Investment Surges in AI-Driven Drug Discovery
Artificial intelligence (AI) has emerged as one of the most transformative technologies in recent years. The European Medtech sector saw a surge in investor interest in early 2025, dominated by AI-powered solutions. In Q1 alone, AI startups secured 25% of all European venture capital funding, with AI for drug discovery emerging as one of the leading segments.
Earlier this year, the UK government announced a £82.6 million investment into cancer research using AI, showing a dedication to harnessing the power of AI for cancer care and drug discovery. In June, the Nuffield Department of Medicine announced a new consortium, based in Oxfordshire, which will generate the world’s largest trove of data on how drugs interact with proteins for training AI models. 20 times larger than anything collected over the last 50 years, this collection will allegedly cut drug discovery costs by up to £100 billion.
Confidence in the potential of AI to solve healthcare’s greatest problems is growing, especially in areas like small-molecule drug and antibody design. With pressure to deliver faster, more targeted therapies, AI is becoming a central engine of biomedical innovation.
AI’s Transformative Role in Drug Discovery
AI is revolutionising how we discover new drugs by unlocking speed, scalability and novel insight. Traditionally, identifying new drug targets relies on a mix of intuition, laborious experimentation and trial-and-error. Pharmaceutical companies typically take 10 to 15 years to bring a single drug to market, which can cost up to $2 billion. Despite this effort, only about 10% of candidates entering the trial pipeline eventually succeed.
These are concerning statistics, but AI’s ability to sift through vast biological datasets and carry out predictive modelling could be the answer. AI can assist at virtually every stage of the small molecule drug discovery pipeline, including target identification and validation, hit discovery, lead optimisation, and preclinical assessment.
Reshaping structural biology with AI
The use of AI in structural biology has become crucial for modern drug discovery. AlphaFold, developed by DeepMind, represents one of the most groundbreaking achievements of AI. Its creators, Demis Hassabis and John Jumper, were awarded one half of the 2024 Nobel Prize in Chemistry “for protein structure prediction” in recognition of their work on AlphaFold.
Traditionally, tertiary protein structures have been determined through complex and time-consuming techniques such as X-ray crystallography. In contrast, AlphaFold enables the prediction of protein structures based on amino acid sequences, which are readily available in different databases. AlphaFold has been widely adopted by the scientific community and has become an indispensable tool in structural biology since its public release. It enables medicinal chemists and structural biologists to identify binding pockets, model ligand interactions, and perform in silico docking studies, even for proteins previously considered “undruggable” due to lack of structural data.
The recently released AlphaFold 3 model further advances the field by improving the prediction of protein-ligand interactions, including the binding of antibodies to target proteins. This enhanced capability is expected to significantly accelerate the design and optimisation of therapeutic antibodies, which now represent a critical class of biologic drugs.
AI for target identification and drug design
AI plays a pivotal role in both target identification and drug design. Enabling researchers to identify novel or previously overlooked drug targets, AI algorithms can mine genomic, transcriptomic and proteomic data to prioritise genes or proteins implicated in disease pathways. AI also accelerates the discovery of lead compounds by predicting molecular properties and optimising chemical structures.
One of the most promising recent examples of an AI-discovered drug is rentosertib, which is a small-molecule inhibitor of Traf2- and Nck-interacting kinase (TNIK). TNIK was identified as a potential therapeutic target for idiopathic pulmonary fibrosis (IPF) through AI-powered analysis of gene expression datasets profiling the tissue of patients with IPF. A separate AI platform then designed and optimised the small molecule drug. Remarkably, it took less than 30 months to progress from target discovery to the completion of Phase I clinical trials. In a recently conducted Phase 2a trial, preliminary results showed that rentosertib was well tolerated and led to significant improvements in patients’ conditions compared to the placebo group.
Unlocking the hidden potential of existing drugs through AI
AI can also help identify potential medical uses for existing drugs, and this approach can save time by reducing the need to optimise drug structures and address potential safety issues.
Baricitinib is a Janus kinase (JAK1/2) inhibitor originally developed for the treatment of rheumatoid arthritis. During the COVID-19 outbreak, researchers used an AI-driven knowledge graph platform to explore existing drugs that could potentially be repurposed to combat SARS-CoV-2. Baricitinib was found to have both antiviral and anti-inflammatory properties which could be useful in treating COVID-19, and the FDA approved it for use in patients with severe COVID-19 soon after.
Intellectual Property: The Strategic Imperative
In the rapidly evolving field of AI-driven drug discovery, intellectual property is more important than ever to attract investment and protect your ideas. Securing patents not only protects novel molecules and AI platforms but also increases a company’s value and positions them as a leader in the competitive marketplace of drug discovery.
A 2024 patent landscape report recorded 1,087 global filings related to AI-enabled small-molecule discovery between 2002 and 2024. Recently, patent filings as well as pending applications in this area have surged, reflecting exciting technological progress.
However, unlike patenting new drugs in the traditional pharmaceutical industry, which could be relatively straight-forward, bringing AI into the mix could complicate things.
AI as the inventor
Despite the growing role of AI in research and development, both the European Patent Office (EPO) and UK Intellectual Property Office (UKIPO) clearly stipulate that AI cannot be named as an inventor on a patent application. In the landmark DABUS cases, where Dr. Stephen Thaler attempted to name AI system, DABUS, as the sole inventor, both jurisdictions rejected the applications on the grounds that only a natural person can be legally named as an inventor. Although AI-generated inventions may still be patentable if a human (such as the deviser of an AI model) claims inventorship, AI itself cannot hold legal rights or be recognised as the originator of a patentable invention.
AI-generated inventions
Inventions such as drug molecules and antibodies designed and/or optimised by AI are patentable under UK and EPO law, provided that they meet the standard legal criteria of novelty, inventive step and industrial applicability. Furthermore, experimental data showing that the AI-designed drugs can achieve specific “technical effects”, such as enhanced efficacy, specificity or binding affinity, is key to securing the grant of a patent.
As with any invention, companies should file early to secure protection, as well as conduct thorough IP searches to avoid infringing on others’ rights. Monitoring existing patent filings in biomarkers and therapeutic targets also allows companies to focus their R&D efforts on drug candidates that can satisfy the patentability requirements of novelty and inventive step.
AI as the invention
In addition, it is advisable to consider obtaining patent protection for any novel AI system which identifies biological targets or designs molecules, not just the output.
Along the same line as algorithms and software, intellectual property law in the UK and Europe views AI models per se as of an abstract mathematical nature and therefore not patentable. However, an AI or machine learning invention may be patentable if it produces a technical effect that serves a technical purpose, either by its application to a field of technology or by being adapted to a specific technical implementation.
In this regard, under EPO practice, AI inventions applied to the specific field of drug discovery may be patentable, especially if such AI models solve clearly defined drug development problems (e.g. improving binding affinity or reducing toxicity). Patent protection may also be available for so-called core AI inventions relying on developments of the fundamental underlying AI techniques, rather than application of an AI model to a particular technical field such as drug discovery. The UK follows a broadly similar approach, with courts applying the Aerotel/Macrossan test, originally devised in the context of general computer-implemented inventions, to assess whether an AI invention is a patentable technical contribution.
Thus, while AI cannot be named as an inventor on a patent application, it can certainly be the subject of patent protection if it contributes to the technical character of an invention. Care must, however, be taken in drafting any patent application directed to such AI inventions.
Conclusion
As AI transforms how we discover and design new medicines, intellectual property becomes a critical pillar for translating technological breakthroughs into lasting competitive advantage.
Given the fast-moving nature of the field, a robust, multi-faceted IP approach is crucial. Other things to consider are leveraging trade secrets as well as patent protection and engaging in strategic licensing, open innovation and partnerships to help ease costs, allow broader access to vital data for AI training, and accelerate development. Most importantly, integrating a comprehensive IP strategy into your research and business activities from the outset will position your company to thrive in this dynamic landscape.
Mathys & Squire have published a report on the use of the Unitary Patent system in the field of IT & engineering, sharing the results of a survey on the patents granted to a selected number of applicants in 2023 and 2024 across six technical areas. The report was compiled by Partner Nicholas Fox and Associate Maxwell Haughey.
The Unitary Patent system came into effect on 1 June 2023. Prior to that date, whenever a European Patent was granted, the European Patent automatically became a bundle of national rights for each of the countries designated in the patent. Such national rights need to be maintained separately. In contrast, a Unitary Patent is a unitary right which provides patent protection across all the member states participating in the Unitary Patent system.
Previously, Mathys & Squire sampled a range of applicants in the healthcare sector and investigated their engagement with the Unitary Patent system (view our report here). The analysis revealed that, contrary to popular belief, there was no blanket approach by healthcare companies to engagement with the Unitary Patent system. Rather, widely diverging approaches between different applicants was observed, ranging from almost universal engagement to widespread avoidance.
On the other hand, concerns which may cause diverging approaches to the Unitary Patent system in the healthcare and life sciences field will be different to concerns which applicants in the field of IT & engineering will have.
Applicants in the IT and telecoms field
In contrast to the life sciences where relatively few, but highly valuable, patents are granted, the number of patents in the electronics fields is much larger. Applicants in the IT and telecoms fields consistently appear at the top of the European Patent Office’s list of most frequent filers. However, unlike the life sciences, where patents are normally validated and maintained in a large number of countries, most electronics patents are only ever maintained in the UK, Germany and France. This is more cost effective as due to the London Agreement, applicants do not need to translate their patent into a national language for the patent to have effect in those countries.
For such applicants, engaging with the Unitary Patent system involves a cost, as a full translation of the patent is required. When applicants are obtaining upwards of 1000 granted patents a year, the costs of such translations (typically around €5,000 per patent) will mount up.
Therefore, continuing with the existing approach of only validating patents in the UK, Germany and France, where protection can be obtained without incurring the translation fees, remains attractive.
Applicants in the engineering field
Compared with IT and telecoms, engineering is a half-way house. The volume of patents in the mechanical and engineering sectors is far lower than in the IT and telecoms fields. However, engineering patents are normally maintained more broadly than IT and telecoms patents – typically in around 4-6 jurisdictions (often the UK, Germany and France, and in addition 2-3 other major jurisdictions often selected from Italy, Spain, and the Netherlands). As such, engineering patents very much hit the sweet spot for using the Unitary Patent system. Where patents have traditionally been maintained more broadly, the Unitary Patent system potentially provides the means for patentees to obtain broad geographical coverage at a lower cost than was possible in the past.
In addition, although Unitary Patents are always subject to the jurisdiction of the Unified Patent Court, and as unitary rights they are always subject to the threat of central invalidation, relatively few IT and engineering patents are ever involved in litigation or are the subject of EPO oppositions compared with the life sciences. Opposition rates rarely exceed 3% and for many of these areas of technology opposition rates of less than 1% are common.
Therefore, the Unitary Patent system potentially provides many upsides for engineering applicants with relatively low levels of risk.
Our report on the Unitary Patent system
Whilst the above theorises their approach, the report reveals how applicants in the IT & engineering fields are engaging with the Unitary Patent system in reality. Mathys & Squire’s survey analyses the number of Unitary Patents granted in 2023 and 2024, across six technical areas: digital communication, semiconductors and microchips, civil engineering, transport, defence, and electrical machinery, apparatus and energy. A range of applicants in each area was also sampled to assess the activity of specific applicants.
In summary, the report shows that approaches to the Unitary Patent system vary significantly. However, in general, the percentages of Unitary Patents observed in all IT and engineering fields were lower than the four healthcare fields covered in our previous report, apart from civil engineering, which is perhaps contrary to expectation.
In addition, the percentage of granted IT & engineering Unitary Patents was higher in 2024 than 2023 across all technical fields, which is unsurprising as Unitary Patents were not available for the first five months of 2023. Although applicants had the option of delaying the grant of patents issued in the first half of 2023 until Unitary Patents became available, it seems that relatively few applicants took advantage of this.
Explore the full Use of the Unitary Patent System in IT & Engineering report to uncover changing trends, specific sector insights and the approach of top filers in the industry.
The highly anticipated trial between Getty Images and Stability AI concluded on June 30, 2025. The case has gained national attention, as it represents a pivotal moment for the future of AI and copyright law in the UK.
On 16 January 2023, Getty Images brought proceedings against Stability AI, alleging that the AI company infringed Getty’s copyright by using millions of Getty’s images to train its generative AI model, Stable Diffusion, and that the outputs produced by the model reproduce substantial parts of these works.
The trial, which began on 9 June 2025, has attracted attention from both the technology and legal sectors, as it raises fundamental questions about how existing intellectual property laws should apply in view of modern generative AI systems.
In this article, Technical Assistant Egheosa Ogbomo and Partner Andrew White analyse the proceedings to date and the potential implications of any future developments.
Who are Stability AI and what is Stable Diffusion?
Stability AI is a UK-based artificial intelligence company which develops the family of Stable Diffusion AI models, open-source image generation tools capable of creating or altering images based on text or image prompts. Stability AI trained the original Stable Diffusion model on a subset of a dataset containing billions of images scraped from the internet.
Claims made by Getty
Copyright infringement claims
Getty alleges that Stability AI committed primary copyright infringement by reproducing substantial parts of millions of its images during Stable Diffusion’s training. This involved downloading, storing and augmenting them. They further claim infringement by making Stable Diffusion publicly available in the UK via Dream Studio and other open-source platforms, thus communicating significant parts of Getty’s works.
Getty alleges secondary infringement by authorising users to reproduce or communicate its works when outputs closely resemble Getty images. Secondary infringement due to the distribution of the trained model (an alleged infringing article) in the UK is another claim.
Trade mark infringement and passing off
In addition, Getty claims infringement of its trade marks, asserting that Stability AI used Getty’s marks without consent when generated outputs include Getty watermarks, causing confusion and exploitation of its reputation. They also allege passing off, arguing that generated images containing Getty logos misrepresent them as Getty-owned or licensed, implying endorsement.
Defences brought by Stability AI
Copyright infringement
Stability AI argues that any copying during data sourcing and training occurred entirely outside the UK, as they stored the datasets abroad. According to them, no infringing work was done in the UK. They claim output-stage infringements are the fault of users, since users control the input prompts and, in the case of image-prompts, the degree of input transformation.
Furthermore, they argue that any reproduced portions of Getty’s works are so minimal that they do not constitute a substantial part of copyrighted works and maintain that Stable Diffusion is not an infringing article. They may also rely on the pastiche defence, asserting that the extent of use of Getty’s work was necessary for pastiche, stating that this use does not affect the market for any originals.
Trade mark infringement and passing off
Stability AI claims that outputs containing Getty trade marks were only created through deliberate efforts by Getty’s legal team and do not reflect its normal commercial use. Furthermore, Stability AI denies any likelihood of confusion or unfair advantage. For passing off, it argues any misrepresentation arises from user actions and that outputs are not sufficiently similar to Getty’s works to mislead the public.
Key case developments so far
Since the trial began, Getty Images have dropped their claims for primary copyright infringement, citing a lack of evidence and knowledgeable witnesses to support the allegations. They also dropped their claims over the model’s training and development, maintaining that infringing acts occurred but that there were no witnesses from Stability AI who could provide clear and comprehensive evidence about the entire training process.
For the claims concerning AI-generated outputs, Getty stated that Stability AI has implemented measures preventing the reproduction of infringing outputs. Getty has been unable to establish that any outputs produced by the models reflect a substantial part of its protected images.
This illustrates the difficulty in proving exactly where the training of an ML model takes place for the purposes of determining infringement, as well as demonstrating that AI-generated images reproduce a ‘substantial part’ of protected original works. While this has narrowed the scope of the dispute, Getty’s claims of secondary infringement and trade mark misuse remain in contention.
What are the implications for IP law?
There remains significant uncertainty over the balance of power between AI developers and content creators on copyright licensing. A win for Stability AI in these proceedings could reduce the incentive for AI developers to seek licences in the UK and may lead some to continue developing models without securing permissions, or to do so outside of the UK. This has prompted questions about whether legislative reforms are needed to address potential gaps in protection. However, extending UK copyright law to cover acts abroad could create conflicts with foreign regimes such as US fair use, risking the UK’s attractiveness for AI research and model development.
There has already been a significant increase in the number of AI-related patent applications globally, with the European Patent Office observing a 45-fold increase in the annual number of AI-related European patent filings since 2015. How UK courts interpret copyright law for AI training and outputs could influence the approach to patent applications for AI-related inventions in the UK. Uncertainty over data use rights may consequently affect the development, disclosure and protection strategies for new AI technologies. Companies already face rising costs of data collection, particularly as new technologies such as Cloudflare’s tool will allow website owners to charge fees for access by web-scraping tools.
A final judgement on the remaining claims is likely to be handed down in the next few months. This will set an eagerly awaited precedent for how UK infringement laws should be interpreted in the age of AI, and large-scale text and data mining.
If you have any questions as to how the outcome of these proceedings may impact your IP strategy, please reach out to your usual contact at Mathys & Squire, or get in touch through a general enquiry and we would be happy to help.
Mathys & Squire Partner Michael Stott was recently featured in ‘EPO appeal board establishes ‘on-sale bar’ with big implications for patent owners’ by IAM Magazine. He provided commentary on the ruling on G1/23, issued by the EPO’s Enlarged Board of Appeal on the 2nd of July.
The ruling concerns the interpretation of prior art, determining in particular when a complex product put on the market should be considered part of the state of art and the extent of “reproducibility” which entails prior art status. Previously following a narrow definition of the “reproducibility requirement” established in the EBA’s G1/92 ruling, the EBA lays down in G1/23 that “a product put on the market before the date of filing of a European patent cannot be excluded from the state of the art […] for the sole reason that its composition or internal structure could not be analysed or reproduced by the skilled person.”
The article in IAM highlights how this new decision will have significant ramifications for the patentability of products across a wide range of technological fields, affecting how innovators approach their IP strategy, including when to file patent applications and the use of trade secrets.
To read the full article click here.
On Wednesday the 25th of June 2025, Mathys & Squire hosted Dr Victoria McCloud, former Judge in the High Court and advocate for LGBTQIA+ rights, in our London office in honour of Pride Month.
From a young age, Victoria discovered a fascination with computers, as well as an acute awareness of human behaviour and interactions – experiencing life through the eyes of a girl as a registered boy at birth. These interests motivated her to pursue a degree in Experimental Psychology and a doctorate in the computational aspects of human vision.
After graduating, she practiced as a barrister, when she came out as a transgender woman, and then went on to be the youngest and first (and only) transgender Master in the UK High Court of Justice.
In 2024, she resigned as a Judge, feeling that there was no longer a place for her as a trans person in the UK court. Now, Victoria McCloud is a freelance public speaker, author and media commentator, raising awareness for issues affecting the LGBTQIA+ community and speaking directly from her experience as a trans woman.
Last year, she featured on the Dow Jones News “Pride of Finance”, whilst this year she reached first place in the Independent Newspaper Pride List and featured in Attitude Magazine’s 101 LGBTQ+ trailblazers 2025.
Victoria gave an educational and engaging talk which followed the timeline of her life whilst delving in to important topics, such as the nature of the UK legal system, changing attitudes towards gender, and her recent move to the “rainbow paradise” of Ireland. She also discussed the topical issue of how the rights of transgender and gay people are under threat in light of the recent Supreme Court Ruling. It was enlightening to gain an insight from someone with a deep understanding of both the law and the trans experience.
We are delighted to announce two new Partners and two new Managing Associates.
Mathys & Squire is delighted to announce a new round of senior promotions to its London office.
Harry Rowe and Dylan Morgan have been appointed as Partners. Helen Springbett and Tom Bosworth have been promoted to Managing Associates.
These appointments recognise their valuable contributions and leadership across Mathys & Squire’s trade mark, design and patent teams.
Harry Rowe is appointed Partner in London
Harry has over a decade of legal expertise specialising in trade mark law issues facing multinational corporations and SMEs. He works across a range of sectors including financial services, life sciences and automotive. Harry has a proven track record handling disputes, prosecutions and enforcement, including litigation. He is a recommended lawyer in the latest edition of The Legal 500.
Dylan Morgan is appointed Partner in London
Dylan has considerable experience drafting and prosecuting UK and European patents, managing global portfolios, and advising on infringement, licensing and IP strategy. He was previously an engineer at the Defence Science and Technology Laboratory. Dylan holds a master’s degree from the University of Cambridge, specialising in aerospace engineering.
Helen Springbett is appointed Managing Associate in London
Helen has extensive experience in patents and designs, specialising in the physics, mechanical engineering and materials science sectors. She has a wealth of expertise in medical informatics and devices, mechanical devices and nanotechnology. Helen holds a PhD in materials science from the University of Cambridge, specialising in the characterisation of quantum dots.
Tom Bosworth is appointed Managing Associate in London
Tom has significant experience in patent drafting, prosecution, and EPO oppositions and appeals. He specialises in cell and gene therapy, vaccines, antibodies, and genomics technologies. He holds a PhD in cardiovascular sciences from the University of Manchester. Tom previously worked in the biotechnology industry prior to his PhD.
Martin MacLean, a Senior Equity Partner at Mathys & Squire, says: “These promotions have all been well earned. Harry, Dylan, Helen and Tom are incredibly talented attorneys whose drive and hard work are an immense asset to our firm.
“We take pride in nurturing and developing our talent, and all four have consistently delivered the highest-quality work to our clients. I’m fully confident they will continue developing their practice and enhancing their expertise.
“We are very excited to welcome Harry and Dylan into our Partnership. Both will help lead our firm on a strategic level and play a crucial role in our growth plans.”
This press release has been featured in Law360 and New Law Journal.
We are proud to announce the appointment of Lyle Ellis as head of Mathys & Squire Consulting, the consulting arm of our firm.
Lyle joins Mathys & Squire from KPMG Law, where he served as Senior Manager in the IP Advisory division, advising startups and multinational corporations on IP strategy and operational management.
Lyle brings over 20 years of extensive experience in intellectual property management, strategy, and advisory services. Prior to KPMG, Lyle had a distinguished career as a UK and European Patent Attorney in-house at Vodafone.
Mathys & Squire Consulting advises clients on how they can maximise value from the intellectual property they produce and own. Specialist IP services within that group include IP audits, outsourced IP management, advising on contracts and licenses, and IP valuations.
Lyle brings a deep background in legal and commercial IP strategy, including IP risk management, threat assessment and value maximisation to Mathys & Squire Consulting.
His proven expertise in developing and managing IP portfolios will contribute significantly to the firm’s growth and capabilities, enhancing its ability to provide clients with high-quality, strategic IP advice.
Alan MacDougall, a Senior Equity Partner at Mathys & Squire, says: “We are thrilled to welcome Lyle to the team. His unparalleled expertise in IP will strengthen our capabilities and accelerate our growth. His leadership will undoubtedly enhance our ability to provide exceptional service to clients.”
Lyle Ellis says: “I’m excited to join Mathys & Squire and work with its talented team of consultants and other IP specialists. Mathys & Squire has a fantastic reputation as a law firm and it is also doing some really innovative and important work in the IP consultancy field. I’m looking forward to working with the team to build on that growing track record.”
The Enlarged Board of Appeal has issued a decision confirming that the description and drawings shall always be consulted to interpret the claims when assessing the patentability (i.e. novelty and inventiveness) of an invention.
In their decision on case G1/24, issued on 18th June 2025, the Enlarged Board of Appeal heard facts and arguments concerning a worrying divergence which had occurred in the case law, whereby questions of claim construction and interpretation had sometimes been made with reference to the description and drawings, and other times in isolation of the remainder of the specification. Oftentimes, this difference depended on the clarity of the claims, with it being generally agreed that the description and figures could be considered if the claims were unclear or ambiguous but potentially not otherwise.
In this new decision, the Enlarged Board have rejected any premise that the resources of the patent which are available to assist in interpreting the claims may depend on the clarity of the claims themselves, stating that: “To regard a claim as clear is in itself an act of interpretation, not a prerequisite to construction.” Thus, the decision of the Board fundamentally changes the impact of claim clarity on the assessment of claim construction, harmonising the approach for all claims.
The Board’s decision also serves to harmonise the approach of the EPO with that of the UPC and European national courts, with the Board confirming that their decision was consistent with recent decisions of the UPC, and acknowledging a need and desire for further harmonisation.
This decision is likely to be broadly welcomed by many users of the EPC due to the certainty it provides as to the scope of the patent teaching which may be relied upon for claim construction purposes. By bringing the EPO approach into greater conformity with that of the UPC and national courts, the EPO also increases its ability to grant and maintain robust patents. Alongside these benefits, care should be taken to consider closely the impact of any amendments or differences that may have arisen between the claims and the description or figures of an application to ensure that undesirable constructions are not arrived at which may impact upon the scope and/or patentability of the claims.
If you have any questions as to how this decision may impact on your IP strategy, please reach out to your usual contact at Mathys & Squire, or get in touch through a general enquiry and we would be happy to help.
Clean energy beamed down to Earth. Exotic semiconductors and novel pharmaceuticals manufactured in microgravity. A base on the moon. Asteroid mining. Satellite recycling. Data server farms in orbit. Space tourists.
A new horizon study Space: 2075, issued by the Royal Society, sets out a vision of potential developments in space over the next 50 years. These could be as consequential, the report says, as the Industrial Revolution of the 18th century or the digital revolution of the 20th. But as space
becomes increasingly commercialised, is the present patent system up to the task?
The state of the UK space industry
The UK space industry is worth over £16 billion annually and employs more than 45,000 people. Almost every year since 2000 has seen the incorporation of at least 50 new space-related companies in the UK.
That said, the UK could do better. The UK spends less on space than some similarly-sized nations – less as a % of GDP than France, Italy, Belgium, Germany, as well as even Switzerland and Norway. Attempts to spur the industry have had mixed results. The UK has established over a dozen space innovation clusters, but none of the seven UK spaceports first legislated for in 2018 have as yet resulted in a successful launch.
Meanwhile, for reasons both geopolitical and economic, international competition in the space sector is increasing. National pride, industrial and defence policies have led to approximately a dozen countries now having launch capability. At the same time, the cost of getting material into orbit has fallen. In the last decade, the cost of launching a 1kg payload into low-Earth orbit has fallen from around £15k to £1k. This has consequently lowered a major barrier for new entrants.
It is clear that the UK space industry needs a boost. And indeed, the Royal Society report identifies the need to stimulate the scale-up of UK space SMEs. One recommendation for achieving this is through increasing the confidence of the finance sector. For example, using technical means to reduce the risk of satellite collisions could reduce insurance costs.
What is missing from the report is a discussion of another form of incentive: patents. Investors looking to back a company in an innovation-driven industry such as space will be wanting to know whether they have sufficiently protected their intellectual property to ensure successful commercialisation.
Patent law and the impact of ‘space law’
Here on Earth, most countries of the industrialised world operate a well-established patent system, the foundations of which can be traced back to the Paris Convention for the protection of industrial property of 1883. Although patents are inherently territorial, which is to say they operate at a national level, various international agreements have sought to allow for some degree of interoperability.
However, patent law becomes less clear above the Kármán line, the 100km altitude widely accepted as the beginning of space. Part of the problem is a certain tension between terrestrial patent law and what might be termed ‘space law’, originating in a handful of international agreements drawn up in the 1960s and 70s. The idealistic tone of these early agreements, seeking to codify the peaceful exploration of space, can be seen in how they constrain property rights. The agreements prohibit national appropriation in an attempt to ensure space remains the “common heritage of mankind.”
This is not to say that ownership of IP in space is entirely impossible. Much of the concern of these treaties was the ownership of physical rather than intellectual property. In other words, whether a nation, corporation or individual could lay claim to a celestial body (generally, no). It has subsequently been argued that the treaty language is ambiguous. For example, it is unclear whether it would apply to processed material extracted from such bodies by mining activities.
Who owns innovation beyond Earth?
There is potential for applying ostensibly Earth-bound laws, including those directed to intellectual property, in space. The potential arises from the way the Outer Space treaty (1967) and the registration Convention (1965) allow for jurisdiction over an object launched into space or on a celestial body to reside with the state which launches the body or the state from which the body is launched. Some later agreements, typically multilateral ones in respect of specific endeavours, acknowledge jurisdiction over IP more directly. For example, the ISS agreement (1998) includes specific provisions regarding protection of IP on the international space station, assigning jurisdiction and territory of each station module according to its state of origin. Others, such as the Artemis Accords (2020), merely acknowledge the need for relevant IP provisions without providing any further legal structure.
At present, in much the same way as an “international patent” does not exist, neither are there any provisions for – or immediate prospects of – a “space patent.” And while some countries, notably the US, have explicitly sought to extend the coverage of their national patent law to inventions made in space, many others including the UK have no such provision. This could arguably lead to the situation of a space object being considered to be in the jurisdiction of the UK by virtue of being launched from the UK, yet outside the territorial scope of UK patent law.
How can space innovations be best protected?
The applicability of patent law in orbit (or beyond) remains untested and proving infringement in space is unlikely to be straightforward. In the absence of specific contractual agreement, the best option at present appears to be, rather ironically, to aim primarily for terrestrial protection i.e. to seek a patent monopoly that would be infringed on Earth.
To that end, a careful analysis of what activities are being conducted on Earth needs to be undertaken. And for a product being made in orbit, where it is to be returned to on Earth.
The patent filing strategy also requires careful consideration, not least because territorial decisions made relatively early in the patenting process become locked-in for the duration. This requires due diligence to identify competitors: where relevant space objects are registered (the ‘flag of convenience’ issue) and launch locations both present and future.
So, can the present patent system cope with potential developments in space over the next 50 years? For the next short while, with careful handling, perhaps – but over the long term it seems some updates will be inevitable. The Industrial Revolution led to a substantial overhaul of patent laws; the digital revolution was accompanied by a flood of patent filings pushing the boundaries of patent laws. Would we expect the space revolution to be any different?
World Environment Day, held each year on 5 June and led by the United Nations, raises awareness of the threats facing our planet — and what we can do to address them. In recognition of this day, we explore how the dream of limitless clean energy may be closer than we think. While solar and wind have laid the foundation, newer technologies like hydrogen and nuclear fusion are gaining momentum — and at the heart of their progress lies innovation and intellectual property (IP).
The growing pressure on power
Global energy demand is soaring — driven by the rise of electric vehicles, energy-intensive manufacturing, and the rapid expansion of AI, data centres and digital infrastructure. Electricity demand alone has grown at twice the rate of overall energy consumption over the past decade. By 2030, it is projected to rise by 6,750 terawatt-hours — more than the current combined usage of the US and EU. Data centres alone could account for 20% of that growth.
On top of this, electricity production remains the largest source of global CO₂ emissions. Without a rapid shift to cleaner energy sources, meeting climate goals over the next five to twenty-five years will be all but impossible.
A green transition underway
Fortunately, change is in motion. As we discussed in our 2025 Clean Tech Trends report, the renewable energy sector is accelerating. Global leaders — from policymakers to scientists — are striving to decarbonise the energy system while also tackling energy poverty, aiming to deliver clean, affordable power for all.
Solar and wind continue to dominate patent filings, accounting for 58% and 19% of renewable energy patents filed in 2024, respectively (See adjacent graph; source).
But despite their success, intermittent supply and grid strain limit their scalability. The question now is: what comes next?
Hydrogen: clean, flexible, scalable energy
Hydrogen is emerging as one of the most promising alternatives. Hydrogen fuel cells produce electricity by combining hydrogen and oxygen — emitting only water and heat. These cells can be integrated into existing infrastructure, making them highly adaptable.
Beyond cutting emissions, hydrogen offers an opportunity to decentralise power generation, which could ease grid pressure and benefit regions lacking reliable solar or wind resources. Companies like GeoPura argue that hydrogen could be the answer to both the AI energy boom and the electrification of transport, especially in the face of projected grid connection delays of up to 15 years.
Government and industry support is also growing. A 2024 white paper from Bosch, Centrica, and Ceres outlined hydrogen’s role in decarbonising UK power through solid oxide fuel cells (SOFCs). And yet, a challenge remains: while hydrogen fuel cells are green, the hydrogen used to power them often isn’t. As of 2024, only around 1% of global hydrogen is produced via low-emission methods like electrolysis — the rest is derived from fossil fuels. Scaling up ‘green hydrogen’ production will be crucial.
Momentum is building. In 2024, the UK committed £2 billion to fund 11 commercial electrolytic hydrogen projects, attracting an additional £413 million in private investment. In the US, Electric Hydrogen is delivering a 100MW electrolyser system capable of producing 45 tonnes of hydrogen per day with minimal emissions. According to the International Energy Association’s Global Hydrogen Review 2024, annual production of low-emissions hydrogen could reach 49 Mtpa H2 by 2030, up from 1 Mtpa H2 in 2024.
The pace of innovation is clear — but sustained progress requires more than technology alone.
Fusion energy: approaching a breakthrough?
Looking ahead, nuclear fusion could become the ultimate clean energy source. By fusing light atomic nuclei — typically deuterium and tritium — fusion releases vast amounts of energy without carbon emissions. One gram of fuel can generate the same energy as 20 tonnes of coal. With deuterium abundantly available in seawater and new tritium breeding techniques in development (e.g. by the likes of Oxford Sigma), fusion promises safe, scalable, and virtually limitless power.
Compared to nuclear fission, fusion produces significantly less radioactive waste, with materials becoming safe in around 100 years — not thousands, and carries a much lower risk of catastrophic failure.
Once considered a far-off fantasy, fusion is now edging closer to reality. In 2025, the EU unveiled its Competitiveness Compass, a roadmap that includes a new fusion strategy and public-private partnerships. The ITER project in France continues to make progress, while the UK has committed £410 million to develop the STEP prototype fusion plant, expected to be operational in the 2040s.
Why intellectual property matters
As hydrogen and fusion technologies scale up, the role of intellectual property becomes more critical than ever. Both fields face substantial barriers: long R&D timelines, high capital costs, and complex global supply chains. In this environment, IP provides innovators with a strategic advantage — helping protect their ideas, attract investment and support market growth.
IP and access to funding
In the hydrogen sector, around half of international patent families in the period 2011-2020 related to hydrogen production technology, with most of the patents filed in 2020 shifting toward greener hydrogen production methods.
It has been found recently that over 80% of late-stage venture capital funding in the hydrogen sector has gone to companies with existing patent applications. (See above graph; source)
In comparison, in the fusion space, innovators have commonly eschewed the pursuit of patents, believing commercial fusion to be too far off for a 20-year patent term to be relevant. That logic is now shifting, particularly as US-based fusion firms with robust patent strategies dominate funding rounds.
IP and collaboration
IP does more than protect inventions — it creates the legal scaffolding that enables meaningful collaboration. In frontier technologies like hydrogen and fusion, where development costs are high and technical expertise is globally dispersed, innovation increasingly happens across borders and between sectors. Whether it’s a private company building on public R&D or international teams co-developing fusion reactors, clear and enforceable IP rights are essential to align incentives, manage shared risk and ensure fair returns. In this way, IP acts not as a barrier, but as a bridge — fostering the trust needed to turn bold ideas into shared progress.
IP and market confidence
In emerging clean energy sectors such as hydrogen and fusion, IP will serve as a key instrument of market confidence. Hydrogen and fusion technologies are often capital-intensive, complex, and years away from profitability. For investors, robust IP portfolios will provide assurance that a company’s innovations are both unique and defensible — that they are not merely speculative science projects, but investable propositions. Patents thus have a key role in transforming R&D into tangible, protectable assets, offering a degree of certainty in an otherwise uncertain innovation landscape. With greater certainty provided, IP in turn can help channel private capital into high-impact green technologies, accelerating their path from lab bench to power grid.
A tool for global impact
This World Environment Day, we find ourselves at a turning point. Hydrogen and fusion have the potential to reshape the global energy landscape — but realising that promise will require coordinated innovation, investment and policy support.
IP will play a central role. Not just as a tool for protection, but as a foundation for confidence, cooperation and commercialisation. To fully unlock its potential, we must also embrace IP models that support responsible licensing, open innovation and global access. If we succeed, IP may become one of our most powerful tools in the fight against climate change.
