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2 October 2018

Breathing life into AI

In the battle for supremacy in artificial intelligence (AI), China is leading the way. The country ranks first in the world for the number of patent applications in the AI arena, according to research organisation Startup Genome.

With four times as many AI-related patent applications than the US, China’s position can perhaps be partly attributed to government and academic incentives.

But the US’s status is not to be sniffed at—in 2010, 145 US patent filings mentioned machine learning (the technology driving AI research), compared with 594 in 2016, the latest year for which data is available.

This is the finding of a National Bureau of Economic Research study, released in 2018, which concluded that patenting in machine learning has undergone exponential growth since 2010, with such patents being acquired primarily by large US technology firms (eg, IBM, Google and Microsoft).

The same isn’t quite true in China, where academic institutions are more prolific patent filers in AI than domestic companies, according to a report from Tsinghua University, in Beijing.

China’s State Intellectual Property Office (SIPO) has claimed that the country’s “top IT giants” such as Alibaba and Tencent are “overwhelmed” by the filings of foreign companies, such as IBM and Microsoft.

What’s behind this difference?

Susan Tull, partner at Finnegan, Henderson, Farabow, Garrett & Dunner, explains that in addition to the Chinese government’s offering of incentives for filing patent applications, some Chinese universities now provide academic credit to students for submitting applications, and some programmes even require it.

“This overall push for patent filings from Chinese academic institutions across the board may have contributed to the higher number of AI-related filings,” she says.

Nick Drysdale, principal at Harness Dickey’s Detroit Metro office, adds that typically, universities act more like think tanks without regard to actual products, while companies place a higher value on saleable products and less on unproven thoughts.

The polarisation of the filing trends between China and the US may also be a reflection of where the respective AI talent pools lie, as the US has more sizeable software and technology companies than China, says Drysdale.

Tull agrees, adding that companies such as IBM, Microsoft, and Apple are global presences pursuing AI-related patents in addition to companies outside the traditional software space.

Innovation spurs innovation

On the assumption that an increase in patent filings will lead to an increase in issued patents, an uptick can incentivise companies to invest in AI research, says Tull, as they can block competitors from releasing products, and license inventions to others.

This technology presents a unique opportunity for licensing as it cuts across almost all fields.

“AI is used in everything from medical devices to drug development to traffic systems management. An AI invention developed for one field could be licensed to another with fewer concerns about giving a competitor the ‘crown jewels’ of your company,” says Tull.

But Drysdale cautions that licensing of US patents (at least in the software space) has “wavered” in recent years due to questions about validity and enforceability post-Alice v CLS Bank.

Tull adds: “As frequently happens when the patent landscape becomes crowded in a particular field, an increase in issued patents can trigger a rise in patent litigation.”

The uniqueness of AI cutting across technologies is a double-edged sword—a company in one technology field may wind up infringing a patent from a completely different technology field if the patent claims broadly cover the underlying AI algorithm or processing system.

Drysdale believes that the heightened perceived value of AI technology is likely to cause an increase in litigation, but the same questions about validity and enforceability may cause patent holders to try to avoid litigation.

“Also, patent owners may find it difficult to detect infringement due to the software nature of this technology. If infringement is difficult or impossible to detect, I would expect litigation filings to be lower,” he concludes.

These are just some of the uncertainties that arise as multinationals, academic institutions and small businesses alike move into an area of exploration that has the potential to touch every aspect of our lives.

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