Blockchain Patent Filing- The Race for Leading Companies’ Patent Dominance
With blockchain’s increasing popularity comes the race for blockchain related patent filing, particularly among leading global companies and economies. Big companies –particularly those in the Fortune 500 categories- are trying to secure their own blockchain patents, even those without any real world applications.
Last week for instance, MasterCard, Barclays Bank, and Bank of America all filed their own blockchain patents. MasterCard’s filing contained information about a blockchain tech that can allow for the linkage of assets between traditional bank accounts and blockchain, Barclays submitted two patent applications for blockchain data storage and digital currency transfer, while Bank of America filed to secure its current blockchain based platform.
The list goes on and on. With blockchain becoming one of the most popular buzzwords for 2018, lots of people and organizations want to jump on the opportunity. This has resulted in the abundance of trolls filing patent applications too, thus triggering a possible race for blockchain patents.
Why Is A Blockchain Patent Important?
As with all inventions and technological innovations, individuals and institutions reserve the right to profit from their technology becoming popular and used by everyone. Without a patent, anyone can hijack the same idea and even monopolize it.
History is filled with lessons about inventors and innovators who didn’t file their patent applications early enough, resulting in lost opportunities and wealth. The US Patent and Trademark Office (USPTO) is responsible for patents filed in the US and by US residents and companies.
The good news is that when a patent is filed with the USPTO, it is also valid in about 152 member countries under the Patent Cooperation Treaty.
Companies looking to pioneer new financial services and platforms are securing their patents. According to Bloomberg, “blockchain based patents are an essential ingredient for companies looking to reshape the financial services industry or spawn profitable cryptocurrency-related businesses.”.
Patents are not only great for reserving the first mover advantage, it also helps with making the venture a reality. For instance, investors would rather there be a blockchain patent filed and approved before investing.
How Long Has Blockchain Patent Filing been Going On?
While there’s no specific date, research of the USPTO listings has shown that the first references to blockchain based patents were in 2012. Between 2012 and 2015, over 83 patents were filed and applied for in the US alone.
However, the number of patents filed started growing rapidly after bitcoin’s massive growth in value. As a result, the year 2017 saw a total of 97 patent applications –that’s more than the total number of applications between 2012 and 2015- in the US alone. At this rate, we can expect an increasingly growing rate of patent applications over the next few years.
Who Is Leading the Global Patent Application?
With the aforementioned numbers, one would think that the US is leading the charge in blockchain based patent filings. This is far from the truth. It is estimated China currently has the largest number of blockchain patents approved and filed.
In 2017 alone, the country filed 225 blockchain patents –that’s more than 50 percent of the 406 patents filed- making China the country leading the blockchain patent filing charge.
This is unsurprising seeing as blockchain is part of the Chinese government’s agenda, thus making it a priority.
Patent Trolls May Pose a Problem
As with all new technology and opportunities, there are those whose business models are centered around filing as many patents as possible in the hopes that they can profit from them eventually. These entities are known as patent trolls and are often loathed in the tech community.
These patent trolls typically acquire these patents without any intention of using the patent to create a new product. While there are quite a few, none stands out like Craig Wright’s EITC. For those who aren’t familiar with the name, Mr. Wright is a known impostor of Satoshi Nakamoto, bitcoin’s founder/creator, and has a reputation for patent trolling.
Not that this is a bad thing necessarily. It’s just a grey area that’s largely unregulated. In fact, leading companies are also dabbling. For instance, a larger percentage of Bank of America’s blockchain patent filings aren’t related to actual product.
In fact, according to Catherine Bessant, chief operations and technology officer at Bank of America, these patents are “very important to reserve our spot even before we know what the commercial application might be.”.
Bottom line, the stance is secure the patents, then worry about its usability later on –if any.
Blockchain Patent Application Process and Outcomes
Filing a patent is just one part of the process. They still have to be processed. This is why in spite of the sizable number of patent filings, there have been only 53 blockchain related patents processed and approved and another 265 bitcoin related patents approved.
The US Patent and Trademark Office is notorious for its long and arduous process of processing and approving patents. As a result, it can take up to 18 months for patent applications to be published and another few years to be processed and approved. An example of this is Bank of America’s patent filing for their crypto exchange system in 2014. The details were published in 2015, while the patent protection was approved in 2017.
Not all blockchain patents filed are automatically approved. Many are often declined –which is why patent trolls like EITC is filing as many as possible in the hopes that a few are approved- even though there’s often not enough information to ascertain the reason for their rejection.
Patents have to pass the eligibility test –an incredibly complex process itself- before they can be published and approved.