[SPICY IP] Yahoo v. Controller, and Rediff: Business Methods are not patentable.

[Rajiv Kr. Choudhry]

In one of its first major decisions involving patentability of business method patents (available here), the Intellectual Property Appellate Board (IPAB) has ruled (December 8, 2011) that pure business methods are not patentable in India.  This post provides an overview of the decision and its implications for the patent community:  (1) Business methods are not patentable in India; and (2) Any refusal of a patent under section 25(1) of the Act may be appealed to the IPAB as it relates to an order passed under section 15 of the Act, which in effect, may be appealed against under section 117-A of the Act.  Shamnad has discussed the issue of patentability of business methods here, and here.  Warning: Long post follows.    

As a further practice pointer, this case is also important because Yahoo overcame all other objections relating to novelty, and obviousness except the most important one, invention (section 3(k)).  Practitioners may want to cite this case to the Examiners while replying to examiners reports as appropriate. 

Quotable Quote:  Justice Prabha Sridevan and D.P.S. Parmar:  "...[W]e must place ourselves in 1998, to decide the patentability and what appears so easy and familiar today was new then. Even if we go back in time to 1998 the nature of invention is still a method of doing business. That does not change. There are huge innovations in the computers themselves, but the invention claimed is not for the machine but for the method. From whichever point of time we look at it, it still looks to be a business method."

Background:  

Overture Services Inc. filed a patent application titled “System and method for influencing a position on a search result listing generated by a computer network search engine”, and the title was later amended to “A method of operating a computer network search apparatus.”  This application claimed priority to a US application 09/322677 dated 28.05.1999. Yahoo acquired Overture sometime in 2003.

While undergoing examination at the Indian patent office, the examiner raised 17 objections against the application in the First Examination Report (FER).  These objections were made under section 3(k), and against novelty.  In it's reply, Yahoo submitted new claims to include technical subject matter so as to overcome the 3(k) objection, and that the new claims were novel.  The Examiner again, in reply to the new claims, rejected claims as they fell under section 3(k).  The claims were further amended to remove apparatus claims.  (The first independent claim is reproduced at the end of this post.)  In responsive to the last amendment, the patent office informed Yahoo that the application had been found in order for grant, but it would be granted only after the disposal of pre-grant opposition, if any.  

On 20.04.2007, Rediff.com India Ltd. ("Rediff"), filed a pre-grant opposition against the application, under section 25(1).  The Controller informed Yahoo that the the invention did not pass the novelty and patentability test in late March 2009.  

Procedural issues:  The decision of the Controller was appealed before the IPAB.  The IPAB at that time passed an order holding that the Controller's decision could not be treated as a refusal order under section  15 of the Act and therefore, the appeal was not maintainable. This IPAB decision was further appealed in a writ petition 4462 of 2010 before the Chennai High Court.  A division bench (DB) of the Chennai High Court held that the appeal was maintainable against the refusal of a patent under section 25(1) of the Act as it relates to an order passed under section 15 of the Act, which in effect, may be appealed against under section 117-A of the Act.  The DB also held that the Rediff was entitled to be heard and issued a direction to the IPAB to number the appeal and to decide the matter on merits after giving an opportunity to Rediff to be heard and consider its submissions made in the opposition.  

Before moving to the detailed reasoning adopted by the IPAB to reject the claims, section 3(k) of the Indian patents act is reproduced below:  

“3. What are not inventions

The following are not inventions within the meaning of this Act, —

…(k)              a mathematical or business method or a computer programme per se or algorithms;”

The IPAB referred to the Manual of Patent Procedures 2008 relating to business methods and considered the definition provided therein.  ““Business Methods” claimed in any form are not patentable subject matter. The term ‘Business Methods’ involves whole gamut of activities in a commercial or industrial enterprise relating to transaction of goods or services. With the development of Internet Technologies, business activities have grown tremendously through e-commerce and related B2B and B2C business. The claims are at times drafted not directly as business method but apparently with hitherto available technical features such as internet, networks, satellites, telecommunications, etc. The exclusions are carved out for all business methods and, therefore, if in substance the claims relate to business methods, even with the help of technology, they are not considered to be patentable.”  

Reasoning of the IPAB: The Board considered the law relating to business methods in advanced patent jurisdictions including United Kingdom (section 2 of the U.K. patents act); Article 52(2) of the European Patent Convention; and United States, 35 USC 101.  After considering the position in these jurisdictions, the IPAB concluded that in contrast to the foreign jurisdictions, in India, the law specifically excluded business methods with clear statutory language excluding business method patents.

Yahoo also raised the issue that Google Inc. had been granted several of "business method" patents.  However the IPAB held that the issue was the claims for the application under consideration and not the ones granted to any other party. The IPAB, however, agreed that there should be uniform practice adopted at the Indian patent offices.

The IPAB, therefore dismissed Yahoo Inc.'s appeal with costs.

First independent claim:

A method of operating a computer network search apparatus for generating a result list (710) of items  representing a match with information entered by a user through an input device connected to the computer network (20), the search apparatus comprising a computer system (22, 24) operatively connected to the computer network and the method comprising:  

      storing a plurality of items (344) in a database (38, 40), each item comprising information to be communicated to a user and having associated with it at least one keyword (352), an information provided (302) and a bid amount (358);       receiving a keyword entered by a user though an input device (12);

      searching the stored items (344) and identifying items representing a match with the key word entered by the user;       ordering the identified items using the bid amounts (358) for the identified items, and generating a result list (710) including the ordered, identified items;       providing the result list (710) to the user;

      receiving a request from the user for information regarding an item selected from the result list (710);

      charging to an account of the information provider (302) associated with the selected item the bid amount (358) associated with the selected item; and providing information providers (302) with authenticated login access to permit an information provider to modify at least the bid amount (358) associated with the information provider’s listing (344); wherein the computer system (22, 24) sends an indication of the status of the information provider’s account to the information provider (302) in response to the occurrence of a predetermined condition.

Think Library-catalog books before the coming of computers

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Posted By Rajiv Kr. Choudhry to SPICY IP at 1/22/2012 03:45:00 PM