How Intellectual Property Fits into Cloud Computing and SaaS Business Models |  Foley & Lardner LLP

How Intellectual Property Fits into Cloud Computing and SaaS Business Models | Foley & Lardner LLP

This article was co-authored by patent engineer Jacqueline P. Campbell and senior attorney Nikhil T. Pradhan of the Boston office of Foley & Lardner LLP.

Various types of intellectual property (IP) can provide companies with protection for innovations and maintain or extend their competitive advantages. For businesses that use Software-as-a-Service (SaaS) technologies and/or leverage cloud-based services to support their operations, each type of intellectual property has unique considerations to ensure its effective use. As a starting point, understanding intellectual property requires understanding how data is owned, managed, and communicated between various entities in the cloud environment.

This article will describe four main types of intellectual property (patents, trade secrets, copyright, and trademark) to provide a framework for how each type can be independently valuable in the context of cloud computing and SaaS.

I. Patents

Patents cover inventions that meet certain standards of being new, non-obvious, and especially for software, oriented towards practical applications and technological improvements rather than abstract ideas. Patent protection provides the ability to prevent others from practicing the patented technology for a limited period. For the avoidance of doubt, software technologies are patentable. In the SaaS context, effective patents often focus on the technological underpinnings that make the service valuable to customers.

Utility patents expire twenty years after filing. These timelines mean that for rapidly evolving technologies, such as SaaS, it can be essential to obtain protection for core functions and processes that should be maintained across many software releases, rather than very specific implementations that might quickly become obsolete.

In addition to utility patents to protect the functions of SaaS technologies, design patents can be sought to protect ornamental design aspects – the look and feel or other aesthetic characteristics of products. These may include graphical user interfaces (GUIs), such as those associated with unique or particularly valuable charts or reporting tools that are presented to end users. Unlike utility patents, design patents expire 15 years from the date the patent was granted.

Unlike other forms of intellectual property, patents must be filed within one year of the first public disclosure, launch, sale, broadcast or demonstration of the product or the technology for which patent protection is sought. This means that a SaaS company should file for patent protection relatively early, often before it has conducted a Series A funding round. Companies are often advised to file a full provisional application that covers the main aspects of the fundamental platform supporting their technology as an effective and deep deposit strategy. Provisional patent applications are unexamined and serve as a placeholder for future patent filings. As such, they are generally less expensive to prepare and file than non-provisional patent applications.

II. Trade secrets

Trade secrets can be a valuable asset, especially alongside patents as part of an overall strategy that uses each where it is most effective. Trade secrets protect confidential information by providing the ability to sue someone who misappropriates confidential information. Trade secrets cannot be used to protect against the use of information discovered independently or through public means – hence the added benefit of patent protection.

Yet trade secrets can be valuable to SaaS companies for at least three reasons. First, they can be a useful cause of action in industries where innovators often move between companies, leading to higher risks of passing on confidential information. Second, trade secret protection can extend far beyond the scope of patentable concepts to customer lists, business plans, and other similar useful information. Third, trade secrets are not time-limited and can potentially last indefinitely, unlike utility patents which only last up to 20 years from filing.

A key requirement for trade secrets is to establish and maintain appropriate processes to keep information confidential. For SaaS companies that use cloud servers for their own internal needs as well as for the services they provide to customers, it is important to ensure that the cloud service provider has appropriate safeguards in place to mitigate the risk. data breaches and other situations that could lead to confidential information being misappropriated or unintentionally made public.

III. Copyright

Copyright protects original works of expression or authorship, including the expression represented by the written code of software, but not the technological ideas that the written code implements. Copyright protection can be useful because you don’t have to register it to allow a cause of action. It’s worth bearing in mind that the emphasis on the phrase for copyright protection means that if someone rewrites or does a workaround in the actual code, it’s not necessarily protected anymore. by copyright. Nonetheless, SaaS companies should keep copyright protection in mind as part of an overall intellectual property protection strategy, especially when their code resides on cloud platforms.

IV. Trademark

While not necessarily unique to SaaS/cloud computing technologies, companies should also keep in mind the value of brands and other brand protection tools to advance and protect their public brand. A trademark is an expression, word, symbol, mark or the like that distinguishes one mark from another. A key element of a trademark is that it is recognizable as an identifier of the good or service offered by the business. As SaaS companies increasingly leverage cloud platforms to support their services, it can be useful to ensure that branding is maintained consistently across the multiple disparate entities involved in the cloud environment.

SaaS companies should remain vigilant about the use of their brands by other entities, especially competitors who engage in comparative advertising. It’s not uncommon for SaaS companies to benchmark their features or results against those of competitors. Businesses can set up alerts to monitor their brands or use brand monitoring services to determine when their brands or products are mentioned. These alerts and monitoring services can mitigate the effects resulting from brand dilution or denigration.

V. Considerations for Using Open Source and Other Software

Early in the development of SaaS technologies, there can be various reasons to rely on open source software to facilitate the development process and get working products into the hands of customers as efficiently as possible. However, companies should be aware of the unique obligations associated with using open source software, particularly regarding (1) attribution to existing developers of the open source software, (2) notifying customers and other users of any obligations associated with the software, and (3) restrictions on use of patent, copyright, or other intellectual property-based protections. Additionally, the license associated with open source code can create a larger body of code that includes open source code that is also open source. Where appropriate, companies should take care, when incorporating open source code into their own code, to avoid the company’s own code being treated as open source. Thoughtful monitoring and review of software licenses can ensure that these considerations are addressed.


Intellectual property assets can be essential for SaaS companies to protect various aspects of their technology and the services they provide in pursuit of their business goals. As companies continue to use cloud platforms to deliver innovative solutions to customers and end users, these assets can be used to establish and maintain competitive advantages and reduce the risks associated with competitors copying or hijacking these innovations. .

To read additional articles from the Clear Skies Through the Clouds series, please click here.

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