Electronic payment methods have resulted in striving competition between financial institutions. Consequently, the number of patents filed including Indian patent in the Financial Sector has increased exponentially across the globe indicating strong propagation of innovative Financial Technology (FinTech) solutions worldwide. With the onset of Blockchain technology, it has become a vital part of the current innovation in the FinTech.
Barclays, the British multinational investment bank and financial services company has filed two patent applications relating to a transfer of digital currency and storage with the Indian Patent Office.
Similarly, MasterCard International has also filed for two patents relating to the method and system for use of a blockchain in a transaction processing network.
Abstract of two patents filed by Barclays;
‘Secure Digital Data Operations’ and ‘Data Validation and Storage’,
Describes them as:
- Method and system for transferring digital currency from a payer to the recipient also touching upon transmitting data through blockchain technology and,
- Cryptographic technology enabling transaction in a digital/electronic currency or digital/electronic money and more specifically about security mechanisms in digital currency namely authorization,
e.g. identification of payer or payee, verification of customer or shop credentials; review and approval of payers.
From the description in the abstract of these patent applications, it is evident that the patents relate to ‘Computer-Related Inventions’ being employed in business transactions.
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Indian Patent law with respect to Computer-Related Inventions (CRIs) is ambiguous. Section 3(k) of the Indian Patent Act, 1970 (hereinafter, the Act) bars patenting of an invention when it pertains in its substance to mathematical or business methods or a computer program per se or algorithms.
‘Guidelines for Examination of Computer-Related Inventions, 2017’
(hereinafter, the Guidelines) issued by the ‘Office of Controller General of Patents, Designs and Trademarks’ aims to bring out clarity in terms of exclusions expected under Section 3(k) of the Act, so that eligible applications of patents relating to CRIs can be examined speedily.
Para 4.5.2 of the Guidelines states that “[I]f the subject matter is essentially about carrying out business/trade/financial activity/transaction…the same should be treated as a business method and shall not be patentable.”
Para 4.5.3 of the Guidelines explains that the Algorithms include “procedures or any sequence of steps or any method expressed by way of a finite list of defined instructions, whether for solving a problem or otherwise, and whether employing a logical, arithmetical or computational method, recursive or otherwise” and are excluded from patentability.
According to Para 4.5.4, only those claims relating to CRIs are excluded from patentability which is directed towards computer program per se i.e.
- Claims directed at computer programmes/ set of instructions/ Routines and/or Sub-routines.
- Claims directed at “computer program products” / “Storage Medium having instructions” / “Database” / “Computer Memory with the instruction” stored in a computer-readable medium.
Guidelines refer to the view expressed by the Joint Parliamentary Committee while introducing Patents (Amendments) Act, 2002 with regards to the legislative intent to attach the suffix per se to a computer program, clarifying that a patent should not be refused to a computer program if it is an invention.
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It will be interesting to see how the Indian Patent Examiners would treat these particular patent applications in light of the Indian Patent Act and the recent Guidelines for Examination of CRIs.
Whether the claimed technologies’ relation to the financial activity/transaction would be treated as a business method, thus denying it patent?
And whether the use of Blockchain Technology will be perceived as Algorithm or a Computer Programme per se, therefore excluding it from patentability?
The decision on these patent applications will determine and hopefully clarify the Indian law on Computer-Related Inventions, especially at this time when there is a growing reliance on and use of the Blockchain Technology.
