Software patents is a patent that protect computer software. Software patents may cover standalone computer software programs, mobile app software, or software that is integrated in a machine. Software must comply with all other types of inventions in order to be patentable. This article provides an overview of the Scope and Criteria for software patents, as well as some benefits of owning one.
Startups and Software Innovation
Software is one of the fastest growing markets in the world and requires minimal capital investment. All one needs is a computer and, small companies and startups still need effective IP protection to secure a fair return on their R&D investments. The following are some of the benefits of software patents for small companies.
The software industry has enormous innovation potential. Because software is easily updateable and is relatively cheap, engineers can build new technical features. Software designers can make minor changes to fix bugs and release new versions of software through easy downloadable updates. Furthermore, it is faster and cheaper to implement an invention in software than in hardware. That’s why many entrepreneurs have been successful with their software innovations, and that is why patents are so important for small businesses.
Software has a great potential for economic growth. It offers tremendous flexibility and innovation. It is relatively easy for software engineers to create new technical capabilities, fix errors, and release new versions of software with downloadable updates. Software implementation of an invention is cheaper and faster than hardware implementation. When the low cost of software, its high value, and viral potential, software can be be a rapid growth, highly profitable business. This makes software patents an attractive option for software developers to preserve their exclusivity.
The Story of Unlockd and Phhhoto
Unlockd was a mobile advertising started slated to go public until Google banned its app. Unlockd’s suit had to rely on allegations of anti-competitive conduct based on Google’s “substantial strategic investment” in startup Glance which operated in the same manner and in the same space as Unlockd.
Unlockd and Phhhoto did not protect its IP with patents, and when trouble come, they can only claim anti-competitive behavior as the basis of their complaints. This is not as strong as enforcing their IP rights and using their patents to protect themselves.
Benefits Of Software Patents
If your startup has invented a piece of software that is in demand, it may be worth considering securing a software patent. A patent gives you the right to exclude and prevent others from making and selling similar products and services. This can be a significant advantage, especially if you’re just starting out. Unlike smaller startups, larger companies can develop competing products more easily and have better distribution channels. By protecting your software invention, you can avoid these problems and ensure that your software remains competitive.
Patents can be valuable in many ways for the software inventor/founder as well as for potential investors and buyers. These include:
- Increased Traction: By keeping out the competition, patents can help software companies maintain their hockey curve. Patents that protect technology are valuable because it allows for additional purchases at a premium price. The owner of the patent is the only person who can produce the technology, so they can charge more for their products or services. The patent can also drive sales of products related to the patented product. This includes derivative and convoluted sales.
- Reducing costs for the Company: Although some patent technologies may not directly result in additional sales, they can be of great value to the owner. These patents may allow the owner to improve computer performance and to produce additional products or services at a lower cost, which could reduce overhead costs.
- Protective Barriers: Patented technologies can also be used to create defensive barriers. A patent provides exclusivity to the company. If a competitor steps foot in the area covered by the patent, then the company can send a cease-and-desist letter to ask the offending company to move on.
- Enhanced Tech Reputation: There are many other situations in which a patent can create a reputational benefit for the owner. A company with a large number of patents might be able use it as a selling point for potential customers, business partners, and future employees. A company that is known for its ability to develop innovative ideas and protect them with patents can be a leader in this field and attract investors and buyers.
- Marketing Advantage: Products that have patent protection can be advertised in marketing materials as such. Customers are able to identify the product as unique by using the words “Patent” and “Patent Pending“. A patent holder might have a first-mover advantage in a market because they own an issued patent.
- Future Licensing/Cross-Licensing Options: Companies that have the foresight to build their patent estate early have another advantage when they mature and bump against big companies. Cross-licensing deals can be an excellent way for big companies to coexist and avoid litigation. Cross-licensing agreements also foster the flow of knowledge between companies and can lead to post-licensing innovations. In practice, cross-licensing agreements can be private between two companies or a group of companies. Public cross-licensing agreements can also be formed through patent pools. Patent pools are industry-based groups of companies that pool their patents for mutual benefit. As long as both companies are interested in using the intellectual property, a cross-licensing agreement is likely to benefit both parties.
On the downside, software patents are expensive and may take two to three years to mature. Furthermore, they can be outmoded due to rapid changes in customer preference and other factors. Before investing in software patents, it’s important to carefully consider the advantages and disadvantages of such a strategy. In addition to being costly, patent prosecution is also expensive. Thus, it’s essential to weigh the benefits and drawbacks before deciding whether to pursue a software patent.
As programmers and software developers, you stare at your software code every day. If you ever wonder how to convert your lines of code into a patent that can be a star on our resume and help our company tell the world about our innovative technology. The benefits of software patents are numerous, and software patenting is hard, but it is worth it.
Requirements
A non-provisional utility patent for software is the most commonly filed type of utility patent. It protects the method of an invention and gives the inventor the exclusive right to manufacture, sell, import and use it. A process patent covers a series of acts, including a method. Unlike a design patent, a utility patent will protect an idea’s design and functionality.
Software patentability often depends on how well your patent claims are written. If you describe the technical challenges and engineering solutions in your software and claims with specificity to avoid an abstract idea rejection, the chances of obtaining a patent are significantly higher. A business-oriented strategy for your patent claims can also be vital in getting sufficient protection from a business point of view.
The first challenge of patent prosecution is determining eligibility, especially for computer software related applications. While international harmonization has reduced differences between patent regulations, there are still some substantial discrepancies in the eligibility requirements for computer software.
In this article, we will analyze computer software patent eligibility requirements at various patent offices and discuss corresponding prosecution strategies. A software patent application should be drafted in a way that clearly explains how it addresses the patent eligibility requirements for its target jurisdiction.
There are many factors that must be met to meet the legal requirements of a software patent. First, it must be a new and useful way to use a computer. Moreover, it must not be obvious to someone with average skills in the industry. Furthermore, it must be sufficiently detailed and meet USPTO guidelines. The following are some examples of what software patent eligibility requirements look like. If you have developed a software product, it should not be too similar to anything else on the market.
Generally, software inventions are eligible for utility patents, which offer broad protection. However, there are strict requirements governing how software patents can be granted. First, the invention must be novel and not obvious. The second is the need for significant improvements in software engineering. Only then can a software patent be granted. But there are still important exceptions that must be met to obtain a patent. So, if you are planning to apply for a software patent, make sure to do your research and make sure to identify all of the relevant issues.
The USPTO published Final Computer Related Examination Guidelines that provide guidance for USPTO examiners when determining the eligibility of a software patent application. In general, if your invention involves a technical improvement that improves the operation of a computer, it is patent-eligible.
There are other types of software that may be eligible for patent protection, such as encryption techniques, machine learning models, and data storage and processing techniques.
Criteria For A Software Patent
Software can be patented for many reasons, including its use in medical applications and the software that controls an insulin pump. Software that controls a connected car could also be patentable, as could software that improves road accident prediction or a drowsy driver detection system. Software patents can also be issued for improvements to a technical process, such as the generation of an orthogonal wireless signal using signal processing.
In the United States, abstract ideas must be tied to a practical application in order to qualify as a patent in the U.S. However, in Europe, further technical effects may be necessary to qualify. The same rules apply to software related to business methods, user interfaces, and mathematical methods, but software-related software may be patented in the United States if sufficiently described and claimed with specificity. Furthermore, software simulations may be patent eligible in the United States.
For example, if your technology is AI-based cancer diagnostics software with an ultrasound scanner, your application may want to explain how the AI software and the hardware work together to achieve faster processing, better cancer detection, and other facts showing technology behind it is inherently valuable. It helps medical professionals perform their work better. It allows them to better analyze data, make decisions, and monitor patients from home Before a software patent application can be approved, it must meet certain criteria. In general, a software patent claim must be patent-eligible, meaning it cannot encompass an abstract idea. The software patent claim must also pass three additional tests: the claimed subject matter must be novel, useful, and nonobvious. Furthermore, the specification must be sufficiently specific to describe the claimed subject matter.
The first step in analyzing a patent application is determining whether the claimed invention is directed to an abstract idea. This includes fundamental economic practices, mathematical ideas, and other ideas that are not concretely tangible. Software inventions based on business methods are generally considered abstract ideas.
Next, patent examiners will assess whether the claimed invention is limited to a particular technology or advances another technology in some way. If so, it will pass the Alice test. This includes improving computer functionality, reducing the number of computers needed to perform a specific task, or solving a problem in an unconventional way.
Software must provide a significant improvement to an underlying mechanism. Additionally, the software technique being patented must not on sale or know to others already (novelty).
Additionally, software must address an underlying technological challenge in a unique and non-obvious manner.
Cost
Obtaining a software patent is a complicated process that requires time, knowledge and monetary resources. Although the benefits of a patent are great, it is imperative to consider the true value of your software before you decide whether or not to go ahead and apply for one. If your business has the potential for a hockey curve traction, one or more software patents may be worth the money since you can keep out the competition and extend your growth curve.
Patent attorney fees will vary according to the complexity of your invention and the number of applications. The process can be time-consuming, requiring you to take the time to research your invention, search for existing patents and get advice from peers in the same field. The patent attorney can also help you with filing the application in the relevant countries. However, you should only file a patent application if your software is intended for sale or licensing.
Because the process of obtaining a software patent is so complex, the cost is higher than for other types of inventions. It can cost $7500 for a relatively simple software invention, while it can cost upwards of $17,000 for more complex applications. Biochemical and biological inventions are typically in the same ballpark. This price range should give you an idea of the complexity of software patent applications.
So how do you justify the cost of patenting. In general, the patent should return as least what VC seek: 10X returns. VCs invest other people’s money and need to create a minimum of 15–30% return per year to satisfy their investors. Thus, your patent investments should aim for 10X returns as well.
Given that the patent filing costs are around $15,000, and that investors will accept arguments that your patent application should contribute around $150,000 to corporate valuation, an investment in a patent application is a sensible decision for entrepreneurs. This rough analysis has been supported by discussions with numerous investors, in that investors accept the value a patent application between $150,000 to $200,000 as part of the company valuation.
Numerous software patents have been granted, so go out and claim yours today! Before a non-provisional utility patent application can be approved, it must contain at least one claim. The claim or claims section must begin on a separate electronic or physical sheet and must be numbered consecutively in Arabic numerals. It is important to follow the rules and regulations for the claims, because this is how patent examiners evaluate your invention.
Inventions Implemented By Software
In the United States, patents for software can protect software inventions if the software is tied to a machine and provides a unique improvement over the prior art. This is a challenge, since software that does nothing new is unlikely to qualify for patent protection. Additionally, abstract ideas are not patentable, so many software patent applications have been rejected.
The second requirement is that software is novel. The first step to securing a software patent is to determine whether a particular idea is novel. An abstract idea can be patented, but in order to do so, the idea must include certain elements that transform it into a patent-eligible application. These elements are discussed below. The inventive step, or the main element that enables the invention, must be novel.
In the US, software inventions are still patentable. To apply for a software patent, you must meet specific technical requirements and craft the application properly. For example, your software may qualify for a patent if it improves computer functionality, requires less resources, or solves a computing challenge in an unconventional way. But in Europe, software patents have many disadvantages. To be eligible, it’s important to be aware of all the requirements, and understand the benefits of software patents.
Novelty
The novelty requirement stipulates that the inventor won’t be granted a patent if his claimed invention was not already in the prior. 35 USC 102. Any printed publication, as well as any item in public use or sold, is considered prior art. The scope of protection sought is the claimed invention as it is outlined in the patent claims.
Thus, if you have a detailed disclosure and a PTO examiner alleges that the invention lacked novelty, you can amend the claims during prosecution and add language disclosed in your description, you are likely to satisfy the novelty requirement if the claim amendment features or relationships not covered in the prior art.
The concept of “usefulness” is a crucial factor in determining the eligibility of a software patent. While this aspect is often overlooked, usefulness separates aesthetics from practicality. For example, a perpetual motion machine would not have a “use” in everyday life, but could nonetheless qualify for a patent. A novel idea in any industry would fall under this requirement. A patent application for such an idea could be granted if the invention results in a useful result.
In order to determine whether a given invention is novel, its inventor must make a comparison of his or her claim to the prior art. Prior art is anything that has been publicly disclosed, published, used, or otherwise obtained. It can be a document, a software application, or an idea. The exception to the prior art rule is if the applicant can show that the matter has been taken without the applicant’s consent or was used commercially in another country.
Non-Obviousness
According to 35 USC Section 103, even if the prior art does not identically disclose or describe the invention, a patent cannot be granted on the invention if the differences between the invention and the prior art are such that the invention as a whole would have been obvious to the person of ordinary skill in the pertinent art at the pertinent time.
As is common practice at the USPTO, your software patent application will likely be rejected as being obvious or unpatentable over 2-4 patents and/or publications. The examiner will reconstruct your invention by selectively picking paragraphs from two or more references in the same field, with logic such as “one skilled in the art would have combined the references to achieve the same advantages recited in the application…”
In response, you can argue how the combination would be inoperative if made as suggested by the examiner, or how the combination would still be missing elements in the claims. You can even also argue that the examiner is improperly reconstructing the invention with the cited references after reading the teachings of the patent application.
The court will consider the objective evidence, such as the commercial success of an invention, satisfaction of a long-felt need in the industry, and skepticism of the prior art. These factors, however, do not have the same persuasive power as the prior art itself.
The first test used by the patent examiner to determine whether an invention is obvious is the difference between an existing piece of prior art. Using a prior art reference to assess whether an invention is novel is to determine whether it would have been obvious if it were known to the public. The relevant case law is used to help determine the obviousness of a patent in light of prior art. The Court also looks at the level of ordinary skill possessed by the public at the time of filing the application.
There are many ways to prove your invention is not obvious. In the USPTO, one of the main criteria for determining whether your invention is obvious is whether it would be known to a person of ordinary skill in the relevant field. This requirement is not easy to prove, but further reading can help you learn when your invention is obvious. This article will discuss the three main ways to prove your invention is not obvious.
Expert evidence is more difficult to provide when challenging the patentability of a software invention. The Federal Court discourages this practice and asks for a statement regarding the ‘inventive step’ that is involved in the invention. The court uses this statement to determine whether an invention is obvious. To do so, the court first constructs a hypothetical addressee with appropriate prior art and common knowledge. Using this hypothetical addressee is a key method to demonstrate novelty and inventive step.
Another way to prove non-obviousness is to show how an idea would have been known to a skilled artisan. The non-obviousness test is a judgment call and requires a reasonable person to have some knowledge of the prior art. A simple example of this would be sodium chloride, which is widely used and is often interchangeable with potassium chloride. A chemist working on improving road salt would consider the substitution obvious. Thus, a formula that simply substitutes potassium chloride for sodium chloride would not be patentable.
In patent cases, the obviousness inquiry asks whether the combination is trivial or requires a high level of inventiveness. This inquiry is fact specific and not subject to per se rules. In many cases, a patent infringement defendant or challenger can present evidence that the combination was obvious to the average person. Moreover, the patent application text must be able to demonstrate that it is novel, useful, and beyond the scope of the ordinary knowledge of the art in question.
Inventive Step
At the European Patent Office (EPO), patentability revolves around its inventive step requirement, which is intended to prevent exclusive rights forming barriers to normal and routine development. An invention is considered to involve an inventive step if it would not have been obvious to a person skilled in the art at the filing date.
The EPO developed a specialized process for assessing inventive step of computer-implemented inventions. This method is often referred to as the “problem-solution approach” or “software patent”. A software patent’s inventive step is assessed using the Problem-Solution approach, a method based on the distinction between non-technical and technical features. It also adds a step for assessing unexpected technical effects. The Problem-Solution approach requires a more rigorous distinction in CII than it does in other sectors. But, if the claim is technically novel and inventive, it will most likely be eligible for a patent.
According to this approach, software must solve or produce a technical effect. In other words, a software patent cannot be granted if some part of the software is not capable of producing a technical effect or solving a technical problem. The EPO will disregard any part of the software that does not contribute to this effect.
Conclusion
A software patent protects certain features from being cloned by competitors and the patent protection/roadblocks gives a startup valuable time to achieve business growth unfettered by the competition. Features of a software program that are patented include algorithms, systems, and user interfaces. Some examples of patented features include language translation methods and program algorithms. Computer software is basically a collection of instructions for computer systems. It generally consists of source code, data, and programs. A software patent application must have at least these three elements: Patent-Eligibility, Non-obviousness, and Novelty.
While patenting your software is not easy, there are several benefits to licensing it to other companies. A software patent will give you leverage when you negotiate licensing deals. This can be a lucrative source of revenue for your business, and if you’re able to sell it at a price that is comparable to that of competitors, a software license can help you keep your patent protection intact. Further, software licenses are often much more cost-effective than outright sales.
According to Forbes, about 70% to 80% (or more) of a company’s market capitalization is made up of intangible assets. These include patents, trademarks and other business knowledge and expertise. Companies, from startups to Fortune 500 companies, must prepare for patents as they move from a legal function to one of strategic management.
