Topic 154 — Tech Industry IP Deep-Dive

TECH INDUSTRY IP encompasses software, AI/ML, IoT, semiconductors, telecommunications (4G/5G/6G), and connected devices — sectors where India has emerged as a global hub. India hosts the world's second-largest telecom market (1.2+ billion subscribers); is a major IT services exporter ($250+ billion); leads in AI/ML innovation; and has emerging semiconductor + chip design capabilities. Tech IP integrates: PATENTS (CRI Guidelines 2025 + Section 3(k) framework); COPYRIGHT (software as Section 2(o) literary work; Engineering Analysis 2021 framework); TRADE MARKS (digital brand protection); TRADE SECRETS (algorithms, source code, business methods); DESIGNS (UI/UX, hardware); SEP/FRAND (telecommunications). Indian framework navigates unique challenges: SECTION 3(k) — pure software/algorithms not patentable "as such" (but technical effect rescues them); CRI GUIDELINES 2025 — three-step test (effective 29 July 2025); FERID ALLANI 2019 — TECHNICAL EFFECT TEST landmark; OPENTV 2023:DHC:3305 — business methods absolute bar; MICROSOFT 2023+2024 — software with technical effect patentable; BLACKBERRY 2024:DHC:6571 — algorithm rooting NOT patentable; AB INITIO 2024:DHC:5708 — blockchain technical effect; CALEB SURESH MOTUPALLI 2025 — sufficiency strict. SEP/FRAND framework operationalises through landmark cases: TELEFONAKTIEBOLAGET v. LAVA (2024:DHC:2698) ₹244 CRORE damages MARCH 2024; INTERDIGITAL v. XIAOMI 2021 anti-suit injunctions; ERICSSON v. INTEX, MICROMAX, SAMSUNG cross-jurisdictional disputes; OPPO v. INTERDIGITAL implementer-innovator balance; NOKIA v. OPPO 2024 5G framework. India's 5G subscriber base expected 350M by 2026 (27% of all mobile). The ENGINEERING ANALYSIS CENTRE v. CIT (2021 SC) DEFINITIVELY established software royalty taxation framework — software payments NOT royalty under DTAAs. ANI v. OPENAI 2024 (judgment reserved 2025) defines AI training framework. STEPHEN THALER 2025 — AI authorship rejected. DPDP ACT 2023 (effective February 2025) integrates personal data + IP. This topic walks through every aspect of tech IP — software patentability, CRI Guidelines 2025, SEP/FRAND framework, AI/ML developments, and recent reforms.

1. Indian Tech Industry — Foundational Framework

A. Industry Scale + Strategic Importance

✅ India's Tech Industry

GLOBAL POSITIONING: · IT services: $250+ billion exports. · Telecom: world's 2nd largest market. · 1.2+ billion telecom subscribers. · 350M projected 5G subscribers by 2026. · Mobile phone exports: $15.6B FY2024 (+42%). · Top global PCT filings (Tata Consultancy, Infosys, Wipro). · Major AI/ML innovation hub. · Emerging semiconductor + chip design. MAJOR PLAYERS: · Tata Consultancy Services (TCS). · Infosys. · Wipro. · HCL Technologies. · Tech Mahindra. · Cognizant (US-listed but largely Indian). · Reliance Jio. · Bharti Airtel. · Vodafone Idea. · Tata Communications. · Tata Elxsi. KEY SEGMENTS: · IT services + consulting. · Software products (SaaS). · Cloud services. · AI/ML platforms. · Telecommunications. · IoT + connected devices. · Semiconductor design. · Mobile applications. · Digital infrastructure. · EdTech + FinTech. STRATEGIC IMPORTANCE: · Major foreign exchange. · High-skill employment. · Innovation hub. · Global digital infrastructure provider. · Cross-border services.

2. Software Patentability — Section 3(k) Framework

A. The Statutory Provision

Section 3(k) Patents Act 1970

"3. What are not inventions.—The following are not inventions within the meaning of this Act,— (k) a mathematical or business method or a computer programme per se or algorithms. Explanation 1.—An invention which is otherwise patentable shall not be considered as such because of the use of a mathematical method, a business method, a computer programme or an algorithm. Explanation 2.—For the purposes of this clause,— (i) \"computer programme per se\" means a computer programme as such which by itself does not have any technical effect or technical contribution..."

B. The Technical Effect Test — Ferid Allani 2019

📖 Ferid Allani v. Union of India, W.P.(C) 7 of 2014 (2019:DHC:6944)

Background — Inventor sought patent on web-based information search method.

Issue — Whether software invention escapes Section 3(k) "computer programme per se" exclusion.

Holding — Delhi HC: SOFTWARE INVENTIONS PATENTABLE if they demonstrate TECHNICAL EFFECT or TECHNICAL CONTRIBUTION beyond merely running on a computer.

Significance — LANDMARK Indian software patentability case; established TECHNICAL EFFECT TEST that bridges Section 3(k) and CRI Guidelines.

Workshop Lesson — For software patents, frame as solutions to TECHNICAL PROBLEMS with TECHNICAL EFFECTS.

C. CRI Guidelines 2025 Three-Step Test

✅ CRI Guidelines 2025 (effective 29 July 2025)

STEP 1 — IDENTIFY THE INVENTION · What is actually being claimed? · Strip away excluded subject matter. STEP 2 — IDENTIFY THE TECHNICAL CONTRIBUTION · What technical problem is solved? · What technical effect achieved? · Anchor in system-level improvements. STEP 3 — ASSESS SECTION 3(k) EXCLUSION · Is invention "as such" excluded? · Or does technical contribution lift it from exclusion? KEY PRINCIPLES: · SUBSTANCE over form. · Technical effect required. · Hardware interaction valuable. · System-level improvements (network, memory, device, processor). WHAT IS PATENTABLE: · Software with technical effect. · Software solving technical problems. · Specific hardware integrations. · System-level improvements. · Security improvements. · Network optimisations. · Resource efficiency. WHAT IS NOT PATENTABLE: · Pure algorithms. · Business methods (per OpenTV 2023). · Abstract logic. · Mathematical methods. · Mental processes. · Software per se without technical effect. CASES SHAPING: · Ferid Allani 2019 — technical effect test. · Microsoft 2023+2024 — technical effect. · OpenTV 2023 — business methods absolute bar. · Raytheon 2023 — cognitive technical effect. · Ab Initio 2024 — blockchain technical effect. · Blackberry 2024 — algorithm rooting NOT patentable. · Caleb Suresh Motupalli 2025 — sufficiency strict.

3. SEP/FRAND Framework

A. SEP/FRAND Foundational Concepts

✅ SEP/FRAND Foundational Framework

STANDARDS ESSENTIAL PATENTS (SEPs): · Patents essential to industry standards. · 4G/5G LTE/WiFi/Bluetooth. · Connected cars/IoT/smart meters. · Cannot be designed around. STANDARDS SETTING ORGANIZATIONS (SSOs): · ETSI (European Telecommunications Standards Institute). · IEEE. · ITU. · 3GPP. · FRAND commitment required. FRAND OBLIGATIONS: · Fair, Reasonable, Non-Discriminatory licensing. · Both SEP holder + implementer obligations. · Reciprocal good faith negotiation. · No unilateral stonewalling. · No extreme take-it-or-leave-it. INDIAN POSITION (emerging): · SEP-friendly recognising strong rights. · Robust interim relief + injunctions. · Security deposits ordered. · Conduct-based assessment. · Indian patents subject to Indian oversight. · Open to global FRAND conversations.

B. Telefonaktiebolaget v. Lava — Watershed Case

📖 Telefonaktiebolaget LM Ericsson v. Lava International, 2024:DHC:2698 (Del HC March 2024)

Background — Ericsson SEPs vs. Lava handsets; FRAND determination.

Holding — Delhi HC: ₹244 CRORE (~$30M) DAMAGES + injunction.

Reasoning — Ericsson's offers FRAND-compliant; Lava effectively "held out"; seven-step novelty analysis applied.

Significance — WATERSHED Indian SEP/FRAND framework; first final ruling post-trial in telecom SEP infringement; precedent for telecom IP.

Workshop Lesson — Document FRAND offers carefully; demonstrate good faith negotiations.

C. InterDigital v. Xiaomi — Anti-Suit Saga

📖 InterDigital v. Xiaomi (multiple proceedings, 2020-2024)

Background — InterDigital sued Xiaomi in Delhi for 3G/4G/5G SEPs.

Anti-Suit — Xiaomi filed in Wuhan seeking global FRAND determination + anti-suit injunction against Indian proceedings.

Counter-Anti-Suit — InterDigital obtained anti-anti-suit injunction in Delhi.

Settlement — Final judgment 13 February 2024 after Chongqing Court determined Global FRAND rate (28 November 2023).

Significance — Global FRAND complexity; multi-jurisdictional litigation; Indian judicial sovereignty.

D. Indian SEP/FRAND Jurisprudence

Principle	Application
FRAND mutual obligation	Both parties must negotiate good faith.
Anti-Holdout	Implementer cannot stay silent indefinitely.
Portfolio licensing	Permitted on FRAND terms.
Interim deposits	Courts can order security deposits.
Single SEP infringement	Sufficient for whole device injunction.
Comparable licences	Subject to confidentiality clubs.
Indian jurisdiction	Indian patents subject to Indian oversight.
Global FRAND	Open to discussions.

4. AI/ML IP Framework

A. AI Patent Patentability

✅ AI/ML Patent Workshop

AI INVENTIONS UNDER CRI GUIDELINES 2025: · AI-driven solutions to technical problems. · Specific hardware integrations. · Performance improvements. · Security enhancements. · Resource efficiency. · Network optimizations. NOT PATENTABLE: · Pure machine learning algorithms. · Abstract data processing. · Generic AI applications without technical effect. KEY CASES: · Ferid Allani 2019 — technical effect. · Microsoft 2023+2024 — software with technical effect. · Raytheon 2023 — cognitive technical effect. · Ab Initio 2024 — blockchain technical effect. · Caleb Suresh Motupalli 2025 — sufficiency. DRAFTING IMPLICATIONS: · Technical effect documentation. · System-level claims. · Hardware interaction emphasis. · Specific use cases. · Performance benchmarks. FOREIGN COMPARISON: · EU — broader software patentability. · US — Alice/Mayo two-step test. · China — modernised framework. · Japan — strong technical effect.

B. AI Authorship + Copyright

📖 Stephen Thaler v. Copyright Office, 2025 (Del HC)

Background — Thaler challenged Indian rejection of AI authorship.

Holding — Delhi HC: 8-week directive on reconsideration.

Significance — India aligns with global rejection of pure AI authorship.

Global Context — US (43 F.4th 1207); UK ([2023] UKSC 49); Indian framework emerging.

Workshop Lesson — Document HUMAN contribution in AI-assisted works.

C. AI Training + Copyright

📖 ANI Media v. OpenAI Inc., CS(COMM) 1028/2024 (Del HC)

Background — ANI sued OpenAI for using copyrighted news content to train ChatGPT.

Status — Judgment RESERVED 2025.

Issues — Section 14 reproduction; Section 52 fair dealing; cross-border; DPDP integration.

Significance — Will define AI training framework for Indian copyright.

Workshop Lesson — Content clearance must consider AI training rights.

5. Software Royalty Taxation

A. Engineering Analysis 2021 — Definitive Framework

📖 Engineering Analysis Centre v. CIT, AIR 2021 SC 1394; (2022) 3 SCC 321

Background — Software royalty taxation under DTAAs question.

Holding — Supreme Court: Standard software payments NOT royalty under DTAAs.

Reasoning — Software licence ≠ assignment; NOT "royalty" under treaty framework.

Significance — LANDMARK royalty taxation; major impact on IT industry valuation; aligns with international DTAA practice.

Industry Impact — Significant revenue + tax implications for IT sector.

B. Tax Implications for Tech Industry

Section 9(1)(vi) ITA — royalty deemed accrual.
Section 195 ITA — withholding tax.
Section 115A — concessional rates for non-residents.
Section 115BBF — patent box (10% rate India-developed).
Sections 92-92F — transfer pricing.
Engineering Analysis 2021 — software DTAA framework.
Income Tax Act 2025 effective 1 April 2026.

6. DPDP Act 2023 + Tech IP Integration

A. DPDP Act Effective February 2025

Personal data definition broad.
Cross-border data transfer framework.
Data Principal rights.
Data Fiduciary obligations.
Data Processor framework.
Significant penalties.

B. DPDP Integration with Tech IP

Software handles personal data.
Cross-border tech services subject to DPDP.
AI training raises personal data concerns.
Cloud services + DPDP compliance.
User data + IP intersections.
Privacy by design + IP protection.

7. Recent Tech IP Cases

📖 Telefonaktiebolaget v. Lava, 2024:DHC:2698 (March 2024)

Holding — ₹244 CRORE damages; injunction.

Significance — Watershed Indian SEP/FRAND.

📖 Caleb Suresh Motupalli v. Controller, 2025

Holding — Strict Section 10(4) sufficiency for software.

Significance — Quality disclosure required.

📖 OpenTV v. Controller, 2023:DHC:3305

Holding — Business methods absolute bar; single valid ground sufficient for refusal.

Significance — Business methods strictly excluded.

Holding — AI authorship 8-week directive.

Significance — Indian alignment with global rejection.

8. Strategic Considerations

✅ For tech companies — eight points

For software patents, frame as TECHNICAL solutions to TECHNICAL problems.

For AI/ML, leverage CRI Guidelines 2025 three-step test.

For SEP/FRAND, document FRAND offers carefully.

For copyright, register key software with Form XIV.

For source code, leverage trade secret + NDA framework.

For tax, leverage Engineering Analysis 2021 framework.

For DPDP, integrate personal data + IP framework.

For enforcement, leverage UTV-style dynamic injunctions.

9. Memory Aid — Quick Recall

✅ Quick Recall — Tech Industry IP

India tech: 2nd largest telecom; $250B+ IT services; 350M projected 5G by 2026.

Section 3(k) — software/algorithms not patentable "as such".

Ferid Allani 2019:DHC:6944 — TECHNICAL EFFECT TEST.

CRI Guidelines 2025 (29 July 2025) — three-step test.

OpenTV 2023:DHC:3305 — business methods absolute bar.

Microsoft 2023+2024 — software with technical effect patentable.

Telefonaktiebolaget v. Lava 2024:DHC:2698 — ₹244 CRORE damages.

InterDigital v. Xiaomi — anti-suit saga; multi-jurisdictional.

Engineering Analysis 2021 — software royalty taxation.

Software NOT royalty under DTAAs.

Section 115BBF — patent box (10% India-developed).

ANI v. OpenAI 2024 — AI training pending (reserved 2025).

Stephen Thaler 2025 — AI authorship rejected.

DPDP Act 2023 — effective February 2025.

🎯 EXAM POINTERS — TOPIC 154

Indian tech industry: 2nd largest telecom market (1.2B+ subscribers); $250B+ IT services exports.
350M projected 5G subscribers by 2026 (27% of all mobile).
Section 3(k) Patents Act — mathematical/business methods/computer programme per se/algorithms not patentable.
Section 3(k) Explanation — technical effect rescues from exclusion.
Ferid Allani v. UoI (2019:DHC:6944) — TECHNICAL EFFECT TEST landmark.
CRI Guidelines 2025 — effective 29 July 2025; three-step test.
Three-step test: identify invention → identify technical contribution → assess Section 3(k) exclusion.
Microsoft v. Asst. Controller (2023:DHC:3342; 2024 Madras HC) — software with technical effect.
OpenTV v. Controller (2023:DHC:3305) — business methods absolute bar; single valid ground sufficient.
Raytheon v. Controller (2023) — cognitive technical effect.
Ab Initio v. Asst. Controller (2024:DHC:5708) — blockchain technical effect.
Blackberry v. Asst. Controller (2024:DHC:6571) — algorithm rooting NOT patentable.
Caleb Suresh Motupalli v. Controller (2025) — Section 10(4) sufficiency strict.
SEP = patents essential to standards; FRAND obligations.
Telefonaktiebolaget v. Lava (2024:DHC:2698; March 2024) — ₹244 CRORE damages.
InterDigital v. Xiaomi — anti-suit saga; settlement 13 February 2024.
Ericsson v. Intex, Micromax, Samsung — earlier framework cases.
Nokia v. Oppo, Vivo (2022-2024) — global FRAND framework.
Engineering Analysis Centre v. CIT (AIR 2021 SC 1394; 2022 3 SCC 321) — software royalty taxation; software NOT royalty under DTAAs.
Section 115BBF — patent box (10% India-developed).
Section 9(1)(vi) ITA — royalty deemed accrual.
Section 195 ITA — withholding tax.
ANI Media v. OpenAI (CS(COMM) 1028/2024) — AI training; judgment reserved 2025.
Stephen Thaler v. Copyright Office (Del HC 2025) — AI authorship 8-week directive.
Stephen Thaler globally rejected: US (43 F.4th 1207); UK ([2023] UKSC 49); India (2025).
DPDP Act 2023 — effective February 2025; personal data + IP integration.
CCI Section 4 dominance; Section 3(5) IP exception.