The recent Formula 1 season has placed the topic of batteries—or rather, their management—at the center of the debate, causing no shortage of controversy among fans and drivers. This refers to real-time algorithms that decide when to harvest energy, when to release it, and how to coordinate everything with aerodynamics and race strategy. We are facing an invisible software that is worth just as much as an engine (if not more).
This is merely one facet of a much broader phenomenon. The same transformation, which sees competitive advantage migrating toward “code,” is already underway in sectors like automotive, energy, robotics, and manufacturing. Consequently, for those operating in innovation, an increasingly pressing question emerges: how do we protect this digital “brain” made of lines of code?
“Software Cannot Be Patented”: False (or Almost)
Leaving aside the applicability of copyright protection as a tool to protect source code, we will focus here on patents and trade secrets.
The European Patent Convention excludes computer programs “as such,” which, at first glance, would seem to be an unequivocal ban. In reality, however, this is not the case. It is an opening left accessible, one that the European Patent Office (EPO) has widened over the years.
The distinguishing factor is not whether there is code, but what that code produces.
A software is potentially patentable if it generates a concrete technical effect—meaning something that goes beyond pure abstract data processing and interacts with the physical world. Think of an algorithm that improves vehicle stability, one that optimizes the energy consumption of a plant, or one that controls a robotic arm in real time. In all these cases, the software is not “pure code”; it is the mind behind a measurable technical solution. Conversely, purely mathematical logic, an organizational model, or a recommendation system without a direct physical impact remain outside the scope of European patentability.
The rule, simplified to the maximum: You do not patent the code itself, but rather the technical solution (implemented via software) that solves a technical problem in a novel and non-obvious way.
From here, we can understand the evaluation logic used by patent offices during examination:
- The first step is relatively accessible: demonstrating that the software interacts with something physical (e.g., a sensor or a control system).
- The second step is the complex one: it is not about how sophisticated the code is, but how tangibly it impacts reality.
The centrality of software is particularly evident, for example, in the automotive sector (which inspired this discussion). Algorithms, which are often patentable, manage physical systems with tangible effects. Predictive active aerodynamics is a key example of this synergy, where algorithms not only control but anticipate road conditions to proactively adjust aerodynamic surfaces. This represents a real-time performance optimization that is equally applicable to energy management, machinery control, and grid optimization.
The True Dilemma: Patent or Keep Secret?
Once we reach this point, the question is no longer “can it be patented?” but rather “is it worth doing?”
The Patent Route
A patent transforms a technical solution into an exclusive, enforceable right. However, it has two limitations to keep in mind:
- Mandatory disclosure: It makes the invention public and accessible to competitors (the price to pay for this “monopoly”).
- A defined lifespan: It lasts for 20 years from the filing date, after which the technology enters the public domain, and you no longer enjoy exclusivity over its economic exploitation.
The Trade Secret Route
Trade secrets, one could say, work the opposite way. There is no publication, protection is immediate, and there is no predefined expiration date. It is the natural choice when the competitive advantage is fast-paced, iterative, and difficult for outsiders to replicate.
However, the risk is real:
- If a competitor arrives at the same solution independently (through their own research or lawful reverse engineering), there is no legal recourse. A secret does not protect against parallel discovery.
- Keeping a secret is not cost-free. Building the organizational structure required to protect it under applicable regulations (from internal protocols and NDAs to security measures) requires concrete and ongoing investments.
A Hybrid Approach
These two tools can be complementary. Increasingly, innovative companies use both strategically: patenting what is destined to scale or what others might develop independently, while keeping secret what provides an immediate advantage that is difficult for competitors to intercept.
Protection Is Designed, Not Appended
For those developing technology today, intellectual property is not a final step to be delegated to lawyers once the product is finished. It is an integral part of the design process, and the earlier it enters the conversation, the better.
Before launching a solution into the market, it is essential to reflect on its protection. This involves asking concrete questions, such as the duration of the competitive advantage, its replicability by third parties, and the existence of a broader market beyond the specific application.
Patents and trade secrets are not two sides of the same coin. They are different tools, with different logics, suited for different moments. Understanding which one to use, and when, is a strategic choice in its own right.
Article in collaboration with AW LEGAL and VISIUS
AW LEGAL is a law firm specializing in Intellectual Property, Privacy, and Legal Tech. VISIUS offers legal assistance and strategic advice to individuals and businesses, in the areas of white and corporate criminal law, Swiss law, and new technology law.
