily boring work when it takes up to administer roles such as IP profile management, patent searching and trademark clearing, patent filling, trademark filing, drafting agreements and discovery. This will make granting patents, trademarks easier and reduce the costs required in the process. Growth of IP as a sector is proportional to that of AI. This will also encourage inventions as it will increase transparency levels, reduce costs, make less errors and complete the process in a hassle-free manner.

The possibility that AI will own IP in the future cannot be ruled out and countries will need to have a relook at its IP laws and include a new dimension or a market segment under its preview. However, before AI can flourish as IP owners, the law will need to redefine concepts of ownership, inventorship and who can be granted an IP. There is also an imperative need to understand algorithms and differentiate it from the AI developers.

Author: Shreya and Vinamra Kothari– students of  National Law University (Odisha), in case of any queries please contact/write back to us at Khurana & Khurana, Advocates and IP Attorneys.

Artificial Intelligence the New Inventors

From the inspirational intergalactic films to science fiction we have always wanted, computers and robots to be able to talk to us, understand us, helps us in ways a human brain cannot process and materialize. Artificial intelligence (AI) is a computer source code which behaves like a cluster of neurons communicating electromagnetically and basing their actions on self-learning algorithms. One can brainstorm on the fiction of Avengers where, Jarvis and Friday, the AI systems that Tony Stark aka Iron Man uses, are undoubtedly his intellectual property. So given the situation where the former develops some benefiting and novel invention would the legal system consider the AI as inventor or its human developer? And who would be the patentee?

A similar situation was presented before the Companies and Intellectual Property Commission South Africa’s Intellectual Property office. “DABUS” which translates to ‘Device for the Autonomic Bootstrapping of Unified Sentience’ is an artificial intelligence system developed by Dr. Stephen Thalar; this system is sentient, is able to learn from its errors and develop ideas. The invention by DABUS is a specially designed container which forms pits and bulges in a way that it enhances the grip, heat transfer and inter engagement of the containers which would enable easy stacking and hold; AI also devised a unique way of communicating the same. However it is important to know that the country of South Africa is a non-examining country i.e. there is no formalized examination procedure. The invention has been published in the patent journal published on 28 July 2021 where it lists DABUS as the inventor.

Equivalent patent applications were filled in the European Union by Dr. Stephen Thaler in the year 2018, where after due examination and pondering, the European Patent Office came to the decision that DABUS cannot be listed as an inventor. The EPO gave the rationale that on interpretation of the legal framework of the European patent system it is unveiled that the inventor designated must be a natural person, such an approach seems to be an internationally applicable standard; the inventor must have a legal personality so as to be able to enjoy the rights conferred; finally, christening of a machine is not sufficient to fulfill the requirement laid down as per Article 81 R/w Rule 19 of the EPC.

Another patent application was filed in Australia. An extensive and thorough legal opinion in the new arena of development was been penned down by Hon’ble Justice Beach where she elucidated and clarified the question as to who is an inventor. Spotlight was on section 15 (b) and (c) of The Patent Act 1990  of Australia (a person who may be granted patent).

It is undisputed that DABUS is not a natural or a legal person rather it is an AI that incorporates artificial neural networks. It has autonomously generated the invention. Dr. Thalar is the owner of the copyright of the source code in the AI and is responsible for its operations but the inventor is the AI not Dr. Thalar.  As per, J. Beach an inventor is a person who is  responsible for inventing a patentable invention it need not be a human only. The position of ownership should not be confused with inventor ship.   Only a human or another legal person can be an owner or controller or a patent. The inventor maybe an AI system but it cannot be the owner, controller, or the patentee of the invention. Reference to s. 15(1)(c) establishes that Dr. Thalar derives a title from the inventor i.e. DABUS, thus he shall be the Patentee while DABUS can be listed as the inventor. Also not granting protection to the patentable invention where no human inventor is involved word undermine the very substance of protection of patents.

Implications for India

The paradigm shift in the nature and meaning of an inventor are the challenges of the modern world .But would an AI be granted the status of an inventor in India?

Section 2(p) defines who a Patentee is “the person for the time being entered on the register as the grantee or proprietor of the patent.” Just like its Australian counterpart it does not define who and inventor is. S.2(q) defines “persons” also include the Government it doesn’t bar the addition of another entity and when read in reference to part 3B of form 1 of the act which under the head of “other”  does not contain what all types of entities come under the meaning could help in expansion of scope. S.6(1)(b) lays down the provision that a “Person being the assignee of the person claiming to be true and first inventor in respect of the right to make such an application”. It emphasizes on the role of an inventor, and since, AI does not fit in the definition of “person” under various laws like under s.2(31) of Income Tax act 1956; therefore it cannot assign a person to make an application on its behalf. Additionally, S.28(1)(a) deals with mention of a person as inventor it states that “if the Controller is satisfied that the person in respect of or by whom the request or claim is made is the inventor of an invention in respect of which application for a patent has been made, or of a substantial part of that invention; and the application for the patent is a direct consequence of his being the inventor”. Such a mention of any person as inventor does not confer or derogate him from any rights under the patent. But this would be rendered useless due to the conclusion drawn earlier and the constricted definition of “person”; the scope of AI being the inventor in India is miniscule but not nil.

Although, DABUS  passed in the novelty tests but, in most countries it failed upon technical grounds which was, failure to identify the inventor. The inclusion of AI as an inventor is a debatable concept. The statutes are not equipped in dealing with technological and legal changes caused by AI. The decisions by the patent office in South Africa and Australia have carved a niche in this field. However a clearer interpretation awaits.

Author: Vrinda Sarin – a student of University Institute of Legal Studies (Panjab University), in case of any queries please contact/write back to us at Khurana & Khurana, Advocates and IP Attorneys or vidushi@khuranaandkhurana.com.

Critical Analysis of the Practice of Regular Granting of Interim Injunctions

It is a known fact that Indian courts, in relation to IPR infringement cases, are prone to granting interim/ex-parte interim injunctions for putting an immediate bar over such an alleged violation. However, it has to be taken into account that, as happened in a plethora of cases, the party against whom such an injunction is issued did not actually violate the Intellectual Property Rights of the other party. In such cases, despite the courts providing for due compensation, a party may suffer harms, which might be irreparable, due to the earlier issued interim injunction. In relation to this, the author aims to analyze the unpopular opinion of doing away with interim injunction and submit its own opinions in relation to the same.

There have been judgements majorly pronounced by Justice Katju and Justice Bhat, wherein, they have provided that the approach of granting an interim injunction at the preliminary stage might serve as an impediment to the final justice, and henceforth, instead of going forward with interim injunctions every time, the courts should try resolving the whole dispute within the shortest period of time possible. Furthermore, Justice Katju also opinionated that the remedy of interim injunctions should completely be done away with and an approach to resolve IP dispute within months should be adopted. The author does agree to Justice Katju’s opinion, but only to a certain extent.

In author’s opinion, completely doing away with the remedy of granting interim injunctions would not be a right step as it can lead to a violation of TRIPS agreement which does provide for interim injunctions, and therefore, the author contend that this phase elimination should not be done on a regular and straightforward basis, when a prima facie assessment can be carried out easily, but only be done when the court is convinced that a decent prima facie assessment of the matter is almost impossible.

In view of the relative inexperience of the Indian courts with IP infringements, the prima facie strength or weakness of the complainant’s case is often very difficult to assess. There is, therefore, a reason why courts must not grant temporary judgments where patent infringements law suits raise credible, complicated problems concerning infringement and validity. They should move directly to the stage of the trial and assess the merits of a permanent injunction or otherwise.

Such trials, however, should be disposed promptly, inter alia, with the discouragement of adjournments, the insistence on fewer hearings and more pleadings, and the appointment of highly neutral technical experts who can assess technology and the scope of claims more objectively than either side.

In suit requesting the alleged IPR infringement, the court should not grant a provisional order in cases where either the validity of the IP or the infringement fact is “credibly” challenged. Instead, for a final decision, the case should go to the trial. This is the result of the fact that the interim decision scrutinizes the fate of the dispute in most IP cases. Any incorrect decision at this point has enormous consequences which require courts to try and achieve the right outcome in the interim phase.

Furthermore, it is also virtually unfeasible to make the correct evaluation, normally available in a short window during an interim phase, in a complicated IP dispute.  The author recommend, therefore, that Indian courts shorten the interim stage and move directly to the proceedings.

A logical corollary of the above proposition is that, if the defendant defends himself intrinsically, by either fostering a frivolous challenge of validity or claiming that the defendant is not infringed without giving reason, the Court should hold that a case of prima facie was established in favor of the plaintiff. The rare exception to the norm is this situation.

There is still no automatic granting of an interim injunction in the above-mentioned rare cases where a court can get a quick prima facie view of the merits in favor of the plaintiff. Rather, the courts have to emphasize that the plaintiff is favored by other factors, such as irreparable damage, balance of convenience and public interest.

To conclude, Indian courts, with time, should evolve the concept of interim injunctions and realize that even granting a simple interim injunction might cause substantial losses to companies. Since a lot of these companies these days are listed in stock markets, one decision is favor or against can change the public outlook and fluctuate their market to a large extent. With this, the author is of the opinion that while respecting the rights of a company whose IP Rights have been violated, the courts should consider the remedy of interim injunction as an exception and incline towards coming to a final decision in the relation to IP matters at the earliest.

Author: Rounak Doshi – a student of National Law Institute University (Bhopal), currently an intern at IIPRD. In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.

Patentability of Medical, Diagnostic, and Therapeutic Methods

It’s sometimes better to think about the things that cannot be patented to get a sense of the contours of patentability. Article 27.1 of the TRIPS Agreement states that patents must be available for the subject matter patentable “for any inventions, whether processes or products, in all technical fields”. Since products or processes used in the course of medical care do not ipso facto represent “methods of treatment,” the Agreement makes it clear that they are patentable in their own right.”

However, not everything made by man is patentable, according to each country’s patent laws; in most nations, certain subject matters are not patentable. Some countries, especially in the field of life sciences or medical treatment provide for exceptions in their domestic laws based on the provisions of TRIPS articles 27.2 and 27.3.

Patent law in India is governed by the Indian Patents Act of 1970.It was eventually amended between 1999 and 2005 to meet India’s international obligations towards TRIPS Agreement. TRIPS aims to eliminate potential obstacles to ‘free trade’ by setting global minimum IPR requirements. It mandates that member countries grant product patents to all technologies and microorganisms. It also allows non-compliance with WTO laws subject to punishment and harsh penalties, such as fines or sanctions.

Despite the protections and other flexibilities offered in the form of preferential treatment for emerging and least developed countries, most developing participants consider the TRIPS patentability spectrum to be much too wide. They claim that excessively strong IPR with expanded reach and period of protection is proving to be counterproductive to the TRIPS Agreement’s very object and intent, as stated in Article 7’s objectives. India like other developing countries has always maintained that ‘Patent rights should be exercised in a way that is consistent with the goals of reciprocal benefit for patent holders and users of patented medicines, as well as the balancing of rights and responsibilities.

Developing countries like India, choose a broad interpretation of eligibility exclusions to represent their national priorities. Patentability, in the case of developing countries such as India, refers to the idea of access to technology products as well as innovation and advances. The term “access” is most often associated with pharmaceuticals and public health.

The concept of exempting surgical, medical, and therapeutic methods from patentability is based on human rights values. A person’s constitutional right to life must be given priority. From the beginning, a person’s right to fair and proper treatment becomes a universal human right to every human being.

Are there any restrictions in the UK?

Patenting medical treatment methods is not allowed in the United Kingdom, allowing physicians to give the best possible service to patients without risk of infringing on patent rights. However, when a potential use for an existing drug is discovered, a patent can be secured using the so-called claim of “second medical use”. Even if the drug and the disease it is intended to treat were already established, a patent can be sought if a new and effective dosage arrangement is discovered.

Diagnostic methods can be protected as long as they do not have a step that is performed on the body.Like a procedure that includes in vitro testing of a blood sample for the presence of a biomarker, for example, is patentable as long as the step of taking the blood sample is omitted from the scope of protection.Further, those biotechnological inventions, such as those that use human embryos and those that depend on natural crossing and selection to produce plants and animals, are not protected by patents.

Position in India

Since the mode of the treatment interferes with human/animal life, the legislator has taken particular care to ensure that these inventions do not have exclusive commercial use. The method of treatment is not patentable except in the United States, Australia, and New Zealand. The exclusion of method of treatment from patent rights is found in Section 3(i) of the Indian Patent Act, 1970.The Indian Patent Act, 1970, states in section 3(i) that:

“any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animals to render them free of disease or to increase their economic value or that of their products.”

However, the Indian Patent Act of 1970 does not prohibit the patenting of products used in treatment, whether they be medical instruments or pharmaceuticals.

Section 3(i) of the Patent Act, 1970 excludes any product intended for use in the medicinal, surgical, curative, prophylactic, diagnostic, or medicinal care of human or animal bodies. Therefore a medico-physical instrument used in treatment and surgery, as well as pharmaceuticals and medical kits, can be covered by patent law. When such devices are novel & the restriction on patenting methods of treatment has no impact on their patentability. Using a common product claim format, the device and pharmaceuticals can usually be claimed as such.

Indeed because of several political, technological, and social considerations, it is impractical to formulate a standard exclusion scheme in the patent system for medical, diagnostic, and therapeutic methods. However, a positive interpretation of an exclusion clause and integration of it into national public policy doctrines would at the very least put an end to major inconsistencies in this area.

Author:  Siddhesh Birajdar a 3rd year student of University of Mumbai, intern at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at aishani@khuranaandkhurana.com.