Astute followers of trends in health care M&A know that investors have particular affection for health care companies that are tech-enabled. “Tech-enabled” historically referred to having proprietary software that enhances delivery of services – and provides a valuable, competitive advantage. Recently, the concept of tech-enabled has been enlarged somewhat to include the use of artificial intelligence. Being AI-enabled is becoming the new normal in health care, with clear potential benefits in diagnostics and drug discovery.
So far, so good. But is an AI-assisted enhancement to a company’s products or delivery of services proprietary? Can a health care company that developed a superior product or service with the aid of AI prevent a competitor from utilizing that discovery or technique or from duplicating it by reverse engineering? Often the answer is no.
Generally, neither patents nor copyrights can be obtained for inventions or works that are generated by AI without any significant human contribution to the invention or creation. How much human involvement is too little? Initially that is for the US Patent and Trademark Office (USPTO) to ascertain from the filings and the evidence presented.
An invention made solely through AI cannot be patented. AI cannot be listed as an inventor in the patent application. However, if one or more natural persons contributed to the invention, a patent may be issued, but only for the claims in the patent application for which a significant human contribution was made. Unfortunately, measuring what is “significant” is subjective and will likely be the subject of evolving guidance from the USPTO and judicial decisions.
Similarly, a creative work cannot be copyrighted if completely created by AI from a user’s inputting of prompts – if the user’s sole involvement in the creation was inputting the prompts. Use of AI to help with the process of creation does not bar the issuance of a copyright, but “sufficiently creative” human modifications to AI-generated materials must have been made. Again, more concrete guidelines for determining whether there was sufficiently creative human involvement will likely evolve over the coming years.
Whether or not a health care company can protect its AI-enhanced products and services through patents and copyrights, such enhancements may often be protected as trade secrets, based on the same standards as would apply to other economically valuable know-how. Generally, however, taking all reasonably necessary steps to protect a trade secret cannot prevent a competitor who discovers the same know-how without having had any access to another party’s trade secrets from using that know-how. For example, it would be entirely possible for a “discovery” made by one business with the assistance of AI to be given by AI to multiple users.
In summary, for an enhancement accomplished with the help of AI to provide a competitive advantage to a health care company, the research and development process must take into account the need for demonstrable and significant human involvement in the creation of the enhancement.