Software is nothing new. Ever since Alan Turing developed his groundbreaking theory for software in 1935, the field of computer science has been broken down into hardware products and the software programs that run on them. And, even though Microsoft and other software pioneers have been around for 45+ years now, the market shows no signs of slowing down.
Why? Because software is the ultimate flexible product. And the ongoing digital transformation of the economy is driving investment in software as a whole.
Software IP issues
All of this is to say that software remains a strong growth area for many startups. But the space also comes with its own unique intellectual property challenges.
Software patents have gotten a bad rap in the past ten years for two reasons: 1) non-practicing entities (NPEs); and 2) case law. Actually, predatory behavior by certain NPEs led to changes in software case law.
Let me explain.
Non-practicing entities (NPEs, or more pejoratively “patent trolls”) are companies that own rights to intellectual property that they use to collect licence fees for use. For example, if the NPE owns the patent rights to an innovation, the NPE might use the patent rights to collect royalties from companies that use that innovation.
The problems started when certain unscrupulous NPEs started going after big companies that fought back. Specifically against software patents wielded by NPEs, these companies argued that software patents are trying to protect abstract ideas that shouldn’t have been patented in the first place. Major decisions, such as the Alice decision by the US Supreme Court made it a lot easier to invalidate software patents, deeming them essentially worthless…for now.
What startups need to know about software IP
Some of the questions that founders should be asking themselves when considering their own software include:
- What exactly is your innovation that no one else has created before?
- Are you writing your own code from scratch?
- Are you taking advantage of existing code, open source or otherwise?
- How much of your “secret sauce” would you have to reveal in your pitch in order to get potential investors and customers interested in your product?
It’s a different situation than what hardware startups face, where IP protection is fundamental to the value and success of the business in most markets. Software IP is typically far more nebulous and freewheeling.
Especially for technology companies, product execution, first mover advantage and brand equity are usually your best bet for beating out your competition in software. Can you talk about your product without getting into the nitty-gritty of how your software works? Can you talk in terms of user scenarios and product specs, rather than exactly what is connected to what? Can you distribute your product in a way that your core code is inaccessible by third parties?
And software products, which can morph or pivot monthly or even weekly or daily, are usually not well aligned with the time frame required for a patent filing. The process takes a month or two for preparation followed by 3-5 years of patent prosecution before hopefully obtaining an issued patent on your original idea – which may or may not be in your final product anymore.
Alternatives to software patent filings
There are alternatives, however, to the long patent process described above that can be a better fit for software startups.
You can put a copyright notice on your code, pitch deck and marketing materials, and wireframe (essentially putting a © mark with the year and the owner entity, followed by “All Rights Reserved”), or even file for formal registration with the US Copyright Office. I wouldn’t worry about a formal registration, though, unless your code is at a point it’s ready for release.
You can also put a “TM” on your logo, company name, product name, etc. Officially filing for a trademark registration (which would eventually get you the right to use a ® marking) costs a couple thousand dollars and takes a few months. But that isn’t always worth the time and effort in the early stages, since there’s a good chance your company name/logo/product name will all change in the coming months.
You should, however, do some internet searching (using Google, USPTO’s TESS system, domain search, etc.) to make sure your logo/company name/product name are not being used by others. If you do decide to move forward with your company and product you don’t want to have created brand equity then have to rebrand because your company name is already in use and you get a cease-and-desist letter.
Bottom line: Software IP is a different beast than hardware IP in that the product development timeline and the case law makes software less of a fit for the traditional patent process. But that doesn’t mean there aren’t steps that software startups can take to protect their work heading into and after release to the public.
At Patents Integrated, we aren’t patent attorneys. We’re not business consultants. We’re so much more than that. We’re patent agents who pull from multiple disciplines to help innovators create successful IP strategies that will serve them for years to come.
If you’re ready to turn your invention into a reality, we’re here to make it possible. Click here to get started.
