Among the things that Blockchain technology has been praised for, so far, is that it is built on simple and well-known ideas which individually could hardly be named new and have been well-known for quite some time:

1. Asymmetric Encryption (US patent 4,405,829),
2. Hash Functions (Hans Peter Luhn in 1960s),
3. Merkle Trees (US patent 4,309,569),
4. Key-value Database (Charles Bachman in 1960s),
5. P2P communication protocol (Tom Truscott and Jim Ellis in 1979), and
6. Proof of Work (Cynthia Dwork and Moni Naor in 1993).

Today, anyone aware of these relatively simple ingredients and how they work together, could build their own blockchain ecosystem of whatever kind or functionality. Moreover, many well-known blockchain projects are developed from the open-source (free) code — anyone can freely use the source code to develop their own public or private blockchain system. They can do so without needing an application for a license from somebody and paying anything for the use.

But those should not celebrate too early, because to their surprise, particular solutions and ideas developed (even on such an open software) may turn to already be somebody’s intellectual property.

Who are the owners?

The highest wave of patent applications was spotted in 2016, a good deal of which successfully granted (mostly coming from Chinese and US companies).

Due to some differences in the legal landscape and reviewing practice of patent authorities, patenting blockchain-related solutions in the European Union is more troublesome than in the United States. As the President of the European Patent Office (EPO) Benoît Battistelli once claimed, EPO patent applications are subject to a more scrutinized review than in the U.S. Patent and Trademark Office (USPTO). It was further confirmed that, in their view, European patents are of better quality than their US counterparts. “It means we are sometimes not issuing patents which have been issued in the U.S.” Battistelli said in an interview to Reuters.[1]

As for now, within the EU, we can see only five granted patents all belonging to nChain (EP3295349, EP3295362, EP3295350, EP325719, EP 3268914).

The US formally goes right after China in numbers of granted patents.

A patent “ownership” structure chart would display not so dispersed ownership — on the contrary — it would rather look like closely held family company, with the main holders being well-known big finance and tech companies.

According to Rimon Law Firm research, as of August 2018 the main holders of the blockchain-related patents were IBM with 84 patents, EITC Holdings / nChain — 75, Bank of America — 52 and others (please see the chart below).

What to expect?

Such a picture does not look promising for the future of the development of technology when the key ideas of blockchain application turn out to be captured by big corporations right from the start.

Despite all the looming concerns though, there is some hope there will be revisions of the emerging blockchain ownership landscape by the U.S. courts. The point is that when it comes to patenting software, it becomes a very delicate matter to determine whether a particular product may have a patent protection. It is not uncommon when patented software solutions, after years of success, fall down in court as “non-eligible subject matter” for patenting, i.e. those not deserving a legal protection.

Certainly, now we can see only the primary landscape of patent ownership, which might be redesigned after the forthcoming so-called “patent wars”.

We, at Blackmoon, are getting ready for any possible outcome of this situation. In particular, we are constantly looking to get patent protection for those technical innovations we implement to the Blackmoon Platform. This will not only protect such innovations from unauthorized use and implementation by other persons, but also protect us from the situation when other persons (who actively seek for patent protection of blockchain-related technologies) may try to restrict us to use any technology vital for normal functioning of the Blackmoon Platform.

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[1] Andrew Chung. Europe issues better patents than U.S. -Europe patent boss [https://www.reuters.com/article/europe-patent-usa/europe-issues-better-patents-than-u-s-europe-patent-boss-idUSL2N1BR00H].

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