These days technology has advanced to such an extent that, everything can be done with the touch of our ever so smart, smartphones. Be it online shopping, booking movie tickets online, paying bills online, banking online, recharging online, online food orders and the like, all have one thing common – a One Time Password (OTP) before completing the order is sent to your phone number to ensure that it is you who is making the said payment from the debit/credit card details entered. Without the OTP no order is completed or processed.
Recently, FreeCharge, a leading Indian e-commerce establishment acquired by SnapDeal, developed a home-made idea which is presumed to put an end to the woes of waiting for an OTP. the patent titled ‘On The Go Pin’ (OTGP) is an authentication system that stays in your phone and changes every few seconds. FreeCharge has filed a patent for the same adding that this technology has been introduced to enable easier and quicker online, as well as offline transactions, hence avoiding the delay in receiving the OTP via a text message. Further to this, online bank servers and bank merchants authenticate this ‘pin’ in order to process online transactions. The OTGP also fulfils the prerequisite of the Reserve Bank of India (RBI) guidelines which mandates a two factor authentication, not requiring additional payment or investment by consumers/customers or the retailers.
While this patent is being lauded for helping other similar ventures to invest in their R&D and develop such technologies, apart from providing a legal backing, the need for patents is increasing, with patents being comprehended as a business/commercial tool to stay ahead of other competitors. As far as the Indian Patents Act, 1970 is concerned; the OTGP technology patent casts a looming question as to its patentability under the Act. Under the Act, Section 3 (k) enshrines that mathematical and business methods, computer programs per se and algorithms are not patentable. A method is termed as a business method if it encompasses a monetary transaction in its purview or mere marketing or a sale/purchase methodology.
The case of Yahoo Inc. (formerly Overture Service Inc.) vs. Assistant Controller of Patents & Designs[i] was pondered under the purview of a business method patent. The Court considered whether the subject matter was excluded by Section 3 of the Indian Patent Act and the IPAB invalidated Yahoo’s claim holding that the claimed ‘invention’ could not be patented as it came under the definition of a business method under 3 (k).[ii] This proved that business method patents cannot be granted protection in India, although a few applications at the Indian Patent Office pose a different story. Like for e.g., Afton Chemical Corporation was granted patent for a “method of increasing fuel value of used or waste lubricating oil”. This patent not only protected the method of augmenting the fuel value but also secured within itself a business method for dispensing and consuming waste oils. Prima facie, this is a business method and has still been granted protection.[iii]
Suffice to say, it is too early to decide the result of the OTGP patent application and it would be interesting to see the how the Indian patent laws scenario will unfold in this case.
[i] The Intellectual Property Appellate Board (IPAB) decided that pure business methods are not patentable in India going by the provision of Section 3 (k) of the Indian Patent Act; OA/22/2010/PT/CH, Dec. 8, 2011.
[ii] Ibid.
[iii] Law Wire, Once upon a Click – A story of Amazons One Click patent and India’s emerging Business patent policy, Yamuna Chengappa, Available at: http://www.lawinfowire.com/articleinfo/once-upon-click-story-amazons-one-patent-indias-emerging-business-policy. Last accessed Dec. 17, 2015.