Blockchains & Patents

In the last couple years, the word “blockchain” has been appearing more and more in newspapers everywhere. But what exactly is a blockchain and what is blockchain technology used for? Since we are talking about technology – and not a kind of magic (even though it may seem to be the case) – the following question also naturally arises in the IP arena: is blockchain technology patentable or not? In this article we consider these questions with a view to elucidating the current landscape of blockchains and their patentability in Europe.

A blockchain can be seen as a distributed, encrypted, chronological, irreversible and incorruptible database that is shared across a network of computers. In other words, digital information (the “blocks”) can be added to – but not removed from – a database (the “chain”) and, instead of being stored on a single server, the database is spread out and stored on a vast network of computers. This means that the system is distributed and there is no central point of control. The computers in the network work together to add a new block to the chain, and each time a new block of information is added it is linked to the previous one in a linear fashion, resulting in the blockchain.

Blockchain technology is gradually appearing everywhere. At first the technology was largely put to use in the financial services industry, however the data stored on a blockchain can relate to anything, including money, insurance claims, medical records, origins of materials, property ownership and exchange, and so on. Blockchain technology can therefore be used in varied areas such as banking, cryptocurrencies, healthcare, supply chains, smart contracts, real estate, voting and many others. For example, a blockchain may be used for recording the origins of materials and tracking goods along a company’s supply chain, facilitating authentication of purchased products.

Blockchain technology has gained particular renown because it is not owned by a single entity (decentralisation), no one can tamper with the data that is inside the blockchain (immutability) and it is possible to track the data (transparency).

Now that is clear what a blockchain is and what it does, it is the time to discuss whether blockchain technology is patentable or not.

Many patents concerning blockchains have already been granted, with some of the big players in the blockchain ‘patent rush’ being Alibaba, Bank of America, IBM, Intel, Mastercard and Visa. In terms of patentability considerations, blockchain inventions are in the category of computer implemented inventions (CIIs). Such inventions are examined by the EPO using stable criteria developed as a consequence of CII case law.

Computer programs “as such” are not patentable under the European Patent Convention (EPC), however CIIs may be considered patentable so long as the invention provides a technical solution to a technical problem. Since blockchains employ cryptographic methods, the inventions of blockchain-related patent applications may be considered to have a technical character and therefore could provide a technical solution. Further, technical problems addressed by blockchain inventions could relate to underlying technologies, such as cryptography or networks, or may concern a blockchain’s application to diverse fields, such as mechatronics, logistics or medicine. For example, due to their complexity and distributed nature, blockchain transactions are slower in comparison to transactions conducted using more traditional payment systems such as cash or debit cards, and cryptographic methods that aim to solve such a problem may potentially be eligible for patent protection.

As for every technical field, blockchain inventions also need to meet the legal requirements for novelty, inventive step and industrial application. Inventive step, in particular, is a relatively demanding condition in the field of CIIs because only those features which contribute to the technical character of an invention are taken into account during substantive examination.

Therefore, when seeking to protect a blockchain-related idea in Europe, it is important to consider both the eligibility of the subject-matter (whether it concerns something technical or if, for example, it is all about a business method), and whether a technical problem has been solved in a novel and inventive way with respect to the prior art.

By Gio Vigano