Software has become an increasingly important source of competitive advantage for businesses of all sizes. Technology companies are developing new applications, platforms, and software-based products, while businesses in virtually every industry are creating proprietary software to automate operations, analyze information, improve customer experiences, and solve industry-specific problems.
With the rapid adoption of artificial intelligence, the pace of software innovation is accelerating even further.
Yet businesses do not always recognize that the software they are developing may represent valuable intellectual property. In appropriate circumstances, innovative software functionality, systems, processes, and AI-enabled technologies may be eligible for patent protection.
Here are five questions businesses should consider when evaluating whether their software innovations should be protected.
1. We Built Innovative Software. Should We Be Thinking About Patent Protection?
Potentially, yes.
Your software may be more than simply a product or an internal business tool. The innovative technology behind it may represent a valuable intellectual-property asset.
If your company has developed a new software platform, application, system, process, or functionality, patent protection may help protect the technological innovation underlying that software and make it more difficult for competitors to appropriate the innovation that took your company months—or years—to develop.
And you do not need to be a Silicon Valley technology company to have potentially patentable software.
Businesses in virtually every industry are developing proprietary software to solve problems, automate processes, improve efficiency, analyze information, and create better products and services.
The important first step is recognizing those innovations and considering intellectual-property protection early.
At The Garcia-Zamor Law Firm, we help businesses and entrepreneurs evaluate software innovations, develop patent strategies, and prepare and prosecute software patent applications before the United States Patent and Trademark Office.
If you have developed software that does something new, it may be worth discussing whether patent protection should become part of your overall business and intellectual-property strategy.
You built the innovation. Make sure you are also considering how to protect its value.
2. What Does Our Software Do That Our Competitors’ Software Doesn’t?
This may be one of the most important questions a software company can ask.
Perhaps your developers created a faster way to process data. Maybe they developed a unique workflow, a new way for different systems to communicate, an innovative user interaction, a specialized algorithm, or software that solves an industry problem in a way that was not previously possible.
Those differences can create a competitive advantage.
In appropriate circumstances, the technology underlying that advantage may also be patentable.
A patent can do more than recognize an invention. Patent protection can potentially help a company protect technological advantages that distinguish its products and services from those of competitors. Patent rights can also become valuable business assets as a company grows, seeks investment, enters licensing arrangements, develops strategic relationships, or ultimately considers an acquisition or other transaction.
Businesses should therefore avoid assuming that an innovative feature is simply “part of the software.”
If your software does something genuinely different, the technology responsible for that difference may represent intellectual property worth protecting.
3. Do We Have to Be a Software Company to Have a Patentable Software Invention?
No.
Some of the most interesting software innovations can arise when businesses use technology to solve problems within their own industries.
Manufacturers develop software to improve production.
Healthcare companies create systems to manage information and workflows.
Financial businesses develop new analytical and processing tools.
Retailers build technology to manage customers, inventory, and transactions.
Professional-service companies automate processes that competitors may still perform manually.
And businesses across virtually every industry are now incorporating software and artificial intelligence into their operations in new ways.
A company therefore does not necessarily need to sell software to develop potentially valuable software-related intellectual property.
If your business has created proprietary software, a new technological process, specialized functionality, or an innovative software-based solution to an industry problem, there may be potentially patentable technology hiding inside your day-to-day operations.
That is why companies developing significant proprietary technology should periodically look at their software from an intellectual-property perspective rather than viewing it solely as an operational expense or internal tool.
You don’t need to sell software for your software innovations to have value.
4. Could Our Programmers and Developers Be Creating Patentable Intellectual Property Without Us Realizing It?
Absolutely.
Every day, businesses hire employees, programmers, contractors, and outside development companies to improve their technology.
Those developers may be creating a new customer platform, a better way to process information, an automated workflow, new analytical tools, specialized functionality, AI-enabled features, or proprietary software that makes the entire business operate more efficiently.
But an important question can easily be overlooked:
Is any of that innovation potentially patentable?
Companies do not always think of routine software development as “invention.” As a result, potentially valuable intellectual property may go unidentified and unprotected.
Management should consider creating a process for identifying significant technological developments and periodically asking whether something genuinely new has been created.
There is also a related business-law issue: companies should make sure they actually own the intellectual property being created for them. Appropriate agreements with employees, independent programmers, contractors, and outside software-development companies can be an important part of an overall intellectual-property strategy.
Patent protection is only one piece of protecting software. Ownership, confidentiality, trade-secret protection, development agreements, licensing arrangements, and other contractual protections may also be important.
The first challenge, however, is recognizing when your developers have created something worth protecting.
5. When Should We Consider Patent Protection for New Software?
Ideally, patent strategy should be considered early—often before a new software product or important innovation is publicly launched or disclosed.
When a company is preparing to release new software, management naturally focuses on development, testing, marketing, pricing, customers, and launch logistics.
Patent protection should also be on that pre-launch checklist.
The United States operates under a first-inventor-to-file patent system, making the timing of patent filings important. Public disclosure can also affect patent rights, particularly when a business may eventually want patent protection outside the United States.
For these reasons, waiting until a product has become successful—or until a competitor appears with similar technology—may not be the best time to begin thinking about patent protection.
Businesses developing innovative software should instead consider intellectual-property strategy as part of the development and commercialization process.
That does not necessarily mean that every software innovation should be patented. The appropriate strategy depends upon the technology, the company’s business objectives, the competitive landscape, available alternatives such as trade-secret protection, and numerous other considerations.
But the evaluation should occur early enough that the company still has meaningful choices available.
Protecting the innovation should be part of preparing to bring it to market.
Software Patents Should Be Part of a Broader Business Strategy
For companies developing innovative technology, the larger objective should not simply be obtaining a patent. It should be identifying, protecting, owning, and strategically using the intellectual property that creates value for the business.
That can involve patent protection for software and AI-related inventions, but it may also involve confidentiality and nondisclosure agreements, software-development agreements, intellectual-property ownership provisions, trade-secret protections, licensing arrangements, commercial contracts, and an overall strategy for protecting proprietary technology as the company grows.
At The Garcia-Zamor Law Firm, we work with software developers, entrepreneurs, startups, established businesses, and companies developing proprietary technology to evaluate software innovations and determine how intellectual-property and business-law protections can work together.
If your company has developed innovative software, artificial-intelligence technology, proprietary internal systems, or new software functionality, we would be happy to discuss what you have created and whether patent protection should be part of your strategy.
The technology you are developing today may become one of your company’s most important assets tomorrow.
