Legal protection of an algorithm: patent, copyright or trade secret?

Every day, entrepreneurs launch digital projects whose value rests on an algorithm. Recommendation system, credit scoring engine, natural language processing tool, logistics prediction model: the algorithm is often the heart of the competitive advantage. Yet its legal protection remains poorly understood. Between the patent that is so often mentioned, the copyright that sometimes applies, and the trade secret that is underestimated, the options are real, but conditioned on precise criteria.

This article reviews the three protection mechanisms available under French law, their conditions of application, their limits, and the strategy to adopt depending on your situation.

What is an algorithm in legal terms?

Before addressing protection, a definition must be set out. An algorithm is a finite and ordered sequence of instructions enabling a problem to be solved or a task to be accomplished. It may be expressed in mathematical form, in pseudo-code form, or in the form of source code implemented in a programming language.

This distinction is fundamental in law, because the law does not treat the algorithmic idea, its formal description and its concrete implementation in the same way. An algorithm as an abstract idea is protected by no intellectual property regime. What the law can protect is either its formal expression (the code), its technical effects (the patent), or the information that describes it (the secret).

The patent: can an algorithm be protected by an industrial property title?

What exactly does a patent protect?

A patent is an industrial property title that confers on its holder a 20-year exploitation monopoly over an invention, in exchange for its public disclosure. To be patentable, an invention must meet three cumulative conditions set out in Article L611-10 of the Intellectual Property Code: it must be new, involve an inventive step, and be capable of industrial application.

Can an algorithm be patented in France?

The answer is nuanced. The same Article L611-10, paragraph 2, explicitly provides that the following are not regarded as inventions: discoveries, scientific theories and mathematical methods, nor computer programs. This exclusion strikes algorithms "as such", that is, considered independently of any technical effect.

In practice, the rule is stated as follows: a pure algorithm, a mathematical formula or an intellectual processing method are not patentable in France, nor before the European Patent Office (EPO).

Are there exceptions?

Yes, and this is where all the subtlety lies. Paragraph 3 of the same article specifies that the exclusion applies only "to the extent that the patent application concerns only one of those elements considered as such." In other words: if the algorithm is integrated into a technical invention producing a concrete technical effect, it can become patentable.

EPO case law has developed this criterion of the "further technical effect". An invention implementing software or an algorithm is patentable if it produces a technical effect that goes beyond the mere normal physical interaction with the computer. For example, an image compression algorithm producing a measurable storage gain, an algorithm controlling an industrial system improving the precision of a machine, or a signal processing process applied to a communication technology, may benefit from a patent.

In practice, for a manager, the question to ask is the following: does the algorithm produce a real and measurable technical effect in the physical world, or does it simply perform information processing of an intellectual or economic nature? In the latter case, the patent route is closed.

What are the risks of a poorly prepared patent application?

Filing a patent involves the full disclosure of the invention. If the patent is subsequently refused, or if it is invalidated in the context of litigation proceedings, the information is public without your benefiting from any protection. This risk is particularly high for algorithms. Before any filing, a patentability analysis is indispensable.

Copyright: is the source code of an algorithm protected?

Software programs are works of the mind

Copyright does not protect ideas, but their form of expression. Now, Article L112-2, 13° of the Intellectual Property Code expressly classifies software, including the preparatory design material, among the protectable works of the mind. This protection is automatic: it arises from creation, without any mandatory filing.

What conditions are required for the code to be protected?

Protection by copyright is subject to one essential condition: originality. Under French law, the originality of software is assessed by reference to "the imprint of the author's personality". The code must reflect a creative effort specific to its designer, and not result from the mere mechanical application of a known technique.

Concretely, complex source code, structured in a personal way, with original architectural choices will be original. Conversely, a basic sorting algorithm or a strictly standard implementation of a known mathematical procedure will not be.

Article L122-6 of the Intellectual Property Code defines the content of the economic rights of the author of software: reproduction right, adaptation and modification right, and right of placing on the market. These rights make it possible to bring infringement proceedings against any unauthorized copying or reuse of the code.

What does copyright concretely protect in an algorithm?

This is where the main limit of this regime as applied to algorithms lies: copyright protects the expression of the code, not the underlying logic or method. A competitor can perfectly reproduce the same algorithmic processing by implementing it in different code, without your being able to bring infringement proceedings.

Article L122-6-1 of the IPC confirms this implicitly: the person having the right to use software may "observe, study or test the operation" of the software in order "to determine the ideas and principles underlying any element of the software". Partial reverse engineering is therefore legally permitted, which weakens copyright protection for complex algorithms.

How can copyright protection be reinforced?

Several complementary mechanisms make it possible to consolidate this protection:

Evidentiary filing: although not mandatory, filing the source code with the Agency for the Protection of Programs (APP), with a bailiff, or by way of a Soleau envelope at the INPI, makes it possible to establish a certain date of creation. In the event of a dispute, this evidence is decisive.

The employment and service contract: if the code was developed by employees, Article L113-9 of the IPC provides that the economic rights over software created in the performance of the employment contract are vested in the employer. For independent contractors, it is essential to provide for a copyright assignment clause in the service contract, failing which the developer remains the holder of the rights.

Trade secret: the most flexible and the most underestimated protection

What is a trade secret?

The trade secret is a protection regime arising from Law no. 2018-670 of 30 July 2018, transposing European Directive 2016/943/EU. It is codified in Articles L151-1 et seq. of the Commercial Code.

Article L151-1 defines with precision the three cumulative conditions for information to be protected as a trade secret:

1. It is not generally known or readily accessible to persons familiar with the sector concerned;
2. It has commercial value, actual or potential, precisely because of its secret nature;
3. It is the subject of reasonable protection measures on the part of its legitimate holder.

An algorithm can perfectly meet these three criteria, provided that the company has actually taken concrete measures to preserve its confidentiality.

What protection measures should be put in place?

The condition of "reasonable protection measures" is the cornerstone of the system. It implies an active approach on the part of the manager. In practice, this means:

Contractual measures: confidentiality clauses (NDAs) signed with developers, service providers, partners and investors; non-disclosure clauses in employment contracts; source code access restrictions in license agreements.

Technical measures: control of access to the source code (restricted access rights, strong authentication), segmentation of teams that only have access to their part of the code, access logging, encryption of the code repository.

Organizational measures: internal confidentiality policy, team awareness, procedures for managing employee departures (return of access, reminder of post-contractual confidentiality obligations).

Without these measures, protection by trade secret cannot be invoked before a court.

What actions are available in the event of a trade secret violation?

The Law of 30 July 2018 put in place a range of civil remedies enabling swift action. Articles L152-1 et seq. of the Commercial Code provide in particular for the possibility of obtaining, by way of summary proceedings, a prohibition on the use or disclosure of the confidential information, the seizure of products or services resulting from its unlawful use, and damages.

The trade secret, however, offers fragile protection on one point: if the same solution is developed independently by a competitor, you cannot prevent them from exploiting it. Protection only applies in the event of the unfair obtaining, use or disclosure of the information.

Which protection to choose depending on your situation?

These indications are provided for informational purposes and do not constitute personalized legal advice. Get in touch with a specialist for an analysis tailored to your project.

What contractual obligations should be put in place from the outset?

The legal protection of an algorithm does not come down to choosing an intellectual property regime. It presupposes a rigorous contractual architecture that the manager must put in place from the launch of the project.

The contracts to systematically provide for:

With salaried developers: the Intellectual Property Code (art. L113-9) provides for an automatic vesting of the economic rights in the employer for software created in the context of the employment contract. It is nonetheless recommended to insert an express assignment and confidentiality clause in the employment contract, to avoid any ambiguity as to the scope of the assignment.

With service providers and freelancers: outside the employment relationship, the copyright remains with the developer by default. Any development engagement must give rise to a precisely drafted copyright assignment clause, stating the scope of the assignment (reproduction, modification, commercial exploitation), the duration, the territory and the consideration. A confidentiality clause must necessarily be attached.

With investors and partners: before any exchange on the technique or the architecture of the system, a non-disclosure agreement (NDA) must be signed. Without this agreement, disclosure to an investor or a partner may call into question the confidentiality condition of the trade secret, or even the novelty of a future patent.

With customers or licensees: if the algorithm is supplied in the form of SaaS or a software license, the terms of use and the license agreements must expressly prohibit reverse engineering, strictly frame the usage rights and provide for contractual penalties in the event of a violation.

What about the protection of an artificial intelligence algorithm?

AI algorithms raise specific issues that the law is still in the process of grasping. Two questions deserve particular attention.

Training data: an AI model derives its value not only from its algorithmic architecture, but also from the data on which it was trained. This data may be protected on several grounds: the sui generis right of the database producer (art. L341-1 of the IPC), trade secret, or confidentiality agreements with the data sources.

The trained model: the parameters of a neural network (weights, biases) represent the result of the learning process. Their protection by copyright is uncertain (the question of originality is disputed). The trade secret is here the most effective mechanism to prevent their unauthorized disclosure or reuse.

The European regulation on AI (AI Act), which has been entering into application progressively since 2024, also imposes transparency obligations on certain high-risk AI systems, which may come into tension with protection by trade secret. This interplay is an emerging legal subject that requires specialized support.

How does the Mirabile firm support entrepreneurs in protecting their algorithms?

The legal protection of an algorithm is rarely a one-off act. It is a strategy built over time, which evolves with the project. The Mirabile firm intervenes at each key stage:

At the creation of the project: analysis of the type of algorithm developed, identification of the most appropriate protection regime, drafting of the development contracts with assignment and confidentiality clauses, implementation of the internal trade secret protection policy.

In the growth phase: contractual audit of existing agreements, verification of confidentiality clauses with service providers and partners, support in the event of investor entry (NDA, legal due diligence on the intellectual property rights).

In the event of a dispute: identification of copyright or trade secret violations, infringement or trade secret violation proceedings, urgent protective measures (infringement seizure, summary proceedings).

On AI matters: compliance analysis with regard to the AI Act, articulation between regulatory transparency and trade secret protection, drafting of data usage policies.

The protection of an algorithm cannot be improvised. Source code that is not contractually protected, non-existent security measures, or a patent application filed without prior analysis are common mistakes that can cost a company dearly when a competitor or a former employee exploits its know-how.

The Mirabile firm supports executives, startups and SMEs in securing their digital and technological assets. For any question relating to the protection of your algorithms, software or data, get in touch with our teams for an initial discussion.