IP and the technology disruptors in the supply chain

We recently collaborated with Retail Week on this article, looking at technologies, such as artificial intelligence (AI) and 3D printing, shaking up the supply chain. Picking up on some of the ideas discussed, we look here at the potential issues for intellectual property in particular.

Artificial intelligence

There are a wealth of potential applications of AI in the supply chain:

  • use with large data sets to forecast demand throughout the supply chain, intelligently allocating resources to prevent bottlenecks or wastage;
  • promoting products to those who are most likely to buy them based on their data profiles, or tracking customers through loyalty schemes and e-receipts; and
  • optimising delivery routes, based on live data and AI to forecast the best route – possibly even using self-driving delivery vehicles.

All of these benefits arise from processes which, if undertaken by a human, might be expected to give rise to fresh intellectual property – patentable inventions or copyright works. But though the code constituting an AI will be protected by copyright, so that the AI itself cannot be copied, it is not clear whether IP rights will arise protecting the AI’s analytics.

Copyright applies to a work produced by a computer only if it is a literary, dramatic, musical or artistic work. So an analysis displayed as a graph or a map may possibly be protected in that form, but results in the form of tables or numbers may not.  Further, AI which learns from data over time and adapts its own analysis may ultimately produce works in which copyright does not subsist whatever their form, if it reaches the point where it is no longer possible to identify any human as having made the arrangements necessary for the work to be created.   Where IP rights cannot be relied on, confidentiality may be the only effective form of protection.

These issues will only become more pressing as data itself, and the insights arising from analysing it, become as valuable a resource as the products sold. But data is not, in itself, intellectual property.  The primary form of protection available for data is that of confidentiality, which requires strict policing. Database rights can also be used to protect data from being copied, if a business has invested in collecting it.  But if one business’s AI learns from analysing a database generated and held by another, IP rights will not give the database holder any power over findings from that data.

Businesses which decide to allow others access to their data will therefore need to rely on contractual terms to maintain their control, rather than assuming that intellectual property laws already apply.

Finally, although a company holding such data has an opportunity to makes its operations the most efficient and its services the most competitive, it must not forget that any business with exclusive access to a valuable dataset may find itself subject to an investigation if it exercises its resulting market power in a way that distorts competition.

3D printing

3D printing, or ‘additive manufacturing’, is another rapidly advancing field that raises IP issues. There are currently substantial limitations on what can be made at home, and printing instead of buying is unlikely to be a viable solution for several years.  But producers and retailers may start to rely on 3D printing to save the costs of transporting products and components, and that raises the risk of unauthorised (and unreported) copies being made and sold at different points in the supply chain.   Product designers may face new issues in trying to protect their products from piracy once the printer files begin to be distributed:

  • Infringement by individuals for their personal use may be very difficult to stop, since the major IP rights which businesses use to protect 3D products – patents, trademarks, registered and unregistered designs – are all subject to defences exonerating acts done privately and non-commercially.
  • 3D printing a spare part for a complex product is also unlikely to infringe patents over the product, as it is legal  to repair a patented product without re-making it.
  • Even selling a design file for a protected item to be home printed would not be illegal, provided the end user is not a commercial one.

What does this mean for businesses?

Businesses will benefit substantially from the efficiencies these technologies can bring to their supply chains, but cannot rely on traditional IP approaches to maintain control in the new order. They will need to take real care to maintain confidentiality over data analytics and consider the potential IP risks before replacing a traditionally manufactured product or part with one designed to be 3D printed. If you would like to speak to OC about the issues raised within this article, please speak to one of our IP experts listed below.

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