Why the USPTO changed software patent eligibility guidelines?

ANSWER: China’s growing leadership in 5G, Artificial Intelligence, Quantum Computing, and Robotics intellectual property

While Covid-19 continues to complicate and politicize the US/China economic and geopolitical relationship, the facts illustrate for the last decade innovation and information technology dominance has been a strategic part of a broad and carefully coordinated Chinese Government strategy that shows many signs of success. By all measures, Chinese businesses, universities and individuals are rapidly catching up and in some areas surpassing the US in patent holdings and patent valuations.

It is rumored among IP Professionals, the USPTO significantly clarified and simplified the software patent eligibility process in order to facilitate national efforts to “leap frog” over this growing Chinese lead in critical national security technologies and related foreign patent and IP ownership.

China’s technological dominance impacts economic, military and geopolitical balance of power.

US and China are in a Quantum and Artificial Intelligence arms race that will transform information and physical warfare. [5 MIT Technology Review]

Here are five troubling examples of Chinese innovation and information technology dominance that contributed to the USPTO software patent eligibility changes:

  1. Today over 600,000 United States Patent and Trademark Office (USPTO) patents are issued each year while China’s National Intellectual Property Administration (CNIPA) issues over 2,000,000 patents a year. While the value of two million CNIPA patents each year is questionable, it does illustrate China’s IP based approach to technological superiority.
  2. In 2018, China received nearly half (46.4%) of all World Intellectual Property Organization (WIPO) patents applications [2 WIPO]. If current trends hold, China will overtake the US in WIPO Patents In Force within the next decade. (See Figure 1 below)
  3. Over half of essential 5G patents are owned by Chinese companies like Huawei, ZTE and others. The top 10 Universities that own 5G patents are all Chinese Universities. [1 WIPO] Historically China technology companies licensed and paid royalties for 3G and 4G patents from US, EU and South Korean technology companies and Universities. This trend will reverse with 5G technologies as US and EU technology companies will now pay licensing royalties to Chinese companies and universities. [4 Wall Street Journal]
  4. China businesses and universities now possess five times the number of Quantum Communications and Cryptography patents. [5 MIT Technology Review] China leads the US in Quantum Cryptography and Communication with a functional Quantum Network connecting Beijing, Shanghai, Hefei and several other cities, as well as a functional Quantum Satellite (Mozi) designed to provide a Quantum Cryptographic Secure Internet to all of China. Quantum Cryptography is unbreakable even with Quantum Computers. [8 Forbes]
  5. We thought the US was leading in Quantum Computing when Google recently announced they hit Quantum Supremacy, demonstrating they can solve a problem on a quantum computer exponentially faster than a classical computer. However, in a matter of days the University of Science and Technology in China announced it had achieved Quantum Supremacy with their all-optical quantum computer. Quantum Computers render all classical cryptography obsolete. [8 Forbes]
Figure 1

Every innovation leader should brace for a rapid increase in the number of software patents in force

The aggressive pursuit of patents is clearly a central focus of Chinese Communist Party information technology superiority ambitions. We’re increasingly connected globally and increasingly competing on a global stage. We’re competing for global capital, competing for global labor, competing for global customers and increasingly competing based on global intellectual property rights.

The Chinese Government understands this reality and has moved in a coordinated manner to dominate 5G Technologies, Quantum Computing/Cryptography/Communications Technologies with ambitions to dominate Artificial Intelligence and Robotics Technologies in the near future.

Fabian J. G. Westerheide, CEO of AI for Humans, an international expert on Artificial Intelligence strategy:

Artificial Intelligence wars are coming. China will become the first global AI superpower in the foreseeable future. The USA has already put some Chinese AI companies on sanctions lists. At the same time the export of American AI software to China has been restricted. Under the leadership of the President of the European Commission, Ursula von der Leyen, Europe will increasingly try to regulate and control AI. While the USA is betting on confrontation, Europe is taking the path of integration.

The battle for control of the strongest Artificial Intelligence will accelerate. China has a head start in this respect, which will be further expanded. This time the Western countries will have to catch up. [8 Forbes]

Prediction: By 2030 we will experience 2x to 4x increase of patents filed and in force.

  1. Abstract Ideas are now patentable
  2. An entirely new class of software patent types is now available — it’s a “Great Digital Land-Grab”
  3. The patent process is more predictable with more relable outcomes and therefore less risky to operationalize

By allowing Abstract Ideas, US companies, universities, and inventors can now wrap existing software patents leaping ahead of others with an existing lead. This applies to you and your industry along with your competitors both domestic and international.

Please contact me. I’m passionate about discussing how to teach your teams to play with ideas and operationalize an intellectual property strategy?

Alan Rodriguez is an accomplished digital leader, startup founder, and patent author with a passion for innovation, strategy and emergent digital business models. He’s available to lead a tailored and affordable IP strategy for a few select organizations.

214 476 7448

alanrodriguezjr@gmail.com

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Startup Founder, Inventor, Product Leader, Digital Hunter & Marketer, Data & Privacy Renegade, Philosopher, Digital Humanist

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