July, 2010

The Supreme Court of the United States has affirmed the judgment of the Court of Appeals for the Federal Circuit (CAFC) in the case of Bilski vs Kappos in its recent judgment announced on June 28th, 2010. The CAFC had earlier affirmed the decision of the USPTO's Board of Patents Appeals (BPAI) which rejected the Patent Claim for an invention in relation to a method of hedging risks in commodities trading on the ground that the patentable subject matter does not satisfy the requirement of 35 U.S.C. 101.

However the Supreme Court has given its opinion by holding that the Court of Appeals for the Federal Circuit (CAFC) was not correct in deciding that the machine or transformation test as the sole test of process patent or a business patent.

The above judgment of the Supreme Court has created a furore in the legal circle about patentability of business method by leaving the question open for further interpretation of § 101 of US Patent Act. The CAFC, while upholding the decision of Board of Patent Appeals (BPAI), vehemently said that an abstract ides is not patentable and the Supreme Court has also upheld the decision of Board of Appeals of Federal Circuit to this extent.

The real problem may now come for the Indian software companies who were hitherto applying for a patent in US for their computer programs. Section 3(k) of Indian Patent Act, 1970 clearly excludes the patentability of 'a mathematical or business method or a computer program per se or algorithms.' In other words, business method or computer software per se is not patentable in India at all unless embedded with a machine or computer hardware, but a copyright protection is available in India for such IPR's.

It is therefore advisable that Indian software companies shall obtain a copyright for their software which in any case is a much broader way of protecting their IPR's at global level. It may be pertinent to mention here that while a patent grants protection only for a territorial jurisdiction in the countries where the patent has been granted and no global protection are allowed for a patent, whereas the copyright protection is available at global level under Berne Convention. It is also worthwhile to mention that the earlier United States Supreme Court decision in the Diamond v. Chakrabarty in 1980 defined patentability in a more flexible and inclusive way which allowed and fostered millions of patents in the field of biotechnology. In this context the Supreme Court's remarks in Bilski judgement are considered praiseworthy, which says that the patent system was designed to be broad and inclusive in order to promote innovation. The Supreme Court's ruling specifically states that the 'machine or transformations test is not the sole test for patent eligibility'. Thus the decision removes the fear in the minds of Biotech companies which could possibly face challenges in the absence of these remarks of the Hon'ble Supreme Court of United States.

ITAG is organizing a conference on Biosimilars at Hyderabad and Bangalore on 22nd, 24th July, 2010 respectively and is hopeful of a live and meaningful deliberation on a very new subject on Biosimilars which has a tremendous market of about 16.4 billion dollars in Europe and the USA alone and with huge market potentiality in the rest of the world.

-Dr. D. R. Agarwal