Majorana and the Chamber of Quantum Computing Trade Secrets
Modern companies are largely valued for the Intellectual Property (IP) they possess, and over the past decade, the Magnificent Seven, a cohort of Tech companies, have been making up an increasing share of the U.S. economy.[1] Quantum Computing has been slowly eroding the ubiquitousness of Artificial Intelligence (AI) in the headlines and is, potentially, the next big thing in tech.[2] There have been many spectacular tech industry flops, like Meta’s metaverse. Unlike some other tech industries ventures, quantum computing has a longstanding and venerable pedigree. In a 1981 lecture, the famous physicist Richard Feynman stated, “Nature isn’t classical, dammit, and if you want to make a simulation of nature, you’d better make it quantum mechanical.”[3] Feynman’s musings led the physics community to take the idea of a quantum computer seriously.[4] Since then there has been a constant ebb and flow of quantum computing research.[5]
Quantum computers are based on Qbits, the analog to classical computing’s bits.[6] While bits are stored on magnetic or semiconductor devices, such as, transistors, at this developmental stage, Qbits are primarily an intellectual construct agnostic of technological implementation. [7] Only time will tell if one Qbit implementation will dominate the quantum computing landscape. This could lead to a winner takes all scenario in the large and lucrative quantum computing market. Do not worry, your regular computers are not going away. You will not be surfing the web or word processing on a quantum computer.[8] However, for a subset of important problems involving simulation, optimization, machine learning and cryptography,[9] quantum computing represents an exponential increase in computing power.[10]
Traditionally, there were five types of quantum computers, named for their Qbit implementation: Superconducting, Photonic, Neutral Atoms, Trapped Ions and Quantum Dots.[11] Recently, Microsoft’s Majorana claims to have employed a state of matter only previously theorized to create a new topological quantum computer.[12] Some of these quantum computers are more akin to classical computers, for instance the superconducting or the quantum dot types are implemented via semiconductors [13]. Other quantum computers are made possible by exploiting the fundamental properties of matter, for instance the neutral atom, trapped ion and now the topological types of quantum computers. [14] The atoms, ions and subatomic particles are the qubits.[15] These qubit implementations may exploit natural yet unknown properties of these particles, more akin to discovery than invention in the eyes of USPTO and therefore is unpatentable.[16] In my opinion, it is possible that these properties may be the big breakthrough in quantum computing rather than the instrumentation to detect these properties. Courts have repeatedly held, “[A]n application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”[17]
Further, this situation may be viewed as similar to the telegraph case of O’Reilly v. Morse.[18] In the case, Morse was unable to make broad patent claims encompassing any use of electricity for communications.[19] Analogizing from O’Reilly v. Morse, the fundamental mechanisms by which a quantum computer operates may be unpatentable, but the specific instrumentation and telemetry may be protectable.[20] While the underlying mechanisms that make these quantum computers possible may be unpatentable, their discovery has only come through tremendous investments in research by technology firms, likely orders of magnitude more than was spent in efforts to invent the telegraph.[21] However, the U.S. patent system does not award or enhance IP rights due to the amount of effort and resources expended in the creation of an invention[22]. Further, in my opinion, the disclosure necessary to receive a patent on a specific implementation of a quantum computer would likely give away the harder and more fundamental breakthrough in quantum computing for free, inviting competitors into the market. This will likely lead to a reliance on trade secrets to protect quantum computing technology.
The quantum computing market was recently spooked by Nvida’s Jensen Wong, who stated “that it will take 15 to 30 years for Quantum computing to be useful.”[23] In my opinion, the fundamental worry of investors is that the patents will get old before they get rich. If patented, patent protection for fundamental parts of quantum computing architecture may lapse before quantum computing is used at scale.[24] Microsoft’s Majorana breakthrough led to few publications besides marketing material.[25] In my opinion, the Majorana chip is a veritable chamber of secrets and would be difficult to reverse engineer. In the old days, one could employ X-Rays or an electron microscope to ascertain a chip’s lithography.[26] These technologies will be unable to directly detect Majorana’s fermions.[27] In my opinion, the Majorana chip’s instrumentation may the only machine in the world that could give clues to how the chip operates. Further, the likely near-term business model for quantum computing will be infrastructure as a service (IaaS), where users log in through a terminal.[28] This will create a degree of separation between the user and the quantum computing technology, increasing the viability of protecting quantum computing via trade secrets.[29] Despite Microsoft publishing a paper on an application for its topological qubits along with its Majorana press release, there has been scant proof of the existence of Majorana’s topological Qubits, leading to skepticism of their existence in the physics community.[30]
Boston Consulting Group projects the annual profits provided to end users by quantum computing will be between $80 to $170 billion dollars annually by 2030 and will grow to between $450 and $850 billion dollars annually by 2040.[31] Quantum computing providers will reap twenty percent of these profits annually.[32] In my opinion, this presents an ineluctable prospect to quantum computing providers. A dominant position in the quantum computing market would allow a company to reap super normal profits possibly indefinitely through trade secrets. While IP protection via patent would lapse after 20 years and require a disclosure will likely create competitors. After which, quantum computing would become a commodity service like cloud computing, as more quantum computers enter the market margins would erode. Therefore, it is hard to see quantum computing companies not using trade secrets as the foundation of their IP strategy.
IBM has taken a different tact in the quantum computing race.[33] While we are used to software running on our laptops through the Von Neumann architecture of classical computers, all of which are electrically quite similar.[34] The range of technological implementations of quantum computers is quite dramatic. [35]IBM has developed Qskit an open-source python-based programing language for quantum computers.[36] This programming language is not tied to a given type of quantum computer but provides a layer of abstraction which any company can employ rather than reinventing the wheel.[37] All a company needs to do is develop a compiler and compatible drivers, or as they state a transpiler, for their quantum computer.[38] However, in my opinion, it is a prescient move by IBM to get in the business of selling shovels to users regardless of whoever makes a breakthrough in quantum computing and mines the quantum computing gold. Qiskit is the most popular software development kit that currently exists for quantum computers and is free for developers to use.[39] Further, I believe that by being a first mover and making Qiskit open source and free to use, IBM invites the marketplace to develop around and to suit Qiskit, potentially enabling it to become dominant and/or an industry standard. However, IBM’s open-source strategy should not be viewed as purely altruistic. By implementing this loss leading strategy, IBM is hoping to profit from whoever makes a quantum computing breakthrough by embedding itself in the quantum computing ecosystem to reap profits later.
Will quantum computing be a winner-take-all market protected almost indefinitely via trade secrets, or will IBM’s open-source strategy carry the day? Will one company dominate the market and keep the world in the dark via trade secrets until a Quantum Prometheus comes along?
Footnotes
