Data Residency Explained: Why Server Location Matters for AI Patent Software

Patent work runs on security, confidentiality, and trust. Attorneys routinely handle unpublished invention disclosures, draft claims, prior art notes, and strategy conversations. These materials should never leak beyond the client team.

So, when clients of patent attorneys ask ‘where are the servers?’ during a software review, it is not a minor technical detail.

This question is really about data residency.

In this article, we explain what this means in plain English, why it matters for patent attorneys, and what to ask vendors before you sign.

Key takeaways

• Data residency is where your data is physically stored and processed, which affects which laws and access regimes may apply.
• AI patent workflows create multiple data footprints: documents, prompts, outputs, logs, backups, and support data.
• If you do not know the hosting region (and what else sits outside it), you cannot properly assess confidentiality, compliance, or client restrictions.
• Ask vendors for specific regions, sub-processors, and where backups and logs live, not just ‘we use AWS/Azure/GCP’.
• Match data residency to client requirements and bake it into vendor terms, questionnaires, and engagement expectations.
• Prefer vendors who are transparent about where data is processed and how cross-border access is controlled.

What is data residency?

Data residency is the physical geographical location of the servers where your data is stored and processed.

That sounds simple, but it has 4 important consequences:

1. Which laws apply to your data often depends on where the data sits and where it is processed.
2. Which regulators have jurisdiction can follow from that location.
3. Which government access rules might be relevant can change across jurisdictions.
4. Which compliance frameworks and contractual commitments you need can also change depending on where the data is hosted.

Data residency vs data sovereignty

These two terms are often mixed up.

Data residency is about where the data lives (i.e. the location of storage and processing).

Data sovereignty is about which laws govern the data (i.e. the legal regime that applies because of location and other connecting factors).

In practice, the two are linked. If a vendor stores and processes your matter data in a specific country or region, you should assume that local legal obligations and access regimes may come into play.

Why server location matters for AI patent workflows

With AI tools, the server location question matters even more because AI features typically involve more than just file storage.

An AI-assisted patent workflow might include:

• Uploading drafts, office actions, and specifications.
• Parsing documents to extract key content.
• Running semantic search across your portfolio and/or prior art.
• Suggesting edits, claim language, or amendments.
• Generating summaries for internal review.
• Logging usage for troubleshooting and improving reliability.

And much more.

Each of the above steps can create data footprints. These include the content you provide, derived outputs, and system metadata (such as timestamps, user IDs, and access logs). Even if the core document stays in one place, the wider system may touch other services for monitoring, backups, or support.

This is why an AI vendor saying ‘we are cloud-based’ is not enough. You need to know where in the cloud the data is being physically stored and processed.

Risks of ignoring data residency in patent practice

Data residency is not just a procurement checkbox. For patent teams, the risks tend to show in four key places.

1. Exposure of unpublished inventions

Unpublished disclosures are the crown jewels. If they are stored or processed in a jurisdiction with weaker confidentiality norms, different disclosure obligations, or unfamiliar enforcement dynamics, your risk profile changes.

Even if no breach occurs, you may be taking on avoidable uncertainty.

2. Does server location affect attorney-client privilege?

Privilege is not a single global standard. Your professional duties and your client engagement terms may impose specific expectations about confidentiality, security, and vendor management.

If your tooling choice results in cross-border transfers that were never assessed or documented, you can end up in a difficult position when a client asks for assurances after the fact.

3. Client restrictions and audit requirements

Many in-house legal teams now ask direct questions about hosting location, sub-processors, and cross-border data flows. Some clients will flatly require that their matters stay within a specific region (for example, within the EU or the US).

If your vendor cannot meet those requirements, you may be forced into workarounds or, worse, you may not be able to use the tool at all for certain clients.

4. Conflicting rules across jurisdictions

Cross-border data handling can create conflicts. A common example is navigating European data protection requirements alongside other jurisdictions’ access or disclosure regimes.

You do not need to be an expert in every statute to understand the point: data location can trigger different obligations. If you do not know where your data is, you cannot sensibly assess the compliance surface area.

What questions should we ask AI patent software vendors?

Do not accept vague answers from your vendors. Ask for specifics, and take steps to ensure data confidentiality when using AI for patent drafting and other patent workflows.

Here are a set of practical questions that work well in vendor reviews.

Where are your servers physically located?

Ask for the actual hosting regions, not just the vendor’s headquarters address or office locations. If the answer is ‘we use a major cloud provider’, follow up with the regions in use.

Do you offer regional data centres?

Ask whether the vendor supports separate regions such as EU, US, or APAC, and whether your firm can be provisioned into a specific region.

Can we choose our data residency location?

Some vendors decide for you. Others let you choose. Some charge for it. This is a key decision point, particularly if you have a mix of clients with different expectations.

What counts as ‘our data’?

You must confirm which data categories the vendor considered in scope when referring to which data is processed where. The data you should ask whether or not is in scope includes:

• Customer content (documents, prompts, drafts, etc)
• Outputs (summaries, suggestions, etc)
• Metadata (logs, usage analytics, etc)
• Support tickets
• Backups and disaster recovery copies

A common trap is that the main database is one region, but backups or logs are stored elsewhere.

How is cross-border transfer managed and safeguarded?

If data can move across borders, ask what safeguards are used. This might include contractual protections, technical controls, and operational restrictions, such as limiting support access by region.

What security and compliance evidence can you share?

This is not strictly about residency, but it is part of the same risk conversation. Ask what independent assurance is available (for example, security reports, certifications, or audit summaries), and whether it covers the region you want to use. Patent attorneys must also fully evaluate AI tools for data security and confidentiality.

Who are your sub-processors, and where are they located?

Most SaaS providers rely on sub-processors. You should ask for the list and where those sub-processors operate. This matters for both confidentiality and compliance.

Are there options for private cloud or dedicated hosting?

Some firms or clients require a higher level of isolation. Even if you do not need it today, it is useful to understand what options exist for future sensitive matters.

Is UK/EU data residency required for UK firms? What about US and European firms?

UK firms: when UK or EU hosting is expected

Often, no. There is not a single rule that says a UK patent firm must keep all matter data in the UK or EU.

But in practice, UK or EU hosting is commonly expected in at least three situations:

• Client-driven requirements: Many UK and European clients (especially larger corporates, regulated industries, and public sector bodies) will ask for UK or EU hosting as a baseline.
• Simplicity for cross-border transfers: Even where transfers can be made compliant through contractual and technical safeguards, UK or EU residency typically reduces complexity in procurement and ongoing risk assessment.
• Sensitivity of the work: If you are handling high-value pre-filing disclosures, trade secrets, or matters with litigation overlap, firms often choose the most conservative hosting option available, even if it is not strictly required.

A practical way to frame it internally is: UK or EU data residency is not always mandatory, but it is frequently the easiest path to meeting client expectations and keeping risk low.

EU firms: when EU hosting is expected

For EU-based firms, EU data residency is not always legally required, but it is very commonly expected.

Reasons include:

• EU client expectations: Many EU clients expect matter data to remain in the EU by default, especially for sensitive R&D and pre-filing work.
• Procurement and compliance friction: Keeping data in the EU can make it easier to satisfy internal compliance reviews, particularly where cross-border transfer assessments would otherwise be needed.
• Multi-country teams: If you operate across multiple EU jurisdictions, EU regional hosting gives you a consistent baseline without needing country-by-country hosting.

Where it gets more nuanced is when a specific client, regulator, or sector expects stricter localisation (for example, in-country hosting or dedicated environments). That is less common, but it does come up.

US firms: when US hosting is expected

For most US firms, there is no single, general rule that requires US-only hosting for all legal work.

That said, US residency often becomes important when:

• Your clients require it: US government work, defence-related work, and some regulated sectors may require specific hosting locations and access controls.
• You want to minimise cross-border handling: Some firms prefer US-only hosting simply because it reduces complexity and avoids explaining cross-border transfers to clients.
• You have mixed client bases: If you regularly work with EU or UK clients, you may need the option to keep certain matters in-region to meet those clients’ requirements.

In other words: US residency is often a commercial and risk decision, not a universal legal mandate.

Other European firms: common patterns and exceptions

If you are outside the EU but still in Europe, the right answer is usually client-led and risk-led:

• If you work mainly with EU clients, EU residency is often the safest default.
• If you work mainly with domestic clients, local residency may be preferred if clients ask for it.
• If you work across regions, the key requirement is usually having clear controls and clear documentation: where data is stored, where it is processed, who can access it, and what sits outside the primary region (logs, backups, support).

If you want a single decision rule: match the hosting region to the strictest client requirement you regularly see, and make sure you can separate matters where needed.

Please note that this section is general information, not legal advice. Data residency requirements can be driven by client contracts, sector rules, and local privacy law. Involve your IT/security team, and relevant counsel,  for a firm-specific view.

Best practices for law firms evaluating data residency

You do not need to turn your patent team into an IT department. You just need a repeatable way to assess risk.

Involve IT and security early

Bring your IT and security colleagues into the discussion before you are deep into trialling and adoption of the vendor. They can help you evaluate hosting models, vendor assurances, and contractual terms quickly. 

Map client requirements

Create a simple internal map:

• Which clients require jurisdiction specific hosting (EU, US, etc)?
• Which matters have heightened sensitivity (trade secrets, pre-filing disclosures, litigation overlap)?
• Which engagements include explicit security or residency language?

This lets you choose tooling and workflows that match the varying needs of your clients, rather than hoping that one setting fits all.

Put data residency into contracts and questionnaires

If residency matters to your or your clients, reflect it in writing:

• Procurement questionnaires
• Engagement terms (where appropriate)
• Vendor agreements and data processing terms

It is much easier to enforce expectations when they are made explicit.

Prefer vendors who are transparent

The best signal is not a perfect answer. It is a clear, easy to understand answer that leaves no room for ambiguity.

A serious vendor should be willing to explain where data is stored, where it is processed, what sub-processors are involved, and what controls apply. If the response is evasive or overly generic, treat that as a risk indicator.

How Solve Intelligence approaches the server location question

During calls with patent attorneys interested in using our software, we often find that ‘where is the data hosted?’ is the moment where security stops being abstract and becomes the primary and most important focus.

Our view is simple: firms should not have to guess. When you evaluate Solve Intelligence, you should expect clear, direct information about hosting regions, how data is handled, and what safeguards apply. You should also expect straight answers about cross-border processing and any third parties involved in delivering the service.

As Josh Snider, Special Assistant Attorney General for Colorado, wrote in a recent LinkedIn post: ‘Those of us in the IP profession appreciate how Solve addresses security concerns upfront in its product development, and not only as an afterthought’.

If you have jurisdiction-specific constraints, raise them early. This is the fastest way to confirm whether the product can fit your risk and compliance requirements.

Conclusion

Data residency is not an abstract IT topic. For patent attorneys, it is tied to confidentiality, client trust, and professional responsibility.

AI patent software can be a major advantage, but only if it is deployed in a way that matches your obligations and your clients’ expectations. Ask where the servers are, understand what that implies, and choose a provider that treats the question seriously.

To see how Solve Intelligence ensures the security and confidentiality of client data for patent attorneys, refer to the Solve Security Trust Center.

FAQ: Data residency for AI patent tools

What is the difference between data residency and data localisation?
Data residency is about where data is stored and processed. Data localisation is a stricter idea: it usually means data must stay in a particular country (and sometimes must be processed only there too). Localisation is less common, but it can appear in regulated sectors or public sector procurement.

Does using a US cloud provider automatically mean US government access to our data?
Not automatically, and not in a simplistic way. The more practical question is: where is your data hosted, who can access it, and under what conditions. A vendor should be able to explain their access controls, encryption, support model, and legal process for responding to government or law enforcement requests.

Can data be ‘resident’ in the EU but still accessed elsewhere for support?
Yes. This is one of the most overlooked points in vendor reviews. A system can store data in an EU region but still allow access from other regions for support, engineering, or incident response. You should ask who can access production systems, from where, and what controls are in place (role-based access, approvals, logging, and time-bound access).

What data types are typically stored outside the primary region?
Common examples include:

• Logs and monitoring data
• Backups and disaster recovery copies
• Customer support tickets (and attachments)
• Email notifications and transactional messaging
• Product analytics and usage metadata

This is why it matters to ask about more than just the main database location.

Does ‘EU hosting’ mean all processing stays in the EU?
Not necessarily. Some vendors store data in-region, but process certain tasks elsewhere (for example, telemetry, analytics, or support). You should ask where data is stored and where it is processed, and whether any data leaves the region for any reason.

What evidence should we ask for when assessing security and compliance?
Ask what the vendor can share that is relevant to your risk review, such as:

• SOC 2 report (or similar independent assurance)
• ISO 27001 certification (where applicable)
• A recent penetration test summary (at least an executive summary)
• Data Processing Agreement terms and sub-processor list
• Clear documentation on data residency, backups, and access controls