This article is a guest post from our colleague J.D. Houvener, Founder, Patent Attorney at Bold Patents Law Firm
Starting a new blockchain business? Or, does your industry/product/service rely on blockchain? Could it? Ok, hopefully you are nodding your head. If you’re not, you should be! 🙂 Blockchain technology is here to stay and it has provided a wonderful opportunity for many industries to be more efficient and secure while providing individuals more freedom.
In recent years, blockchains, cryptocurrency, and non-fungible tokens (NFTs) have dominated headlines in the tech industry. There’s no shortage of corporate buzzwords and industry jargon surrounding these topics—resulting in a fair share of confusion. The hype (and misunderstanding) around blockchain technology has left innovators with a few glaring questions. This article will discuss one of the most prominent ones: can you obtain patents for blockchain technology? Patents for software-related inventions can be tricky, so we’ll start with the basics and work our way up to technicalities.
What is a blockchain?
The definition of a blockchain is simple: it’s a type of database. Databases act as hubs for storing and maintaining information electronically. Typically, that information is organized into tables and stored in a computer system. Your favorite streaming service is a database. The primary difference between a blockchain and a traditional database is that the information is digitally formatted and collected in clusters—or blocks.
How does a blockchain work?
These blocks store a finite amount of information. When a block has reached its maximum storage capacity, it’s closed and securely linked to the block that was filled before it via cryptography. Thus, a chain is formed! But instead of links, the chain is made up of those data-filled blocks of digitally formatted information. This structural approach creates a data timeline by generating permanent timestamps each time a block is filled and linked to another. The goal of this organizational structure is to create, store, and distribute information that is unchangeable and decentralized.
How is a blockchain used?
Blockchains are most widely associated with cryptocurrency systems like Bitcoin. The chronological data structure mentioned above enables the secure, trustworthy recording of transactional information. The decentralization of the blockchain means that the network is not subjected to third-party governance. Instead, it is meant to be peer-regulated so no particular person (or financial institution, in this case) has control. Conversely, the blockchain has also been used in the fashion industry to track the progress of garments from raw materials to finished products for sustainability purposes.
Can You Obtain Patents for Blockchain Technology?
It is possible to obtain patents for blockchain technology, despite the fact that it was freely donated to the public by creator Satoshi Nakamoto. The open-source nature of blockchains leads many people to believe that intellectual property (IP) rights don’t apply. However, the US Patent and Trademark Office (USPTO) has already granted numerous patents for blockchain platforms. The hesitation surrounding patents for blockchain technology arises from 2 primary sources:
- Impediment of continuing innovation. Blockchain is a major advancement with the potential to play a significant role in many industries. That being said, concerns have arisen surrounding the potential impact of patents for blockchain technology on innovation. Without the proper precautions, patent litigation can stunt emerging technologies. It’s essential for those seeking patents for blockchain technology to acknowledge this drawback throughout the patenting process.
- Misinformation surrounding blockchain technology. There is a steep learning curve when it comes to patents, blockchains, and patents for blockchain technology. Due to the recent boom in the popularity (and unpopularity) of NFTs, hordes of misinformation have circulated the internet—most commonly regarding blockchain’s role in the technological systems and platforms it supports.
Key Takeaway: Open-source technology does mean that no individual can limit the use of it or claim ownership. However, open-source technology can be used as a component of your patentable technology. The patentability lies in the new feature or functionality that’s been built onto the open-source platform, not the platform itself.
Blockchain Technologies Eligible for Patent Protection
Most patents for blockchain technology are utility patents. Utility patents address the features, functions, or processes of an invention. Less commonly, inventors may seek design patents for blockchain technology. These are patents that cover the visual elements of blockchain technology, like user interface layouts or icons. The list below covers a few types of blockchain-based technologies that have already been granted patent protection by USPTO. Nonetheless, it is always best to consult with an IP expert to determine your invention’s eligibility.
- Digital wallets, like Google Pay.
- Data structures, like this method patented by General Electric.
- Methods of validation and other security measures, like PayPal’s security method.
- Protocols and procedures surrounding transactions and data storage, like this patent from Salesforce.
How to Obtain Patents for Blockchain Technology
Navigating the patenting process for any invention is challenging. The patent search process is arduous, and there are many patent requirements that must be adequately met and articulated. When the intricacies of blockchain technology are introduced to the mix, the time and resources you’ll need to dedicate to your IP protection grow. The best way to mitigate these constraints is to consult with a trusted IP expert or attorney. Professionals in this field can help you ensure your IP receives the most comprehensive scope of protection in the least amount of time.