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Protecting Our Software Exports

India’s technology exports have grown considerably over the years.

Software exports constitute a lion’s share of these exports. According
to recent NASSCOM reports, the software product exports have
grown by 14.4 percent in the current fiscal year, touching about USD
7.3 billion (INR 330 billion). Further, the reports predict the market
to grow exponentially, driven by an increasing number of start-up
software product businesses as well as a rapid growth of existing
businesses.
The growth in software exports have forced software companies to
focus on legally protecting their technologies/products in the coun-
tries of export. This holds true especially for utility software products
developed exclusively to be retailed in foreign markets. One way of
legally protecting technologies/ products may involve securing the
intellectual property by means of patents, more often than not com-
plimented by copyrights. Trademark protection may also be consid-
ered, to protect consumer interests in lieu of counterfeit branding.
However, considering the encompassing and strong nature of patent protection, the focus of the companies should
be more on protecting their technologies/products by means of patents than protecting their products through any
other instruments.
For applying patents abroad, the Indian patent laws provide 2 main routes. It should be noted that both the routes
require utmost caution from the companies as missing any procedural formality or a deadline can be detrimental to
the patent obtaining efforts. The starting point of the patent obtaining procedure is, of course, to prepare a patent
application, which includes a detailed description of the technology/ product, and most importantly one or more
claims defining the scope of the protection needed. It is strictly advisable to prepare the patent application in a for-
mat accepted by, and in accordance with, best practices of the patent offices of the countries where the technology/
product is being intended to be exported. This is because the standards of an acceptable patent application in US
and Europe differs significantly from the standards acceptable in India. Accordingly, it makes a lot of sense to hire a
patent attorney/agent who has a global exposure in drafting and handling patent applications filed in these jurisdic-
tions. Luckily, India has been a hot destination for patent outsourcing for some time now. Therefore, finding tal-
ented patent attorneys having global exposure is not a difficult proposition for software companies.
Once a patent application is prepared, the next step is to elect the route through which the patent application is to
be filed in foreign countries. The first route is to file the patent application in India, and follow the patent application
with a Patent Cooperation Treaty (PCT) application or with corresponding applications ( Paris conven-
tion applications) in the desired foreign countries, within 12 months from date of filing the patent application in In-
dia. Now, the filing of the PCT application has advantages and disadvantages vis-a-vi filing convention applications
directly in foreign countries. The most important advantage is that the filing of a PCT application provides a com-
pany an extended time for selecting the countries to enter. This allows the companies to seriously deliberate upon
countries to apply for patents. Such deliberation is an absolute must as the cost of obtaining a patent in foreign
countries is very expensive, and the process is lengthy and saturating. One of the biggest disadvantages of filing the
PCT application is, of course, the expenditure incurred to file the PCT application. For example, filing the PCT appli-
cation, and transmitting it to WIPO, the administrative authority of the PCT application, costs (official charges)
around INR 12,000 for companies.
The second route, which is much more advisable for software and business method product/technologies, involves
filing patent applications directly in countries of export, without filing a patent application in India. The advisability of
this route is attributed to statutory laws, which exclude patenting of few classes of products/technologies, in India.
These classes include “typical” software products and business method products. Accordingly, it does not make sense
for a company to invest time and money in filing and obtaining a patent in India for software/business method prod-
ucts.
However, direct filing in foreign countries, without filing in India, requires a patent applicant to obtain a Foreign Filing
License (FFL) from the patent office. It should be noted that the penalty of filing for patents in foreign countries in
contravention to the FFL levies a penalty, which can even be of criminal nature! Such FFL can be obtained by applying
for the license in prescribed form to the patent office. Usually, the patent office is quick to respond to such license
requests, and gives the FFL in 6 weeks from making the FFL application.
The Indian software industry is at a point of inflexion. The industry is transiting from essentially a service based indus-
try to a development based industry. However, software companies should be careful with legally protecting their soft-
ware products, especially in export markets, such as US and Europe, which have strong patenting culture. The Indian
patent laws provide various routes for the software companies to apply for patents in foreign countries. However, the
companies should be careful with respect to meeting procedural formalities at the patent office as any failure to meet
the formalities can be detrimental to efforts of patenting abroad.

About the Author

Kshitij is Managing Director at Inohelp IP. He is a chemical engineer and a patent agent regis-
tered to practice at the Indian patent office. He focuses his practice on domestic and interna-
tional (PCT) patent prosecution, and intellectual property counseling related to chemical, ma-
terial science, mechanical and information technology, with particular interest in the area of
medical devices, pharmaceutical formulations and fine chemicals. He has prior experiences of
working with the largest Knowledge Process Outsourcing (KPO) company, a top Legal Process
Outsourcing (LPO) firm, and a top Indian IP Law firm. During his professional experience he
has interacted with attorneys of leading law firms in US and Europe. Kshitij has drafted vari-
ous patent applications filed with USPTO, EPO and Indian Patent Office (IPO). He has been
involved in many patentability and validity opinion projects. He can be reached at
kshitij.malhotra@inohelp.com.

Inohelp is an emerging Intellectual Property (IP) service company that specializes in

serving the IP needs of inventors, technology entrepreneurs and business owners by
Inohelp IP protecting inventions, designs, trademarks, copyrights, trade secrets, and other valu-
able intellectual property assets. Inohelp also work closely in association with foreign
Helping you with your IP
IP attorneys, who help us in securing our client’s IP in their respective jurisdictions at
an affordable cost.

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