You are counsel for a company which just developed an innovative process incorporating a generative artificial intelligence (Gen AI) component. For example, Tech Company may have designed AI-powered personalized health assistant designed to provide real-time health monitoring and personalized health recommendations. The technology leverages Gen AI-driven interfaces to allow users in conversational form to use data from various sources, including wearable devices, electronic health records, and others. Tech Company has made significant investments in this Gen AI-driven technology and is seeking your counsel regarding how to best protect its interests. Specifically, Tech Company would like to know if the intellectual property (IP) of their AI technology would be better protected by a patent, trade secret, or perhaps a combination of both. What do you recommend? As discussed in the following article, utilizing a dual strategy of protection under patent and trade secret for Gen AI inventions could help companies strategically and holistically protect their Gen AI innovations while maximizing their competitive edge.

Understanding AI and Gen AI

AI refers to technology that is capable of performing tasks that typically require human intelligence. These tasks may include learning, reasoning, problem-solving, perception, and language understanding. AI systems can be found in various applications, such as virtual assistants, self-driving cars, and recommendation algorithms. Gen AI, a subset of AI, focuses on creating new content, whether it be text, images, or sounds, by learning from a vast dataset and identifying patterns to generate outputs that are novel and not explicitly programmed by humans. Gen AI is expected to fundamentally change how businesses operate, from increasing productivity to creating new business models. The AI market is projected to grow substantially, with an estimated annual growth rate of 37.3% from 2023 to 2030. (See "24 Top AI Statistics and Trends In 2024," Forbes Advisor, June 2024.) More and more companies are looking to Gen AI technologies to enhance efficiency, enable better decision-making, and foster innovation. Alongside this growth, IP protection is becoming increasingly crucial as Gen AI technologies advance and proliferate. However, deciding how to protect AI technology can be difficult as both patents and trade secrets have Gen AI-specific pros and cons. But first, what are patents and trade secrets?