Facts of the Case
An IT firm based in India recently developed a highly innovative computer programme designed by one of its in-house software engineers. The programme streamlines data management and integrates artificial intelligence for predictive analysis, making it a valuable asset in the firm’s service portfolio. Recognising its market potential, the firm seeks to protect this programme against unauthorized use, reproduction, and distribution.
The management is unsure whether to file a patent or seek some other form of protection under India’s Intellectual Property Rights (IPR) regime. They aim to retain exclusive rights over the software and want to prevent competitors from copying or reverse-engineering it. Legal counsel is sought to determine the most appropriate and effective mode of protection.
Issues of the Case
- What form of intellectual property protection is legally appropriate for computer programmes in India?
- Can a computer programme be patented in India, or should it be protected under copyright law?
- How does Indian law safeguard the rights of a software developer or employer in such scenarios?
- What are the firm’s remedies in case of infringement, and how can it enforce its rights?
Principles and Related Case Law
Under Indian IPR law, computer programmes are primarily protected under The Copyright Act, 1957, not under The Patents Act, 1970. Section 2(ffc) of the Copyright Act defines computer programmes as a form of literary work, thus qualifying them for copyright protection. This legal route ensures that the software code, as well as its structural framework, is safeguarded against unauthorized reproduction and adaptation.
The Patents Act, 1970, specifically excludes “computer programmes per se” under Section 3(k), making them ineligible for patent protection unless they demonstrate a technical effect or are combined with novel hardware. The Indian Patent Office (IPO) follows strict guidelines in evaluating software-related patent applications.
Case Reference:
In Tata Consultancy Services v. State of Andhra Pradesh (2004) 271 ITR 401 SC, the Supreme Court of India recognized that software is intellectual property that holds value. It ruled that software recorded on a media and used for commercial purposes can be considered “goods” under certain legal frameworks, indirectly supporting software protection.
Further, in Ferid Allani v. Union of India (2019), the Delhi High Court highlighted that software demonstrating a technical contribution can qualify for patent protection. However, this remains the exception, not the norm, under Indian patent law.
Judgement and Legal Advice
The firm should register the computer programme under the Copyright Act, 1957. This process is efficient, cost-effective, and grants the creator exclusive rights to reproduce, distribute, and adapt the software. Once registered, the software enjoys protection for 60 years from the year of publication, ensuring long-term security.
Since the software was developed by an employee during the course of employment, Section 17(c) of the Copyright Act clarifies that the employer becomes the first owner of the copyright, unless a contract states otherwise.
Although software patents are generally rejected in India, if the firm believes the programme has a technical advancement or produces a tangible technical effect, it may explore the possibility of filing a patent application with detailed documentation. However, this should be a secondary route, pursued only when the software clearly transcends being a programme “per se.”
To further protect their interests, the firm should:
- Sign confidentiality and IP assignment agreements with all software developers.
- Maintain thorough documentation of the software development process.
- Use licensing agreements for clients to control the software’s usage.
