After becoming a party to the Agreement on Trade-Related Aspects of IP Rights (TRIPs), India significantly amended its IP laws to comply with various requirements set out in TRIPs. Article 27(1) of TRIPs states that patent protection for new, inventive and industrially applicable inventions must be available without discrimination based on the technical field of an invention. In respect of software, Article 10(1) of TRIPs mandates the protection of computer programs, whether in source code or object code, as literary works under the Berne Convention, to which India has also acceded. However, TRIPs is silent on the patentability of software inventions, unlike the patentability of pharmaceuticals and agricultural chemical products, which is specifically mandated through Article 70(8). Further, Articles 10(2) and (3) of TRIPs explicitly allow its members to exclude certain inventions (eg, those contrary to public order or morality, methods of treatment and essentially biological processes) from patentability. To this end, Article 27 of the Patent Cooperation Treaty (PCT) also allows contracting states to prescribe their own substantive conditions of patentability.

Against this backdrop, the Indian government proposed to bar the patentability of computer programs in the Patents (Second Amendment) Bill 1999. During a parliamentary debate on March 9 1999 Subramanian Swamy, in support of the bill, said that “we are not going to be a permanently copying country. We are now producing software which needs to be protected”. The bill was referred to a joint parliamentary committee (JPC) for comment. In 2001 the JPC recommended to bar only “computer programs per se”, instead of an absolute bar on computer programs. The intention was to grant patents for inventions involving a computer program that may include certain other things, ancillary thereto or developed thereon. However, computer programs as such were not intended to be granted patents. During a parliamentary debate on May 14 2002 Minister of Commerce and Industry Murasoli Maran highlighted that “India is emerging as the new leader of the software and IT industry in the world”. In the end, the JPC's recommendation to include the phrase 'per se' after “computer program” in Section 3(k) of the Patents Act was accepted by Parliament.

In 2004 Section 3(k) was modified through an ordinance to ban the patentability of “a computer program per se other than its technical application to industry or a combination with hardware”. The government acknowledged that Section 3(k) had been subject to confusing interpretations and given the emerging opportunities in the software section and the growing strength in information technology, the modification was necessary. The record of the Group of Ministers meetings held on September 24 and October 25 2004 shows that the intent behind the modified Section 3(k) was to clarify the provision in order to allow software inventions when they have technical applications. During a December 27 2004 news conference the then Union Minister of Commerce and Industry Kamal Nath stated that:

In IT, the trend is to have software in combination with or embedded in hardware – such as in computers or cell phones or a variety of other gadgets. Software as such has no patent protection (the protection available is by way of copyright); But the changing technological environment has made it necessary to provide for patents when software has technical applications in industry in combination with hardware. This has been a demand of NASSCOM… We have introduced a provision for patenting of software that is embedded in hardware.” 

Thus, the intention behind modifying Section 3(k) was to provide much-needed clarification. However, some groups lobbied against the modification, stating that it would needlessly widen the scope of protection for software inventions. For example, in a parliamentary debate of March 18 2005 Member of Parliament N N Krishnadas said that “if this Bill is passed in its present form, it will be deadly against the spirit of the common people of our country and the general interest of our country, especially in the area of pharmaceutical industry, drugs, software, etc.”. The amendments proposed in the ordinance were ultimately removed by the Patents (Amendment) Act 2005. To this end, the parliamentary approval of March 19 2005 stated that “concerns have also been expressed against the clarification relating to patenting of software related inventions when they have technical applications [Section 3 (k) - Clause 3 (b) of the Bill]. It is proposed to delete the proposed clarification and leave the provision as it was”. Therefore, the intention behind modifying Section 3(k) was to provide clarification, but not to narrow the scope of Section 3(k).

In 2008 a parliamentary standing committee on commerce conducted several study visits, during which one issue was that patents are granted for tangible objects. It was felt that Parliament could include software, which is generally considered an intangible item, by listing software in the definition of tangible items, provided that it satisfies other norms such as having industrial application. After that, the committee's report recommended that the scope of 'per se' in the definition had to be clearly defined.

Since then, the situation has remained unchanged. The patent office has issued manuals and guidelines to streamline its practices and procedures, and the tribunals and courts have provided some judicial precedents. However, more clarification is needed. For example, the denial of patent protection under the per se exclusion must be limited to those aspects covered by copyright law. Considering that the same piece of source code can be written in many different ways and different programming languages, and the copyright law protects only the literal copying of software code, copyright law cannot provide adequate protection to software-driven inventions. The copyright law does not protect the basic idea behind the software code. The functional and technical aspects of software-driven inventions ought to be patentable considering that it is the improvements in software that significantly affect the performance of hardware.

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