The Madras High Court has once again weighed in on the scope of Section 3(k) of the Patents Act, 1970, which excludes a mathematical or business method or a computer programme per se or algorithms from patent protection. In its recent decision in the case of Tekelec Inc. vs The Controller of Patents [(T)CMA(PT)/106/2023], the Court built upon its earlier ruling in Priya Randolph vs The Deputy Controller of Patents [2023:MHC:5450] and Microsoft Technology Licensing, LLC vs The Assistant Controller of Patents [2024:MHC:2537], and alluded that the assessment of patent eligibility under Section 3(k) must be guided by the substance of the invention, not its form.

In the case of Priya Randolph, the Madras High Court examined the claims related to concealing a purchaser’s physical address in e-commerce transactions. The Court held that while the invention could be used in the business context of e-commerce, the monopoly claim made in the application was not in respect of a business method, but for the purpose of data privacy by deploying hardware, software, and firmware. Accordingly, the Court ruled that the rejection on the ground that the claimed invention was a business method was untenable.

This principle was revisited in the case of Microsoft Technology Licensing, where the Madras High Court further clarified that exclusions under Section 3(k) are directed at inventions that ordinarily fall within the ambit of copyright protection, i.e. business methods and computer programs per se. The Court clarified that when a computer related invention (CRI) is used in a business method, the fact that it serves a commercial purpose does not automatically bring it under the business method exclusion. If monopoly is being claimed for the CRI and not the underlying business method, then the business method exclusion under Section 3(k) is not applicable.

In Tekelec Inc. vs Controller of Patents, the Madras High Court applied the same reasoning to overturn the rejection of Patent Application No. 7133/CHENP/2009, entitled “Methods for Acquiring Billing and Usage Data in an IMS Environment.” The Controller had refused the application citing Section 3(k), and concluded that the invention was, in substance, a business method implemented via software and algorithms.

Disagreeing with the impugned order, the Court held that, “the monopoly claim is not directed at a method of conducting business. Instead, it is directed at a method of using software… so as to improve the system’s functionality.”. Thus, the Court found the rejection under the business method exclusion untenable.

The Court remanded the matter to the Patent Office for re-consideration, observing that the impugned order made a cursory reference to “algorithms” without any supporting discussion or reasoning. The reconsideration was directed to be confined to assessing whether the claimed invention fell within the exclusions “computer programme per se” or “algorithm” under Section 3(k).