The tech dilemma: Should I patent my app?
Mobile apps can certainly be profitable, especially if you maintain in-app purchases and "freemium" business models, and so it is worth your while to protect them from imitators and copycats. Fortunately, apps can be patented in some jurisdictions.
Suppose you have developed a trail-blazing mobile app or feature. In that case, the question you ultimately need to answer is whether it makes sense, from a commercial point of view, to pursue patentability or whether other Intellectual Property (IP) protection might suffice, namely copyrights, design rights or trademarks.
If you determine that it does make sense, you must then figure out how to patent your app. To this purpose, you should rely on the counsel of a patent attorney and other experts to prevent the road to patent registration from turning into a dead end.
For example, an app — like Dennemeyer IP Lounge — is broadly defined as any piece of software capable of running on any device with a supported browser (or operating system) and an active internet connection. Some of the most game-changing, disruptive apps on the market today are those utilizing machine learning or natural language processing.
Factors like the rise of the vast network of data-sharing devices known as the Internet of Things have led to smartphone apps becoming deeply rooted in consumers' daily lives, addressing needs ranging from navigation and finance to leisure and health. Google and Apple Maps are some of the most obvious big names, but for a more recent example, consider the Corona-Warn app available in Germany, which helps track actual or possible exposure to COVID-19 and contact with others.
The global mobile application market was valued at USD 154.05 billion in 2019, and is expected to grow, fueled by the greater availability of high-speed internet connections at lower prices, more powerful mobile devices and the proliferation of e-distribution platforms. Mobile gaming has been a segment steadily on the rise too (remember the Pokémon Go phenomenon, anyone?), with companies switching to in-app purchases or in-app advertising as a new revenue model.
Not just about the technology
Many elements contribute to the commercial success of an app. Well in advance of a release, product managers engage in extensive research and employ user behavior analytics to narrow down that product's placement in the market before moving it down the development pipeline. They also aim to keep a lean and clean approach (or "agile," if you prefer), so they test prototypes to avoid investing time and energy into a final product that does not meet a demand or meet it well.
If you nail your app's creation, you might be tempted to rely purely on the market and not pursue patent protection. After all, a patent comes with costs in terms of time and money, and patent enforcement may not apply in practice as consistently as it should in theory. In that sense, having a superior design and delivering the best user experience are selling points that can swing users toward a competitive product and help determine market success without filing for a patent.
Nevertheless, it is always wise to perform a freedom-to-operate study before product deployment. You can either outsource this task or conduct the search in-house if you have specific databases at hand, like Dennemeyer Octimine, together with internal resources trained in their use.
Product managers must also bear in mind that mobile apps are complex creations that involve multiple IP rights, including trademarks, copyrights and — in jurisdictions like the European Union and many of its member states — design rights. The gaming sector again offers a good illustration of this fact: Patents are relatively scarce, but trademarks and copyrighted characters, as well as copyright-protected music, are always present. Thus, owning one or more IP rights is essential for your product strategy.
In short, the decision of whether or not you should pursue patent protection for your app depends on both internal and external influences. Some considerations might be: How much open-source code was used in developing your mobile app idea? And can you meet the exacting standard of demonstrating a technical effect when running your app, as the European Patent Office (EPO) requires?
If you have developed an app that can solve a technical problem in a non-obvious way, you might want to pursue a patent. But beware: Just like with any other computer-implemented invention, there is more to the process of being granted patent protection than simply drafting and filing an application for your app (pun intended). If you are not aware of the specific legal requirements pertaining to patent filing and travel down this path with a poorly thought-out application, your journey might come to an abrupt and disappointing end.
Game over, Europe? Patent eligibility pitfalls for a mobile app developer
After a patent application is filed, if protection is to be granted at the national (and sometimes regional) level, there are common standards set by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement that any app creator would be expected to satisfy:
- Novelty: The feature must be new and not already disclosed to the public at the time of filing for patent protection.
- Non-obviousness / inventiveness: The mode of operation must not be immediately obvious to a person having ordinary skill in the art.
- Industrial applicability: The app must have clear use in an industry when realized as a finished product.
Regional distinctions may also apply; you cannot patent software "per se" under the European Patent Convention (EPC), but it is permissible if your software achieves further technical effects; that is to say, it allows a device to operate in a qualitatively or quantitatively novel manner. To support filings, EPO jurisprudence has clarified over the years what such an effect means and has produced specific guidelines for computer-implemented inventions.
Additionally, if artificial intelligence (AI) is involved in your app, you will need to consult with a patent attorney because machine learning techniques pose challenges to the disclosure and clarity requirements as interpreted under traditional patent law. Namely, disclosing the underlying algorithm or training steps involved might not be sufficient for a person averagely skilled in the art to reproduce the invention, and access to training data might have to be accommodated.
A matter of strategy
With IP rights being rights to exclude, a core reason for getting a patent is to be in a position to negotiate licenses. When it comes to mobile apps, the tech world is highly competitive – there is no guarantee that the app you have devised and wish to protect under a patent will not be independently discovered by someone else. There is always the risk they may move more quickly in the market, so you must secure your competitive advantage as fast as you can.
This brings us back to the question of whether you should actually try to file a patent application for your app. In addition to the above-mentioned factor of market pressure, there are other business reasons to push your patent application forward.
- A startup courting new investors may be pressured to obtain patent protection for its invention(s) by said prospective investors.
- A company merging with or acquiring your business may want you to protect app products with patents as a way to protect their investment and secure a stake in the value of the IP itself.
- Filing a patent application may serve the purpose of creating a "sticky" product, helping you foster a higher retention rate. This idea is rooted in the principle that it is more efficient to grow by expanding your product's features for your existing client base than by converting prospects.
Spotify exemplified this last point perfectly when, in 2020, the streaming service was granted a US patent on novel ways to make a voice assistant more responsive to users' emotions. So while the patent does not strictly address the app itself, it covers a feature – a responsive voice assistant – to be used within the app for the betterment of the users' experience.
Even if you are granted a patent, that does not put you in the clear. Snapchat, for example, filed for an application in 2015 under the Patent Cooperation Treaty (PCT) for their implementation of "ephemeral message galleries" (PCT/US2015/053811), but that did not stop Instagram from crediting Snapchat and using the same idea for its "Stories" feature in 2016 – and all that without starting an IP clone war. How? Because Snapchat's patent only protects the technical expression of a feature and does not bar competitors from implementing something conceptually similar in a different technical way.
The anti-patent argument
Taking note of all we have discussed, there are some considerations that might weigh against seeking patent protection for your mobile app:
- Smartphone apps are usually licensed at lower prices. You must be absolutely sure to gather a large pool of users if you want to recoup the cost of obtaining patent protection (fees to patent offices, legal expenses, etc.).
- You need to make sure your app will outlast the time needed to receive a patent grant, which is, on average, three to five years for a patent application submitted to the EPO. Mobile tech becomes obsolete faster than almost any other tech product.
In the cases above, it may not be immediately prudent to seek patent protection. Nevertheless, you must keep in mind that the invention cannot be disclosed to the public before filing a patent application. Otherwise, that disclosure will be considered novelty-destroying by a patent examiner.
However, as mentioned in the beginning, some alternative protection methods can be less time-consuming and expensive: copyrighting the source code, applying for trademark registration of your logos or other key brand-identifying art and obtaining NDAs from any individuals or organizations you work with, thereby protecting the app's key functions and code as trade secrets, to name a few.
Whatever course of legal action you decide is best for you, the old adage still applies: You get what you pay for. Be sure to keep patent attorneys in the loop when devising the appropriate business strategy for your app – you will be glad you did.
Investors and investment targets must understand the relevance and usefulness of IP along every step of the path, wherever it may lead.