Intellectual property in cyberspace: software patents, copyright in software and piracy

1. Cyber intellectual property: overview

“Cyber intellectual property” is not a separate right. It is the application of the ordinary forms of IP — copyright, patents, trade marks, designs, trade secrets — to things that exist or are exploited online: software, websites, databases, digital music, films and books, domain names, online brands and e-commerce listings. Cyberspace raises three kinds of question:

• New subject matter: software, databases, websites, digital content and domain names.
• New ways of infringing: copying is perfect, instant and free; file-sharing, streaming, linking and framing, metatags and keyword advertising using another’s mark, and counterfeit goods sold on marketplaces.
• New actors: intermediaries such as internet service providers, search engines, social media platforms and marketplaces, which carry infringing material without creating it.

2. Problems in protecting IPR in cyberspace

• Territoriality. IP rights are national, but a website can be reached from every country. Which court has jurisdiction, and which country’s law applies, are difficult questions.
• Anonymity. Infringers use false identities, proxy servers and offshore hosting, so the defendant may be unknown. Indian courts have answered with “John Doe” (Ashok Kumar) injunctions and orders against unnamed defendants.
• Scale and speed. Content copied once can be re-uploaded on many sites within minutes; blocking one site leads to mirror sites. The Delhi High Court has developed “dynamic” injunctions that extend to mirror sites.
• Intermediary liability. Section 79 of the IT Act gives intermediaries a safe harbour if they observe due diligence and remove unlawful material on actual knowledge; after Shreya Singhal (2015) actual knowledge means a court order or a government notification. Section 52(1)(c) of the Copyright Act similarly protects transient or incidental storage unless the person responsible knows the copy is infringing.
• Technological measures. Digital locks can be circumvented. Sections 65A and 65B of the Copyright Act (added in 2012) punish circumvention of technological protection measures and tampering with rights management information.
• Enforcement cost and the low awareness of users that downloading or sharing is infringement.
• New technology: whether AI-generated works have an author, and whether training AI on copyrighted works is infringement, are questions the Indian statute does not yet answer.

3. Patents for software: section 3(k)

Section 3(k) of the Patents Act excludes “a mathematical or business method or a computer programme per se or algorithms”. The words “per se” (added in 2002) are what matter. A programme as such, a set of instructions, is not an invention; but an invention that uses software and produces a technical effect or makes a technical contribution — for example, software that makes a machine work faster, improves data security, or controls an industrial process — is not a programme “per se” and may be patented if it is new, inventive and industrially applicable.

The Patent Office applies its Guidelines for Examination of Computer Related Inventions, which require the claimed invention to be assessed as a whole for a technical contribution, and not merely for novel software or hardware in form. The Delhi High Court in Ferid Allani v. Union of India (2019) held that the bar in section 3(k) was intended only for computer programmes as such, and that an invention showing a technical effect or contribution is patentable even though it is based on a computer programme. Pure business methods (an online shopping process) and algorithms remain outside, however they are claimed.

4. Copyright in software

• Subject matter. “Literary work” includes computer programmes, tables and compilations including computer databases (section 2(o)). Source code and object code are both protected. Copyright arises automatically on creation; registration is optional.
• Rights. In a computer programme the owner has the rights in a literary work (reproduction, issue of copies, communication to the public, adaptation, translation) and the right to sell or give on commercial rental any copy (section 14(b)).
• Ownership and term. Where a programme is written by an employee in the course of employment, the employer is the first owner of copyright unless there is an agreement to the contrary (section 17). The term for a literary work is the life of the author plus sixty years.
• Exceptions (section 52(1)(aa) to (ad)). A lawful possessor may make copies or adaptations to use the programme for its purpose or as a temporary back-up; may do acts needed to obtain information for interoperability with an independently created programme; may observe, study or test the programme’s functioning; and may make copies for non-commercial personal use from a legally obtained copy.
• What copyright does not protect. The idea or functionality of a programme, as opposed to its expression in code. A competitor who writes his own code to achieve the same result does not infringe. This is the gap a patent can fill.

5. Software piracy

Software piracy is the unauthorised copying, distribution or use of software. Its common forms:

• Softlifting — installing a single-licence copy on several computers;
• Hard-disk loading — dealers loading unlicensed copies on computers they sell;
• Counterfeiting — copying and selling discs or keys made to look genuine;
• Internet piracy — downloads from file-sharing and torrent sites, and cracked versions;
• Client-server overuse — more users on a network than the licence allows; and unauthorised rental.

Remedies. Civil: injunction, damages, accounts and delivery-up under the Copyright Act. Criminal: section 63 (knowing infringement: six months to three years and fine of fifty thousand to two lakh rupees); and specifically section 63B, which punishes a person who knowingly makes use on a computer of an infringing copy of a computer programme with imprisonment of seven days to three years and fine of fifty thousand to two lakh rupees (the court may impose only a fine up to fifty thousand rupees where the programme was not used for gain or in business). Section 65A covers circumvention of licence locks. Under the IT Act, downloading or copying data from a computer without the owner’s permission attracts compensation under section 43(b), and, if done dishonestly or fraudulently, punishment under section 66.

The proviso to section 81 of the IT Act states that nothing in that Act restricts any person from exercising rights under the Copyright Act or the Patents Act, so the two regimes apply together.

How this is examined

August 2024 asked “What are problems encountered while protecting IPR in cyber space?”; January 2026 set a short note on “Protection of Intellectual Property Rights in Cyber Space”. Section 2 answers the first; for the note, give a compressed version of sections 1 to 4. A question on “software patent and copyright in software” is answered by sections 3 and 4 with the contrast in the box above.