[Patent Attorney Commentary] Patent Strategy for SaaS Business | How to make the communication processing between server and client the strongest right

Nowadays, the main battlefield of business has shifted from packaged software to SaaS (Software as a Service), and many startups are aiming to expand their business through a subscription model. However, it is surprisingly little known that due to its technical characteristics, SaaS is extremely difficult to obtain patents and is prone to failure.

"Even though we developed a revolutionary algorithm, we were unable to sue our competitors for patent infringement"

"Just because the server was moved overseas, the patent rights no longer apply"

In order to prevent such a situation, a sophisticated strategy is required to legally define the relationship between the "server" and "client", which is the unique architecture of SaaS.

In particular, SaaS patent practice has reached a dramatic turning point with the Supreme Court ruling in the Dwango v. FC2 case in March 2025. It is too dangerous to file an application based on old knowledge without knowing this ruling.

In this article, from the perspective of a patent attorney who specializes in the IT and software fields, we will thoroughly explain the core of patent strategy in SaaS businesses and the know-how for "winning rights acquisition" based on the latest court precedents.

1. Why are SaaS patents different from "ordinary patents"?

Traditionally, manufacturing patents (for example, "engine" or "chair") were completed as long as that one item existed. However, the invention of "networked systems" including SaaS only works when multiple physically separated elements work together.

The biggest problem here is the "multi-actor wall" in patent law.

Risk of dispersion of infringers (principle of implementing all configuration requirements)

In principle, in order to establish patent infringement, "one entity (competitor)" must implement "all the constituent elements stated in the patent claims."

What would happen if you patented the entire system as a "chat system consisting of a server and client terminal" without thinking about it?

・The server is managed by a "competitor (SaaS vendor)".

・The person operating the client terminal is a "general user (customer)".

In this case, there is a risk that a competitor will argue, ``I am not operating the client terminal (the user is doing this on his/her own authority). Since I am only implementing half of the entire system, it is not a patent infringement.'' There is a risk that the infringement will not be established.

To prevent this, it is essential to properly divide the invention, clarify who is doing what, and "claim design".

2. "Three divisions" strategy for communication between server and client

The most important thing when it comes to SaaS patents is ``from what perspective should you approach the invention?'' Even for the same technology, by acquiring rights in multiple layers in the following three categories, you can build a powerful patent network with no escape.

Strategy 1: Server-side complaints (the most important main focus)

This is the right to directly attack SaaS vendors (competitor). The components of the invention will be described only as "processing performed by the server."

・Bad example (multi-subject):

"A system in which a user sends a request from a device, a server receives it, processes it, and displays the results on the user's device."

(*Contains the user's action of "displaying")

・Good example (single-based):

"A server device comprising a receiving unit that receives a request from a terminal, a control unit that performs processing based on the request, and a receiving unit that transmits display data to the terminal."

By unifying the subject as "server" in this way, no matter what the user is doing, a competitor can be questioned about infringement (production, use, etc.) when they operate that server. For SaaS patents, this is the most basic and powerful right.

Strategy 2: Client-side complaints (vs. app store)

This is effective when there are special features in dedicated apps or JavaScript processing that runs on the browser.

Here, we will license the "program" itself.

If you want to eliminate a competitor who distributes apps on the Apple Store or Google Play, it may be difficult to explain to the platform operator with just a "server patent," and removal may be delayed. However, if you have an "app patent," you can simply claim that the distributed app itself is an infringing product, and you can smoothly request its removal from the store (takedown).

Strategy ③: System complaints (against overseas servers)

In the past, complaints about the "entire system (server + terminal)" tended to be avoided due to the risk of multi-party infringement, but the importance of such claims is being re-evaluated due to the latest rulings described below.

In particular, system claims are very effective when the server and client work closely together and the essence of the invention lies in their interaction (protocol or communication sequence).

3. "Dwango case" Supreme Court decision that changed history (March 2025)

The biggest concern in the SaaS business for many years has been the issue of "server installation overseas (cross-border)".

Japanese patent rights are based on the "territorial principle" and are valid only within Japan. As a result, there was a risk of "patent evasion" in which "Japanese patent rights do not apply because the AWS region is the United States."

The Supreme Court decision in the Dwango v. FC2 case handed down on March 3, 2025 completely settled this issue.

It's an infringement if it's "substantially domestic"

The Supreme Court determined that even if the server is located outside the country, if the act of creating the system "can be evaluated as substantially taking place within Japan" by comprehensively considering the following factors, it constitutes an infringement (production) of Japanese patent rights.

1. Type of transfer, etc.: Is the service provided for users in Japan (Japanese display, Japanese Yen payment, etc.)?

2. Location of effects: Are the effects of using the system occurring within Japan (are domestic users able to use it?).

As a result of this groundbreaking ruling, SaaS providers no longer have the option of simply moving their servers overseas.

In other words, the Supreme Court has established that if you securely obtain a patent in Japan, you can request an injunction and damages against counterfeit services using overseas servers.

Since this ruling, the strategy of daringly obtaining a patent for a ``system that includes a server and a terminal'' and claiming that ``it includes users (terminals) in Japan, so it can be implemented domestically'' has become an extremely effective option.

4. How to prove "invisible internal processing"?

No matter how great your patent is, it is meaningless unless you can prove that a competitor's service is using the patent. This is called "detectability."

SaaS backend processing (AI algorithms and high-speed calculation logic) is a black box. What calculations are being done inside the server cannot be seen from the outside.

For this reason, when I am in charge of SaaS patents for client companies, I always include the following points of view.

Define rights with input/output (I/O)

Claims are constructed not by the internal logic itself, but by including the causal relationship of "what kind of output is returned in response to a specific input."

× Complaint for internal processing only:

"The process of calculating coefficients on data A using algorithm X and storing them in memory B."

(*Since it is absolutely invisible from the outside, no evidence of infringement can be obtained)

○ Complaints focusing on input/output:

"A process of generating data B containing specific parameters in response to receiving data A from a terminal, and sending this back to the terminal."

If you write it like this, you can simply hit your competitor's API and check the response (JSON data, etc.) to prove that "Look, this parameter is returned. This is patent infringement."

A "strong patent" is one that is not only technologically advanced, but also one that is easy to detect infringement.

5. Intellectual property roadmap for SaaS startups

Speed is the key to SaaS business. Patent applications must be filed at the appropriate time according to the development phase.

Phase 1: MVP development ~ Immediately before release (before PMF)

This is the biggest battle.

A patent requires "novelty." Even if it's a beta version, once it's released to the world, it can no longer be patented (novelty is lost).

Please be sure to complete your application before issuing a press release or releasing an LP. At this stage, we focus on the basic concept of "business model x technology" rather than detailed code.

Phase 2: Growth period (Series A to B)

This is the time when the number of users increases and features are added. Here, we will proceed with the acquisition of rights to specific UI/UX, data structures, and API specifications that will differentiate us from other companies.

Particularly when looking at future IPOs (initial public listings) and M&A, a patent portfolio becomes an asset that can significantly boost a company's valuation. Investors and acquiring companies pay not only for the technology itself, but also for the ``right to monopolize that technology.''

6. Summary: Importance of choosing a patent attorney who is strong in SaaS

SaaS business patents will end up being full of holes unless you deeply understand the following three elements.

1. Network technology (HTTP, API, WebSocket, cloud infrastructure)

2. Latest legal logic (Dwango Supreme Court decision, multi-party implementation, indirect infringement)

3. Business model (monetization points, entry route for competitors)

Simply ``writing down the specifications heard from the engineer'' will not protect SaaS patents.

It is essential to have the support of experts who can communicate with engineers in technical terms and who can visualize invisible processing between servers and clients in the form of "rights."

Our firm provides patent support specializing in SaaS/cloud business.

If you are not sure whether your service will be patented or if you are worried about being imitated by a competitor, please contact us as soon as possible before the development is completed.

SaaS technology becomes an asset from the moment you write the code. Our job is to turn that asset into "exclusive rights."

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#SaaS #Patent strategy #Software patent #Business model patent #Startup #Patent attorney #Server client system #Dwango judgment #Cross border #API #UIUX #Proof of infringement #Intellectual property strategy #Cloud service #Patent application #IT patent

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