Patent Rejection of Kroll’s P2P Tech: A Lesson in Section 3(k) and Software Patentability

The article explores the Delhi High Court's decision in Kroll Information Assurance LLC v. Controller General of Patents, examining why a decades-old peer-to-peer (P2P) technology was denied patent protection in India. It unpacks Section 3(k) of the Patents Act, contrasts P2P vs client-server models, and evaluates the legal threshold for patenting software-driven innovations. With references to Bitchat and modern decentralized tools, the piece critiques the evolving tension between innovation and patent law.

Patent Rejection of Kroll’s P2P Tech: A Lesson in Section 3(k) and Software Patentability

 What is the buzz about?

Technologist and designer John Maeda rightly said, “The future belongs to those who understand technology and design it to serve people.” It doesn’t matter if the technology is prior existing or recently developed, if it makes life easier or improves it, then surely it serves the interest of the people. However, a drastic change in the living pattern of the masses with the advent of technology may not be a very good sign. In a recent case, a company sought the patent of a technology which has already existed for nearly 4 decades.

The case at hand involves Kroll Information Assurance, LLC filing a patent as a national phase application under the Patent Cooperation Treaty (hereinafter PCT) titled "A System, Method and Apparatus to Locate at Least One Type of Person, via a Peer-to-Peer Network.". A national phase application refers to the process where a Patent Cooperation Treaty (PCT) international application enters the national or regional patent systems of the countries where the applicant seeks patent protection. Essentially, it's the stage where the international application is converted into individual national applications for each desired country. On a request for examination of the patent application, way back in 2007, the appellant was furnished with the details that clearly stated that the subject matter does not constitute inventive step as defined under Section 2(1) (ja), to which a letter to amend the claim was submitted. After a hearing, common details were provided to the appellant, by the patent office. To this, the counsel submitted that the “technical challenge addressed in the subject patent application is the inadvertent or unauthorized sharing of sensitive data on peer-to-peer networks due to user error, malware, or malicious activity, and the need to identify and mitigate such sharing,” meaning that the said technology has been used for identify the sharing of delicate data and alleviate it, in a first, allowing a safe environment to identify and take down delicate data in a user tracking system.

What the court did

The court upheld the Controller of Patents' decision to refuse the patent application, primarily citing section 3(k) of the patents act, 1970, which excludes "algorithms" and "computer programs per se" from patentability. It was observed that "For a software or computer programme to qualify as an eligible subject matter under Section 3(k) of the Act, it should be more than a mere sequence of instructions and should result in significant technical effect or advancement of the hardware."

The court examined whether Kroll’s invention was merely a software-based algorithm or if it provided a technical advancement to hardware. Key observations included:

  1. The invention used standard computing components (processor, storage, input devices) to execute keyword-based searches on P2P networks.
  2. The profiling mechanism relied on conventional search functions without any technical transformation of hardware.
  3. The claimed features (searching, receiving responses, identifying users) were deemed abstract and non-technical.

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What is peer to peer technology

Peer-to-peer (P2P) technology refers to a decentralized communication model where users interact directly with one another without relying on centralized servers. In messaging, this means messages are exchanged from one person’s device to another’s enabling greater privacy, less surveillance, and less dependence on internet infrastructure. Peer-to-peer (P2P) and client-server networks differ fundamentally in how devices communicate and share data. In a P2P network, all devices’ called nodes are equal and can function as both clients and servers. There is no central authority; instead, data is exchanged directly between devices. This decentralized approach enhances privacy and resilience, as there is no single point of failure. In contrast, a client-server network operates with a clear hierarchy: client devices request data or services, and a central server processes these requests and distributes the data. Most modern apps like WhatsApp or Gmail use this model, relying on central servers to manage user information and communication. While client-server systems are easier to manage at scale and provide more consistent performance, they are also more vulnerable to server outages or centralized control. P2P networks, like those used in Bitchat or BitTorrent, offer a more autonomous and fault-tolerant alternative, especially useful in environments where connectivity is limited or surveillance is a concern.

What is Bitchat?

Jack Dorsey’s new app, Bitchat, takes this concept further by creating a fully offline, encrypted messaging platform using Bluetooth Low Energy (BLE) mesh networking. It allows users to send messages without the internet, SIM cards, or even phone numbers by forming a dynamic mesh between nearby devices. Messages can hop from one device to another within a 300-meter range, reaching users even in blackout zones or restricted environments like protests. Bitchat uses end-to-end encryption (Curve25519/AES-GCM), password-protected channels, dummy traffic, and even a panic mode to ensure strong privacy. Inspired by old-school IRC chatrooms but optimized for modern decentralization, Bitchat reflects Dorsey’s belief in protocol-driven communication over platform dominance.

What is section 3(k)

Section 3(k) of the Indian Patents Act, 1970 excludes from patentability “a mathematical or business method or a computer program per se or algorithms.” This provision is often invoked in the context of software patents and has been a subject of extensive judicial and administrative interpretation. The phrase “per se” is crucial—it suggests that a computer program by itself is not patentable, but if it is tied to a novel hardware application or shows a technical effect, it may be considered. This opens the door for patents that are not merely software but demonstrate some technical advancement or industrial applicability.

Section 3(k) is intended to prevent monopolies over abstract ideas, mathematical formulas, or standalone software. But it does not prohibit patenting software-implemented inventions that exhibit a technical effect or technical contribution. Courts and the Patent Office now focus on substance over form, weighing whether the claimed invention solves a technical problem through technical means.

Conclusion

The Kroll Information Assurance case reinforces the Indian judiciary’s consistent stance that software-based inventions, unless demonstrating a clear technical effect or hardware advancement, remain excluded from patentability under Section 3(k) of the Patents Act, 1970. While peer-to-peer technologies and data privacy solutions are increasingly relevant in the digital age, mere implementation of known methods like keyword searches over standard networks, cannot cross the threshold of “inventive step.” This case reflects a broader tension in patent law: how to protect genuine innovation in software without granting monopolies over abstract ideas or long-existing technical processes. As emerging technologies such as Bitchat push the boundaries of decentralization and encryption, innovators must be mindful that legal recognition will hinge not on novelty in application alone, but on demonstrable technical contribution and industrial applicability.