The Swiss Federal Institute of Intellectual Property and London-based law firm Withers & Rogers report that patent filings for blockchain technology has increased worldwide. In fact, the amount of blockchain patent filings has outnumbered those for other technologies, including quantum computing.
From 2016 to 2017, more than 2,600 blockchain patent families were said to have been filed. This number accounts for some 60 percent of the overall number of blockchain patent families around the world.
China is among the frontrunners in terms of number of blockchain patent applications filed. According to WIPO, China had around 225 applications filed in 2017. In contrast, the United States had 91 while Australia had 13.
“Blockchain technology is usually filed as a software patent,” says Michael Wu, senior patent attorney at Chang Tsi & Partners in Shenzhen. “Under the current patent system, the software patent is adequately protected, especially after the amendment of the examination guidelines in 2017. More software became patentable.”
Katie Feng (pictured), partner at Hogan Lovells in Shanghai agrees. “The IP ecosystem in China makes it possible to protect blockchain and distributed ledger technology through patents, trade secrets, copyrights and trademarks. In terms of available IP protection, China’s IP ecosystem does not fall behind that of the US or Europe,” she says.
Chinese e-commerce firm Alibaba ranks first in Chinese trade journal iPR Daily’s list of 100 global organizations with the highest number of patent applications filed for blockchain technology as of August 2018. The country filed about 90 applications at the time of the review. Out of the total 406 blockchain-related patents filed in 2017, around 43 were from Alibaba alone, says the Nikkei Asian Review.
People’s Bank of China (PBoC), now conducting trials for its central bank digital currency, is on fifth position with around 44 patent applications.
Other than financial institutions and the internet industry, Wu says that auditing and the legal fields are seeing an uptake in blockchain adoption. Both fields require reliable evidence, spending a lot of time and money in acquiring it. “Applying blockchain technology not only makes their data and evidence safer,” he says, “but also reduces a lot of costs.”
Feng also sees insurance, communications and healthcare making more use of the technology in the future.
With blockchain adoption moving beyond fintech and stepping into other fields, would it be advantageous if a patent attorney of a certain expertise extend his practice to other areas
Wu says his firm does provide that encouragement to its patent attorneys, especially the patent litigators. “Particularly, for our electrical and telecom team, we encourage them to learn more background information on fintech, health, and retail,” he says.
“It would certainly be helpful for the patent attorney to acquire deep industry and technical knowledge in the field where the blockchain technology is applied,” says Feng. “The main attributes a client is looking for in a good patent attorney are, among others, ability to explain complex information clearly and concisely, good analytical skills, sound scientific and technical knowledge. So the client will likely choose a patent lawyer who knows the relevant field well.
“That said, it does not mean the patent attorney has to follow how the blockchain technology moves and switch his or her industry focus as the blockchain technology develops,” she explains.
For Chul Hyun Park, a patent attorney at Kim & Chang in Seoul, it could prove difficult.
“Technically, blockchain can be considered as a distributed database to avoid any modification or alteration without approval of participants. Thus, if someone is specialized in blockchain technology, he or she may easily understand any application of blockchain to each area. However, if one is specialized in a certain industry rather than general blockchain technology, and only aware of a small portion of blockchain technology related to his or her own specialized area, it would not be easy to expand his or her practice to other areas,” he explains.
If China leads the pack in number of blockchain patents filed, South Korea prides itself by having the highest patent grant rate at 54 percent, according to Withers & Rogers.
“In Korea, the most active area in blockchain is cryptocurrency exchange and the government is trying to regulate that area to protect consumers,” says Park.
“On the other hand, several large companies or their subsidiaries like Samsung SDI, SK Telecom and Hyundai BS&C are trying to adopt blockchain technology to other industries like logistics, home automation or manufacturing management. Additionally, in the financial area, many companies including banks are trying to adopt blockchain technology for user authorization and authentication for their online/ mobile services,” he says.
Yet, despite these developments, Park says the Korean government is not focusing on IP or patent issues surrounding blockchain and cryptocurrency.
Japan, with a patent grant rate of 17 percent, and Hong Kong are also investing time and money on blockchain projects.
Apart from these four APAC nations, which other country in the region has the potential to follow their lead in terms of blockchain patent filing?
“As a neutral state, Singapore is attracting more and more cryptocurrency companies while cryptocurrency is illegal in China. Singapore plays an important role in the ASEAN patent examination cooperation and has a transparent legal system,” says Wu. “Hence, I believe Singapore will become the next big patent filer for blockchain.”
Park agrees and adds India, Indonesia and Malaysia as possible additions to the roster. “In countries that have advantages in financial and shipping network areas, blockchain can be easily adopted to such industries,” he says.
Sixty-two other East Asian companies are also in iPR Daily’s Top 100 rankings. American brands IBM, which occupies second spot, Mastercard and Bank of America round up the top five on the list.
Though China is at the top of the list, Feng mentions current developments which could alter the blockchain scene. She says blockchain patent filing activity has actually slowed down in China this year. A record 5,000-plus applications were filed in 2018. Yet, the first half of 2019 tells a vastly different story: only around 900 filings were recorded.
She also says that China has yet to witness blockchain’s largescale application in the country.
“Without substantial commercial application, the blockchain technology at issue will not be deemed to have a high commercial value, hence the likelihood for patents wars in the blockchain area will not be high,” says Feng. “The drop in China patent filings as I mentioned also shows the enthusiasm about blockchain technology is cooling down a little bit this year.
“That said, China and the United States remain to be the top countries for one to patent blockchain-related technologies,” she says.
Espie Angelica A. de Leon