Why is open-source community in India rallying against software patents

The rise in software patents is drawing backlash, with critics claiming they stifle innovation and create barriers in tech. FOSS United India, a non-profit promoting open-source software, is leading a coalition to exclude software and algorithms from patent eligibility, arguing these patents act as “state-sanctioned monopolies” that benefit large entities over startups and individual developers.

The initiative also believes that software patents stand to hinder key government initiatives like Digital India, Startup India, and Atmanirbhar Bharat – all built on the foundation of open and freely available software. The effort finds several supporters, including the chief architect of Aadhaar Pramod Varma, founder of Razorpay Sashank Kumar, and CTO of eGov Foundation Manish Srivastava, among others.

Software is fundamentally mathematical and logic, it shouldn't be patentable, as India's patent law intends, however, the rise of software patents threatens this principle, stifling India's digital innovation, which heavily relies on open-source software, say proponents of this initiative.

Burden on smaller companies, developers

“Software is made up of mathematical operations — binary processes of adding, moving, and computing. Since mathematics can't be patented, software, as applied mathematics, shouldn't be either. Despite this, many are seeking patents in emerging tech fields like drones, artificial intelligence/machine learning (AI/ML), Internet of Things (IoT), and blockchain. Companies often rush to patent new trends, which are often simple and basic solutions. These patents are used to either demonstrate expertise or, unfortunately, to hinder market innovation,” explains Sai Rahul Poruri, CEO of FOSS United. 

“A patent infringement suit can cost anywhere from lakhs to crores of rupees, with cases dragging on from months to years. Beyond the financial and time costs, the real burden often falls on founders and executives, who then have to navigate the stress and distraction of lengthy litigation.”

To be sure, in 2005, the Patents Act, 1970 was amended to exclude business methods, computer programs, mathematical methods, and algorithms from patentable subject matter, shielding Indian software companies from the patent litigation seen in Western markets.

India’s Patent Act, Section 3(k) says that ‘mathematics, business methods, computer programmes per se, and algorithms’ are not patentable subject matter. However, a 2019 ruling by the Delhi High Court (Ferid Allani v. Union of India & Ors., and multiple subsequent decisions) changed this approach, clarifying that only software by itself, without any technical purpose, is excluded from patent protection, tells Jogeshwar Mishra, Partner at law firm Shardul Amarchand Mangaldas & Co. “The words ‘per se’ ensure that genuine inventions based on computer programmes get due protection. Accordingly, inventions based on computer programmes are considered patentable if they demonstrate a ‘technical effect’ or a ‘technical contribution.”

Experts attribute the increase in granted software patents in India to the ambiguity surrounding the term “per se” in the Patent Act. A Nasscom study in April revealed that in FY23, India filed 83,000 patents, marking a nearly 25% annual growth—the highest in two decades. This trend is expected to continue, with over 100,000 patents anticipated between March 15, 2023, and March 14, 2024. Additionally, the proportion of patents filed by India-based applicants doubled, with AI, IoT, and neurotechnology leading the way.

Societal and financial incentives are fueling a rise in patent filings, particularly among larger companies. Patents are seen as achievements, with many corporations offering significant financial rewards and career advancements for obtaining them. Supporters of this initiative claim that the number of patents held is increasingly used as a criterion for evaluating candidates for leadership positions and promotions.

Government policies also encourage patenting, as they grant visibility and financial incentives. For startups, patent filings may serve as a tax incentive. These incentives have led to a steady increase in patents, though often more for the perceived rewards than for genuine innovation, Poruri noted.

Defensive patents and copyrights

A lot of patent filers term software patents as defensive patents meant to safeguard their innovation. It may be noted that the term of protection of an Indian patent is 20 years from the date of filing of the application, subject to the payment of annual fees.

“Major tech companies like Google and Microsoft have built extensive patent portfolios defensively, spending millions to prevent exploitation of common software ideas. This approach is flawed; defensive portfolios should be unnecessary. Instead of fostering innovation, the current system compels companies to invest heavily in patents merely to guard against potential extortion,” said Zerodha’s CTO Kailash Nadh. To be sure, Zerodha is one of the founders of FOSS United.

When small tech companies innovate with software, they often face lawsuits from “patent trolls” — entities that hold patents, subjecting them to heavy royalties, he adds. Nadh further explains that software copyrights sufficiently protect software, including proprietary code, without imposing restrictive patents on simple ideas. 

Goal of the initiative

The initiative targets individuals, organisations, and the government to raise awareness about patents and their implications. It advocates against using software patents as performance metrics within organisations and pushes the government for stronger enforcement of laws prohibiting software patents, aligning with similar efforts in the US and Europe over the past 10-15 years.

“We believe software patents are a poor fit for India because they go against the principle that software, like math and logic, shouldn’t be patentable. In practice, patenting software leads to issues since abstract concepts don’t have clear boundaries, resulting in costly legal battles. Patents often clash with India’s reliance on open-source software, which is built on the freedom to modify and share,” says Venkatesh Hariharan, open source evangelist.