Racing to file a Blockchain Patent Application

Filing a Blockchain Patent Application

Why would an inventor file a patent application covering a blockchain? Recently, many American and Chinese inventors have filed blockchain patent applications covering blockchain technologies.

The Growing Blockchain Patent Landscape

Since 2013, there has been a significant surge in blockchain-related patent applications. According to recent data:

• Nearly 14,000 blockchain patent applications have been filed with the USPTO in the last decade
• Close to 10,000 blockchain patents have been issued during this period
• Major players like Mastercard, VISA, Alipay, and Bank of America are among the top patent filers

This flurry of activity underscores the perceived value of blockchain innovations and the desire to secure intellectual property rights in this space.

IBM recently was awarded a blockchain patent (US Pat. No. 10,091,228) for detecting network security breaches. Currently, IBM has 89 blockchain patents, while Alibaba (a leading Chinese company) has 90 blockchain patents. After passage of the AIA, US became a First to File country where the first inventor to file an application on an invention has priority. This was a change from the First to Invent System, which America had in place since 1836. The America Invents Act promoted the Race to File system currently in place where patent applicants are encouraged to file first.

What is a blockchain

While many people still think blockchain means Bitcoin, this is no longer the case. In essence, blockchain provides a new way to share and distribute data. Today, blockchains are considered a disruptive technology and represent one of the greatest sources of innovation from retail to high technology industries.

While Bitcoin was the first well known application of the blockchain technology, it can be used for many different applications. Generally, blockchain is a process for encrypting and recording data in a way which allows it to be transferred around the world in a decentralized, peer-to-peer environment. Because it utilizes a decentralized environment, blockchains do not require someone or something to monitor or control it. They also provide a way to verify the authenticity of the record so that unauthorized changes or modifications can be easily detected.

In an era where the transfer and recording of data has value in itself, the ability to utilize a blockchain transaction to record and transfer data and information contained within the blockchain can be very beneficial. In addition, by making the blockchain secure, tamper-proof, authentic and portable, it can be utilized in a number of different valuable ways which can be commercially valuable.

Overcoming Patent Eligibility Challenges

One of the biggest hurdles for blockchain patent applications is subject matter eligibility under 35 U.S.C. § 101, particularly in light of the Supreme Court’s Alice decision. To improve chances of approval:

1. Focus on technical improvements and solutions to technical problems
2. Emphasize how the invention improves computer functionality
3. Avoid claims that could be interpreted as abstract ideas implemented on generic computers
4. Include detailed technical descriptions and diagrams in the specification

It’s crucial to draft applications with the Alice/Mayo test in mind from the outset.

Key Drafting Strategies

When preparing a blockchain patent application:

• Resolve § 101 issues with the examiner rather than appealing to the PTAB (which has a very high affirmation rate for § 101 rejections)
• Avoid conceding that claims are directed to an abstract idea
• Focus on prong 2 of step 2A in the USPTO’s subject matter eligibility guidance
• Describe technical contributions in detail, explaining how they differ from conventional blockchain uses
• Consider claiming from different perspectives (e.g., user, exchange, wallet provider) to avoid divided infringement issues

Emerging Trends and Considerations

As the blockchain space evolves, patent applications are expanding beyond basic cryptocurrency concepts to cover areas like:

• Smart contracts and tokens
• Private and permissioned blockchains
• Novel consensus mechanisms
• Integration with IoT and AI technologies
• Supply chain and logistics applications

Inventors should consider how their innovations might apply across various industries and use cases.

Many people believe that blockchain is poised to change the way we do things, in much the same way as Napster did for the music industry 25 years ago. As a result, there have been a large number of patent applications which have recently been filed and are currently being filed on the technologies and algorithms behind blockchains in order to own and control this latest innovation. The potential industries which could benefit from blockchain technologies include the fashion industry, food industry, transportation, retail, healthcare, document management, manufacturing, and controlling against counterfeit and unlicensed products.

As many of you know, patents can help companies monetize various innovative technologies. Many companies and individuals file a patent application in order to obtain an exclusive right or a monopoly right on their invention. This exclusive right covers the patented invention and allows an inventor to exclude others from using, making or selling any product which is based on the registered patent. Inventors can also require any user of the patented technology to obtain a license in order to continue to use the technology, or they can require an infringer to stop using the patented technology.

Many, Chinese companies have and will file a patent application covering blockchain technologies as evidenced by Alibaba’s own patent applications, where more than 10 percent of their overall patent applications are tied to blockchain technologies. In fact, China has filed more than 56 percent of the blockchain patent applications; while in the U.S., blockchain patent applications represents only 22 percent of the filings.

The Importance of a Comprehensive IP Strategy

While patents are valuable, they’re just one piece of the intellectual property puzzle. Companies working on blockchain technologies should also consider:

• Copyright protection for software code
• Trade secret protection for proprietary algorithms and processes
• Trademark protection for branding associated with blockchain products/services

A holistic IP strategy can provide multiple layers of protection for blockchain innovations.

Conclusion

The blockchain patent landscape is dynamic and complex. Success in this arena requires a deep understanding of both the technology and the evolving legal framework. By focusing on technical innovations, drafting applications strategically, and staying abreast of industry trends, inventors and companies can position themselves to secure valuable patent protection for their blockchain innovations.As this field continues to mature, we can expect to see more refined patent strategies emerge, along with potential legal battles that will further shape the blockchain IP landscape. For those working in this exciting space, staying informed and adaptable will be key to navigating the challenges and opportunities ahead.

While blockchain is still in its infancy, like many technological innovations, patents can be used to leverage the new technology with various business specific applications in a way to provide a competitive advantage for companies and individuals. If you have questions about how blockchains can work or how you can file a patent application on a solution or system which involves a blockchain, feel free to email or call our office to schedule an appointment with one of our patent attorneys.