Are Patent Wars Coming to Blockchain?
Bitcoin and blockchain technology was founded on the principles of the open-source movement: software that anyone could inspect, anyone could copy, anyone could repurpose.
This has worked really well for many years. There have been a ton of useful innovations in consensus mechanisms, in better security, in new token types - that have been rapidly adopted by other bitcoin project teams. But all these good things may be changing.
We’re now seeing a growing number of companies patenting blockchain technology. This is happening all over the world. But especially in the US and China.
What’s especially worrisome about this, is that many of the companies pushing blockchain patents are big. Some of the biggest companies in the world: JP Morgan, Tencent, Paypal, IBM.
I have 2 particular issues with the way these big companies are going about filing blockchain patents:
First, many of these patents are bogus. In fact I know of several big companies that have filed patents for ideas that already exist. This is really troubling. It tells me the patent office is not doing a thorough job scrutinizing prior art. Prior art by the way is a patent term that basically means “stuff very similar to what you are trying to patent, has already been invented, so your idea is not novel, and therefore it’s not patentable.” But still, patents that shouldn’t be getting granted, are getting granted. Not good.
My second issue is that the patent office, and the companies that are filing these bogus patents, are going to hurt all of us in the crypto world. And that’s because these companies with those bogus patents will use their large size and deep pockets, to litigate. And patent litigation is enormously expensive.
This is really disturbing because many of these companies aggressively filing blockchain patents have been very unfriendly to the crypto movement. One example, the CEO of JP Morgan - Jamie Dimon - a few years ago said that bitcoin was a fraud. He also said he wouldn’t allow his employees to do anything with crypto. And now? Well JP Morgan has filed blockchain patents around the concept of security token offerings. Oh, and JP Morgan is now also saying, it might create a stablecoin.
So what should the crypto community do about this?
I have a couple of ideas:
Native blockchain companies might want to change the terms of their open source software agreements. Perhaps put in language that requires these big public companies to provide reciprocal licensing rights for their blockchain technology.
I also think blockchain companies should start thinking about patenting the novel technology they’re developing. Blockchain companies could potentially then pool their patents as a defensive shield against large companies that start taking an aggressive stand with THEIR patent portfolios.
The blockchain patent wars haven’t started - yet. But be on notice. As this market develops, and big business starts seeing the profit potential of blockchain, we are going to see patent fights.
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