Utility Model Protection In Iran: A New Path For AI Innovations

This new framework not only streamlines the process for protecting small technical advancements, but also addresses some of the inherent limitations posed by traditional patent systems, namely, the stringent inventive step requirement, extensive disclosure mandates, and slow registration processes

In recent years, Iran has made significant advancements in its intellectual property (IP) landscape, responding to growing demands for stronger protections to foster innovation, economic growth, and foreign investment. A notable development in this context is the recognition and legal protection of utility models, introduced for the first time under Iran’s new IP law enacted in 2024. This article analyses the provisions of Iranian law in this regard and explores the potential collaboration between utility models and artificial intelligence (AI) within the IP landscape, offering insights for legal practitioners navigating this evolving terrain.

Definition of Utility Models under Iranian Law

Utility models, sometimes referred to as “petty patents” or “innovation patents”, are IP rights granted to relatively minor technical inventions, typically those that may not meet the stringent novelty and inventive step criteria required for standard patents. As there is no definition of it in any IP-related convention, each country has adopted its own definition. WIPO defines utility models as “inventions that make small improvements to, and adaptations of, existing products or that have a short commercial life”.

Previously, Iranian IP law lacked provisions for utility models, although Article 11 of the Paris Convention 1883, to which Iran is a contracting party, required its member states to grant temporary protection to utility models exhibited in official international exhibitions. With the adoption of the Industrial Property Protection Law 2024, however, Iran now offers legal protections for utility models.

Under the new provisions, utility models are defined as new technical solutions related to the shape and structure of the product or a combination of them that improves its performance. Unlike the patents, there is no requirement of inventive step (aka, “non-obviousness”) in utility models. Also, it is specified that improvements or modifications of an existing patented invention may be registered as a utility model, noting that any exploitation of them is subject to the authorisation of the patent holder.

It is important to note that protection under this regime is confined to products; processes remain ineligible, and utility model protection is not available for chemical, composite, or multi-component materials, even when presented as a product. The protection period is three years, extendable once for another three years. Other provisions largely mirror those applicable to patents.

Patent Protection Challenges for AI Innovations

AI presents unique challenges to traditional IP frameworks. The complex nature of AI systems, comprising algorithms, data structures, training methodologies, and application-specific implementations, creates multifaceted protection needs that do not always neatly align with existing IP categories. Currently, AI innovations are protected through a patchwork of mechanisms including patents, copyrights, and trade secrets.

Three main challenges arising from the nature of the AI systems within current patent frameworks, are as follows:

1. Patentability: Patentability barriers pose a hurdle, as many jurisdictions like Iran exclude abstract ideas, mathematical methods, and raw algorithms from patent protection. AI systems, fundamentally reliant on algorithms, often struggle with these exclusions. Further complications arise in determining inventorship, especially as AI begins generating potentially patentable innovations.

2. Disclosure requirements: Patent disclosure rules can be problematic for AI innovations. Effective patent protection requires detailed disclosure, but AI developers may be reluctant to reveal proprietary algorithms or training methodologies. This tension between disclosure requirements and the desire for secrecy creates a dilemma for AI innovators seeking IP protection.

3. Rapid changes: The rapidly evolving nature of AI technology also poses challenges for traditional IP protection. Patent processes, which can take several years from application to grant, may move too slowly to provide meaningful protection in a field where innovations can become obsolete within months. This mismatch weakens the practical value of patents for fast-moving AI innovations.

How Utility Models Can Benefit AI-Related Innovations

By adopting a legal framework for utility models, Iran aligns with global IP trends, recognising the unique role of utility models in supporting innovation, especially within SMEs and startups. This change encourages inventors and companies to seek IP protection for practical improvements that drive competition and contribute to technological advancement in various fields, especially high-tech innovations such as AI, from manufacturing to consumer products.

The characteristics of utility models suggest several potential advantages for protecting certain aspects of AI innovations. The lower inventiveness threshold of utility models could accommodate the incremental nature of many AI developments, protecting innovations that enhance existing approaches rather than creating entirely new paradigms. Based on the definition of utility model under the Industrial Property Protection Law of 2024, AI-related innovations can be registered as a utility model in Iran if they are linked to a tangible product. For example, novel methods for implementing neural network architectures on hardware, optimization techniques for reducing computational requirements, or specialized approaches to data preprocessing if incorporated into physical products, could represent incremental, technical innovations that utility models are designed to protect. These elements often represent significant competitive advantages in AI systems but might not meet the higher inventiveness threshold required for patent protection. More generally, AI-integrated hardware such as smart wear and AI-enhanced devices such as robotic vacuum. Standalone software or AI algorithms, however, would not be eligible for utility model registration under the Iranian law, unless integrated into a specific product.

Since utility models under Iranian law do not undergo substantive examination, the faster registration process of utility models aligns well with rapid development cycles of AI technology. Where patent processes might take years, utility model registration can often be completed in months. In fact, the examination of utility model registrability typically takes about two months, providing legal protection that keeps pace with technological advancement. For AI developers working in competitive fields, where technological advancements occur quickly, and market entry speed is vital, this speed advantage could be crucial for securing market position while innovations still retain commercial relevance.

Building on this, the absence of substantive examination for utility models under Iranian law also means that applicants are not required to meet the effective disclosure requirement that is mandatory for patents as a substantive criterion for patentability. By focusing the examination on formalities, utility model systems can reduce the need to disclose sensitive details about AI implementations during the application process. This helps address the tension between disclosure requirements and the desire for secrecy that troubles many AI developers considering patent protection.

Conclusion

The recent incorporation of utility models into Iran’s IP law marks a transformative step towards bolstering its innovation landscape, particularly in the rapidly evolving field of AI. This new framework not only streamlines the process for protecting small technical advancements, but also addresses some of the inherent limitations posed by traditional patent systems, namely, the stringent inventive step requirement, extensive disclosure mandates, and slow registration processes. By offering a more adaptable and faster route to securing IP rights, utility models hold the potential to bridge the gap between the rapid pace of AI development and the need for effective legal protection. AI-related innovations in Iran can be registered as utility models if tied to tangible products. This legal innovation could therefore play a pivotal role in stimulating both domestic and foreign investment, encouraging technological progress, and maintaining competitive advantages in AI-driven industries.

Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.