For years, software product developers have heard the same refrain: “Software is hard to patent.” In many cases—especially involving AI, machine learning, and data-driven systems—that advice was justified.  At the very least it drove up costs of obtaining software patents.

But a recent decision by the USPTO Director has signaled a huge shift in a way that the USPTO examines software patent applications.

What Changed?

A software patent application (regarding an AI invention) filed by DeepMind was rejected under section 101, as being a mere “abstract idea.”  In September 2025, USPTO Director Kathi Vidal intervened in the appeal, setting aside this rejection.   The Director gave specific direction that software inventions deserve serious patent consideration, and summarily rejecting them as unpatentable abstract ideas is contrary to the interests of the country.

Why This Matters for Software Product Developers

This is a powerful signal to Patent Examiners throughout the USPTO.  Rejecting these applications is against the interests of the country.  This is a sea change from prior administrations that have often taken an adversarial position against software patent applications. 

Historically, inventions like these were often rejected early under patent eligibility rules—before novelty or technical merit was even considered.  The USPTO’s recent stance signals that those early dismissals are no longer appropriate when the software produces concrete technical improvements.

If your invention also includes physical components or product improvements, certain manufacturing changes may be patentable as well.
→ Link to: 5 Product Changes Manufacturers Make That Are Often Patentable

The Opportunity Window (and the Risk of Missing It)

Importantly, this is not a blanket rule change or a guarantee of allowance. Examiners still scrutinize software patents carefully.  However, this shift creates a window of opportunity for software developers who are interested in protecting their software, AI, ML, or Fintech products or services.  Teams that delay may find competitors securing protection for foundational improvements—especially in crowded AI and SaaS markets.

What Software Teams Should Be Doing Now

If you develop software products, especially those involving AI, automation, or large-scale data processing, this is a good time to:

• Review innovations and improvements that are currently in development, and consider whether any of the innovations may potentially be patentable.
• Revisit past technical breakthroughs and improvements that were never patented

Involve a patent attorney early to determine whether any of the innovations are potentially patentable.  It may also be desirable to do a Freedom to Operate search to determine if there are any dangers of infringement of existing patents.

Final Thought

The USPTO is signaling that well-engineered software deserves meaningful patent protection.  This presents a chance to secure durable intellectual property that aligns with how modern software is actually built.

If you’re building a company around your software, your corporate structure can influence how investors evaluate your long‑term potential.
→ Link to: The C‑Corp Advantage: Why Investors Care About Section 1202