IP Trolling Becoming Threat as More Firms File Blockchain Patents

With the new blockchain industry growing, the rise of filing patents has become a seemingly necessary step for people starting new projects, with entrepreneurs and developers worried about patent trolls locking them out of their own ideas.

Also read: Accenture and EY Making Moves to Grow Blockchain Technology

A Vast Array of Patents Surround Blockchain Technology

Over the past couple years, filing patents has become a norm within the cryptocurrency and blockchain landscape. Legacy banks in particular have filed several blockchain-related patent. Bank of America, for example, has filed roughly 20 patents related to blockchain technology.

Cryptocurrency-based companies have also taken the patent initiative, such as Coinbase and BitGo. Even the notorious Craig Wright — who claimed to be Satoshi Nakamoto — has reportedly filed for over fifty blockchain patents.

The Electronic Frontier Foundation has reported that patent trolling in the software industry has increased significantly. In the Bitcoin and blockchain space, the organization has given credit to Blockstream for committing to patent non-aggression. Just recently, Blockstream made headlines for announcing their defensive patent strategy, pledging to allow the use of software they create without fear of litigation.

Notable businesses, such as Twitter and Tesla, have taken similar approaches over the years. Blockstream’s move towards defensive patenting didn’t please everyone in the community, though, as intellectual property in general is a touchy subject for Bitcoin’s libertarian users.

Blockstream explains their decision to move into the defensive direction, saying:

We believe, then, that the way to ensure that our technology remains most usable is to obtain patents ourselves and make binding promises for their use. We look forward to a legislative environment where this is not needed: our strategy is not a substitute for attempts to reform or eliminate software patents, or to invalidate issued patents, including our own. But until we can ensure that no one can own exclusive rights to the technologies surrounding Bitcoin, we want to ensure that they remain available to the community.

Is Patent Filing Necessary?

On September 8, Dell filed for a blockchain patent. The description explains the patent is for a “computing device configuration and management using a secure decentralized transaction ledger.” The platform is managed using a blockchain that is maintained by decentralized nodes within a peer-to-peer network.

What Dell is working on at the moment remains in the dark, but it’s safe to say the computer firm is building something that involves blockchain technology. It’s also worth noting that Dell is well-known for accepting bitcoin for its services and is one of the largest companies to do so.

Decentralized application patents are turning up everywhere in the US and across Europe as well. According to the publication Fusion, there is an IP race happening between giant corporations, smaller startups, and legacy banks. Colonizing the cryptocurrency and blockchain ecosystem with patents is justified by proponents because creators don’t want to wind up in the courthouse.

Unfortunately, patent trolling is a real threat for all areas of business and technology. In fact, free market economists have suggested countless times in the past that patents on software threatens innovation. However, the world we live in relies heavily on patent law, and innovators will have to continually fight against the trolls until a solution is found.

What do you think about the colonizing of cryptocurrency and blockchain ideas through the use of patents? Let us know in the comments below.

Source: The US Patent & Trademark, EFF, Brian Cohen (Dell), and espacenet.com

Images courtesy Shutterstock, Dell.

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