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CANADIANLAWYERMAG.COM/INHOUSE JULY/AUGUST 2019
W
hile there is no agreed-upon definition of
blockchain, this technology is often associ-
ated with an append-only, tamper-resistant,
distributed ledger of peer-to-peer transactions main-
tained by a decentralized network of participants. As
the name suggests, blockchain consists of "blocks" of
transactions that are cryptographically linked togeth-
er. Blockchain technology has gained immense popu-
larity in the field of financial transactions, particularly
due to high costs associated with conventional means
of monitoring and managing instances of fraud in tra-
ditional bank transactions.
While blockchain is popularly associated with cryp-
to-currencies (such as Bitcoin or Ethereum) and other
fintech applications, the use cases of blockchain contin-
ue to expand into many other real-world applications.
For example, voter registration is being facilitated via
blockchain-based projects such as
Agora and Voatz.
Companies such as IBM, Wal-Mart and Unilever are
using blockchain to enable tracking of food items from
farm to table.
Blockchain is also being applied in the field of intel-
lectual property. For example, a Munich-based startup,
Bernstein, offers a blockchain solution for recording
ownership and registration information about intellec-
tual property assets and innovation processes to prove
ownership, existence and integrity of those assets. Sim-
ilarly, smart contracts are being increasingly recog-
nized as powerful tools for establishing and enforcing
licensing and other agreements.
The popularity of blockchain can also be evaluated
from the exponential increase in the number of patent
filings for blockchain applications. A patent is a power
-
ful form of IP protection that grants the patent owner
an exclusive right to exclude others from making, using,
selling or importing the claimed subject matter without
the owner's permission.
A survey of the
United States Patent and Trade-
mark Office
for "blockchain" indicates that approxi-
mately 2,200 patent applications have been published,
of which 437 have been issued patents. In contrast,
approximately 100 patent applications appear to have
been filed and published at the Canadian Intellectual
Property Office, of which only one appears to have
been issued a patent. On a global scale, about half of the
patent applications in this field have been filed by only
seven companies — namely, IBM, nChain, Wal-Mart,
Intel, Alibaba, Mastercard and Bank of America.
While more and more blockchain patent applica-
tions continue to be filed by financial institutions, lega-
cy technology companies, as well as new and emerging
startups, patentability and validity of blockchain inven-
tions face some uncertainty, especially in view of ongo-
ing debates about treatment of computer-implemented
inventions at various patent offices. To be patentable
in Canada and the U.S., an invention must meet the
following criteria of patentability: patentable subject
matter, novelty, utility and inventiveness. Of these, the
most relevant to blockchain technology is the subject
matter eligibility of the blockchain claims.
In Canada (Attorney General) v. Amazon.com, Inc.,
2011 FCA 328 (Amazon), the Federal Court of Appeal
opines that patentable subject matter "must be some
-
thing with physical existence, or something that mani-
fests a discernible effect or change."
Similarly, the Supreme Court's decision in Alice
Corp. v. CLS Bank International, 573 U.S. 208, 134 S.
Ct. 2347 (2014) and subsequent practice guidelines is-
sued by the USPTO clarify that the mere presence of
an abstract idea is not determinative of subject matter
eligibility on its own.
Examples of blockchain patents granted in Canada
and the U.S. range from those directed to
improve-
ments
to the underlying technology (such as rewritable
blockchain or changing an existing blockchain) to spe-
cific uses of blockchain technology (such as indicating
when a product arrives at a destination,
managing
data for autonomous vehicles on a decentralized led-
ger
or blockchain-based identity management sys-
tem, for example).
While blockchain technology is still in its infancy,
it is evolving rapidly. As blockchain technology be-
comes more mainstream and continues to be used in
solving real-world problems, it is reasonable to assume
that not only the blockchain-based products and ser-
vices but also the intellectual property protecting such
technology will have significant commercial value. A
well-developed IP strategy and comprehensive patent
applications can help avoid patentability challenges that
face this technology.
IH
Increasing use of IP
for blockchain inventions
Reshika Dhir
is an engineer,
a technology lawyer
and a registered patent
agent in Canada and
the United States.
She is an associate at
Bereskin & Parr LLP
in Toronto.
Intellectual Property
By Reshika Dhir
