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With rise in AI, patent filings are rising too

Let us dive back in the past two months, a time when the new year was upon us, we were looking for opportunities, studying various trends in business sectors, discussing the possibilities of what the new year would likely be. Forbes, in its story, declared 2022 as the year where AI took the center stage. It was not the first MCU movie which unlocked our minds to the potential of AI and ML. AI technology has always been in our conscience. But like in movies, the scope of AI isn’t just limited to bad or evil, the business sector, be it manufacturing, legal or any other service sector, has found this technology’s presence truly prominent. With solutions such as personal shopping, search engines, voice assistants, maps, facial recognitions, and much more, AI has truly bagged the center of our attraction.

The first AI development was introduced in January 2021, Open-AI introduced the first beta of Dall.E a revolutionary image-making consumer product with a trained algorithm that can translate text prompts into beautiful images and art. Further, in 2022, DALL.E 2 entered into a beta phase with invitations sent to 1 million waitlisted individuals; users can generate a certain number of images for free every month and may purchase more.

Then again, another AI app was introduced by Open.AI, called the ChatGPT, an AI-based text generator. ChatGPT is a variant of the GPT language model, which has been fine-tuned for the task of generating human-like text in a conversational context. The app uses a combination of machine learning techniques, including deep learning and unsupervised learning, to generate texts which are coherent and flows naturally. Moreover, the app is so finely trained on a large dataset of conversation transcripts, the dataset is used to learn the patterns and structures of human conversation, and the model is then able to generate text that is coherent and follows these patterns.

Now that AI has everyone’s attention, another thing which everyone is waiting for, is to observe where it will take us from here on. Through our article today, we will be discussing the latest patent trends in the AI industry in 2023.

Firstly, let us discuss the different IP tools which can protect AI.

PATENTS - the Cambridge dictionary defines a patent as an official legal right to make or sell an invention for a particular number of years. These are legal rights granted to investors, excluding others from making, using, selling and importing an invention for a certain period. If we consider the Indian scenario, AI-related inventions are examined based on the subject matter exclusions defined in Section 3(K), of the Indian Patents Act, 1970, which proscribes patentability of “mathematical methods, business methods, computer programs per se, and algorithms.” In India, AI-based inventions that are novel, non-obvious, and useful are patentable in India.

If we consider the U.S. environment, the U.S. Patent Act, defines an inventor as “the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.” While the Patent Act does not define an “individual,” in 2012, a Supreme Court decision held, in relation to text associated with a different statute, that an “individual” is ordinarily understood to be a human being. Hence, it was concluded that in passing the Patent Act, “Congress has determined that only a natural person can be an inventor, so AI cannot be.”

TRADE SECRETS - one can generally define trade secret as a technique or a secret device used by companies in manufacturing its products. These are basically confidential information which gives owner an economic advantage over competitors. Trade secrets may include information such as business plans, financial data, customer lists and other technical data. In India, trade secrets are protected under the Indian Contract Act, 1872. Since AI based inventions often involve proprietary data in the form of data sets, trade secret protection can be used to prevent others from using or disclosing that data.

Further, in other countries, such as the EU, trade secrets are protected under the Directive on the Protection of Trade Secrets, which was adopted on 27th May 2016. The goal of the directive is to harmonize the definition of trade secrets in accordance with existing international standards, and the means of obtaining protection of trade secrets within the EU.

TRADEMARKS and COPYRIGHTS - in simple words, trademarks are special symbol, design or name that a company puts on its products and that cannot be used by any other company. In India, trademarks are protected under the Trademarks Act, 1999. Any company can get a trademark registration which would help it to get the statutory right to the mark and would enable it to defend its brand against unauthorized use and other misappropriation including as a domain name. under this section, it is important to note that AI per se cannot be protected through trademarks, the branding used for marketing the AI including any logos and slogans can be registered and protected as trademarks.

Further, copyright is a type of intellectual property that protects original works of authorship as soon as an author fixes the work in a tangible form of an expression. The literary works included under copyright also consists of programs and software. Hence, codes used in AI programs are considered to be eligible for copyright protection. In India, these are protected under the Copyright Act, 1957.

Moving on to our next segment, the prime challenge which every patent filer in the AI domain faces is related to the classification of the true and the first inventor, i.e., who will be classified as the inventor of any product or process invented by AI?

As of now, most countries are facing a legal quandary regarding this subject. According to the United States Patent & Trademark Office (USPTO), the U.S. Patent Act defines an inventor as “the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.” While the Patent Act does not define an “individual,” the Federal Circuit cited a 2012 Supreme Court decision that held, in relation to text associated with a different statute, that an “individual” is ordinarily understood to be a human being. Hence, it was further concluded that in passing the Patent Act, “Congress has determined that only a natural person can be an inventor, so AI cannot be.” Apart from this, even the European Patent Office (EPO), has clarified that in order to be an inventor, a person must be a ‘natural person’. Therefore, an AI system cannot be designated as an inventor.

But the same isn’t the case at every place. The Australian patent system in its initial years in this regard, took a favourable decision for considering AI machine as an inventor, which was later turned down by the nation’s federal court. Further, in July 2021, in South Africa, the Companies and Intellectual Properties Commission (CIPC) granted a patent listing the inventor as DABUS. However, as reported in August 2022, South Africa differs from the other jurisdictions, and that it does not have what is known as a “substantive patent examination system” through which the government evaluates the merits of a patent application before granting a patent. Rather, as Meshandren Naidoo and Christian E. Mammen noted in Patently-O, in South Africa “all that is required in a formal examination (also known as a registration-based system) is for the application forms and fees to be in order with the specification documents attached. If these affairs are in order, the patent will summarily be granted by the CIPC.”

Over the past years, there has been an increase of almost 7 times in AI-focused patent filings. If we focus at this growth sector-wise, we can take example of the healthcare sector. The sector witnessed a major transformation, especially during the COVID-19, there was 2.5 times increase in patent filings between 2020-22. To state the reason for the same, we can certainly say that the pandemic pushed countries to collaborate, making them share data and other information so as to collectively solve a major health crisis. In addition to this, change in consumer demand, increase in investments in the healthcare sector, and the high demand for medical and diagnostic solutions played a major role in encouraging AI-focused innovations, thus increased patent filings.

Moving down the list, the image processing domain comes second in terms of patent filings, followed by the ed-tech, automobile and IoT. Speaking about the image processing domain, the sector witnessed the number of patents being quadrupled in 2020. The image processing domain has been witnessing a high progress. From applications related to face recognition and detecting objects and patterns, the AI has improved computer vision technology which has enhanced its abilities to support the country’s security. Since image processing deals with sensitive data such as facial images, fingerprints, etc., it is important that the AI techniques implementing image processing must handle the sensitive data with responsibility and avoid any possible breach of the data.

To conclude, the trend of patent filing has been on a steady rise, especially since the past few years. With advancement in technology, requirement of effective solutions, and investment, the contribution to this rise is likely to increase.


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