July 29, 2025 by Amit Kumar
In the rapidly evolving technology sector, patents are not merely protective legal tools — they are strategic business assets. For startups, MNCs, and R&D-driven organizations alike, patent protection often makes the difference between market dominance and irrelevance.
This article explores:
The legal framework of tech patents
Trends in AI, software, semiconductors, IoT, fintech, and cybersecurity
Strategic use of patents for funding, licensing, and valuation
Common legal pitfalls and litigation trends
Landmark Indian and global precedents
| Legal Provision | Application to Tech Sector |
|---|---|
| Section 2(1)(j) & (ja) | Defines "invention" and "inventive step" – essential for software, AI, IoT inventions |
| Section 3(k) | Excludes “computer programs per se” — the most debated clause for software patents |
| Section 10 | Requires disclosure with sufficient enablement — crucial for algorithmic inventions |
| Patent Rules, 2003 (as amended 2024) | Governs e-filing, expedited examination, fee categories for startups, small entities |
Tip: The technical effect and technical advancement standard is key for eligibility of software-based or computer-implemented inventions.
Patentable if the AI model leads to a tangible technical outcome (e.g., fraud detection, speech-to-text interface).
Requires disclosure of datasets, training logic, and system architecture.
Subject to Section 3(k) exclusions.
Innovations involving technical infrastructure (cryptographic systems, secure transaction processing) may qualify.
Highly patentable — especially when involving hardware+software interaction.
Examples: smart meters, medical devices, industrial automation systems.
Cryptography-based methods, network defense systems, and hardware-secured layers are often granted patents globally.
India and USPTO both encourage filings in this space.
Detailed circuit designs, signal processing methods, and power optimization algorithms can be protected.
| Purpose | Role of Patents |
|---|---|
| Funding & Valuation | Startups leverage IP for investor confidence and due diligence |
| Licensing Revenue | Tech giants monetize via FRAND licensing or cross-licensing |
| Defensive Strategy | Patent portfolios deter litigation and secure negotiation leverage |
| Exit/Acquisition Strategy | Patent-rich companies attract higher acquisition offers |
Case Study: Google acquired Motorola Mobility in 2011 primarily for its patent portfolio, valued at over $5.5 billion in IP alone.
Telefonaktiebolaget LM Ericsson v. Intex Technologies (2016)
Delhi High Court upheld Standard Essential Patents (SEPs) in mobile tech, validating FRAND licensing and enforcement rights in India.
Ferid Allani v. Union of India (2019)
Delhi HC clarified that software patents are not outright excluded under Section 3(k) — if the invention has a technical contribution, it can be patentable.
Significance: This judgment opened doors for AI/ML and software inventions in India.
Alice Corp. v. CLS Bank (U.S. Supreme Court, 2014)
Set the “abstract idea” test — software must show inventive application to qualify.
Enfish LLC v. Microsoft (Fed. Cir., 2016)
Recognized improvements to computer functionality as patentable — vital for SaaS and platform-based inventions.
Under Rule 24C of Patent Rules, startups, female inventors, and select applicants (like those filing under PPH with Japan) can fast-track examination.
Grant in 12–18 months instead of 3–6 years.
| Country | Tech-Friendly Patent Policies |
|---|---|
| 🇺🇸 USA (USPTO) | Broad interpretation of software & AI eligibility post-Enfish |
| 🇪🇺 EPO | Allows software if it solves a technical problem in a novel way |
| 🇨🇳 China | Encourages AI, IoT, and smart manufacturing patents |
| 🇸🇬 Singapore | Startup-friendly patent box and simplified fast track system |
File provisional applications early to secure priority
Avoid disclosing ideas publicly before filing
Draft claims emphasizing technical problem and effect
Maintain documentation of R&D and inventor contributions
Align with business strategy — e.g., focus on core algorithms, protocols, or system design
In the tech industry, patents are not luxuries — they’re weapons.
Used strategically, they can:
Raise capital
Block competition
Open global markets
Create perpetual revenue through licensing
Enhance valuation in IPO or acquisition scenarios
Whether you're a startup working on a fintech app or an MNC launching IoT devices, a thoughtful, jurisdiction-aware, and claim-focused patenting approach is your innovation’s strongest legal armor.
Q1. Are software-based inventions patentable in India?
👉 Yes, if they demonstrate a technical effect and overcome the Section 3(k) exclusion.
Q2. Should I patent my algorithm?
👉 Only if it has a technical application, e.g., AI for medical diagnostics or cybersecurity.
Q3. How long does a tech patent last?
👉 20 years from filing, subject to renewal fees.
Q4. Should startups file abroad?
👉 Yes, via PCT or Convention route, especially in key markets like US, EU, China.
Q5. Are open-source projects patentable?
👉 Yes — code can be licensed freely, but system/architecture can be patented.