This series of articles explores the effect of COVID-19-related disruption on start-ups’ management and monetisation of intellectual property (IP), giving practical guidance to start-ups to improve and preserve their position for the future.
- Part one of our series focuses on strategic considerations for managing patents during this unprecedented time
- Part two outlines strategies start-ups can use now to manage trade marks in the face of COVID-related disruption
- Part three discusses commercial best practices to clarify ownership of IP
- Part five looks at managing know-how and trade secrets
Many start-ups are underpinned by software innovation, whether or not they are expressly a tech start-up. Even in the current disruption, software innovation continues at pace, with typical software development workflows able to continue despite lockdown measures in a way that may not be possible in sectors that rely on labs or workshops. Of course, the disruption can also provide opportunities for innovation itself, for example in terms of increased interest in remote-working and collaboration software .
What’s stayed the same?
In this post-COVID world, the pragmatic approach to protecting software innovation arguably is being affected, however, the devices and methods of protection have of course not changed. There are two main IP rights that can protect software inventions: copyright and patents.
Copyright protects source code of software, which is treated by copyright law along the same lines as a work of literature. Copyright infringement occurs where a substantial part of the source code is copied from the original source code.
The protection provided by copyright is relatively narrow, as copyright protects the code itself, not its underlying functionality. A program delivering the same functionality along the same underlying principles, but structured differently, would likely not infringe copyright.
Patents can provide broader protection that abstracts away from the underlying source code and protects the software at a functional level. However, not all types of software inventions are patentable, and the legislation and case law defining what is patentable differs among jurisdictions.
Whilst this might paint a complicated picture, the patentability of an invention generally turns on the underlying problem that the software addresses, and whether that problem is a “technical” or business consideration.
The following are some rough guidelines that may help indicate whether or not a software invention is likely to be patentable:
Interaction with hardware beyond a computer
In most instances, software that controls hardware in order to achieve some improvement in the operation of that hardware will be patentable. This includes methods of controlling devices such as driverless vehicles, 3D printers, Internet-of-Things devices, and so on.
Processing sensor input
Devices that interact with the real world by process sensor input, including images, are likely to have a patentable dimension. Examples include medical image or CCTV image processing, the processing of 3D scanner data, or the processing of sensor data to detect error conditions in the automotive or aeronautical fields.
Software solutions aimed at improved security tend to be patentable. These can be broad (e.g. a new cryptographic technique), or application-specific (a new way of verifying a user, or establishing that a printer cartridge is genuine).
Disk storage, compression, network traffic
Similarly, inventions that clearly relate to improved resource utilisation, such as disc storage structures, compression techniques and codecs, network routing and cloud computing infrastructure are likely to be patentable.
Accountancy and finance software, and ways of organising people
Whilst cutting-edge finance platforms may include patentable aspects, in general, software that implements a business method, a financial transaction or operation (e.g. generating a cost estimate), or relates to organising people (e.g. teaching or coordinating social activities) will be difficult to patent.
It is helpful to consider the role of the software developer in the invention. If the problem the invention addresses was solved by the input of a salesperson, marketing executive, finance manager or accountant, and the developer simply implements the software to carry out that solution, the invention is unlikely to be patentable. If, on the other hand, the invention arose from a technical difficulty with the software and could not have been solved by a business person without technical skills, it may indicate a patentable development.
Websites and other user interfaces
Typically, a new website or other user interface will not be patentable, if the improvement relates to the aesthetics of the interface.
We hope the above guidance gives you a feel for whether patent protection is likely to be appropriate for your business. Of course, the guidance is not comprehensive, and we are always pleased to assist clients in navigating this complex area of the law.
How should start-ups adjust their approach to patenting software given COVID-19-related disruption?
A tech-savvy workforce that can readily pivot to remote working, limited reliance on physical infrastructure such as labs and workshops for innovation means that software start-ups are some of the businesses best positioned to flourish in the current circumstances. Even so, it is natural to consider prioritising spend in view of the ongoing disruption.
Applying for a patent has inherent risk, because the scope of protection available depends on what is already in the public domain. Even with pre-filing searches and a good knowledge of your sector, something new is often uncovered during the life of the patent application.
The additional hurdle of software patentability, over and above those usual prior art concerns that apply to all inventions, introduces further risk, especially in borderline cases where the inventions involve finance or commerce. In the current climate, focusing the budget on applications that are more clearly patentable may be a way to rationalise expenditure.
It is tempting to release new software products at this time, as millions of people continue to seek hobbies and distractions as well as tools for remote learning and connectivity. However, before releasing it, you should think carefully about the features of your software that make it distinctive in the market. If these features are user-facing, i.e. an ordinary consumer will interact with them, then a patent application must be filed whilst the features are still confidential. If these features are in the background, e.g. features that make your software run faster or more reliably but which cannot be discovered without access to your code, system or architecture, then you may be able to release the software before filing the patent application.
If you are budget-constrained, it can also be useful to think about how long you expect the software you have developed to be used, and whether it will continue to be of interest when the current disruption ends. For example, software that is used to improve the security of transactions or communications will likely be in demand for some years and so may be commercially sensible to patent, but software products that are solving a niche problem or a problem that may only exist during the pandemic may not be worth spending money on right now.