Last week, Professor Adam Jaffe (Brandeis University, USA & Motu Economic and Policy Research, New Zealand) joined for a presentation assessing the implications on the patent system from the rise of inventions created by AI.
The subject is topical; we’ve previously covered Thaler
-v- Comptroller, a case to be heard by the UK Supreme Court relating to an
AI that generated two inventions and a dispute following the AI being listed as
an inventor, and we’ve considered non-human inventions from a patent valuation perspective.
The talk was founded on a dual premise that: (1) AI systems
soon will be (or already are) making inventions, and (2) the patent system as
it stands is not ready for that. Whilst patent law in most jurisdictions does
not make allowances for AI to be an inventor, and that position looks likely to
hold, Professor Jaffe suggested it is both unavoidable and undesirable to seek
to halt the rise of AI invention machines. A change in the law will likely be
required.
It is theorised that AI would be capable of creating
inventions at a very low marginal cost and in substantial number. Should those inventions
be patentable, either because the law changes to accommodate AI as an inventor
or because AI owners exploit the indistinct line between machine-assisted
invention and machine-generated invention to list themselves as inventors,
patent offices could be flooded with new applications. It is important,
therefore, to discuss how AI inventions relate to the fundamental goals of the
patent system. A predictable and fair patent system, and one that incentivises
innovation are obviously desirable, yet it is on the goal of protecting
investments that develop an invention to a marketable product or process that
is particularly interesting.
In a previous
article considering AI inventions, we speculated that AI inventors would
lead to ‘invention factories’ – businesses who produce patentable inventions
using their AI invention machine and sell or license those patents to others
who exploit them to bring patents to market as products. We can therefore
envisage a scenario with three elements: (1) AI inventors producing many more
inventions each year than are currently created, (2) we assume patent offices
are able to keep up, and so many more patents are granted on these inventions
each year, and (3) those patent owners are unwilling or unable to exploit those
patents and bring products to market. In this scenario, a substantial patent
marketplace emerges.
This raises important questions for patent valuation. In any
market, value is most simply determined by what someone else might pay for a
product, and therefore an increase of supply (patents) into that marketplace
depresses the value of each individual item given the increase in choice for
buyers. Comparative IP valuation methods may need to adjust to account for this
if the comparison is based on a different, non-AI generated, patent marketplace.
Yet, each potential buyer of patents will have different capacities to exploit different
types of patents – a chemical manufacturer has no use for a patent relating to
the production of bread, for example. Increase in supply therefore, may not
substantially depress value. We must also keep sight of the importance of a
patent’s quality to patent valuation. A high-quality patent – by which we mean
one with a long term of protection, substantial coverage and strong potential
commercial gains when properly exploited – remains a valuable item whether
created by a human or AI. Identifying those patents will be crucial for
commercial success in an AI invention landscape.
Should a patent marketplace emerge as we have speculated,
the demand for effective patent valuation to complement patent-related
dealmaking will rise. Moreover, with so many patents potentially on offer, the
importance of good patent valuation only grows. The problem for patent
valuation therefore may be the same as for the patent offices – volume. The
skills, however, remain the same. Patent valuation experts who can identify and
understand market outlooks, growth implications and draw valuable insights from
the comparative deal landscape to make well-founded, accurate and commercially
useful judgements on these patents will be invaluable.
We are very grateful to Professor Jaffe for sharing his
ongoing work with us. The question of AI inventions and how they fit into the
patent system is an important and fluid issue. This talk demonstrated both the
considerable interest in the area, and the need for open-minded thinking about
how we might negotiate the problems and opportunities raised by AI inventions
to achieve the greatest benefit from them.
The full webinar is available at: https://www.youtube.com/user/Oxfirst.
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