Jan Kleffmann
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Cost of Patent Protection – What has to be expected?

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First published 26 August 2020 by Jan Kleffmann - co-author(s): Louis Lagler

Introduction

While patents can provide powerful protection for an invention, the costs involved with obtaining patent protection can be substantial and should therefore not be neglected. In this blog post the expenses which typically have to be expected are summarized on a high level to offer a realistic overview over the lifetime of a patent. It has to be kept in mind, that the provided information is based on our expertise and experience and may therefore be subject to significant variations, depending on the chosen strategy.

What is Patent Protection?

A patent is an Intellectual Property (IP) right granted for an invention. “Invention” in this context relates to a product, a process or an improvement thereof that provides a new way of doing something, or offers a new solution to a technical problem. A patent allows the owner to prevent others from using the protected invention for commercial purposes and to decide who is allowed to produce, sell or import the protected invention in those countries in which a patent is in force. In order to get patent protection, technical information about the invention must be disclosed to the public in a patent application. The protection provided by a patent usually lasts up to 20 years from the filing date of the patent application. After lapse of the patent, the invention becomes public domain and can be used by everyone.

Reasons to apply for a patent…

There are various reasons why you may consider to apply for a patent. Samples thereof are:

  • Protection of an idea/technology solving a technical problem, e.g. in form of an improvement which will be implemented in a product.
  • Avoidance of conflicts with competitors by claiming protection for the idea/technology.
  • Creating assets in form of intellectual property (IP): When selling a company, the intellectual property owned by a company is often one of the most important assets.
  • Tax advantages are possible on income generated from IP rights by utilizing the Swiss patent box.
  • Marketing for customers and potentially investors alike.

While planning an IP strategy the business impact as well as the costs should be well considered in the budget as patents are usually too expensive when there is no equivalent business. In view of business decisions, this blog post aims to provide a brief overview of the typical costs involved with patenting an invention.

What will not be addressed in this blog post - but is at least equally important and should therefore be considered in each IP strategy - is the aspect of Freedom To Operate (FTO): Independent of filing patent applications to protect an invention, it is necessary to avoid collision between the products/processes brought to the marked and existing IP rights of others.

How much does a patent family cost?

As with most questions, there is no definitive black-or-white answer but the truth resides in various shades of grey. There are various factors determining the cost of a patent, as outlined below.

Generally speaking, the costs involved with obtaining and maintaining a patent can be placed into three stages:

  • Stage 1: The costs associated with preparing and filing a patent application.
  • Stage 2: The procedure up to grant.
  • Stage 3: Annual fees for maintaining patent protection.

Realistic examples for the costs of stages 1 and 2, as well as stage 3 are given at the end of this blog.

Stage 1: Laying the basis for the future - Preparing the patent application

It has to be emphasized that the first application lays the foundation for all subsequent proceedings and ultimately the protection. It should therefore be prepared as thoroughly and complete as possible, keeping in mind that, once the first application has been filed, no alterations (additions or deletions) can be made which affect the content of the application and one is limited to what was originally filed. The reason being, that changes made to the application after it is filed, which affect the original disclosure of the application, usually have an impact on the validity or the application date of the underlying patent application.

The expenses for the initial stage (first year):

Attorney’s Efforts and Official Fees – Total approx. costs 5k-15k CHF which include:

  • Discussion of the invention, patent strategy
  • Professional Preparation of Application (Claims, Figures, Description) based on information provided by inventor/applicant
  • Optional: Prior art search re. patentability of invention (plus 1k-3k CHF)

Comment: A patent application for a mechanical invention usually requires less effort to prepare than, for example, an invention in the fields of biology or chemistry. Additionally, within the respective areas, some inventions are more complex and more comprehensive than others, which typically translates into increased attorney fees as more time is require for different stages of patent prosecution, including drafting of the application. It also matters whether the aim of the application is to lay the base for a whole product family or if only a small improvement shall be protected. Efforts for protecting a new technology are usually significantly higher compared to those which occur when an improvement shall be protected.

Stage 2: Procedure up to grant – Shaping the claims…

The scope of protection is defined by the claims which are the most important part of a patent. Whether a patent with strong and therefore valuable patent claims is obtain or not depends on the results of the examination procedure. Depending on the strategy, the examination procedure typically lasts 3-5 years (it may be accelerated if necessary) and is based on and limited to what was originally filed (see stage 1 above).

During the prosecution of the patent application(s) costs mainly incur from one or several office actions which are dispatched by the patent examiner of the respective patent offices on a national/regional level. In order to achieve the best outcome in view of a strong patent it is necessary to:

  • Analyze documents of prior art cited and the arguments brought forward by the examiner in the office action
  • Discuss options and define the strategy with the applicant
  • Prepare and file a reply to the office action
  • If necessary, conduct a telephone interview with the patent examiner(s)

The costs are greatly influenced by the following two factors:

Number of Office Actions/Timing: Usually 1-4 office actions are necessary until the patent application is granted or rejected. More difficult examination procedures require more office actions which lead to greater overall costs. Interesting information regarding the grant rate of a specific US-examiner can be retrieved here. After a reply to an office action has been filed it usually takes several months to more than a year until the next office action is received.

To be on the safe side, an average amount of 1k-3k CHF per office action should be taken into account.

Geographic Scope: The more jurisdictions are selected to seek patent protection in, (i.e. how many countries) the more costs will incur, as the official fees, as well as costs for local representatives and translations etc. must be taken into account.

After grant: It is still possible that after grant additional expenses occur, e.g. in the case that some files an opposition against grant of the patent.

Stage 3: Maintenance - Keeping the patent application / patent alive

After the grant of a patent the protection lasts up to 20 years from the application date of the original patent application. Provisional protection exists from the application date although the patent can be actively enforced only after grant of the respective patent.

In order to keep a patent alive in a country, annually occurring renewal fees have to be paid usually form the third and each subsequent year. These expenses vary depending on country and typically the fees increase during the lifetime of a patent. The total for renewals therefore strongly depends on the geographic scope in which patent protection is to be maintained. If the renewal fees are not timely paid for a specific state, the respective patent right lapses.

The following chart provides an overview of the official fees for five exemplary countries, as well as an estimation of the running total costs for the maintenance of the patents in those five countries (all amounts in kCHF) for the years 3 to 20:

Not covered by this blog are the costs for legal disputes. A patent claiming protection for a technology in a field of active competition can become subject of opposition proceedings after grant of the patent, wherein in most jurisdictions each party covers their attorney fees. Enforcing a patent in order to prevent a competitor from using or selling the protected invention may involve substantial costs as well.

Overview costs for an int. patent application and subsequent national patent applications (rounded figures)

  • Up to filing of a priority founding first application: CHF 5-15k CHF for professional preparation and filing fees.
  • Before 12 months after filing of a priority founding patent application: Filing of international patent application 5k CHF (assuming no changes are necessary on the priority founding patent application and the content of the priority founding application can be reused for the international application).
  • Until 18 months after filing commenting search report / forwarding publication of application: appr. 2k CHF
  • 30 months after filing of international application: entry into national phases (for 20 countries appr. 30-50k CHF
  • After grant of the patent(s) annual fees need to be paid continuously in order to maintain the patent (see stage 3 above).

Filing an international patent application according to the PCT and then entering into the national phase thereupon delays the decision in which countries to seek patent protection and the related costs by about 1.5 years compared to a direct filing in the desired jurisdictions. This time is often valuable in bringing a product to market and getting customers feedback in order to make a more informed decision about the desired geographic scope of protection.

The figure below shows a typical timeline, the main steps in the process of getting a patent and the costs involved by example of a Swiss startup protecting a medical device for consumers. The costs arise from attorney fees (solid bars) and third party fees like official fees, local representatives etc. (striped areas).

In the example above the cost of preparing and filing the priority founding application in Switzerland (CH, blue) in 2015 are shown. In 2016 the international application (PC, red) was filed 12 months after the Swiss priority application. After 30 months in 2017 the national phases were initiated in China (CN, green), the US (light blue) and in Europe (EP, violet) causing costs in filing fees in each respective country. Afterwards costs occur for handling of the office actions in process up to the grant of the patents.

In case of any question, please feel free to contact the authors of this blog post or any other patent attorney from our firm via our contact form or at This email address is being protected from spambots. You need JavaScript enabled to view it..

Louis Lagler
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WIPO - Patent Cooperation Treaty (PCT) Yearly Review – 2020

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First published 22 July 2020 by Louis Lagler

The international patent system administered by WIPO is a very beneficial way for those who seek patent protection in multiple countries. By filing an international patent application (PCT-application) the applicant can benefit from the several advantages, e.g.: (a) postpones major costs associated with international patent protection by 18 month; (b) the results from the search and preliminary opinion received during the international stage provides a strong basis for patenting decisions; (c) the PCT-system provides a harmonized base for entry of the national/regional phase after 30 month counted from the earliest priority date.

WIPO was established in 1967. It has its headquarters in Geneva, Switzerland, and is the global forum for intellectual property (IP) services, policy, information and cooperation. WIPO is a self-funding agency of the United Nations, with 193 member states. WIPO’s mission is to lead the development of a balanced and effective international IP system that enables innovation and creativity for the benefit of all. Among others, WIPO administers 26 treaties including the WIPO Convention.

Latest numbers on the International Patent System (PCT-System)

WIPO published on 2020-07-14 the annual PCT-Statics 2020 which reveals interesting information on the PCT-System and the global development in the field of patents for 2019. The report can be downloaded here. It analyses the data which was collected from various IP-Offices around the world.

Key numbers

The key numbers for 2019 are:

PCT national phase entries: 647’700 (+2.6%)
PCT applications filed: 265’800 (+5.2%)
Countries in which PCT applications were filed: 127 (unchanged)

This year's report provides a descriptive analysis of PCT filing activity at a subnational level, based on the location of inventors named in published PCT applications - so called clusters of innovative activity. According to the report, identifying and analyzing clusters of PCT filings allows for a more detailed overview of where the innovations described in PCT applications took place.

The top 50 clusters of innovation

The top 50 clusters can be summarized as follows:

  • Six of the eight largest PCT clusters were in East Asia
  • The top 50 PCT clusters account for almost 58% of all PCT filings
  • Universities are the top applicant for six clusters
  • Almost a third of filings from Shenzhen-Hong Kong-Guangzhou are in digital communication
  • U.S. applicants filed over 10% of applications in one half of all clusters

Top Business Applicants

The report comprises a comprehensive list of applicants. The top 10 Business Applicants are:

Ranking Change in Position Applicant Origin in Published PCT-Applications
        2017 2018 2019
1 0 HUAWEI TECHNOLOGIES CO., LTD China 4024 5405 4411
2 0 MITSUBISHI ELECTRIC CORPORATION Japan 2521 2812 2661
3 2 SAMSUNG ELECTRONICS CO., LTD. Republic of Korea 1757 1997 2334
4 -1 QUALCOMM INCORPORATED U.S. 2163 2404 2127
5 12 GUANG DONG OPPO MOBILE TELECOMMUNICATIONS CORP., LTD China 474 1042 1927
6 1 BOE TECHNOLOGY GROUP CO.,LTD China 1818 1813 1864
7 2 TELEFONAKTIEBOLAGET LM ERICSSON (PUBL) Sweden 1564 1645 1698
8 53 PING AN TECHNOLOGY (SHENZHEN) CO., LTD. China 23 336 1691
9 1 ROBERT BOSCH CORPORATION Germany 1354 1525 1687
10 -2 LG ELECTRONICS INC Republic of Korea 1945 1697 1646
Source: Report, page 33

Some selected statistics

PCT national phase entries for the top 20 origins, 2018:

Trends in PCT national phase entries for the top five origins, 2004–2018

Share of PCT national phase entries in total filings abroad for the top 20 origins, 2018

Top 20 applicants in foreign-oriented patent families using the PCT System, 2014–2016

(All four images were created by WIPO and are licensed under Creative Commons CC BY 3.0 IGO.)

Christian Ebner
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10 mn read - Topics: Patent Law, Start-up Subscribe

The Success Story of a Life Science Startup

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First published 15 July 2020 by Christian Ebner - co-author(s): Andrea Carreira

Swiss startup Inflammex AG developed specific compounds for treating inflammatory diseases. Last year, Inflammex AG was successfully sold in a multi-billion-dollar deal to a globally operating pharmaceutical company.

From a Serendipitous Finding to Starting a Company

The journey of Inflammex started at a local Swiss university, when two PhD students discovered that an accidentally synthesized side product showed a remarkable decrease in secretion of pro-inflammatory cytokines in initial biological studies.

Encouraged by these first results, further studies were directed towards the optimization of the anti-inflammatory behavior of their initial lead compound. After a first library of compounds has been synthesized, tested and confirmed the initially obtained biological profile, the entrepreneurial spirit of the young PhD students was awakened and they decided to found a new business Inflammex to pursue their vision of providing a novel treatment of inflammatory diseases.

Who owns the intellectual property?

From introductory courses in intellectual property, taken by one of the young founders during grad school, it was immediately clear that a patent application must be filed as soon as possible to protect their invention. First however, the question of ownership of the newly developed compounds arose because the promising results as well as the compounds per se have been produced and developed during their PhD studies. As both students were at that time employed by their university, the invention in fact belonged to the university.

Upon contacting the university’s technology transfer, the university assured them that it would assist in filing a patent application and also bear the costs for the first filing. According to the university’s internal policy, ownership would however remain with the university. Nevertheless, Inflammex would be awarded an exclusive license. Inflammex consulted a patent attorney to assist them in closing a license agreement that is fair to both Inflammex and the university. In particular, Inflammex would be in the lead in prosecuting the IP rights, in particular with respect to geographical protection and would have the option to award sublicenses.

Filing of the Patent

At first, Inflammex filed a Swiss priority founding application, which secured the priority date, i.e. the effective date that is relevant for any prior art for the corresponding patent application. A first filing in Switzerland has the advantage that the official filling fee is relatively low (CHF 200) and furthermore, upon request, a highly professional patentability search can be conducted by the experts at the Swiss Institute of Intellectual Property (IPI), which is even subsidized by the state of Switzerland.

This search revealed relevant prior art documents, which served as a basis for specifically amending the subsequent international application that was filed within 12 months of the day of filing the Swiss application. Thus, Inflammex knew already at a relatively early stage and before investing significant amounts of their funding if they had chances of obtaining a valid patent after a substantive examination.

In addition, in order to minimize the risk of running into problems with existing patents by any competitors, Inflammex further instructed their patent attorneys to perform a Freedom-to-Operate (FTO) search. Therein, the patent attorneys screened the prior art for any patents and patent applications that may potentially be infringed by the developed target compounds. Importantly, as patents generally expire 20 years after their filing date, the FTO searched was limited to the last 20-25 years, while the prior art search performed by the IPI considered all prior art documents. At first, the two founders were shocked, because the FTO search indeed revealed a patent with a claim scope that would potentially be infringed by some of their lead compounds. Gratifyingly however, patent protection only existed in Japan and the patent would expire within the next year, i.e. long before any clinical studies would commence and long before any market entry.

After one year an international application was filed based on the Swiss priority application, which provided Inflammex with a patent application that can be pursued in over 150 countries. Moreover, with the international application in hand, Inflammex could take part in startup competitions which did not only raise additional funds, but also brought them respect and reputation in the community. The international application was further important for securing more funding from new investors, which enabled Inflammex to set up novel facilities on its own, to continue its research and enter into collaborations with larger pharmaceutical companies. Ultimately, after 30 months from the first filling in Switzerland, it was decided to pursue patent protection in Europe, the US and China.

Patents as Leverage for Sale Negotiations

At that point in their career the founders knew they would have to decide whether to continue with their company and try to grow and become a bigger player in the pharmaceutical area or whether they would sell their company and return to their primary interest of searching for new treatment possibilities. The significant financial support required for conducting clinical trials, among other factors, ultimately led them to sell Inflammex together with its intellectual property on the developed anti-inflammatory lead compounds. The broad geographic coverage of their intellectual property portfolio covering the major important markets turned out as a major selling point in the sale negotiations with potential buyers.

While one of Inflammex’ founders stayed with the project within the new owner, the other was intrigued by the possibility to enter a different responsibility as a CSO in a newly founded life science startup.

Take Home Message

Founding a startup company requires a lot of courage, dedication and time investment. Especially within small teams, all members are absorbed by various different tasks and projects. However, securing the intellectual property of your startup is crucial not only for preventing your competitors from exploiting your idea, but also for securing funding. Investors want to secure their revenue, which in most cases is only possible if market exclusivity can be guaranteed.

Consulting a patent attorney already at a very early stage of the entrepreneurial journey is strongly advisable. Our startup team at Rentsch Partner AG offers free initial consultation sessions and specific consulting modules tailored to the needs of a young emerging tech startup.

Please feel free to contact us at any time via our contact form or via This email address is being protected from spambots. You need JavaScript enabled to view it.

Philip Kerpen
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6 mn read - Topics: Patent Law, Start-up, SME Subscribe

Patenting Tips for Swiss Startups

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First published 20 February 2020 by Philip Kerpen - co-author(s): Matthias Städeli

In this blog, we answer some common questions and share some tips to get your patent strategy off the ground and help your startup take flight.

Can I get a Patent for my Invention?

Patents are granted for new, non-obvious and useful inventions. Generally speaking, an invention is a technical solution to a technical problem. Business ideas or other abstract ideas, on the other hand, are not regarded as patentable. However, the word invention must be understood broadly - not just inventions as revolutionary as the light-bulb and the transistor are patentable. Small advances to existing technologies form the bulk of granted patents, and every day, thousands of such patents are granted world-wide.

Tip: Think about the technical problem your invention solves and the difficulties you encountered while developing it – this can give you vital clues as to which parts could be patentable and worth protecting.

Tip: Software is also open to patent protection. As software plays an increasing role in many products and services, many companies are making use of the patent system to protect their software innovations. In particular, artificial intelligence has proven to be a technology with many applications. See our blog post for more details: How to Protect your AI Innovations with a Patent: Updated EPO Guidelines

What does a Patent give the Holder?

A patent grants the holder the right to stop others from exercising the patented invention. Though some international harmony exists in how patents are examined and enforced, patents remain national rights and therefore you will need a patent in those jurisdictions in which you wish to protect your invention.

Tip: You don't necessarily need patents in all jurisdictions – often having patents in a few jurisdictions relating to your key markets is enough to secure your invention.

How to Search for Existing Patents

A patent search is best performed before developing or launching a new product and can also be useful for market research. There are several powerful and free search engines available: we recommend Espacenet from the European Patent Office (EPO). Enter your search terms and scan the abstracts and figures to quickly get an idea if the result could be of relevance for your product.

Tip: Be sure to check the applicable jurisdiction of each document, as denoted by the first two letters of the publication, as well as the applicant.

Tip: There can be major differences between what is applied for and what is eventually granted, so remember to check the last two symbols of the publication number. For example, the 'A' publication EP2616147A1 refers to a European patent application published 24 July 2013 relating to an airbag rescue system, while the 'B' publication EP2616147B1 refers to the European patent as granted on 1 January 2019. The greatest differences are usually found in the Claims, which define the scope of protection and are often narrowed during grant proceedings.

The Swiss Patent Office (IGE) also offers an Assisted Patent Search, which is available to innovative SMEs, startups, individual inventors, and public research institutes. For CHF 300 (current fee) you can sit together with a professional from the IGE performs and conduct an initial basic search on your invention to get an impression of the state of the art. It takes half a day and at the end you will have a list of results and a basis for next steps.

Tip: For a more comprehensive patent search or to discuss and evaluate the results of your search, we recommend contacting a patent lawyer with expertise in your field of technology.

What to Disclose When

The patentability of your invention has to do with whether it is new, non-obvious and useful. The requirement of novelty is paramount, and the prior art search will give you an idea of whether your invention has already been publicly disclosed.

It is vital to remember that public disclosure also relates to what you yourself tell others about your invention, for example what you tell potential investors or customers, what you present at conferences or conventions, and what you publish on the internet.

Tip: Keep as much of your invention to yourself as possible until you have filed your first application. If you must talk about your invention, we suggest talking about it only in general terms and/or having NDAs signed by all participants.

Freedom to Operate

Whether your invention may infringe patents of third parties is also worth clarifying before you launch your product and is best done by a patent lawyer. A comprehensive freedom-to-operate search and opinion can be very time-consuming and costly to perform, however, given the large number of granted patents in existence, so a compromise may have to be made.

Tip: For startups a cost-effective and pragmatic approach can be best: focus on the granted patents your competitors hold and keep an eye on their pending patent applications.

Where should I File first?

Filing a first application for your invention at the Swiss Patent Office is a good idea, regardless of where you will eventually want to seek patent protection. The official fees are low and if you choose to have a search performed you will receive a good quality search report often within months of filing, depending on the type of search you choose.

This first application is a so-called priority founding application and within twelve months of the filing date you can file subsequent applications for the same invention in other countries. Making use of the international Patent Cooperation Treaty (PCT) or filing a European patent application with the EPO is recommended to streamline your subsequent applications. The twelve months also gives you breathing room so you can take into account tweaks to your invention and also strategically file subsequent patent applications.

Tip: To save costs with a subsequent European patent application, make sure to apply for an International-Type search with your first Swiss application. This is carried out by the EPO on behalf of the Swiss Patent Office, and when you file your subsequent European patent application, the search report will be recognized and the search fee can be partially refunded.

Are you interested in an exchange with other startup companies? Register for our next Start-up Stories Night with focus on Artificial Intelligence on 19 August 2020 here.

Philip Kerpen
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7 mn read - Topics: Patent Law, IT law, Software, Artificial Intelligence Subscribe

How to Protect your AI Innovations with a Patent: Updated EPO Guidelines

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First published 19 October 2019 by Philip Kerpen - co-author(s): Dany Vogel

Software has become ubiquitous: it has reached almost all areas of industry and commerce. Artificial intelligence and machine learning in particular are game-changers – fueled by more data and faster hardware they show no signs of slowing down. Ever increasingly it is the software component of products and services which plays the decisive role in determining their success. In fact, a strong integration of software into your products can end up changing your business model.

The purpose of this blog post is to go through the part of the updated Guidelines of the European Patent Office (EPO) which relate to artificial intelligence and machine learning. The updated Guidelines will come into effect on the 1 November 2019 and they will be used by the EPO during the examination of patent applications. It is also our aim to bring across the basics of patenting AI inventions with some practical tips and strategies.

"The New Electricity"

"Just as electricity transformed almost everything 100 years ago, today I actually have a hard time thinking of an industry that I don’t think AI will transform in the next several years,"Andrew Ng, one of the foremost experts on AI.

Artificial intelligence (AI) and machine learning (ML) are here to stay. Besting humans in complex games such as Go and Poker was just the beginning. Today, companies in fields as diverse as life and medical sciences, telecommunications, energy management, security, and manufacturing are seeing the benefits that artificial intelligence and machine learning can bring. This impact is reflected both in the number of scientific publications in the field (over 1.6 million and counting) and also in the number of patent filings (nearly 340'000 worldwide to date). The pace shows no signs of slowing down: patent filings in deep learning (an area of AI) experienced an average annual growth rate of 175% between 2013 and 2016. Computer vision, biometrics, natural language and speech processing, robotics, and predictive analytics are some of the technological areas which have seen the largest number of patent filings. WIPO Technology Trends 2019: Artificial Intelligence

Is AI not an unpatentable abstract mathematical idea?

The abstract mathematical nature of the computational methods and algorithms behind artificial intelligence and machine learning does not preclude them from patentability in Europe altogether. Although the computational methods and the algorithms taken by themselves are abstract mathematical ideas and therefore cannot be patented according to European patent law, technical solutions to technical problems are patentable. Therefore, if the AI component (e.g. a neural network) of an invention is directed towards achieving a technical effect, it can make a technical contribution and make the patent allowable.

In light of this, the EPO has specifically mentioned artificial intelligence and machine learning in their updated guidelines for examination of patent applications. The updated guidelines confirm that the EPO is treating artificial intelligence and machine learning in line with the settled case law and general practice of the EPO regarding software patents, which is permissive to patents on software directed towards achieving a technical effect.

What needs to be considered when assessing an AI invention?

To help clarify whether the AI technology your company has developed may be susceptible to patentability, we recommend asking: what does the AI do or enable? It may be that the AI component is able to make sense of data in a novel way, for example finding previously hidden correlations and relationships, or it may be that the AI component provides better robustness or accuracy than previous methods. It may also be that the AI component increases the speed of a calculation and therefore achieves computational efficiency, or that it allows a calculation to be carried out on a piece of low-power hardware such as an IoT device or a smartphone.

It is also important to understand what kind of data is used and produced by the AI: what data is input into the AI and what is the data output? If the input data is of a technical nature, such as physical quantities (i.e. measurable by a device, such as temperature, noise, position), then it is more likely that the AI-component makes a technical contribution and the invention could be susceptible to patentability. Likewise, if the output of the AI-component is used to achieve a technical effect beyond the normal interaction that occurs between software and the processor, then chances are good that the invention could be patentable. If neither of these is the case, then the invention needs to be looked at more closely, as it is often the subtleties of a particular invention that become decisive.

How does this work in practice?

In this section, we provide more patent specific details and recommendations regarding European patent practice.

In general, an AI invention can be placed in one of the following three categories:

  • AI algorithms as such: these are currently not patentable as they are not considered inventions under Art. 52 EPC. For example, this could apply when a patent is sought for an AI algorithm on its own - separate from any technical context.
  • Generic trained models: a generic trained model which can be applied to many technical problems may be difficult to patent – providing sufficient comparative examples and parameter ranges may be needed. For example, if an AI invention is capable of both detecting anomalies in MRI images and determining the wear of truck tires, we would recommend providing sufficient detail for both cases – or filing separate patent applications, each directed to one particular technical problem (and application).
  • AI applied to a particular technical problem – here the AI component is typically part of an encompassing claim which is directed towards a concrete technical problem, and therefore is patent eligible.

Read the whole EPO Conference Summary: Patenting Artificial Intelligence.

When filing AI patent applications, we recommend including in the specification as much information as possible regarding the technical effect produced or enabled by the AI component. Further, defining the AI component (e.g. by specifying its data input/output and network architecture) is recommended for purposes of sufficient disclosure and clarity. Jargon should be avoided, for example even if a new type of neural network or layer has a name that has been established in a number of scientific publications, it is advantageous to define exactly what is meant.

The claims of the patent application define the subject-matter for which protection is sought. Broad claim types include method and device. For AI inventions we recommend claiming both the method itself, as carried out by a computerised device (defining a step-by-step process of how the invention is carried out), as well as the computerised device itself, configured to implement the method. Further, the steps of generating the training set and training the AI component may also contribute to the technical character and can also be claimed.

How do I protect my AI invention worldwide?

The realities of a globalised world demand that patent protection is sought in multiple countries, depending on which your most important markets are and where your competitors are located. As different national patent offices have slightly different criteria when assessing patent applications, it is vital to select the right national patent office for filing your first application. A good option here is the EPO, as applications which satisfy the European requirements are usually unproblematic when it comes to subsequent filings, for example in the US. In our experience, the converse is not always the case as the US drafting style, in particular regarding software inventions, can lead to objections when it comes to a subsequent European filing.

Within one year of filing the first application, subsequent applications can be filed in other jurisdictions for the same invention. If the number of jurisdictions sought is high, it can make sense to file an international PCT application (Patent Cooperation Treaty), which also has the advantage of giving the applicant another 18 months to decide in which jurisdictions to ultimately file subsequent applications.

Conclusion

The EPO has recognised the importance of artificial intelligence and machine learning in inventions and its updated guidelines underscore that inventions based on artificial intelligence and machine learning will be examined in the manner established for other software inventions. If your company uses, or intends to use, AI in its products or services, we suggest assessing how to best protect and generate value from this intellectual property.

Matthias Städeli
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4 mn read - Topics: Patent Law, Patent box Subscribe

Introduction of the Patent Box in Switzerland

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First published 20 May 2019 by Matthias Städeli - co-author(s): Alfred Köpf

On 19 May 2019, the Swiss electorate voted in favour of implementing the Swiss patent box. Tax advantages on income generated from intellectual property rights will become a valuable tool for companies in Switzerland to promote research and development activities and to generate added value in these areas.

In future, the Swiss patent box will make it possible to tax part of the profits from inventions at a reduced rate. Additionally, cantons will have the option of providing an additional deduction of up to 50% of R&D expenditure.

Which companies benefit from the Swiss patent box?

All companies that conduct research and development in Switzerland and generate patentable technology may benefit from the patent box. The legal ownership of a patent is not important, the decisive factor is the economic ownership (i.e. who has borne the costs of the innovation).

Which IP rights qualify for the Swiss patent box?

Under the new Swiss law, the following IP rights are eligible for the patent box:

  • Swiss and foreign patents
  • Comparable Swiss and foreign rights as supplementary protection certificates, topographies, plant varieties, as well as documents protected under therapeutic products law and designations protected under agricultural law

Product patents as well as method patents qualify for the patent box.

What is your next step?

It is worthwhile for all companies with scientific and technological developments to review their patent strategy from an intellectual property and tax point of view, allowing them to benefit from the advantages of the patent box. An optimal tax advantage is achieved by a combination of competences in tax and patent law.

For further questions, please contact patent box experts Matthias Städeli or Alfred Köpf, RENTSCH PARTNER.

The cooperation between FRORIEP and RENTSCH PARTNER stands for agility, innovation and an interdisciplinary powerhouse in the field of technology and commercial law.

Gregor Wild
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6 mn read - Topics: Trademark Law, IT law Subscribe

Trademark Protection for Blockchain?

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First published 22 May 2018 by Gregor Wild

It lies in the nature of the blockchain technology that the control and securing of blockchain transactions have a non-proprietary character. The decentralisation of the system shall furthermore guarantee the stability and consistency of this decentralised trust “sphere”. Starting with this characterisation, it seems at first sight to be paradox to openly think about the question, whether trademark rights could play a valuable role in the “blockchain community".

However, as commonly used terms, such as “software”, “Internet”, “social media” or “crowd funding” and the like, generically describe specific methods, technologies or systems, they are public domain and thus free for anyone, without the possibility of monopolisation through trademarks.

This said, we have to distinguish between the term (“trademark”) for a technology or method being public domain, on the one hand, and specific products or services that are developed based on this technology or method, on the other hand. But we must also be aware of the fact that there is a space between technology or method per se and the final product. As many Internet services and applications, e.g. search engines, social media platforms or media streaming, rely on specific (standardised) protocol layers, applications and cryptographic solutions have been developed likewise on the basis of existing blockchain technologies and platforms. Keeping in mind that trademark rights provide an instrument for legal protection of investment, there is no reason why a developer and creator of a specific blockchain solution should be forced to tolerate that a third party is using the same or a confusingly similar name (trademark) for its product. If this would be the case, the third party could profit from the quality reputation and goodwill built and established by the “first mover”. At first sight it is obvious that trademark protection can be obtained for blockchain based products (goods or services) by opting for the accurate class within the Nice classification system – for example: software (class 9), data compilation (class 35), financial transactions (class 36), design and development of a new technology for others (class 42), software as a service (SaaS) (class 42) or licensing of technology (class 45).

Nevertheless, we may also think about alternative options for trademark protection for blockchain brands which are more agreeable with the “open access”-spirit of the blockchain community. Given that the trademark owner wants to have his technology and brand used by as many users as possible, it could make sense to revitalise the institute of a guarantee mark (certification mark or label). Likewise, such certification mark could ensure the protection of a label for standards describing the functions and events that a token contract has to implement (eg. ERC20). A certification mark is used by several users under the supervision of the proprietor of the mark, which serves to guarantee characteristics common to goods or services provided by such users. As a specific trademark type the guarantee mark is acknowledged by the European and the Swiss Legislation (Art. 83 EU Trademark Regulation and Art. 21 Swiss Trademark Act).

We believe that registration and protection of a guarantee mark (label) would combine the interest in a wide market penetration of a technology, on the one hand, with the interest in a good and fair control of reputation and goodwill of blockchain driven products, on the other hand.

Demian Stauber
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10 mn read - Topics: Copyright Law, IT law, Software Subscribe

Spotlight on Copyright Issues of Blockchain Technology

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First published 21 September 2017 by Demian Stauber

With the growing universe of blockchain based systems and applications, legal questions associated with this technology emerge and require consideration (ideally) before substantial sums are invested. In this blog series related to blockchain, we have covered a number of legal aspects (such as Starting an Initial Token Offering (ITO, also called Initial Coin Offering or ICO) - Things to consider and Blockchain for Patents - Patents for Blockchain) already.

This blogpost is about copyright in the blockchain environment.

Traditionally, copyright protects works of authorship, such as literary or musical works, from unauthorised reproduction (copying, alteration etc.).

Now how is this possibly relevant in the context of blockchains? The answer is: software code.

Many countries’ copyright laws protect software code (source and object code) against unauthorised reproduction or alteration. This and possible patents are the reason why you have to accept a license agreement any time you install an app on your mobile phone or a new software on your computer. By this license, the copyright owner grants you the right to use the software in a way that would otherwise be prohibited by copyright law (e.g. installing the software amounts to copying).

Technical and Legal Considerations

Since blockchains (distributed ledgers) and related applications come in a wide variety of implementations, we will only address a few main principles here. Different "pieces" of software can be identified such as

  • the blockchain software (implementing the blockchain, such as Bitcoin or Ethereum core)
  • Middleware
  • Applications integrating with / using the blockchain
  • Smart contracts deployed on a blockchain

Since it is the very purpose of blockchains to be computed on a network of different computers, copying the core and all code contained in the blockchain is system-immanent. Moreover, many blockchain projects live from contributions by "the community". Now, what rules govern the use, alteration or copying of such software?

Most public known blockchain projects are open source projects. Open source means that software is licensed under distribution terms that comply with certain criteria (such as access to source code, free redistribution, permission to make modifications and derivative works, no discrimination rules etc., see e.g. the widely used Open Source Definition of the Open Source Initiative).

There is a large number of different open source licenses with significantly different terms (some prominent licenses used for blockchain projects are GNU General Public License, GNU Lesser General Public License [LGPL], Apache License 2.0, MIT license). These licenses impact the way of how the software proliferated under the license may be used, modified and redistributed. Particular attention needs to be paid to the redistribution rights and obligations because several open source licenses require that software or at least the derivative part of the software incorporating the open source software is redistributed again under the same open source terms (“copy-left”, GNU and LGPL).

An example of a basic conflict is reported in an article on the website of ETH News. In essence, Hyperledger "considered hosting projects that would be designed to connect to the ETH chain as a client or be built on top of the Ethereum platform. They attempted to solidify this collaboration by incorporating Ethereum C++ (cpp-ethereum) into Hyperledger but to do so, the C++ iteration would first have to be relicensed before being absorbed." The main reason for this incompatibility was different open source licenses with conflicting terms: Ethereum C++ was licensed under GPL-3, while Hyperledger uses Apache 2.0, which would have required a relicensing of the Ethereum C++ client to the Apache 2.0 license.

The example above also demonstrates that changing a license to another license may become burdensome if not impossible, since this requires consent of the contributors and the number of contributors to blockchain projects can be significant (and contributions can be made under an alias; see the article in the International Business Times).

Surprisingly, though, finding easily accessible and reliable information (other than in the code) about the licensing terms of prominent blockchain projects is a rather cumbersome task. However, it is key to make a proper investigation before starting an own project to avoid unpleasant surprises.

Dany Vogel
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5 mn read - Topics: Patent Law, IT law, Software Subscribe

Blockchain for Patents - Patents for Blockchain

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First published 12 September 2017 by Dany Vogel

Much has been written and discussed about how blockchain technology would bring about fundamental changes to the financial industry which could actually threaten the very existence of banks as intermediary trust centers. At the latest after the major central banks met about a year ago in Washington at a three-day event, hosted by the World Bank, the International Monetary Fund and the US Federal Reserve, to discuss blockchain and crypto currencies, it probably dawned on a wider public that the hype around blockchain must be more than just that.

In a recent in-depth analysis report, the European Parliamentary Research Service investigated how blockchain technology could change our lives. Indeed, blockchain has potential for application way beyond Fintech - so the current hype may actually be understated.

Blockchain for Patents

While the Internet provides a global network for sharing and communicating information, blockchain will use this network for managing and transferring value and assets in a distributed trust system. The European Parliament's in-house research department and think tank identified digital contents and rights management, the electoral system, supply chains, and smart contracts as fields of blockchain applications beyond the current crypto currency developments. What is of interest here is that, aside from its potential impact on public services in general, the report pointed out that blockchain could help the patent system. While it has been suggested that blockchain could substitute or even abolish the patent system, the report acknowledged that blockchain makes it possible for an innovator to record content, such as a description of an invention, and to proof later the time of recording and the content recorded, without having to reveal the content in the meantime. The report agreed that blockchain could reduce inefficiencies in the registration process across several national patent systems, but found that blockchain did not lend itself to promoting innovation, as it does not provide for publication and cannot assess novelty and other patentability requirements, as patent examiners do. Nevertheless, as the number of patent applications continues to increase, so will the demand for a more efficient patent system. In a system where novelty and inventive step of patent applications are examined only per request and as needed, blockchain could very well be the basis for a global registration system for innovation. The addition of an automatic and verifiable content publishing system and an automatic payment system for filing and annuity fees would be relatively straightforward. At least from a technical perspective, blockchain must be considered an efficient alternative or addition to the present patent system.

Patents for Blockchain

The application of blockchain is and will not be limited to the financial and legal sectors. With the advent of Internet of Things and cloud-based data processing and their propagation to virtually all kinds of technologies and industries comes a need for logging and registering events and values with critical requirements of reliability, security, and verifiability, qualities which are inherent to blockchain. The application of blockchain in technical fields will spur innovation and with it patent applications. The current numbers of published patent applications related to blockchain are still low, worldwide in the range of about two hundred patent families, primarily from the financial sector. Although there is a blind spot of a year and a half, because patent applications are published as late as eighteen months after their filing, it is evident that the numbers are growing rapidly. In just the last three months, the number of published US patent applications increased from 123 to 225. Worldwide, this rapid growth is indicated by an increase of patent families from 175 to 250, with published patent applications growing from 284 to 425 in the same short period. This tremendous activity is further evidenced by the appearance of new applicants, with top ranking numbers of applications, and a broadening of relevant fields from finances to information and communications technology.

But can blockchain related innovations be patented and is it worth it? In general, at the onset of new technological fields, the claims can be staked broader than in mature fields, where innovation is typically directed to small improvements. So yes, in that sense it could very well be worth it.

But what can be patented? In essence, blockchain related innovations are software inventions and the same rules apply, i.e. the same laws and case law, as for any other computer-implemented inventions. The European Patent Office, for example, requires that a claimed invention provide a solution to a technical problem in order to be patentable. According to the case law in the United States, a claimed invention is only eligible to a patent, if it is directed to significantly more than an abstract idea. Provided it is new and non-obvious, a specific technical application of blockchain will be amenable to patent protection in most jurisdictions.