Christopher Juhasz, Senior Associate
Wrays Perth
The market for software applications (Apps) for smartphones and other mobile devices is growing exponentially. Apple’s iTunes Store sells thousands of Apps and has monthly sales of over $200 million. Patent applications for new Apps are on the increase. Is obtaining patent protection for a new App a worthwhile investment?
WHEN TO PATENT YOUR NEW APP
Whether you need to obtain patent protection for a new App depends on both the commercial circumstances of your business and on the nature of the App. If your business plan already takes into account potential imitators entering the market and copying your App, then you may not be overly concerned about such competition. Perhaps your business strategy relies on rapidly developing an App and bringing it to the market first so that users will already be adopting your App before your competitors can get a foot in the door. With any luck, your product will be rapidly adopted by many users so that by the time your competitors are promoting a similar product, your share of the market will have become difficult to dilute. You may even have the next App in the pipeline, or you may be developing and improving your first App so that your product is superior to copied products. In such circumstances you may decide that obtaining patent protection for your App will not give you any commercial advantage and you may choose to rather rely on the copyright in the software code of your App to protect your business.
However, while it is theoretically possible to work to a rapid development business strategy, in practice everything does not always go to plan. For instance, competitors may be quick to use your idea and develop another App that essentially achieves the same results. If their App becomes the product of choice in the industry, then without patent protection there may be little you can do to stop them. Unless another party has actually copied the software code or screen shots of your App, then copyright will be of little or noassistance to you in stopping a competitor from selling a copied product. This is why many innovators are turning to patent law to protect their software inventions in this fast moving industry.
A CASE IN POINT
Apple now owns US Patent 8,083,643 entitled “Systems and Methods for Accessing Personalized Fitness Services Using a Portable Electronic Device”. A copy of the published patent can be found here. The invention relates to an App which allows people to access information about a fitness centre, gives them incentives to join the fitness centre, and motivates them to use the fitness centre. While this could be considered a simple idea, it has provided the basis for patent protection as well as a potentially valuable business proposition.
Obtaining patent protection for your App gives you more options in protecting your market and your business. Even in the mobile device industry where new innovations rapidly supersede the old, many innovators are now budgeting for a provisional patent application for their App invention. This approach can be easily aligned with a business strategy which relies on rapid development of products to maintain a competitive lead. The very nature of App inventions makes it possible for innovators to quickly ascertain how successful their App will be soon after they are released. This rapid feedback is useful in helping an applicant of a provisional patent to decide whether or not to file a complete patent application in Australia or overseas patent applications within 12 months from the filing date. In the App market, unlike other areas of innovation, 12 months may be more than enough time in which to assess how successful the App is likely to be. If the App does not sell, then you may decide not to proceed with any further patent applications. However, if the App is successful, you may wish to consider filing a complete patent application in Australia and/or overseas patent applications.
Patent protection may provide you with options to simultaneously deal with both competitors and potential imitators and achieve a beneficial commercial outcome. Not only do you have the option of patent litigation to protect your business interests, but you also gain intellectual property assets which can be leveraged in negotiations with such parties when selling or licensing the App. From this perspective, patent protection of software inventions such as Apps can be aligned with a rapid development business strategy to propel your business forward.
It should also be kept in mind that patent protection for App inventions is an emerging and developing area of intellectual property, and the extent to which such inventions are considered suitable subject matter for a patent varies from country to country. This means that while you may be able to obtain broad patent claims for your App in some countries, other countries may only permit patent claims of narrow scope for an App invention or may even not allow any patent claims at all. This is why it is good practice to develop a patent strategy during the 12 months after filing a provisional patent application for your App and before filing patent applications in overseas jurisdictions.
While some may regard the uncertainty of this newly emerging and developing area of law as risky, in this field this uncertainty could be advantageous to you in commercialising your App. Your competitors are likely to find it difficult to predict the scope of any patent claims that you may ultimately obtain to protect your invention. This uncertainty could be leveraged to increase the risk for your competitors in copying your product.
In light of Apple’s success in the App market, perhaps the question is no longer whether patent protection is a worthwhile investment. Rather, innovators in this competitive industry may question whether they can afford not to obtain patent protection for their App inventions.
For more information please contact Chris Juhasz at christopher.Juhasz@wrays.com.au