The Delhi High Court in its recent decision of Microsoft Technology Licensing LLP v The Assistant Controller of Patents and Designs, C.A.(COMM.IPD-PAT) 29/2022, set aside the findings of the Controller related to the patentability of a patent. The matter was before the High Court by way of appeal from the order under Section 15 of the Patents Act, 1970. The patent pertained to a computer-related invention, specifically a two-step authentication process that addressed the riskier use of cookies in authentication. The Patent office disputed the appeal, stating that the invention lacked a technical effect since it was only at the “User Interface level”. The Delhi High Court rejected the contentions of the patent office and held the technical aspects of the invention, such as the use of cookies and two-factor authentication, are fundamental to the functioning of computer networks and are not limited to the user-interface. These aspects are vital for safeguarding access to network locations and their corresponding sublocations, representing a critical concern for Corporate Affairs and various judgments were relied upon to submit that the former director could not be held liable merely on account of his directorship without producing any evidence to suggest his involvement in the alleged violations. SEBI accepted the submissions made on behalf of the former director and concluded the proceedings against him without any adverse observations. SEBI’s order dated April 28, 2023 is an acknowledgment of the well settled principle that directors of a company cannot be held vicariously liable for the acts of a company unless their involvement in the affairs of the company/ alleged violations can be established through board processes/ other documentary evidence. Notably, other parties to the proceedings were penalized; barred from accessing capital markets; and/ or restrained from holding the post of director or any other key managerial position in any listed company or a public company which intends to raised money from the public. JSA Team comprised of Vikram Raghani Partner; Pulkit Sukhramani Partner; Vidhi Jhawar Senior Associate and Deepank Anand Junior Associate. June-July 2023 | Lex WITNESS | 81 both businesses and individuals. In addition, the Delhi high Court directed the patent office to follow USPTO and EPO in providing clear guidelines by way of examples of patentable and nonpatentable CRIs to serve as signposts for examiners. The Court added that the Indian Patent Office should use a clear standard for assessing CRIs’ patentability, in a rare postscript. The Court also observed that mere fact that a CRI involves algorithms of computer executable instructions, does not make it non patentable under Section 3(k) of the Patents Act, 1970.

The matter is remanded to the Controller for further proceedings on the aspect of novelty and inventive step.