Sara-Jayne Clover

A jet lagged, but enthusiastic, Horacio Gutierrez took time out of his visit to London this week to talk to IAM ahead of his turn as speaker at the Intellectual Property Institute's annual Stephen Stewart Lecture. "This is a fascinating time in the world of technology and in the world of IP," Microsoft's chief IP officer told me, "so I'm a happy man!"

The theme of Gutierrez's speech was cloud computing, something that he says Microsoft has been investing in for around 15 years in the forms of Hotmail and X-Box Live. The cloud, Gutierrez states, is undoubtedly where the future of computing lies: "I am equating the cloud computing paradigm to a shift as significant as the emergence of the internet or personal computers."

Although this opens up new opportunities for high-tech companies, it also brings with it new challenges for the effective management of intellectual property. As things stand, patents may be an essential tool for companies looking to monetise innovation, but their effectiveness in the emerging world of cloud computing is questioned by Gutierrez on two fronts. First off is the detectability of patent infringement. In the offline world if you suspect a product is infringing you can acquire the product, tear it down and analyse it, and subsequently determine whether there is an issue. But with cloud computing this is not the case. "In the world of the cloud the computing is behind a firewall," states Gutierrez. "You don't even get your hands on the binary code. Your ability to detect infringement there is diminished. So how are you going to discover it?"

The second challenge is enforceability once an infringement is detected. The cloud knows no national borders, the services you receive could come from a hub in your neighbourhood or from a different continent. But patent law is jurisdictional, which makes deciding which courts have the authority to hear a case tricky, to say the least. "Where services are provided from all over the world, it is going to be a significant enforcement problem," states Gutierrez.

Inevitably, as with all big developments in technology, there will be a lag while legislation and case law strives to catch up with the advances. During that time, says Gutierrez, we may see the role of patents decreasing and other forms of IP - such as trademarks - become more important. "Even a small diminution in the efficacy of patent protection," claims Gutierrez, "could result in a significant strategic shift away from reliance on patents in the cloud."

Coming from the head of IP at a high tech giant like Microsoft, this is quite a statement. Gutierrez is quick to state that he's not advocating that patents should become less important. "Rather," he states, "while there are some issues surrounding the detectability and enforceability of patents, other forms of protection that perhaps haven't been so highly valued in recent years are going to be more prized in the future."

So, according to Gutierrez, we are on the cusp of a major revolution in the high tech arena. As Gutierrez emphasises, "during the early stages of any major technological shift it is almost impossible to predict the new uses that will emerge, let alone their long term implications." However, if he's even half right about the effect that the emergence of cloud computing will have on patents, we are in for some interesting times ahead.