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The rise of blockchain and cryptocurrency movements has spawned a booming new sector, full of opportunities for monetization. Investors, entrepreneurs and innovators entering the ground floor of these movements should consider the implementation of the strategy of protection of intellectual property (IP) in their business plans.
IP protection is particularly critical for inventors of new currencies, developers who have created new software or a computer-based methodology to innovate in blockchain or emerging bitcoin companies seeking to attract investors.
Types of protection of intellectual property
The types of IP protection are patents, trademarks, copyrights and trade secrets. The best intellectual property strategy should contain a combination of all four types, with particular attention to patents.
The patents grant the owner an exclusive right, or monopoly, for a limited period on the claimed object disclosed in the issued patent. They are a powerful form of intellectual property protection. A significant distinction for patents over other types of intellectual property protection is that published patent documentation must allow anyone with ordinary experience in the industry to make and use the invention.
A brand is a word, a name, a logo, a symbol, a device or a combination of these, used to identify the source of goods or services on the market. Brands enable potential customers to evaluate the reputation of the manufacturer of the goods or service provider.
A copyright provides the copyright owner with the exclusive right to reproduce and distribute copies, prepare derivative works, as well as perform or publicly display the work. The author does not need to register the work to have the copyright, but the author must register the copyright to sue another party for violation.
A trade secret is any valuable information that is not publicly known and of which the owner has taken reasonable steps to maintain secrecy. These include information such as business plans, customer lists, research and development ideas, specific methodology used, etc.
Complications with Blockchain and Crypto Patents
There are two distinct types of patent categories: specific for blockchain and specific for cryptocurrency. Both categories of patents are increasing in popularity.
While patents are considered the most crucial aspect of any successful intellectual property strategy, the growth of the blockchain movement has revealed a number of complexities in the process of patenting these assets. Three of the most important complexities are the novelty and instability of industries, ethical concerns and the difficulty in demonstrating patent eligibility.
Intrinsically, there is a controversy in patenting cryptography. After 2008, the world experienced a profound lack of confidence in the fact that money was owned by a central party. The cryptocurrency arose partly to eliminate this need for monetary centralization. The original blockchain software was intentionally made to be free and open-source. Many argue that the patents directly contradict the ethos of the blockchain.
Subsequently, the cryptocurrency patents often see a check in the courts due to issues of admissibility by subject. Currencies and blockchain software are financial transactions. The courts of the federal circuit claim that simple financial transactions are not patentable. To patent cryptocurrency, inventors must demonstrate that the functionality of their cryptographic software makes a process more efficient or effective, provides new data or exceeds what can only be done by humans.
Trends with the Blockchain patents
Despite the complications mentioned above, the increase in regulations / prohibitions and price volatility, specific cryptographic documents increased by 16% for a total of 602 patent applications in 2017, while specific patents for blockchain increased by 300%.
These growth data show that there are many large companies investing in the future of cryptocurrency, despite complications in obtaining cryptographic patents.
The main players who are recovering blockchain patents are Bank of America, Barclay and Mastercard. Bank of America has applied for patent protection on its blockchain-based system that allows external data validation; Barclays filed two patent applications to protect their method of digital currency transfer and storage of blockchain data; and MasterCard applied for patent protection on its blockchain-based method to link assets between blockchain and legal tender accounts. These initial patents are extremely valuable because of the freshness of the technology.
Other methods of IP protection
While patents are the most important and important IP resource for a company or an entrepreneur to get on an emerging product, process or technology, other methods of protecting intellectual property are less difficult to obtain and can provide benefits. key.
J.D. Houvener, founder and CEO of Bold Patents, affirms that,
"A bitcoin company, a large bank that is innovating in the blockchain, or a new institution that wants to launch a cryptographic currency has a brand that is building much like any other industry. These forms of protection can help to consolidate a brand and a logo, which in turn will help this company to create a potential customer base and generate goodwill on the market ".
The author's rights concern in particular artistic creation and can go very far in the crypt. The software codes used by the blockchain companies, their designs and UX interfaces, their specific tokens should be protected by copyright law.
Trade secrets are crucial as a competitive advantage and should be kept strictly internal. If a competing company were to snatch your blockchain patent, your copy would not be able to do exactly the way you would, because it would not have access to your trade secrets. Keep the processes and distinctive systems strictly under control and use the NDA as often as possible.
Overall, blockchain and IP may exist in a parallel space despite the underlying complications. Houvener thinks of the relationship between IP and blockchain as analogous to the relationship between IP and Internet: "Internet (open) is for website (protected) as blockchain (open) is for a cryptocurrency payment network (protected). no one can necessarily limit what can be done, where it can go or how it exists.With blockchain, which is a distributed book with a revolutionary lack of central ownership, no one is excluded from access, nor can a person patent the blockchain.
As companies can obtain rights over certain web addresses, logos of websites or search engines, blockchain users can get rights on specific uses. This is similar to any particular software or method that uses computing and network technology. "
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