#87 IP in Quantum Technology

00:00:02: Welcome to the IP Market Signal series from IP Management Voice.

00:00:06: Based on OFB-IP market research group analysis, this series explores the industries technologies and market developments that are shaping the demand for intellectual property expertise.

00:00:18: each episode highlights key topics driving current discussions influential market voices emerging needs among innovators in businesses an opportunities for ip experts created by these trends.

00:00:31: In this episode, we examine the IP market signals shaping quantum technologies.

00:00:37: What happens when a technology is so new and absolutely mind-bending that rules for who gets to own it haven't even been fully written yet?

00:00:46: That's

00:00:48: right because imagine you are standing on edge of a continent but instead of physical land How do you even draw a border around something that exists in multiple states at once?

00:01:04: You really can't.

00:01:05: I mean, we're used to legal frameworks Think of like a mechanical engine, or at least classical software.

00:01:14: But with quantum technology the fundamental boundaries of ownership are just being stress tested in real time.

00:01:20: We're trying to apply these centuries old property concepts To the literal mechanics of quantum physics.

00:01:25: Okay

00:01:26: so let's unpack this For our deep dive.

00:01:27: today we are exploring The invisible architecture behind the Quantum Technology Revolution.

00:01:37: No, exactly.

00:01:38: We are looking at how companies are staking their claims.

00:01:41: you know the no strategies required to protect these innovations and The legal frameworks that are basically sprinting just to keep pace.

00:01:48: Yeah because if you kill back the layers this isn't some dry procedural legal topic

00:01:53: Not at all.

00:01:53: what we are really Looking At is a high stakes real-time geopolitical chess match

00:01:59: And To truly understand How That Chess Match Is Being Played You Have To Connect The Dots Between Theoretical Physics business strategy, and global market dominance.

00:02:10: The decisions being made right now regarding quantum IP are going to dictate the industrial power dynamics for the next fifty years.

00:02:17: Fifty years?

00:02:18: Wow!

00:02:18: Yeah it is that massive companies are trying to design a protection architecture across these highly interdependent layers of technology all while simultaneously trying to enable collaboration in global standardization.

00:02:29: It's huge balancing

00:02:30: act.

00:02:31: Well, I was looking at some recent data to get a sense of the scale and the sheer acceleration is just staggering.

00:02:37: Like Jan Menier over at The European Patent Office had this great point he said an quote international patent families in quantum increased sevenfold between two thousand five and twenty-twenty four

00:02:48: A seven fold increase

00:02:50: right?

00:02:50: Seven X explosion in less than twenty years.

00:02:53: And He presents that patent activity not just as a legal metric, but has the ultimate indicator of the accelerating industrialization of quantum technology.

00:03:02: Meaning it is NOT just theoretical anymore?

00:03:04: Exactly!

00:03:05: A seven-fold increase shows we have definitively exited the purely academic research phase... The theoretical physicists have essentially handed baton to commercial engineers….

00:03:15: And you see playing out on national level too.

00:03:17: like in Germany alone Quantum relevant published patent applications hit eight hundred and fifteen in twenty-twenty four,

00:03:24: which is a huge jump.

00:03:25: Yeah because just a decade earlier that number was one hundred and twenty.

00:03:29: yeah.

00:03:29: And diving into the broader global analysis from Dr.

00:03:32: Jillian F. Weenan Eric Fisher They highlight this continued global expansion of quantum patenting.

00:03:37: didn't they point out specific area growth?

00:03:39: Yes, interestingly they point out particularly strong growth in quantum communication even though quantum computing actually overtook communication and patent intensity a couple of years ago.

00:03:50: Which tells us exactly where the commercial pressure is building right now.

00:03:54: The focus is shifting rapidly toward building functional interconnected computing systems.

00:03:59: Right

00:04:00: Dr Robert Harrison Actually frames the stakes of this transition perfectly.

00:04:06: He notes that Quantum technologies are no longer theoretical.

00:04:09: They're reshaping industries, economies and global competition.

00:04:13: Reshaped Global Competition?

00:04:16: That is a heavy statement!

00:04:17: It

00:04:17: is but it's accurate.

00:04:18: he emphasizes that IP systems absolutely must evolve alongside this commercialization because the old rules, well they simply don't map perfectly onto this new reality.

00:04:28: But wait if everyone is frantically rushing to file patents on every tiny piece of quantum tech.

00:04:33: it sounds like building a modern skyscraper where one company owns the patent on the concept of concrete

00:04:39: Right and another owns the design for steel beams

00:04:41: Exactly.

00:04:42: And third claims that they own fundamental idea.

00:04:45: If I am a startup trying to build working machine, how do i ever move forward without tripping over a dozen different

00:04:53: patents?

00:04:54: What's fascinating here is that you've hit on the exact structural challenge defining the industry right now.

00:05:00: It is what we call The Patent Thicket!

00:05:02: This ticket like being tangled in the weeds.

00:05:04: Yeah

00:05:04: precisely In traditional IP contexts value is usually tied To A Single Discrete Invention.

00:05:11: You invent a better spark plug... ...you patent the spark plug and sell it.

00:05:14: Simple enough.

00:05:15: Right, but in quantum value is distributed across highly interdependent system elements.

00:05:21: you have the physical hardware architecture The air correction systems the software interfaces the fabrication capability.

00:05:27: I mean they all rely on each other entirely.

00:05:30: So nobody is actually patenting the quantum computer as one big box.

00:05:34: They're patenting tiny, hyper-specific slivers of the ecosystem required to make it run.

00:05:39: Precisely and this has been driven by what we call technology push dynamics rather than demand based logic.

00:05:45: What does that mean practically speaking?

00:05:47: Well usually a company files a patent because they have market ready.

00:05:51: product customers are actively demanding Demand-based, but quantum companies are having to construct their own decision anchors under total uncertainty.

00:06:00: They have to make aggressive IP decisions before the market The applications or even the final technological trajectories.

00:06:08: Have stabilized.

00:06:09: that

00:06:09: sounds incredibly risky.

00:06:11: Let's look at the actual physical machines to see how that plays out, because this is where that thicket we mentioned has become incredibly dense.

00:06:17: Right?

00:06:17: Oh absolutely!

00:06:18: If you look at hardware layer things like quibits themselves, cryogenic cooling systems, photonics and especially quantum error correction these are the hottest most congested areas of IP.

00:06:29: right now big players like IBM Google Ion Q and Quantinium building massive overlapping patent portfolios

00:06:37: And Because Of Those Thickets What We Call Freedom To Operate is becoming severely constrained.

00:06:42: Freedom to operate being the ability to actually build and sell your product without getting sued?

00:06:47: Exactly, Without infringing on someone else's rights.

00:06:50: a new startup can no longer just assume they have the freedom To operate within their chosen hardware architecture.

00:06:57: But if I am that start-up That sounds like a total nightmare.

00:07:01: If i need to license The cooling system from company A The chip architecture From Company B and the error correction from company C just to turn my machine on, well how do I ever make a profit?

00:07:13: That is The Commercial Squeeze happening at the hardware level.

00:07:16: And to complicate matters even further, simply getting those hardware patents granted in the first place is notoriously difficult.

00:07:23: Because the tech is so complex?

00:07:25: Exactly!

00:07:26: Overcoming the strict patentability challenges requires an unusually high level of technical disclosure.

00:07:32: Dr.

00:07:32: Maximilian Kek has pointed this out noting that providing explicit and detailed explanations about how an invention is implemented may help overcome sufficiency challenges.

00:07:41: Meaning, I can't just walk into the patent office and say hey i claim a quantum processor that runs twice as fast.

00:07:46: Right they'll just reject it?

00:08:03: Because the physical hardware layer is so congested, expensive to protect and requires spilling many of your engineering secrets.

00:08:11: The strategically valuable IP is increasingly being written at software level.

00:08:16: Ah, moving up the stack.

00:08:17: Exactly!

00:08:18: Yeah We are talking about a software stack The translation layers, the control software... ...the compilers that sit between user and machine.

00:08:25: Here is where it gets really interesting to me.

00:08:27: A great example of this is Zapata Quantum.

00:08:30: They recently secured major patent grant for their QIR Which is quantum intermediate representation.

00:08:37: Right,

00:08:38: the QIR patent

00:08:39: It's essentially hardware agnostic translation layer.

00:08:42: I think of it like a universal translator from science fiction.

00:08:45: The real commercial value isn't necessarily the alien hardware itself, It's the software that actually lets us speak to it...

00:08:51: That is a highly accurate way to visualize it yeah?

00:08:53: ...it let developers run applications across different types of quantum machines without needing to you know understand the underlying physics

00:09:01: Because the commercial bottleneck right now has usability so the values sits above the quibbit level.

00:09:07: However claiming software in patent law Has always been tricky even with classical computers.

00:09:13: Really?

00:09:13: Why is that?

00:09:15: Well, Phil Merchant argues that patent protection is available for software inventions in quantum technology but he adds a crucial mechanism the technical contribution must be clearly demonstrated.

00:09:25: Okay

00:09:26: I have to push back on that though because if software is essentially just math i mean it's algorithms logic gates equations.

00:09:33: how do you definitively prove like technical contribution into a patent office?

00:09:37: Math is an abstract concept.

00:09:39: You can't patent the Pythagorean theorem!

00:09:41: No, you can't and that's a million dollar question particularly in Europe.

00:09:45: The European Patent Office uses framework called the

00:09:50: CoMVik approach.

00:09:52: Yeah, C-O-M-V-I-K Under Komevic... ...you absolutely cannot patent an abstract mathematical method To get the patent.. ..you have to prove your quantum algorithm solves a tangible real world technical problem.

00:10:07: It has to bridge the gap between theoretical math and applied engineering.

00:10:11: Give me an example of that, what is bridging that gap actually look like for a developer sitting at a keyboard?

00:10:16: Okay let's say you write a quantum algorithm that factors large prime numbers twenty percent faster.

00:10:21: OK

00:10:21: sounds useful

00:10:22: it is but that is purely mathematical.

00:10:24: under CoMV its generally not patentable.

00:10:28: But let's say you write an algorithm that optimizes the timing of the microwave pulses controlling the quibits, and as a result it reduces thermal heat load on the triogenic cooling system by ten percent.

00:10:38: Ah I see!

00:10:39: You're using math but are creating physical measurable change in machine hardware environment?

00:10:45: Less Heat!

00:10:46: Exactly...you have shown software controls a physical technical process or optimize the hardware internal functioning.

00:10:53: That makes total sense.

00:10:54: And the technical prosecution, like the actual mechanics of proving that and getting these patents granted is becoming quite mature.

00:11:01: We know how to do it But what is severely lacking in the market?

00:11:06: Is this strategic supply of advice?

00:11:08: What do you mean by that?

00:11:10: well knowing how to get a patent doesn't tell the company when or why they should get.

00:11:15: That's a good point, because the cost of proving that technical contribution can be what?

00:11:20: Hundreds of thousands of dollars.

00:11:21: Easily Which forces us start-up founder to ask is this specific patent even worth it right now?

00:11:27: and that brings us To a massive structural failure happening in the industry which is The missing.

00:11:32: middle companies are realizing that traditional IP advisors You know the ones who just filed paperwork or failing

00:11:38: them.

00:11:38: Yeah at translation problem quantum companies do not lack brilliant technical patent attorneys.

00:11:44: What they lack are advisors who understand their daily operational business decisions and how IP actually fits into that roadmap.

00:11:51: So if you're a founder listening to this, You know need help sequencing your IP?

00:11:57: Let's say have brilliant new quantum protocol.

00:12:01: Do you patent it today?

00:12:02: do keep as tightly guarded trade secret or defensively publish the world just put in public domain so competitors can't patent it and block you later.

00:12:13: And making that choice is incredibly messy.

00:12:16: because these technologies aren't built in a vacuum, You have to handle what we call consortium IP architecture right?

00:12:22: Because of all the partnerships

00:12:24: exactly.

00:12:24: let's look at realistic scenario.

00:12:26: your start-up spun out university lab University claims baseline research background IP.

00:12:32: then The startup gets a massive influx of public funding like a Horizon Europe grant, which comes with its own strings attached.

00:12:39: Of course it does!

00:12:40: Right

00:12:40: and they partner with the corporate giant to build the prototype.

00:12:43: so who actually owns the resulting product?

00:12:45: The foreground IP.

00:12:47: How do you negotiate with universities technology transfer office without stalling the entire company?

00:12:52: It sounds like a legal minefield, not to mention the founder has to translate all of that dense complicated patent architecture into an investor grade narrative.

00:13:02: Yes!

00:13:02: The narrative is crucial

00:13:04: because if you are going for a series A or Series B funding round your CFO and venture capitalists They don't want to read a two hundred page patent filing.

00:13:14: You need to turn your IP portfolio into a ninety second one-page story that justifies your company's valuation, which

00:13:21: is incredibly hard to do.

00:13:23: but knowing the stakes are this high why not?

00:13:25: Just patent everything immediately.

00:13:27: protect your flank right patented.

00:13:28: all That Is The Natural Instinct.

00:13:30: But The Paradox Of Quantum IP Is At The Earlier you Protect It The faster your protection becomes obsolete, that binary choice between doing nothing and over committing by patenting everything is the danger zone.

00:13:42: Because you lock yourself in?

00:13:43: Yes!

00:13:44: If you publish or patent a concept too early You have to disclose how it works which completely ruins your ability To keep its trade secret.

00:13:51: Yeah But if you file a patent too narrowly just get granted quickly.

00:13:55: It become useless as technology pivots for next five years.

00:13:58: Right, because the tech is evolving faster than ink can draw on application.

00:14:02: Precisely!

00:14:03: You need intermediate decision states.

00:14:05: you need ability to build readiness without premature over-commitment.

00:14:09: IP no longer a reactive siloed legal category where an engineer just hands invention disclosure to lawyer at end of project.

00:14:18: It has be baked into business plan.

00:14:20: it's proactive integrative business capability design protection architecture that layers patents trade secrets open-source strategy and ecosystem trust.

00:14:30: Which is a delicate balancing act on its own, but it gets even more intense when we zoom out from the struggles of individual startups And look at the macro level how our governments and global standards bodies stepping in to referee this entirely new world?

00:14:45: Because let's be honest This isn't just about business advantage anymore.

00:14:48: It is a matter of national security.

00:14:50: Oh absolutely We are looking toward the twenty thirty horizon right now and the regulatory environment is shifting dramatically.

00:14:57: For example, we have the EU Quantum Act which is expected to take shape around two-two of twenty twenty six.

00:15:02: And what will that do?

00:15:03: This type of legislation is going to pull IP directly into a much broader and stricter regulatory frame.

00:15:10: because governments are terrified of IP leakage.

00:15:12: they're deploying foreign direct investment FDI screening in incredibly strict export controls.

00:15:19: but wait How does an export control actually apply to a quantum algorithm?

00:15:23: It's not like you are loading of physical nuclear centrifuge onto a cargo ship.

00:15:27: No, and that is the modern complexity of export controls.

00:15:31: Exporting an algorithm might simply mean granting cloud access to server located in another country or pushing code update for foreign research partner.

00:15:39: Just

00:15:39: a Code Update

00:15:40: Yes If that code has national security implications Like The ability to break encryption For example, granting that digital access is a severe export violation.

00:15:49: Wow!

00:15:49: So the standard licensing deal could suddenly get flagged for national security review or startup taking venture capital from an overseas fund can change their entire FDI exposure and get them investigated?

00:16:00: Exactly these regulatory frameworks – FDI screening, export controls.

00:16:06: they aren't just distant political talking points undeniable operational realities that companies must navigate to survive.

00:16:14: Gregory Eurotunian points out how rigorous this environment is becoming.

00:16:18: what does he say?

00:16:19: He notes, in quantum IP only claim features they contribute to solving a technical problem are taken into account.

00:16:26: He positions quantum IP within his massive multidisciplinary legal framework.

00:16:31: includes patent law foreign investment screening export controls procurement and technology regulation.

00:16:37: it's

00:16:38: the web that you can easily get caught in.

00:16:41: And on top of that regulatory Web, there is a massive legal storm brewing.

00:16:45: analysts are expecting major pattern litigation to kick off at the unified patent court The UPC between twenty-twenty seven and twenty thirty.

00:16:52: The conditions are perfectly right for it.

00:16:53: honestly we have overlapped portfolios held by really well funded competitors and the first commercial quantum products or finally approaching enterprise deployment.

00:17:00: There's real money online now.

00:17:02: The

00:17:02: stakes were real?

00:17:03: Yes But perhaps the most complex hurdle on the horizon is the rise of standard essential patents or SAPs.

00:17:10: Okay, let's break down SAP for the listener real quick.

00:17:13: when an industry agrees On a universal standard like how Wi-Fi routers talk to each other Or How five G cell networks communicate?

00:17:20: The patents covering that essential baseline technology become SAP.

00:17:25: Anyone building to that standard is legally required.

00:17:28: To use that patented technology, right?

00:17:30: And Right now this happening in post quantum cryptography driven by new security standards from bodies like NIST as well As in quantum key distribution.

00:17:38: and

00:17:38: if you own the patent That becomes The foundational global Standard for Quantum Cryptography You hold incredible leverage.

00:17:44: I mean every single company government or bank that uses that standard has to negotiate a license and pay your royalties.

00:17:50: But isn't that just creating government mandated monopolies?

00:17:54: Doesn't that stifle the exact innovation these massive public funding programs like Horizon Europe are trying to create in first place.

00:18:01: I mean, if one company locks down the Assepi everyone else pays the toll!

00:18:06: It reminds me of the brutal telecom and smartphone patent wars of the twenty-tens... Are we about see exactly same bloodbath with quantum

00:18:15: computers?!

00:18:16: If connect this to a bigger picture….

00:18:17: That is EXACTLY the trajectory we're on And the industry knows it, which is why its entering a heavy consolidation phase.

00:18:25: Firm creation largely plateaued after twenty-twenty one.

00:18:28: Now we are seeing mergers acquisitions and IPOs The

00:18:32: big fish eating little fish

00:18:33: Exactly!

00:18:34: That requires incredibly deep IP due diligence.

00:18:37: When bigger company acquires quantum startup They aren't just buying the engineers, they're buying the patent portfolio and need to know if it's actually bulletproof.

00:18:45: Because If that startup technology is secretly infringing on someone else's patent thicket The acquiring company bought themselves a massive multi-million dollar lawsuit.

00:18:54: Yes!

00:18:54: They bought a liability And the window to build expertise.

00:18:58: since stake these foundational claims Is closing rapidly The IP advisors and the companies who can integrate their patent strategy with FDI rules, export controls in global standards today are going to be the undisputed authorities by twenty thirty.

00:19:11: It's a race against the clock.

00:19:13: it is those who wait for the market to completely stabilize before thinking about there.

00:19:18: IP strategy will be permanently locked out.

00:19:24: So to quickly synthesize the journey we've taken you on today, We started by looking at a massive seven X explosion in global quantum patents proving The field has moved from purely theoretical physics into hard industrialization.

00:19:36: We navigated the thorny congested thickets of hardware patents and explored the vital strategic pivot toward capturing value In the software and translation layers using mechanisms like the key MVic approach.

00:19:48: You know, the paradox where protecting your IP too early makes it obsolete.

00:19:52: Exposing strategic failures of treating quantum like a standard physical product rather than messy interdependent ecosystem.

00:20:01: And finally we looked ahead to future that will be dominated by stringent export controls FDI screening and looming high stakes patent wars over global standards.

00:20:10: It is landscape defined by volatility but also immense opportunity for those who understand mechanics in game.

00:20:17: And as we wrap up, I want to leave you with one final thought.

00:20:19: To consider what's here?

00:20:20: As quantum value becomes increasingly distributed relying on massive interdependent ecosystems public consortiums and global standards Rather than a single Eureka moment in alone inventors lab will our centuries old winner takes all patent system even survive?

00:20:35: Or is the sheer complexity of conom technology going to force us to invent an entirely new legal paradigm for defining ownership?

00:20:42: Wow That is the perfect question to leave hanging in the air.

00:20:47: If technology itself can exist at multiple states, maybe our concept of owning it will have.

00:20:57: You

00:21:14: can download the full report using link provided in show notes.