[Patent Attorney's Guide] Patent Strategy for Physical AI | Key Filing Considerations for Protecting Intellectual Property in Hardware-Software Convergence Technologies

Introduction: AI Expanding into the Physical World and the Importance of Intellectual Property Strategy

In recent years, AI (Artificial Intelligence), which has evolved in the software domain, is expanding into the “physical world” as its next main battleground. This is known as “Physical AI (Physical AI / Embodied AI).” Physical AI, which fuses robotics, sensor technology, and AI, holds the potential to fundamentally transform the structures of all industries, including manufacturing, logistics, and healthcare.

If you are a business owner, CTO, or IP manager thinking, “I’ve launched a business utilizing physical AI but don’t know how to obtain patents,” or “I want to consult an expert about securing rights for technologies involving AI and hardware,” please be sure to read this article to the end.

1. What Is Physical AI? The Background Behind Its Rising Popularity

From Software AI to AI That Interacts with the Physical World

Physical AI is an AI technology that recognizes real-world situations in real time through sensors such as cameras, makes autonomous decisions, and performs "physical actions" via actuators such as robotic arms.

Conventional AI completed information processing entirely within the digital space. In contrast, Physical AI seamlessly combines “inference capabilities in cyberspace” with “physical movements in the physical space.” Thanks to improvements in computing resources, the falling cost of sensors, and advances in simulation technology, it is now transitioning into the phase of societal implementation.

Key Business Applications of Physical AI

2. Three Reasons Why Obtaining Patents Is Essential in the Physical AI Business

"Acquiring patent rights" is just as important as technological development. From the perspective of a specialized patent attorney, I summarize the reasons into three points.

① Securing Competitive Advantage and Building Barriers to Entry

The physical AI market is a fiercely competitive arena where tech companies vie for dominance. Even if you develop a groundbreaking control method, without a patent, it will be reverse-engineered and imitated by large corporations with abundant financial resources.

By obtaining a patent and securing the “exclusive right” to legally prevent others from manufacturing or selling your product, you can block competitors from launching similar products. Patents that link AI decision-making logic with hardware operations enable you to build a powerful barrier to entry.

② Strengthening Negotiating Power in Open Innovation

Since the development of physical AI requires a wide range of specialized knowledge—including AI algorithms, sensor technology, and mechanical engineering—joint research with other companies is common.

In such cases, if a company does not hold patents for its own technology, it faces “intellectual property risks,” such as having its technology misappropriated by joint research partners or being forced to accept unfavorable terms. Patents serve as the “strongest bargaining chip” for establishing an equal partnership during collaboration and preventing the company from being reduced to a subcontractor.

③ Dramatic Improvement in a Startup’s Ability to Raise Funds

For startups, patents are a key factor in dramatically enhancing their appeal to venture capital (VC) firms.

Investors rigorously scrutinize whether a technology can be imitated by competitors. Possessing a portfolio of filed patents indicates a high likelihood that the technology’s uniqueness is guaranteed by public authorities, which directly leads to increased corporate value and successful fundraising.

3. Three Obstacles and Key Considerations in Physical AI Patent Applications

To obtain strong patents, it is necessary to understand the unique "barriers" and take appropriate measures.

Hurdle 1: Increased Complexity Due to the Convergence of Hardware and Software

Traditional patents have typically focused on either “new mechanical structures” or “methods of information processing.” However, in Physical AI, the two are inseparable.

The true test of a patent attorney’s skill lies in clearly articulating the coordinated process between software computation and hardware, and convincing the examiner that it constitutes an “indivisible invention.”

Hurdle 2: The Challenge of Patenting AI Algorithms Themselves

Simply stating that the invention “uses machine learning” is not sufficient to obtain a patent. A specific mechanism explaining how the invention solves the problem is required.

Challenge 3: Expressing how to handle "uncertainty (noise)" in the physical world

The physical space is subject to an infinite variety of noise sources, such as friction, temperature changes, and light reflection. The true value of Physical AI lies in how it addresses this noise.

4. A Multi-Faceted IP Strategy for Obtaining Strong Physical AI Patents

To obtain strong patents that overcome obstacles and protect your business, we recommend the following multifaceted approach.

Strategy 1: Comprehensive Protection Through a Three-Layer Structure of Hardware, Software, and Systems

Relying on a single patent for protection is risky. It is crucial to break down the technology and build a “patent portfolio” from multiple perspectives.

By securing rights across multiple layers, it becomes extremely difficult for competitors to circumvent your technology.

Strategy 2: The "Open & Close Strategy" for AI Patents and Trade Secrets

When a patent is filed, the technical details are made public. Therefore, a strategy to distinguish between “what is disclosed via patents (open)” and “what is kept confidential as trade secrets (closed)” is essential.

Skilled patent attorneys also provide strategic IP advice on whether to file a patent application or keep information confidential.

Strategy 3: Foreign Filing Strategy with an Eye on the Global Market

Patent rights are subject to territoriality, meaning a patent obtained in Japan is only valid within Japan.

It is essential to consider “PCT international applications” from the early stages to secure patents in countries where your products are exported or where competitors exist (such as the U.S., China, and Europe). In particular, given the intense competition in AI patent development between the U.S. and China, it is crucial to draft comprehensive patent specifications from the outset that can withstand foreign applications.

5. Key Points for Choosing a Patent Attorney Specializing in Physical AI Patent Applications

Whether the resulting patent scope is “usable in business” depends heavily on the skills of the patent attorney in charge.

Summary: For Physical AI IP Strategy and Patent Applications, Contact Our Firm

Physical AI is a next-generation core technology that highly integrates the cyber and physical worlds, serving as a source of competitiveness for all industries.

However, patent applications face hurdles such as the “integration of software and hardware,” “AI-specific disclosure requirements,” and “dealing with physical noise.” Even groundbreaking technology will fail to serve as a shield to protect your business if you adopt the wrong intellectual property strategy.

We are fully committed to helping you transform your technology into your company’s “most valuable asset” to safeguard your business.

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