Investment Strategy

US Patent Office Sidelines AI as Inventor

Artificial intelligence is not a person. Or so claims America’s top patent court. The argument is important because of the potential impact on intellectual-property protection. If an AI does the heavy lifting for an invention, then there are material questions about whether a discovery is sufficiently unique to even warrant a patent.

Unless you are a patent attorney, this issue may sound esoteric, but there are billions of dollars in future revenue at stake. No big-tech company seems willing to fight the US Patent and Trademark Office on its stance. The idea is that the current system—which requires an inventor to be human—works just fine. Why introduce a cascade of questions about the role of technology in the invention process, potentially undermining the commercial benefit of hefty R&D expenditure?

The US ruling stems from a case brought before the Court of Appeals for the Federal Circuit by Stephen Thaler, who runs a St. Louis-based company called Imagination Engines. Thaler advocated on behalf of a patent application in which he asserted his AI independently created a “neural flame” and “fractal container.” The US Patent Office denied the application on the basis that the AI does not meet the explicit requirement that an inventor is a person under existing US patent law.

In his appeal, Thaler argued that allowing an AI to be listed as an inventor is consistent with scientific promotion. His case was fueled by the fact that his AI was able to secure patents in South Africa and—at least for the time being—in Australia. The US judge was unswayed by the argument.

This may not be the final word on this issue. The US court acknowledged that its role is to interpret the law, not make the law, essentially punting to Congress. But Capitol Hill seems to have little interest in the topic, in part because of big-tech lobbying.

“AI as an Inventor” is likely to reappear on the international stage. The matter is now being vetted by the intergovernmental IP5 forum. The working group was created in 2007 by the US, European Union, China, Japan, and Korea to address common challenges in safeguarding intellectual property. These five nations account for about 85% of world’s patent applications. In 2019, IP5 set up a task force to address emerging technologies and artificial intelligence.

Our Vantage Point: The US patent system is fine-tuned to encourage commercialization. However intriguing, granting a patent to an AI will remain an academic concept.

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