In the current economic climate, inventors, entrepreneurs and businesses of all sizes must be diligent in turning their creativity into marketable products and services.
Part of this process involves understanding the intersection of operations and the full life cycle and protectable scope of intellectual property, focusing on maximizing long-term value and viability. Innovation is not static, and business leaders need to understand and be aware of evolving legal risks related to licensing, product development, due diligence, cyber security, innovation, IP theft and assignment of ownership.
Looking ahead into 2023 and beyond, there are two important technology trends that are distinct but related to the larger intellectual property landscape, which itself is changing in how technologies are protected, either in patenting or in litigation.
Artificial Intelligence and Machine Learning
The first of these technologic trends is the continuing development of artificial intelligence and machine learning (AI/ML) algorithms that will continue to expand application into new products and into the patents that protect the associated intellectual property. Some AI/ML is familiar, such as self-driving automobiles; however, with the continued development of predictive and anticipative algorithms, there will be further developments in this area.
Currently, this technology spans capabilities from interpreting speech and determining the intent or meaning of what someone is saying to increasing a retail store’s ability to predict and anticipate precise details of an individual customer’s purchasing habits.
The power in these AI/ML algorithms will continue to evolve and develop in ways that cannot be foreseen. AI/ML has the potential to be disruptive in the same way that classic industrial technologies sparked the industrial revolution. Associated with the development and application of any new technology is the need to provide the necessary IP protection through patents, and thus we foresee increased associated activity in the IP realm associated with these rapidly developing AI/ML technologies.
Blockchain Technology for Electronic Transactions
The second of these technologic trends is the use of blockchain technologies for electronic transactions.
The anonymity, trust and decentralized nature of this technology with the use of smart contracts inherent to this technology promise to revolutionize how electronic payments are handled in the future. The use of Non-Fungible Tokens, often referred to as NFTs, which use blockchain technology to provide a digital certificate of ownership, are an application of this technology. These can be used, for example, to sell tickets to sports events, or provide evidence of ownership for digital assets such as electronic games or electronic assets.
Central banks are experimenting with the use of Central Bank Digital Currency (CBDC) as a blockchain-based alternative to current physical currency systems. This changing landscape to electronic payment and transaction systems, in similar ways to the AI/ML technologies discussed above, promises a rich landscape for ensuring IP protection for whatever ways these technologies are implemented to make it easier for people to buy things, attend a sporting event or even electronically pay a babysitter.
The IP Landscape
A major factor in obtaining IP protection, whether obtaining a patent or pursuing litigation, is the United States Patent and Trademark Office’s requirement for what is called patent eligibility. Certain kinds of computer-based inventions are not deemed patent eligible simply because they contain what are known as “abstract ideas.” For example, if a patent is directed to a process that simply was previously done manually, such as keeping a manual ledger of accounts, merely placing that process on a computer would not be patent eligible. This rule was set in place by the well-known Supreme Court Alice decision in 2014, which was widely considered a decision about patents on software for business methods.
Currently, the IP landscape for obtaining patent protection for patents is still in flux because of ongoing court decisions that shape the meaning of the original Alice decision, as well as how the USPTO applies the law in determining eligibility. The eligibility landscape absolutely affects obtaining patent rights (or protecting those rights through litigation) even for what are considered novel and not obvious technologies when those technologies’ primary embodiment is computer software.
The AI/ML and blockchain technologies, which are computer software embodied, fall under this requirement. Obtaining IP protection for these technologies requires careful framing of the patent to ensure that what is being protected is sufficiently technology-based. This step is necessary to further ensure the patent can withstand the forces of litigation.
Central banks are experimenting with the use of Central Bank Digital Currency (CBDC) as a blockchain-based alternative to current physical currency systems.
Last year, a draft of the Patent Eligibility Restoration Act of 2022 was introduced as a bill designed to revise patent eligibility standards. While this bill is currently in Congress, it is unclear the exact form it will take and if it will be passed into law. Since Alice was decided, there has been talk of Congress clarifying patent eligibility and this is potentially a major step in that direction. If passed, and depending on what amendments or clarifications are added, this bill will affect how IP is obtained through a patent and protected through litigation.
Conclusion
2023 is looking to be an exciting year for IP. The fast growth of new technologies and the desire to ensure adequate IP protection, both through patenting and litigation, and as well the promise of new legislation directed to determining what is considered a patentable invention, provide a dynamic and exciting time for intellectual property practitioners.
Spencer Fane partner Steven Laureanti helps his clients identify, protect, and enforce their intellectual property (both domestically and internationally), develop and grow key technologies, and create long-term strategies and technology roadmaps for building comprehensive intellectual property portfolios.
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