As Blockchain Inventions Explode, EPO Says It’s Ready To Meet Patent Demand

THE HAGUE, NETHERLANDS — The number of blockchain inventions is mushrooming, and the European Patent Office wants to ensure it handles the increasing patent applications consistently, officials said at a 4 December conference that brought together around 350 patent examiners and practitioners.

The past two years have seen a sharp increase in patent applications relating to blockchain, EPO President António Campinos told the event. There are more applications in a greater number of technological fields, he said.

The EPO became aware several years ago that many computer-implemented invention (CII) patent applications were appearing, and, in response, began organising to handle them predictably, said Director of Information and Communications Technology Koen Lievens. CII inventions are those, such as blockchain, that involve the use of a computer or computer network in which one or more features are implemented in whole or in part by a computer, he said. The invention must also be novel and represent an inventive step, he said. The software itself is not patentable but is protected by copyright, he noted.

EPO examiners already know how to examine CII and, hence, blockchain, applications, Lievens said. There is a “well-established and stable practice” with updated guidelines to help assess blockchain applications, he said. The guidelines are here: https://www.epo.org/law-practice/legal-texts/html/guidelines/e/j.htm

“We are very well organised” for the expected flow of applications, he said.

The office sees blockchain uses everywhere, said Lievens, from providing computer and network security to solving problems of speed and scalability to tackling issues related to the enormous amount of power needed for blockchain functions. Many blockchain uses are also arising in the auto industry, such as for combining parking with billing and for ensuring that traffic-jam reporting data is reliable, he said. The first sets of patent applications related to payment systems, management of communications networks and other operations are now appearing at the EPO, he said.

There are now around 4,000 patent families related to blockchain globally, most filings in the US and China, said EPO Chief Economist Yann Ménière. The top applicants worldwide are led by IBM and Alibaba; the leading EPO applicants are Visa and MasterCard, he said. The main technological fields for blockchain are payment protocols, followed by security innovations, and those that leverage the technology for specific uses such as supply chains, he said.

The European Commission sees blockchain as a foundational technology for the next-generation internet, said Benoît Abeloos of the European Commission’s DG CONNECT. It’s engaged in several blockchain-related activities, including analysing the legal and technical challenges of the technology and urging member states to agree to provide government services via blockchain, he said.

Abeloos and others cautioned that although governments shouldn’t seek to regulate or standardise blockchain too early, they should be thinking now about what the technology might mean for society.

Role of IP in Blockchain

The disruptive potential of blockchain is “huge,” said Michael Fröhlich, EPO director of European and international legal affairs, Patent Cooperation Treaty. The intellectual property landscape for the technology includes issues surrounding open source and patent enforcement, he said.

Speakers generally agreed that, although time will tell, blockchains may not attract the kind of patent litigation that has plagued the “mobile phone wars.”

The foundational elements of what are considered blockchains are already open source and will probably remain so, said Open Innovation Network Director of Linux System Definition Mirko Boehm. Patents are likely to occur in the upper layers above the fundamental blockchain technology for inventions that can be marketed, he said. The OIN describes itself as a shared, defensive patent pool intended to protect Linux.

Some of the basic technology must be open source but that doesn’t prevent someone from patenting value-added services on top of blockchain, said IP attorney Benjamin Bai, vice president of Ant Financial Services Group/Alipay, China. There is no existing technology that allows chain-to-chain interoperability, so whoever solves that problem deserves a patent, he said. Bai predicted that there will not be patent litigation at this point because blockchains don’t yet have large commercial value. His company joined the OIN because it doesn’t want to see litigation kill innovation, he added.

How China Deals with Blockchain

China’s handling of blockchain patent applications is generally like Europe’s with some exceptions, said Wang Xinyi, China National Intellectual Property Administration expert patent examiner.

The country’s blockchain industry encompasses upstream (mining, hardware), middle stream (smart contracts, etc.) and downstream (financial and energy uses, for example) enterprises, Wang said. China wants to frame its rules in the right way to promote development of the sector, she said. Commercial blockchain uses now receive the most patents, followed by communications uses, she said. Alibaba is the giant in patent requests, she said.

Chinese patent law mirrors Europe’s in requiring that blockchain patents cover technical solutions to technical problems and that novelty and inventive step be present, Wang said. It, too, bars patents for pure algorithms. Chinese law differs, however, in prohibiting patents for inventions that are contrary to law or social morality or are detrimental to the public interest, she said. Bitcoin, for instance, won’t be patented because it could destabilise China’s financial markets, contrary to public interest, she said.

China’s patentability rules are “nothing special,” said Wang. “Just pay attention, don’t be cute.”

 

Image Credits: EPO