A small UK-based start-up focussed on providing cloud-based analytics services contacted the Dehns Consulting team regarding an idea that they had been working on in relation to a software product  that used AI algorithms to improve their customer’s sales and marketing processes.

The software product designed by the start-up had a lot of potential to disrupt the market as it was able to harness AI to analyse a number of large data sets in a very short amount of time and to provide recommendations regarding how marketing resources should be spent to obtain a maximum return-on-investment.

The client recognised that IP was at the heart of their business, but did not know how best to protect the idea and originally came to Dehns seeking help with filing a patent. The client’s key concern was preventing copycat products from appearing in the market.

After spending some time reviewing the overall structure of the system and the algorithms being used, we determined that while the idea had strong potential as a business plan, seeking patent protection would likely lead to a refusal on the grounds that the idea sought to solve a commercial business problem, rather than a technical one, where the AI algorithms being used were known from wider academia but had been optimised in a way particularly well-suited to analysing financial forecasts and customer behavioural data.

Dehns advised that even if a patent were obtained, it would be difficult to detect infringement and ultimately enforce due to the algorithms being executed on a remote, cloud-based server.

In view of the high likelihood of refusal of any patent application and the amount of know-how behind the choice and optimisation of the AI algorithms providing a sufficiently high barrier to entry for competitors, Dehns advised that keeping the details of the algorithm as a trade secret was a more effective way of preventing copycats, particularly as any patent application detailing the algorithms would publish, regardless of whether grant could ultimately be secured.

We advised the client regarding internal processes that should be put in place to ensure that key elements of the system would be recognised as trade secrets.

Internal processes have now been implemented within the client’s business to specifically identify innovations regardless of whether patent protection will be sought. Once identified, a procedure outlined by Dehns is followed in order to properly identify and mark commercially sensitive work products as trade secrets, and to silo access to authorised personnel only.