An Overview of the Blockchain Patent Landscape

An Overview of the Blockchain Patent Landscape
by Henry Chiu
IP and Brand Protection Solution Consultant
IP and Standards

From shells to currency to digital currency: How blockchain technology is revolutionizing people’s lives

Over ten thousand years ago, humans began learning to use shells to trade for materials. Shells eventually turned into currency. Now, with the development of the Internet, digital currency has begun to circulate and is gradually replacing traditional currency. Unprecedented changes in payment methods are coming about as a result. The sudden emergence of cryptocurrencies such as BitCoin, Ethereum, and LiteCoin have forced the financial world to meet these changes head-on and to consider systemic changes. Cryptocurrencies have been able to develop unhindered by the traditional financial system because they are backed by a key technology – the blockchain.

 

What is the Blockchain? Where to Look for Related Patents?

The book Blockchain: Reshaping the Economy and the World¹ explains that a blockchain is a public database that records transactions done with it, and which is well-protected against outside interference. It’s a distributed system that is not stored on a specific server or node, but is instead distributed across innumerable nodes on the web, where every node only keeps a portion of the whole. The blockchain is also a consensus protocol where everything follows the same rules. Blockchains serve in turn as the fundamental technology behind cryptocurrencies. Identity verification, medical records, market forecasting, capital transactions and other applications have gradually begun adopting blockchain technology. To understand the larger picture of blockchain-related patent applications around the world, the definitions of blockchain, distributed ledger, and smart contract can be used to expand your search rather than just limiting the search to patents that use the word “blockchain”. (The search queries used here in this blog post are attached at the end. Derwent Innovation users are free to reuse them²).

 

Since different blockchains have different forms, not all blockchain technologies have used patent protection. However, blockchain technologies that have been protected with patents hold more interest. Considering technology disclosures and the high cost of application fees, why has patent protection been chosen for some blockchain technologies?

 

With blockchain technologies, the majority of those employing patent strategies come from the information technology or financial industries.

A search with  Derwent Innovation reveals that 631 patent families (1853 patents) exist worldwide, of which roughly 75% (465 patent families) have been granted³.  The main blockchain patent assignees are as follows:

 

Top players Number of patents Industry
SECURITY FIRST CORP 64 IT
MICROSOFT 40 IT
IBM 25 IT
QUALCOMM 19 Semiconductor
TORONTO DOMINION BANK 19 Finance/Finteh
MASTERCARD 15 Finance/Finteh
SCALITY SA 13 IT
ACCENTURE GLOBAL SERVICES LTD 11 Consultants
MEDICI INC 10 Blockchain
BROADCOM 9 Semiconductor
FUJITSU 9 IT
GOOGLE 9 IT
RED HAT 9 IT
BANK OF AMERICA 8 Finance/Finteh
CISCO TECHNOLOGY 8 IT
HEWLETT-PACKARD 8 IT
NEC 8 IT
HUAWEI TECHNOLOGIES 7 IT
JIANGSU TONGFUDUN TECHNOLOGY 7 Finance/Finteh
LOYYAL CORP 7 Blockchain
MONEGRAPH INC 7 Finance/Finteh
NEOSAEJ CORP 7 Finance/Finteh
RIBBIT.ME USA INC 7 Blockchain
SKUCHAIN 7 Blockchain
BRITISH TELECOM 6 Telecommunication
DIGITAL ASSET HOLDINGS 6 Blockchain
FMR LLC 6 Finance/Finteh
JOLTID LTD 6 Blockchain
LUCENT TECHNOLOGIES 6 IT
NEXTPAGE INC 6 IT

Source: Derwent Innovation

 

No single company that holds more than 100 blockchain-related patents. Renowned blockchain technology company Medici is within the top 10 blockchain patent assignees. Aside from a handful of companies that focus on developing blockchain technologies, the remaining patent assignees are primarily from the information technology, financial and fintech industries. The company with the most patents is an American company who specializes in providing information security solutions. The company holds patents that mainly revolve around telecommunications security, and owns several highly cited patents.

US20060177061A1

Patent Assignee

SECURITY FIRST CORP

DWPI Abstract

Novelty:  The sliver of data respectively containing random distribution of respective subset of data set is generated at a location. The sliver of data is communicated over communication path separately from generation location to receiving location. The data set is restored from subset of sliver of data at receiving location.

Use: For secured communication of data set in electronic mail (e-mail) system, redundant array of independent disk (RAID) system, video broadcasting system and database systems.

Advantage: The possibility of compromising data is greatly reduced.

Claim 1

  1. A method for securing communication of a data set from a first location to a second location, the method comprising:
    generating at the first location at least two portions of data from the data set, wherein each of the at least two portions of data respectively contains a substantially random distribution of a respective subset of the data set;
    communicating from the first location to the second location the at least two portions of data over at least one communications path, wherein the at least two portions of data are communicated separately from each other; and
    restoring at the second location the data set from at least a subset of the at least two portions of data.

 

Number of Citations

257 times

Blockchain Technology Focus, by Country

To understand the content of patents for blockchain technologies, we can visualize the content through a ThemeScape map using text-mining analysis, as seen in the figure below. One dot on the map represents a single patent. Black text represents technical topics frequently discussed by the patents clustered in the area; white mountain peaks are high density clusters; and prairies and oceans represent clusters with relatively lower densities. Visualizing patent contents, as opposed to reading patents one by one, provides a more intuitive grasp of the key information. The top five markets for blockchain patents are marked with different colors; the keywords discussed in the patents, and their frequency, are given on the map.

 

 

For some technologies, it is obvious that there are market-wide strategies. Examples where this is true include communication systems, query databases, and hashes.

 

 

For patent assignments for the US (green dots), distinct peaks exist for applications related to data identifiers, e-mail systems, and energy-related high performance optimization services.

 

 

 

 

Patent assignments for China (red dots), on the other hand, focus on memory, block connections and applications based on blockchain technologies.

 

 

 

Taiwan has not been absent from the blockchain market with 29 patent (family) applications, several of which relate to receiving encrypted commands and translation technologies.

 

 

Blockchain Technology Ready to Emerge in China

Looking at prime blockchain technology markets (countries with patent assignees), the US still leads the way overall. However, even from what 2016 information is publicly available, blockchain technology patent assignees in China have already exceeded the number for the entirety of 2015. If the trend holds, blockchain technologies will see even greater growth in China in 2016. Patent applications are costly, so a greater number of patent assignments implies that investors (patent assignees) are placing a higher importance on the market. This can be used to determine their development intentions.

 

The country with the right of priority can in general be used to determine the origin of the patent (though this may depend on the type of technology and the patent strategy). Looking at countries with right of priority for blockchain technologies, the US still leads the way. However, China has gone from a country claiming right of priority for merely 23 patents in 2015, to 90 patents for the year 2016 (again, with incomplete numbers). The trend resembles that in the previous table. There has been a prominent push in recent years toward growth in blockchain technologies originating in China. This could mean that some companies, either new or previously existing, have recognized the importance of blockchains and have begun investing in protecting their ideas with patents, so that latecomers cannot use the technologies without paying a price.

 

Why does code and programming technology need patent protection?

Looking at the trends in the chronology of countries, patent assignments, and rights of priority, it’s clear that every country has a growing number of patents in blockchain technologies. Aside from the US, which has the most patents, China has also seen a surge in recent years. Of course it can be said that with the support of the Chinese government, the yearly growth in the number of patents isn’t limited to just the field of blockchain technologies, so what does this growth mean exactly? However, if we limit ourselves to fintech for a moment, the Chinese market is definitely one of the fastest growing ones in the world. With the emergence of electronic currencies, there has been a boom in the Chinese market for blockchain technologies. If you wish to understand the development of blockchain technology, this is definitely a trend to take notice of.

Why is blockchain technology so hot, while the number of patents is so low? Owing to the technological characteristics of blockchains, many owners of blockchain technologies may choose to protect them as know-how and as business secrets. This explains why, compared to the number of patents in the ICT industry, blockchain patents are clearly fewer in number. However, if someone applies for a patent, they must have a reason to do so. The DWPI editorial enhanced patent data will help you quickly understand what it is these few blockchain patents are trying to protect. Why are these technology owners willing to disclose their technology to the public? Is it that someone will eventually find out anyway, so they might as well protect it? Or are these blockchain technologies focused on practical applications soon to appear in real life? Why don’t you find out for yourself?

 

Notes

Note 1             Blockchain: Reshaping the Economy and the World, by Mingxing XU, Yong LIU, Xinxing DUAN, and Dazhi GUO

Note 2             Derwent Innovation blockchain search queries used here

Q1

(ALLD=(blockchain or block ADJ chain) OR CTB=(blockchain or block ADJ chain)) AND ALLD=((hash near3 point*) or (link* near3 blocks) or (timestamp and transact*) or (Cryptography or cryptology) or ((record* near3 transact*) same (across* and (multiple or computers or devices or terminal*))) or e-cash or *currenc* or Bitcoin or Ethereum or Ripple or Litecoin or digital ADJ token);

Q2

(ALLD=((distribut* ADJ ledger*) or ((distribut* near3 data*) and ((store* or accross*) near5 multiple))) OR CTB=((distribut* ADJ ledger*) or ((distribut* near3 data*) and ((store* or accross*) near5 multiple)))) AND ALL=(decentral* or Consensus ADJ algorithm or blockchain or block ADJ chain or (comput* same (dispersed near5 network*) same (intercon* or connect*)) or (peer adj2 peer));

Q3

ALLD=((((smart ADJ contract*) and agreement) or (enforced near3 without near3 interaction) or (automated ADJ escrow)) or ((protocol* or Consensus ADJ algorithm) near5 (agreement and transaction))) OR CTB=((((smart ADJ contract*) and agreement) or (enforced near3 without near3 interaction) or (automated ADJ escrow)) or ((protocol* or Consensus ADJ algorithm) near5 (agreement and transaction)));

Q1 or Q2 or Q3

Note 3 At least one member of the patent family was approved

 

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