Protecting Intellectual Property Rights in Cloud Computing

2023/09/07 14:00

In the era of digital technology, safeguarding Intellectual Property (IP) is becoming increasingly intricate, especially when applied in cloud computing. This blog will delve into a crucial aspect of IP protection in this context, focusing on the utilization of cloud computing to manage copyrights and integrate IP within the Software-as-a-Service (SaaS) business model.

Digital Rights Management in the Cloud

1. The Trend of Cloud Computing as a Service Delivery Platform

Currently, the cloud computing market in Vietnam has reached over 400 million USD, and it is expected to grow to 1 billion USD by 2025. This presents a significant growth opportunity for businesses and cloud computing service providers.

According to SkyQuest's report, the public cloud constitutes one-third of the total IT infrastructure spending by enterprises, and this figure is expected to continue rising in the future. Statista's survey also reveals that revenue from the public cloud has nearly doubled over three years, from 214 billion USD in 2019 to 415 billion USD in 2022. The entire market is expected to sustain growth with a compound annual growth rate (CAGR) of 26.7% by 2023, reaching a total value of 525.6 billion USD.

Cloud computing trends reflect the dynamic nature of the cloud environment, impacting how businesses and individuals utilize and gain from cloud technologies

Software-as-a-Service (SaaS) is anticipated to generate revenue of nearly 254 billion USD in 2023, reflecting an 18% increase from the previous year. Additionally, Infrastructure-as-a-Service (IaaS) is experiencing the fastest growth, projected to increase by 35% from 117.3 billion USD in 2022 to 158.4 billion USD this year, and an estimated 53% further growth to 243 billion USD by 2025. Moreover, the Platform-as-a-Service (PaaS) segment is forecasted to reach a value of 113.3 billion USD in 2023, up from 83.7 billion USD in the same period.

As such, the public cloud is undergoing robust growth, with IaaS as the fastest-growing segment, demonstrating promising prospects for the cloud technology industry in the future.

2. The Importance of Protecting Intellectual Property

Safeguarding IP rights through technological solutions is an effective way to ensure security and enhance the value of inventions and critical data. Vietnam has undertaken the issuance of various legal documents, including laws, decrees, and circulars, to comprehensively regulate and protect IP rights.

According to the National Assembly of Vietnam (2023), Law No.50/2005/QH11 on Intellectual Property was amended and supplemented three times in 2009, 2019, and 2022. Additionally, Decree No. 99/2013/ND-CP on handling of copyright infringements on the Internet, and Decree No. 28/2017/ND-CP amends and supplements Decree No. 131/2013/ND-CP regarding administrative penalties for copyright and related rights violations. In addition to domestic legal provisions, Vietnam also adheres to international commitments in the field of IP protection. Multilateral and bilateral international agreements that Vietnam participates in play a crucial role in promoting effective copyright protection, such as the TRIPS Agreement and agreements with international partners like the United States and Switzerland on IP rights.

The IP law protects creative works and innovations, promoting creativity and ensuring creators' rights are preserved

While there are instances of utilizing information technology to infringe upon IP rights, there are also situations where technology is employed to implement solutions for copyright management, safeguarding IP rights on the Internet. Many users and business' view this as an efficient approach alongside legal enforcement.

3. Overview of Digital Rights Management - A Content Protection Solution

The Digital Rights Management (DRM) solution is a method to safeguard copyrights for digital media. DRM technology helps prevent theft or unauthorized sharing of content from the outset. This approach employs technology to restrict the copying and usage of copyrighted works and exclusive software. The data management server automatically synchronizes new information about stored data with the Rights Management Server, authenticating users and providing decryption keys for the content they have purchased and downloaded.

Through this, businesses offer various types of products with several restricted usage features for users:

  • Providing services to customers based on registered timeframes.
  • Setting a feature that limits users from printing exclusive products.
  • Establishing a mode that prevents users from editing or creating backups of products.
  • Preventing users from copying data to other devices.
4. Cloud-based DRM solution

Below is how the DRM solution operating in the cloud computing platform:

  • Authentication and Authorization: When users access digital content on the cloud computing platform, the system will require them to authenticate, either by logging in or using other authentication methods.
  • Encryption and Decryption: Digital content is encrypted to ensure safety and security during transmission and storage on the cloud.
  • Rights Management: These rights are established based on factors such as user rights, access time, and content type.
    Usage Limitation: Restrictions can be applied to access frequency, access duration, or devices used to access digital content. This allows for the management and control of content usage under specific conditions.

In summary, the DRM solution on the cloud platform focuses on protecting and managing the IP rights of digital content within the cloud environment, helping users maintain safety and control over the content they access and use.

The Integration of Intellectual Property in Cloud Computing and SaaS Business Models

Diverse forms of IP offer companies the ability to safeguard their innovations and uphold or enhance their competitive edges. For enterprises that function through Software-as-a-Service (SaaS) technologies and/or harness cloud-based services to bolster their operations, each category of IP demands distinct considerations to ensure its effective utilization. To commence, comprehending IP necessitates grasping how data is possessed, governed, and exchanged among different entities within the cloud environment.

This piece will delineate four principal classifications of IP – namely patents, trade secrets, copyright, and trademarks – to establish a structure for comprehending how each type holds independent value within the realm of cloud computing and SaaS.

The integration of IP into cloud computing and SaaS business models navigates the intricate relationship between technological progress and legal factors
1. Patents

The initial section explores patents covering novel and non-obvious inventions, particularly in software. These patents focus on practical applications and technological advancements, rather than abstract ideas. Obtaining a patent grants the right to restrict others from using the patented technology for a limited period. Notably, software technologies are eligible for patent protection, and in the realm of SaaS, valuable patents often revolve around technological foundations enhancing service value.

Utility patents remain valid for twenty years from filing, emphasizing the importance of safeguarding fundamental functions over highly specific implementations, especially in swiftly evolving fields like SaaS.

Additionally, design patents can preserve ornamental aspects, such as the visual appeal of products, including graphical user interfaces (GUIs) tied to unique charts or reporting tools. Unlike utility patents, design patents last 15 years from issuance.

Unlike other intellectual property forms, patent applications must be filed within a year of initial disclosure. Thus, SaaS companies should consider early filing, often pre-Series A funding. A comprehensive provisional application covering foundational aspects is a cost-effective and strategic filing approach, serving as a placeholder for future patent submissions.

2. Trade secrets

Trade secrets hold considerable value, especially when combined with patents in a comprehensive strategy that deploys each where most effective. These secrets safeguard sensitive information by offering the means to legally address misappropriation. However, they do not shield against independently discovered or publicly available information, underscoring the supplementary advantage of patent protection.

Nevertheless, trade secrets offer distinct benefits to SaaS companies for several reasons:

  • They serve as a useful resource in industries where professionals often transition between firms, heightening the risk of confidential data transfer.
  • Trade secret protection covers a broader spectrum, including customer lists, business strategies, and similar valuable data that might fall beyond patentable concepts.
  • Trade secrets are not confined by time constraints and can potentially persist indefinitely, unlike utility patents with a maximum validity of 20 years from filing.

Crucial to trade secrets is establishing and maintaining robust protocols to ensure confidentiality. SaaS enterprises utilizing cloud servers for both internal operations and customer services must guarantee that their cloud service providers implement adequate safeguards. This is essential to mitigate risks of data breaches or other scenarios leading to inadvertent disclosure or misappropriation of confidential information.

3. Copyright
Technology companies are paying more attention to adhering to IP laws

Copyright safeguards original works of expression or creation, encompassing the textual representation of software code. However, it doesn't extend to the underlying technological concepts the code embodies. Copyright protection offers advantages, as registration isn't obligatory to initiate legal proceedings. Nonetheless, it's crucial to note that the copyright's emphasis on expression implies that modifications or workarounds made directly within the code might no longer be covered by copyright.

Despite this, SaaS enterprises should consider copyright protection as an integral facet of a comprehensive intellectual property strategy, especially when their code is hosted on cloud platforms.

4. Trademarks

Beyond SaaS or cloud computing, companies should value trademarks and brand protection for enhancing and preserving their public image. A trademark, which can be a word, symbol, or phrase distinguishing one brand from another, serves as a recognizable identifier for a company's offerings. As SaaS companies increasingly rely on cloud platforms, maintaining consistent brand imagery across the complex cloud environment is beneficial.

Discretion is crucial for SaaS firms to monitor trademark usage, particularly by competitors engaging in comparative advertising. Setting up alerts or using trademark watch services helps track trademark references and usage, preventing potential trademark dilution or disparagement effects.

5. Open Source and Software Usage Considerations

In the initial stages of SaaS technology development, there are often compelling reasons to utilize open-source software, streamlining the development process and swiftly delivering functional products to customers. Nevertheless, companies must recognize the distinct responsibilities linked to open-source software adoption, particularly concerning (1) crediting the original developers of the open-source software, (2) informing users, including customers, about any associated software obligations, and (3) adhering to limitations on utilizing patent, copyright, or other intellectual property-based protections.

Furthermore, the open-source code's license can render a broader codebase incorporating it also open source. Consequently, it's imperative for companies to exercise caution when integrating open-source code into their proprietary codebase, thereby preventing their own code from inadvertently becoming open-source. Diligent tracking and assessment of software licenses are key to addressing these considerations effectively.


Complying with IP regulations and strategically leveraging IP assets are crucial for business market entry

Intellectual property assets hold immense significance for SaaS enterprises, safeguarding diverse facets of their technology and services in alignment with business goals. As businesses persist in delivering innovative solutions to users via cloud platforms, these assets prove crucial in establishing and sustaining competitive edges, mitigating risks tied to imitation or unauthorized utilization by competitors.

At VNG Cloud, we commit to comply with Vietnamese regulations to safeguard the IP rights of organizations and individuals, promptly preventing any misuse of services provided by VNG Cloud that may infringe upon the IP rights of any party. You can learn more about our Complaints regarding IP rights terms.

IPR rights specified in this provision are understood as the rights of the organizations and individuals to intellectual property, including copyright and copyright-related rights, industrial property rights, and rights to varieties plants under the 2005 Intellectual Property Law as amended and supplemented in 2022 and guiding documents.