Protecting your innovation in software products: Know the IP Rights

Protecting your innovation in software products: Know the IP Rights

Software, whether system or application software, is a set of instructions, data, or programs used to solve a problem, implement logic, and/or to operate physical components of the computer or any other hardware to accomplish specific tasks. On comparison to other technical fields, software has been and seems to continue with tremendous amounts of innovations and improvements that are changing the future of product development and providing effective practical solutions for ever-changing requirements in all walks of life. Innovation is the key driver in software industry, unlike other technologies, the logistics, raw material costs, procurement etc. are negligible or secondary to the requirement of innovation and efficiency.

Software companies/entities face cut-throat competition due to low production costs and vulnerability of easy replacement. To top this, challenge by genuine competition, there are severe issues like piracy and unauthorised duplication of an innovative software. Such piracy or unauthorised use is difficult to trace back to the original offender and difficult to prosecute in comparison to unauthorised duplication of other real world tangible products.

Therefore, it would not be wrong to say that the intellectual property awareness and protection in software should be pristine to maintain the exclusivity and even to survive software market. Intellectual Property Rights in software industry ensure economic interests of the owner giving software companies the much required impetus to keep innovating and finding exclusive innovative solutions or services.

Software patent protection: The requirements for patentability in a software include novelty, inventive step, industrial application and to inter alia overcome Section 3(k) of the Patents Act, 1970, which stipulates that mathematical methods, business methods, computer programme per se and algorithms are not inventions under the meaning of the Act, hence, software per se is not a patentable subject matter. Therefore, to have a patent over software or computer-related invention, the applicant needs to show that such software or computer program exhibiting a technical advance to solve a problem is enabled with help of hardware components. A plain software application or mere computer program/code or algorithm would not find patent protection.

Software copyright protection: The IP Rights recognized over plain software or computer codes is under copyright laws. A copyright accrues by way of creation and does not mandatorily require registration. However, copyright registration certificate certainly makes a better case of interim injunction and tilting the balance of convenience towards the plaintiff in suit for infringement. As per recent amendment to Copyright Rules, for registration of computer programs or codes as copyright, at least the first 10 pages and last 10 pages of the source code i.e. human-readable form, or the entire source code if less than 20 pages long, without blocking or redacting any portions must be made available by the applicant. Thus by 2021 amendment, the compliance requirements for registration of software have been reduced as earlier there was a requirement to submit the entire “source and object code”. The amendment in 2021 ensures that the confidential information in the source code of the computer program is not compromised in any manner.

Software trade secrets protection: Another option often used by the companies to have exclusivity over a unique software product is by keeping the source code or critical parts thereof as a well-guarded secret. Prime examples of trade secrets are Coca-Cola recipe formula and Google’s search algorithm. The strength or exclusivity over trade secret is as good as the means and efforts by the owner company to keep it confidential. Several software companies keep the source codes of their flagship software or applications as confidential and selected few from the promotors or only the founders are in possession of the base file or the source code. This protection lasts as long as the protected element retains its trade secret status. Unlike patents or copyrights, trade secret protection has a huge disadvantage of not having a dedicated statue for protections. Trade secret protection is generally covered by law of contracts, and unauthorised disclosure of trade secret is remedied by claims of breach of trust and unfair business practices. Trade secrets are not subject to being infringed as with patents and copyrights, but are subject to theft. The moment a trade secret is out or if other party stumbles upon the magic formula or innovative code or reverse engineers the application to reach the confidential code, the owner cannot stop this other party from using such code. Whereas for a patent or copyright, even though the other party knows about the formula or code, he cannot use the same without consent from the owner of such patent or copyright.



Views expressed above are the author’s own.