24 January 2013

The Problem with Apps

I have recently received a number of enquiries from inventors looking for patent protection to cover an app. Theoretically, there is no reason, at least in Australia and the US, that you should not be able to cover your app with a patent application. However, there are practical and legal implications that could result in you throwing good money after bad.

In this post, I am considering Australia and the US only.

An app is a software product and so does fall within the category of products that can be covered by a patent. But what does your app actually do? As a general rule, if you're just receiving information, re-arranging it and then presenting it, then it might be difficult to convince an examiner or a court that your invention is "proper subject matter" for a patent. But proper subject matter aside, you need to bear in mind that changing information and not structure or the manner in which that information is manipulated could result in the invention falling foul of the "novelty" and "inventive" step requirements. That's because you can't get patent protection for information per se.

How clever is your app? A patent examiner or a court is more likely to favour an invention in which the mobile device is used to perform some relatively complex or clever algorithms. So, for example, if your app is a directory-type app, it is less likely to attract patent protection than an app that is capable of predicting stock price changes using heuristic algorithms.

Then there's the timing. It could take up to 4 to 5 years from the date of our first meeting before you achieve patent protection. Some apps have been around for that long and are proving to be very successful. Others tend to fizzle out after a few years, even if they have generated significant cash flow during that time. While it is possible to put competitors on notice once a patent application is published, it might be difficult to obtain a damages award for the period that the patent application was pending. Of course, many investors will require that you file a patent application. But if that's not your model, then you do need to bear the time factor in mind.

How will you enforce the patent, if and when it is granted? A patent application must set out a full disclosure of the invention and how it is to be enabled. However, an infringer does not have the same obligation. The app may be of the type that would indicate clear infringement just from executing the copy. But there may be cases in which you simply cannot determine whether or not your invention is being copied, even though you are losing market share.

And never forget the cost. It can be very expensive to have a patent application prepared and filed for a software product. Not only that, but the cost of prosecuting the application through to grant of a patent can also be extremely costly. This is a function of the difficulty in writing software patent specifications. It is also a function of the fact that there seems to be a large amount of prior art out there which is difficult to filter and analyse. While the examiners are improving, it can be difficult to convey an understanding of the invention to an examiner.

So, at the end of the day, think carefully before going down this route. As a general rule, unless you have a good budget or keen investors and a product that is relatively sophisticated from an algorithmic point of view, the journey will more than likely be harrowing.

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