AHMEDABAD / BENGALURU: The Indian Patent Office ’s recent guidelines declaring that software and business methods are patentable in India has set off alarm bells across the software product industry.The patent office for the first time made a clear interpretation of the Patents (Amendment) Act, 2002 to mean that if a software has novelty, is inventive or tangible, and has proper technical effect or industrial application, it can be patented. The guidelines serve as a reference for officers in granting patents.Software product industry experts are against modifying the law to make computer programs easily patentable, arguing that innovation in the area is often incremental and programs are built on top of other programs. They cautioned that if the guidelines are made into law, programmers will be barred from using a particular method to solve a problem without the permission of the idea’s owner, like in the US.The new guidelines will make it easier for companies to file for software patents in India, but for startups, for whom innovation is critical, the upside is almost none.“We want Indian entrepreneurs to be focused on innovation and not litigation,” said Venkatesh Hariharan, member of software product think-tank iSpirt’s software patents expert team. “We fear that these guidelines will open the floodgates for software patenting and the resultant litigation because software patents are the most contentious and litigated sector of patents in jurisdictions that allow it.”Indian law excludes grant of patents to mathematical or business methods, algorithms and computer programs, which software industry body Nasscom has said was ambiguous. Software is protected through copyright.To understand the difference between patents and copyrights, consider their implication in the music industry. A sequence of notes make music. A tune created using a sequence of notes is protected by copyright to prevent others from copying the tune and profiting from it. But acquiring a patent would bar other musicians from including or building on that sequence of notes to compose a new tune altogether. A musician would be forced to buy musical sequence license.Similarly, thousands of instructions to the computer make up a program. Thousands of programs packaged together make a software. The unique combination of these program algorithms is protected by copyright law. While a patent protects an idea, a copyright protects the expression of an idea.Although the Patent Act was passed in Parliament, the guidelines for its implementation and examination is set by the patent office and are subject to changes from time to time. The office released draft guidelines and invited comments before issuing its final guidelines on August 21.The new guidelines allow companies to show innovation in just software, rather than in both software and hardware as was previously required. This also makes it easier to register a patent for technical innovation in a business method—the basis of most patents filed in the business process outsourcing industry.“We feel that the recently issued (guidelines) will bring in software patents through the backdoor, and this is not good for the Indian software product ecosystem,” said Hariharan of iSpirt, who plans to meet with the patent office in the coming weeks.Industry experts said the guidelines are problematic also because of the rapid pace of software development, often incremental.“Development in (the software) field is very incremental and a new version of a software comes out every few weeks or months, while the patent period for India is 20 years,” said Prasanth Sugathan, a counsel at Software Freedom Law Center, India, who participated in discussions with the patent office before the guidelines were issued.Countries such as New Zealand, Saudi Arabia and Russia have kept software out of their list of patentable subject matter. But India should allow software patents, argued Abhishek Pandurangi, partner at Khurana & Khurana Advocates and IP attorneys.“India’s current copyright only protect the code as is and the graphical user interface in the software and provides no protection to the innovative technical concept of a software,” he said, adding allowing patents will make the software industry more incentivized, healthy and competitive.History says otherwise. Research by American authors James Bessen and Michael Murer shows that patents on software and business methods are litigated more frequently because they have “fuzzy boundaries” and lead to loss of billions of dollars.Between 2009-10 and 2010-11, 344 software patents were issued in India, 97% of these to foreign entities, show research by Software Freedom Law Center. In fiscal 2014-15, Tata Consultancy Services filed for 509 patents and Wipro submitted 578 applications globally, their annual reports show.TCS, Wipro and Infosys did not respond to emails from ET till the time of going to print.