When developing an app, entrepreneurs need to keep a keen eye on its technical specifications and its market potential on route to market. Both aspects could be critical when deciding whether to pursue patent protection or not, according to John Paul Rooney, from Withers & Rogers.
As long as an app is novel and has a technical effect, it is likely to meet the patentability criteria set out in European patent law; opening the door to greater profit potential, tax relief and exclusivity.
A global search for patents that relate to an app or app-based service brings up more than 10,000 entries. However, the number of patents filed in the UK is still remarkably low in comparison to other countries. In the case of apps, this could be because there is little general awareness surrounding the process of obtaining patent protection, and some developers may wrongly believe that it is not possible to patent software. As long as new technical effects, such as more secure or faster data processing, are involved in running a piece of software, then it is likely to be patentable.
For any entrepreneur, it is important to consider intellectual property strategy at an early stage. Failing to do so, could mean they miss out on commercial opportunities – for example, the 20-year period of exclusivity that comes with patent protection could provide a window of opportunity in which to license the technology to third parties in exchange for royalty payments. However, if the invention has been disclosed to a third party, or otherwise made public, prior to a patent application being made, this could constitute ‘prior art’ and any rights to patent the invention would be forfeited. Early disclosure could also give other companies a chance to copy the invention and compete for market share.
Obtaining a patent isn’t the right route for every business however. Some entrepreneurs are in a race to market and may feel that stopping to obtain patent protection could cause them to lose commercial ground. It is worth remembering however that beginning the patent process isn’t particularly lengthy or costly, so it should be given full consideration before bringing a new app to market. An experienced IP professional can be helpful in developing a strategy that does not get in the way of executing the initial business plan successfully.
If the timing is right and the business proposition suits, then filing a patent can be hugely beneficial. The exclusivity it grants allows a business to maximise its profits, whilst potentially benefiting from Patent Box in the UK – a form of tax relief applied to profits from patented technologies. The patent itself is known as an intangible asset and this can also add value to the business itself, which is particularly important if it is likely to be considering a sale or merger in the future. Such benefits tend to come later, but can be enormously valuable in the longer term.
To understand exactly how a specific business venture might benefit, a patent attorney can help by outlining the pros and cons. As well as advising on whether an invention is patentable or not, they will be able to assist with the application itself. The specific wording of the application can be crucial, particularly at an early stage of development, as innovations often continue to evolve even after they have been released onto the market.
For instance, the social media platform, Pinterest, began life as a mobile shopping app called ‘Tote’. This doesn’t mean that the company behind the two services necessarily had to file for patent protection twice. Instead, it is likely to have used a practice known as ‘pivoting’, and if the IP strategy was sophisticated, would have involved building in some flexibility when filing any patent applications. If the terms used in the patent applications are broad enough; focusing on the technical effect which underpins the software rather than its specific application, then it may be possible to change the app significantly while still benefitting from some patent protection afforded by the original patent applications. If broad terms are used to describe the technology and the application of the technology, then the patent is likely to have wider scope and a longer useful life.
Also, for many businesses, their brand becomes their most important piece of intellectual property. Entrepreneurs should consider protecting their brand names with registered trade marks as early as possible. In some overseas markets such as China, waiting too long before applying for protection can be disastrous.
It is vital that entrepreneurs come to recognise the opportunities, potential barriers and general processes surrounding the patenting of apps, app-based services and similar software-based technologies. As long as they are aware of the basic requirements, then they will be able to make informed decisions and optimise their business potential.
John Paul Rooney, is a partner and patent attorney at intellectual property firm, Withers & Rogers.