Ericsson vs intex an overview of software patenting

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ERICSSON VS INTEX-AN OVERVIEW OF SOFTWARE

PATENTING

P.ILANANGAIIP CONSULTANT

PATENT DEPARTMENT



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• The term “software patent” does not really have a universally accepted meaning.• Broadest definition: A software patent is any patent that covers a computer

implemented process. • The Indian IT industry has witnessed tremendous growth in the past decade,

resulting in large IT companies.• In the initial phases, the IT industry was largely focused on offering services.

However, eventually, several companies started creating software products.• Companies that create software products strive on innovation to create unique

products to counter competition, hence, the desire to protect such innovation through patents and sustain competitive advantage.

• contd…

INTRODUCTION



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• Exs:

• Software may be incorporated in a computer or an apparatus, such as a household appliance or a car.

• Software may provide technical functions, such as controlling a machine or regulating the room temperature.

• Do we really need a patent for software-related invention?• WHY PROTECT SOFTWARE THROUGH PATENTS?• An owner of a patent may prevent all others from making,

using, selling, or importing the patented invention.• One thing that is clear is that software can still be patented. But

not all software can be patented.• contd…..



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• If software merely implements an abstract idea, then a claim to that software will likely be rejected by the courts and the patent office as being directed to an unpatentable abstract idea.

• In contrast, if the software is designed to improve the functioning of a computer or some other type of technology, then that software should be considered patent eligible.

• It is to be noted that….. • Over the years the patent office categorized patents into various

classes and sub-classes. Currently the US Patent office classifies patents using the Cooperative Patent Classification (CPC) which was jointly developed by the European Patent Office and the USPTO. Software has never been classified in the 474 classes of patents and over 160,000 sub-classes.



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THE INDIAN PATENTS ACT, 1970

• The Indian Patent Act offers patent protection to product or process (if they satisfy various requirements of patentability) as long as they do not fall under non-patentable subject matter.

• Section 3(k) of the Indian Patent Act excludes 'a mathematical or business method or a computer program per se or algorithms' from patentability.

• contd…..



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GRANTED-SOFTWARE PATENTS-INDIA

Company Patent No. Title

Google 252220

Generating user information for use in targeted advertising

Google 252156Method and system for text segmentation

Google 246911

A method for automatically targeting web-based advertisements

Oracle 245515Tracking space usage in a database

Oracle 252448In-place evolution of xml schemas in databases

Ebay 242805

Facilitating micropayments between a plurality of parties

Ebay 239304

Method and system for scheduling transaction listings at a network-based transaction facility



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GUIDELINES TO COMPUTER RELATED INVENTIONS

• Recently the Indian Patent Office has issued guidelines to Computer Related Inventions.

• For being considered patentable, the subject matter should involve either-a novel hardware, or-a novel hardware with a novel computer programme, or-a novel computer programme with a known hardware which goes beyond the normal interaction with such hardware and affects a change in the functionality and/or performance of the existing hardware.

• contd…..



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• Example-Granted claims by Indian Patent Office:• A method of controlling an electronic device (1) comprising a touch

sensitive display (11) the method comprising:• displaying a plurality of graphical items (43) on the touch sensitive

display (11) where each graphical item (43) has an identity (44);• detecting a coupling, formed by a user, of at least two graphical items

(43), the coupling comprising, a trace on the touch sensitive display (11) between the at least two graphical items (43); and,

• performing an action dependent upon the identity (44) of the coupled graphical items (43),

• characterized in that when the user begins to make the trace, an indication is displayed to indicate the item (43) on which the trace began.

contd…



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• Example-Claims refused by the Indian Patent Office:• A method of scoring compatibility between members of a social

network, said method comprising the steps of:• preparing interest compatibility scores based on expressed Interests of

the members of the social network; and• computing a compatibility score between a first member of the social

network and a second member of the social network based on expressed interests of the first member, expressed interests of the second member, and the interest compatibility scores between the expressed interests of the first member and the expressed interests of the second member.

• The Controller held “the said method for scoring compatibility between the social network users is nothing but a business method which shall be used commercially. Thus the subject matter of the instant invention cannot be allowed u/s 3(k) of The Patents Act, 1970.



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ERICSSON VS INTEX

• Swedish telecom giant Ericsson has one of the industry's strongest intellectual property portfolios, which includes more than 37, 000 granted patents, and equally as many pending application, worldwide. To date, Ericsson has signed more than 100 patent-licensing agreements with most major players in the industry.

• Intex Technologies incepted in the year 1996 is an Indian smartphones, consumer durables and IT Accessories manufacturer.

• contd…



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• It all started back in 2008, when Ericsson approached Intex with the claim that the devices it was importing into and selling in India infringed the patents it held.

• Ericsson claimed that its patents were Standard-essential Patents (SEPs) that are necessary for any devices that claim to be compliant with multiple standards, including 2G/EDGE, 3G and Adaptive Multi-Rate [AMR].

• It offered to license its patents to Intex on FRAND licensing terms, and the parties entered negotiations, despite clear reluctance on the part of Intex.

• Ericsson instituted similar negotiations with Gionee and Micromax around the same time.

• While Intex was negotiating with Ericsson, and making its reluctance clear, it also instituted proceedings against the company in the Competition Commission of India [CCI] for abuse of dominance and filed petitions for revocation of patents in the IPAB.

• contd….



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• The plaintiffs arguments:• The plaintiffs, Ericsson, argued that it owned multiple SEPs which are

necessary for any device to comply with the 2G, 3G standards, and that Intex was selling products that claimed to be so compliant, but had not licensed the patents from it.

• It thus claimed that the Intex devices were infringing on its patents.• The defendants arguments:• The defendants argued that the essentiality of the patents in question

had not been established in the first place, and that there were multiple ‘serious challenges’ pending against the same for violations of Section 8 and Section 64 of the Indian Patents Act.

• Intex here was relying on the argument that the validity of the patents must be established first, before any action can be taken for infringement, and that cannot be done at the interim stage.

• contd…..



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• The defendants also had an issue with the fact that the plaintiff wanted the royalties to be made on the basis of the selling price of each device, and argued that it should only have to pay on the basis of the profit margin on the sale price of the chipset in which the technology is used.

• The Court dismissed the arguments of the defendant with regards to Sections 8 and 64, finding that none of the actions of the defendant, including its lack of provision of all the details of the proceedings against its patents in the various foreign offices, seriously damaged the validity of the suit patents in question.

• The Court also dismissed the defendant’s arguments regarding the fact that the plaintiff had yet to establish the essentiality of its patents.

• The Court also noted that the actions of Intex throughout the process, starting from 2008 itself, show that it was acting in bad faith, and was trying to avoid paying royalties to Ericsson.

• contd……



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• The defendant’s argument regarding charging royalties as per chipset rather than selling price of devices was also rejected by the Courts, as per the balance of convenience.

• The Court also dismissed the arguments of the defendants on the count of the non-patentability of computer programmes under Sections 3(k) and 3(m) of the Act.

• The Court conducted a detailed analysis of the position of the law in the European Union, the United Kingdom and the United States, analysing the ‘technical features/character’ and ‘significantly more’ tests used in these countries.

• These tests are used here to allow the patenting of computer programmes despite the specific exclusion under the respective laws.

• These tests essentially require that as long as the invention itself is patentable, the mere factum of its implementation by ‘modern technical means in the form of a computer program’ should not be a bar to the granting of the patent. contd……



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• The patent that is granted here is not on the idea of invention, but the technical process by which the invention carries it out.

• The Court stated the following: “thus, it […] appears to me prima facie that any invention which has a technical contribution or has a technical effect and is not merely a computer program per se […] and […] is patentable”.

• Thus, all the arguments made by Intex were dismissed by the Court, and arguably rightly so. The contrasting positions taken by Intex in front of the CCI and the Delhi High Court, and its clear reluctance in the negotiations with Ericsson are clear indicators of bad faith.

contd……



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• The Delhi high court directed Delhi-based consumer electronics vendor Intex Technologies (India) Ltd to pay royalties to Ericsson for alleged infringement of eight patents relating to 2G, 3G and Edge technologies used in mobile phones and tablets.

• After fixing the royalty rates, the court has asked Intex to pay 50% of the amount of royalty (from the date of filing the suit till 1 March) directly to Ericsson and secure the remaining 50% with a bank guarantee within a period of four weeks.



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CONCLUSION

• Thus, it appears that the Intex judgement may have opened the doors to a new era of software patenting in India, if not by setting down new law then by codifying and implementing a different and contested interpretation of the existing law.



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Ericsson vs intex an overview of software patenting

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