Prospect of Business Method Patents in India: A Comparative Study between Usa, India And European Union



The adoption of certain methods or techniques of executing business by corporates, be it in any part of the world, are available for getting a Patent, which goesby the name- Business Method Patents. The different ways of deploying technology for the economic affairs of the corporates is what makes them stand apart and be eligible for acquiring a Business Method Patents. Though technology plays a very crucial role in handling the Idea behind Business Method Patents, in the USA even, some patents are granted for business methods not involving computers as well but under certain circumstances only. The Necessity of Business Method patents are that they would stand beneficial for the corporates who make use of technology in an innovative way to run their business. The corporates would be eligible for royalty amount if they provide the license to another corporation for using their business method with them being grant of business method patents. India follows a European Unionof Intellectual Property Law which does not provide Business Method Patents, and USA has more stringent laws in accordance to Intellectual Property, be it the reason that more number of Multi-National Corporates exist in United States than in India or countries of European Union. There have been scenarios where business method patents have been granted in the countries of the European Union, eradicating the statutory obligation of not granting the same. According to the Indian Patents Act of 1970, there is no such provision so as to provide business method patents in India. The research will look to evaluate as what benefit could business method patents provide if it is madelegal in India. USA is providing Business Method Patents since years so what difference it would make to corporates in India if they be granted patents for their business method. The justification as to whyIndia Should or should not provide business method patents in the upcoming future would be done with a comparison to the USA.


Business Method Patents (BMPs) are not patentable subject matter when seen from the scope of the Indian Patents Act, 1970 (hereafter “the Act”). Section 3(k) of the Act specifies “a mathematical or business method or a computer programme per se or algorithms,” which directly prohibits the grant of patents to inventions in relation to business methods. While the Discussion can be put to rest since it is explicitly prohibited by the statute in India that this subject matter is not patentable; it should be borne in mind that previously, the United States Patents and Trademark Office(USPTO) provided business method patents but changed its stance in lieu of Corporate boom in the country. Similarly, this paper attempts to explore if a similar shift can happen in India.

Compartmentalizing Business Method Patents into two entities, namely- “Business Method” and “Patents”, it has to be considered that the Business Method is synonymous with “Business model” while “Patent” is synonymous to “right”. Business in a wider sense, does not merely mean finances and profits today but includes innovative ideas and methods to approach consumers, which includes research and development. The object of patent law is to encourage more innovations while granting exclusive rights to innovators for a certain period of time. The criteria for grant of a patent under a statute is subjected to novelty, inventive step and utility of the invention in any jurisdiction of the world. Though undergoing statutory provisions, the subject of “novelty”, “inventive step”, and “utility” has been defined nowhere. Therefore, from time to time, different interpretations of the same have been made by different jurisdictions while granting patents.

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Since Business Method is synonymous with Business Model it can be made clear from the purview of the Patents Act of 1970 that it is a process patent rather than a product patent. Computer Programmes and Business Methods do not come under the ambit of patentable subject matter in the European Union . Whereas India follows European Union Intellectual Property Law, and the European Union does not provide for Business method patents directly as stated. Though computer programmes have been excluded from the scope of patentable subject matter, it would be a surprise to mention that many Patents have been granted for computer programmes and computer-related inventions in the European Patents Office . The indication behind computer programmes would be the technical approach of the European Union to make computer programmes under patentable subject matter. It should be noted that computer programs that have technical character are patentable subject matter . The technical approach was given importance while granting Business methods patents, and therefore, they were made patentable subject matter indirectly. In India, it has to be seen whether this is applicable or not. The reference will be made to computer programmes and software patents in the case of India under this research paper. And will the acceptance of the Business method as a patentable subject matterbenefitsit India on a future note would be a point of concern in this blog article.

CHAPTER 2: Contemporary Need for Patents for Business Methods in India

Witnessing the approaches by European Union and India in grant of Business Method Patents, it has to be taken into consideration that there needs to be ascertained massive shift in Indian IP regime. Since India being a developing country, it should take initiatives to promote innovations across the country then, be it in the form of software patents or in the face of business methods.

It has to be taken as a surprise element, but there was a patent granted for business methods in the field of micro-biological research in the year 2,002. The case of Dimminaco Ag vs Controller of Patents wherein Calcutta High Court initially granted a patent for the business method in the light of technical effect and micro-biological factors. The patent dealt with the process of forming a vaccine and then trade the same to the commons. There are also certain patents that have been granted indirectly during the recent year for Business Methods by IPO.

Table 1.1: Grant of Patent for Business Method in IPO

Application Number Status

IN 252951 Granted

IN 217241 Granted

240258 Granted

IN 252220 Granted

IN 242805 Granted

5749/CHENP/2010 Published

CN109191335A Granted

The major connection in all of these patents granted or either published was the role of “technical effect” in their innovation. These patent applications directly never applied for Business Methods but always took the approach of technical advantage mostly through software patents.

1.1 Recent Developments

MSME National Manufacturing Competitiveness Programme is an initiative of government to promote innovations on a smaller scale which aimed about protecting their business strategies by enhancing awareness among them about Intellectual property rights.

In the case of Open Tv Inc vs Controller of Patents and Design , Justice Pratibha M Singh observed that-

“There is a need to have a re-look at the exclusions in Section 3(k) of the Patents Act,1970, in view of the growing innovations in this space. As the Parliamentary Committee Report referred to above recommends, the need to consider the march of technology in the digital space, is an urgent one, so that Patent law is not outspaced, and patenting itself does not become irrelevant in the years to come.”

This can be interpreted in a way as to refocus the shift on consideration towards the IP regime in the country. This has not been the sole reason as to decide that business method should come under the radar of patentable subject matter, but there are many other evidences to substantiate the same.

The recently published report on the Intellectual property rights regime in India also discusses about the same activity should be made compatible with the current generation.

“A large number of inventions in emerging technologies, including SME start-ups and educational institutions, could be in the field of business methods or application of computing and digital technologies. There is a need to have a re-look at the exclusions in Section 3(k) of the Patents Act in view of the growing innovations in this space.”

The patent applicants have seen a massive surge in numbers with the introduction of AI and IoT. There, 40% of IOT patents were granted after 2021, which were filed majorly by Multinational companies. In the last four years, of all the patents to maintain business administration, there have been patent applications filed in the face of software patents by Indian start-ups also.

Therefore, a separate provision for patents of Business methods could result in growth of the Intellectual property space of India rather than downgrading it. This will enhance research and development in the companies and would work for more innovative strategies to further strengthen their business, and also allow others to license their business model so that they could benefit from the same.

Author : Mudit Mani, in case of any query, contact us at Global Patent Filing or write back us via email at


Convention on the Grant of Patents,2002 E.P.C art 52(2)

Lionel Bently Brad Sherman, Intellectual Property Law 375 (4th ed., Oxford University Press 2014)

Dimminaco AG vs Controler of Patents, IPLR 2002 July 255


Open Tv Inc vs Controller of Patents and Design,2023: DHC: 3305

The Department Related Parliamentary Standing Committee on Commerce, Review of the Intellectual Property Rights Regime, 2021

NASSCOM, IoT: Driving the Patent Growth Story in India, 2020

NASSCOM, Why Indian Companies Need to File More Patents, 20

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