Business processes:

Very often people hear about how intellectual property protects all creations of the mind and immediately think their ideas have monetary value. Often times, when talking to people about patents, and their requirement for novelty, they usually believe that they do business differently [I blame the “winners don’t do different things but things differently” quote for this]. The unique aspect that is claimed is in fact the business process or the way they do it. Does intellectual property law afford such protection in India? While there is no specific statute to protect business processes, some of the existing streams of law, are:

Business processes under Copyright:     

Process written down can be protected under the law of Copyright! However the extent of protection is of concern. The written expression of the process can be protected under the copyright law as literary work. Copyright law though protects the expression and not the idea. So if your process has stages 1, 2 and 3 the steps which you have written down would be protected but stopping someone who modifies those steps would be rather difficult. So business processes can be protected under the law of copyright but for all practical purposes it isn’t. I realise the answer is rather vague.

Business processes under Trade secrets:

WIPO defines a trade secret as “any confidential business information which provides an enterprise a competitive edge”. It refers to any data or information relating to the business that is generally not known to the public which confers economic benefit on the holder of the information and for which reasonable attempts are taken to keep the information secret and confidential. A company’s business process is to be considered a trade secret and being the most confidential information for a company’s growth and survival it has to be adequately protected from any unauthorised usage. Such unauthorised usage is considered to be an unfair practice and a violation of the trade secret.

There is no specific legislation in India to protect trade secrets and confidential information but Indian courts have upheld the protection of trade secrets on the basis of principles of equity. In India Trade secrets are mainly protected through the law of contract. Section 27 of the Indian Contract Act restricts a person from disclosing any information, which he acquires at the time of employment or through a contract, but provides with only civil remedies and fails to provide criminal remedies. As a step towards improvising the legal framework regarding protection of trade secrets in India, a draft legislation namely, the National Innovation Act, 2008 was introduced. Chapter VI of the legislation titled “Confidentiality and Confidential information and remedies and offences” which was considered a comprehensive framework regarding the protection of trade secrets but to our dismay, the status of it is unknown.

In Burlington Home Shopping Pvt Ltd, Rajnish Chibber the Delhi High court observed that “Trade secret law protects a wide array of business data while customer lists and other compilations of business data may be copyrightable as fact works. In theory, copyright and trade secret law protect different elements of compiled business data, with copyright protecting the expression in these compilations and trade secret law protecting the underlying data. In fact, copyright and trade secret protection for compilations of business data frequently converge. Copyright protection for business directories often extends to the underlying data, and trade secret protection may extend to particular expressive arrangements of data”

Business process under Patents:

Business process may be referred to a process of operating any aspect of an economic enterprise. Every company has its own strategy and goals and accordingly evolves an approach or system to achieve them. These companies may invest huge amount of resources in order to find a suitable approach/system to reach their goals. Patenting their business method or process is one of the ways of protecting their innovative methods and approach from their competitors. The legal position in India regarding the patenting of business process or method is not particularly favourable. The processes or the methods cannot be protected under patent law. Section 3 of the Indian Patents Act, deals with inventions which are not patentable which includes “a mathematical or business method or a computer programme per se or algorithms”.

In Yahoo vs controller of patents, Yahoo sought to patent its business method, which was an invention titled “A method of operating a computer network search apparatus”.  The court rejected Yahoo’s claim and held that the claimed ‘invention’ “is nothing but doing the advertisement business electronically. Even the technical advance that is claimed over the existing art is only an improvement in the method of doing business and Sec 3(k) is clear that business method cannot be patented, the fact that there is an advance has not improved the case”.

There is no effective legislation or regime for protection of business processes or methods in India. Until we have something concrete, we need to rely on a combination of copyright law and contracts to protect business process as trade secrets.

This article has been authored by Jayashri Suresh, an IP Law practitioner.