Patent portfolios as protection against the unknown

• The development of AI technologies will increase the focus on patentability and novelty questions
• The map of patent protection will change, with China leading the charge
• New markets will become important for patent rights in different sectors

The new technologies emerging will bring several new challenges that in-house practitioners will have to confront. Foremost among these is what role, if any, patents will actually play.

One question that cannot be avoided is whether AI technologies such as machine learning, natural language processing and deep learning are even patentable, and in particular whether they can pass the patentable subject matter and novelty hurdles. “Patents have a special place in protecting these cutting-edge technologies, but there are challenges,” observes one in-house counsel. Another believes that IP offices will have to relax rules on patentability: “The digital world is changing whether you like it or not – and patent offices have to deal with that.” When the heart of the invention is an algorithm, he argues, that should be protectable; whereas the reality today is that, generally speaking, it is not. “If I can’t get a patent at the algorithm level, I would apply for 100 use patents instead. That’s not the most efficient way to the run the system.”

Practitioners are looking to the EPO and China to lead in this area, and the EPO has indeed recently published updated guidelines on patent applications for AI and machine learning, along with examples – although this does not go far enough for many practitioners. In the United States, however, much uncertainty remains following the Alice decision and subsequent guidelines from the USPTO, as well as challenges in the US courts, which are discussed in greater depth in our report on patent law firm practices.

Three comments from people in different sectors and regions demonstrate the frustration felt by in-house counsel:

• “The United States is more challenging in getting patent rights, and more unpredictable.”
• “The last seven to 10 years in the United States have been awful in terms of how the system has been developing for patent owners. Will it change? I hope so!”
• “We have to re-tool our [patent] portfolio to reflect the hostility in the US system.”

It is not just high-tech industry that is affected. The Mayo and Myriad judgments in the United States and Australia raise serious questions over the patentability of diagnostic methods just as pharma companies are pumping research into what one practitioner calls “more intelligently designed drugs” and exploring technologies such as CRISPR and CAR-T therapies (both of which are subject to patent litigation).

With little sign of things changing in the United States, it is not entirely surprising that several in-house counsel, particularly in the high-tech sector, reported that they have pulled back on their patent filings or projections, even as investment in R&D grows.

The challenges in the United States, uncertainty in Europe (pending the implementation of the unitary patent and Unified Patent Court) and growing markets in east Asia mean that the map for patent protection, exploitation and enforcement could change dramatically in the next few years. Some predictions can be made fairly confidently. As one in-house counsel remarks: “There will be more business opportunities outside the United States and western Europe.” Another adds: “China has really moved a long way in terms of respecting IP rights. India is changing, and the map will continue to expand.” But there will also be surprises. Will a new jurisdiction emerge as a key player for patents? Some of the contenders are considered in the map.

In this uncertain outlook, a patent arsenal is likely to remain the best insurance policy for businesses. “Everybody needs to have a patent portfolio to protect them from the unknown,” notes one in-house counsel. The question is: what changes when everyone has a patent portfolio and needs to exploit it?