“Significant questions remain as to whether U.S. courts will reliably permit IP holders to proceed with AI-focused IP infringement claims against potential offenders, or if patent-eligibility, inventorship, fair use, and other defenses will tip the scales towards trade secret protection.”
The National Security Commission on Artificial Intelligence (NSCAI) recently issued its Final Report outlining a strategy for the United States to “win” the artificial intelligence (AI) era. Critically, the Commission argues that the United States government is not currently organizing or investing to win the technology competition in AI against a committed competitor (i.e., China), nor is it prepared to defend against AI-enabled threats and rapidly adopt AI applications for national security purposes. In addition to the potential patent-eligibility and data ownership IP issues noted in the Report, other IP uncertainties unique to AI technology continue to persist, such as machine authorship and machine inventorship of valuable contributions. As part of the United States’ overall strategic interests in winning the AI era, the Commission recommends that the United States adopt IP policies to incentivize, expand, and protect AI and emerging technologies, as well as recognize IP as a national priority. But significant questions remain as to whether U.S. courts will reliably permit IP holders to proceed with AI-focused IP infringement claims against potential offenders, or if patent-eligibility, inventorship, fair use, and other defenses will tip the scales towards trade secret protection.
Uncertainties in IP Policy for AI Innovation
In chapter 12 of the Report, the Commission highlights how stringent patent eligibility requirements in U.S. courts and a lack of explicit legal protections for data have created uncertainty in IP protection for AI innovations, particularly with respect to patents.
By way of background, the United States Patent and Trademark Office (USPTO) revamped the patent eligibility requirements in 2019, resulting in a 44% decrease in uncertainty of patent examination concerning subject matter eligibility in the one year following the 2019 Revised Patent-Eligibility Guidance. U.S. courts, however, have only recently begun applying patent eligibility requirements to AI inventions—thus far with mixed results and continued uncertainty. See, e.g., Quad City Patent, LLC v. Zoosk, Inc., No. 20-cv-01996-JST (N.D. Cal. Nov. 3, 2020) (Opinion) (finding claims ineligible under Section 101). Accordingly, further guidance from the Supreme Court or a legislative effort to reform Section 101 may be necessary to ensure that AI innovators can not only obtain patent protection, but reliably enforce their patent rights in a U.S. court.
Moreover, the Commission’s observation regarding a lack of explicit legal protections for data echo recent sentiments from industry, as reflected in the USPTO’s October 2020 report on Public Views on Artificial Intelligence and Intellectual Property Policy. The USPTO observed that commentators “were nearly equally divided between the view that new intellectual property rights were necessary to address AI inventions and the belief that the current U.S. IP framework was adequate to address AI inventions.” While an appeal is currently pending in the U.S. District Court for the Eastern District of Virginia, last year the USPTO held that an inventor to a patent must be a natural person. The Copyright Office has similarly required human authorship for a copyrighted work. See, e.g., Compendium of U.S. Copyright Practices, § 306 (“The Human Authorship Requirement”). In addition, significant questions about the scope of copyright protection for certain types of software (i.e. “Application Programming Interfaces”) and the bounds of a fair-use defense are currently pending before the Supreme Court (Google LLC v. Oracle America Inc., No. 18-956). Accordingly, current IP policy potentially leaves certain discoveries and data output from machines outside the realm of patent or copyright protection.
Findings and Recommendations in the NSCAI Report
In the Report, the Commission notes that the “U.S. has not developed comprehensive IP policies to incentivize investments in and protect the creation of artificial intelligence (AI) and other emerging technologies,” and that China is “poised to ‘fill the void’ left by weakened U.S. IP protections, particularly for patents.” The Report highlights the following key areas that have weakened U.S. IP protections:
- S. Courts have severely restricted what types of computer-implemented and biotech-related inventions can be protected under U.S. patent law;
- China has met its strategic policy goal of increasing the quantity of its patent applications and issued patents, creating the narrative that it has “won” the innovation race;
- China’s prolific patent application filings have created a vast reservoir of prior art that now must be reviewed in examining a patent application;
- China’s companies have been identifying many patents as “standard-essential” in standards development organizations;
- The lack of explicit legal protections for data or express policies on data ownership may hinder innovation and collaboration, particularly as technologies evolve; and
- China continues to pervasively steal American IP-protected technological advances through varied means like cyber hacking of business and research institutes, technological espionage, blackmail, and illicit technology transfer.
To fill the IP policy void, the Commission recommends that the “United States must, at a minimum, articulate and develop national IP reforms and policies with the goal of incentivizing, expanding, and protecting AI and emerging technologies, at home and abroad.” For next steps, the Commission recommends that the President issue an executive order recognizing IP as a national priority and directing the Vice President, as chair of the Technology Competitiveness Council, or an interagency task force to oversee this effort. The Secretary of Commerce, in coordination with the Under Secretary of Commerce for Intellectual Property and the Director of the USPTO, should further be directed to develop proposals to reform and establish new IP policies and regimes, including proposals for executive and legislative actions and an assessment of a non-exhaustive list of IP considerations.
A Patent Upswing for AI
AI innovators should take note that the Report–consistent with other executive federal policy concerning AI—appears to favor forms of IP protection that promote the disclosure of AI technology to the public, such as through a patent filing, rather than keeping the AI technology a trade secret. Indeed, as reflected in the USPTO’s October 2020 report on Inventing AI, the number of AI-focused patent filings has exploded over the past several years: “One hallmark of valuable new technologies is an increase in patent applications. These applications reflect the expectations and decisions of investors and innovators who seek to use or build on the new technologies for innovation. AI technologies exhibit this increase.”
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