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It’s no surprise that artificial intelligence (AI) has become a go-to tool in the race to innovate, especially in the robotics industry. Whether it helps in the creation of new algorithms or novel innovations for automation, AI can be a creative partner, or in some instances, even contribute to the creation of inventive concepts.

Given the prevalence of AI, robotics executives are grappling with the fundamental question: can you protect innovation not entirely created by humans? And if so, how?

The answer to that question includes two distinct paths: patents or trade secrets. Choosing the right path in the age of AI has never mattered more.

Detour ahead: patent route possibly closed for AI-generated innovations

For the robotics industry, patents can provide broad protection for innovative concepts and can cover almost any novel aspect of a technology, including hardware, software, compositions, materials, processes, and business methods. Patents can also provide protection for improvements to existing technology — the innovation need not be radical or revolutionary in order to be patentable, merely new and not obvious. By protecting these innovative concepts, an emerging robotics company can generate significant competitive advantages for itself.

A strong and robust patent portfolio can prevent competitors from making, using, selling or offering for sale your patented technology. In addition, patents can create tangible value for investors and partners, and can be out-licensed to generate an additional revenue source. A strong patent portfolio can often help attract investment dollars as venture capitalists and angel investors often look to see whether the company has implemented a strategy for protecting its intellectual property. A solid patent strategy can also minimize the risks associated with reverse-engineering by a competitor, a common occurrence in robotics, where hardware and firmware can often be deconstructed.

However, in the U.S., the patent term is limited to 20 years from the effective filing date of the patent. Once the term expires, anyone, including your competitors, can legally copy or reproduce your innovation. Further, pursuing patent protection can be time consuming and expensive as the preparation and subsequent examination by the Patent Office, including potentially multiple rounds of prosecution, can present significant obstacles for the robotics company. Despite these issues, patents should be viewed as a long-term investment in the company’s assets, and the cost of filing is simply the cost of doing business.

Importantly, however, patents also require that the inventor be human. Under the U.S. Patent Act, an “inventor” is defined as an individual, and the courts have interpreted this to mean a natural person. Recently, in Thaler v. Vidal (2022), the Federal Circuit confirmed that an AI system cannot be named as an inventor under U.S. patent law.

In other words, patent protection may not be an option if the AI is the sole inventor of your robotic design or process, absent significant human involvement. The U.S. Patent and Trademark Office recently further clarified this point noting that inventorship is determined by whether a natural person conceived the invention, not by the use of AI tools. AI systems are considered instruments, similar to laboratory equipment or software.

If AI was involved, what are your options?

Trade secrets may be an alternative route for AI-generated technologies

Trade secrets are an option for protecting AI-conceived technologies, especially those that may not qualify for patent protection. Indeed, certain robotics innovations – specifically those that can be kept secret, AI-conceived or otherwise – may be more effectively leveraged if held as trade secrets instead of being disclosed to the world through the patenting process. For robotics companies, this could include motion control algorithms, machine learning models, data sets, or the processes your AI uses to generate optimized designs. Trade secret protection can provide, in many instances, a viable option to protect the IP assets of the company when used in conjunction with or as an alternative to patent protection.

Unlike patents, there is no requirement under trade secret law that the source of the innovation be human. Thus, AI-conceived innovations are just as eligible for trade secrets as human derived innovations. The two requirements for trade secret protection are that the innovation must be kept secret and that the innovation provides value by being kept secret. Contrast this with patent protection, the innovation must be disclosed for the world to see. It should be noted that even if implemented in a product or made available for purchase on the open market, the technology can be held as a trade secret, so long it is not disclosed, cannot be discovered, or reverse-engineered. However, protection is lost as soon as a trade secret is divulged, whether intentionally or unintentionally.

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Because all that is needed to maintain a technology as a trade secret is ensure its secrecy, trade secrets avoid the effort and expense associated with pursuing patent protection. The requirement that the technology remain secret, however, can require continuous diligence and can present a challenge in trade secret protection. Therefore, it is critical that employees are educated on keeping information confidential, and that a corporate program is implemented to maintain secrecy of the company’s technology.

Another advantage to pursuing trade secret protection is that it is oftentimes easier to obtain an injunction against misappropriation by a competitor. This is because courts might be more willing to issue a preliminary injunction in a trade secret case. Whereas for patent cases, in the absence of a prior favorable court finding of infringement and validity of the same patent, courts may not be as willing to issue preliminary injunctions, thus allowing wrongdoers to continue infringing. Because of the potential to prevent wrongdoers from benefiting from a misappropriated technology, trade secret protection may be considered as a viable alternative or complement to protecting owners of robotic technology against infringement.

Despite clear benefits, the trade secret path does have inherent risks. Once the information becomes public or is reverse-engineered, all protection is gone. Additionally, since trade secrets aren’t registered, it can be harder to monetize them through licensing or attract investors who prefer the certainty of a patent portfolio. Furthermore, with a trade secret strategy, a competitor could independently develop the technology and subsequently commercialize the technology, or even pursue patent protection, the result of which can potentially preclude you from using your trade secret.

In the U.S., the “prior user rights” defense is available in certain instances against a patent infringement lawsuit for someone who was commercially using an innovation as trade secret more than one year prior to a competitor patent filing on that innovation. But, it is a narrow and complex legal defense that requires solid documentation of prior commercial use.

Taking the right path to protection

With the availability of both patent protection and trade secret protection, how does a robotics company decide which strategy to pursue, and particularly if AI is involved? To determine which may be a more viable strategy, here are a few things to consider:

1. Is technology susceptible to reverse engineering or independent discovery?

If yes, pursue patent protection.

If not, then keep technology as a trade secret.

2. Is it easy to detect infringement and to enforce patented technology?

If easy, then pursue patent protection.

If not, then keep technology as a trade secret.

3. Is it difficult to maintain confidentiality of the technology?

If difficult, then pursue patent protection.

If not, then keep technology as a trade secret.

4. What is the life expectancy of the commercial value of the technology?

If not, then pursue patent protection.

If long, like Coke formula, then keep technology as a trade secret.

5. Did the AI conceive the innovation?

If not, then pursue patent protection.

If the answer is significantly or even partly yes, trade secret protection could be your best option, while identifying any human-derived contributions to reassess.

6. Is licensing or investment a priority?

If yes, pursue a patent since they are easier to leverage for funding and commercialization.

If not, consider trade secret protection.

Power of a hybrid IP approach for robotics innovation

Relying solely on either patent regime or trade secret regime to protect your robotics related innovations can carry the inherent risks noted above. However, patents and trade secrets protection together can provide an effective approach to your IP strategy. Patents (which require full disclosure) and trade secrets (which are kept confidential) can complement one another and can be used synergistically to protect innovations by a robotics company.

For those robotics innovations involving contributions solely from a human, the above matrix can be used to determine whether the patent regime or the trade secret regime is appropriate.

For those robotics innovations involving inventive contributions solely from an AI, consider the trade secret regime as an initial strategy for protection. What if patent protection is desired for contributions from an AI? In such an instance, the company may want to work with a patent attorney to identify where human contributions are involved in the inventive process and focus on pursuing patent protection for those human contributions that led to the AI-related results.

For those robotics innovations involving contributions from both a human and an AI, depending on the business objective, any or a combination of the approaches noted above can be utilized.

Ultimately, as the line between human and AI innovations continues to blur, inventors and companies must adapt their methods for safeguarding robotics innovations. The optimal approach may require a balance between the two regimes. When used strategically, the patent regime and/or trade secret regime can effectively capture human and AI contributions and position your robotics company for a future when both AI and humans invent side by side.

Whether you choose the patent or trade secret path, robotics companies should carefully consider each option in the context of their overall IP strategy to gain the edge they need to succeed against their competition.

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