Tag Archives: patent applications

Only 1 in 10 U.S. blockchain patent apps have been issued; China PCT filings outpace the U.S. almost 3 to 1

For all the discussion about blockchain, the distributed ledger that is the foundation for fast, decentralized transactions, relatively few patents have been issued. 

Only about 10% of those filed in the U.S. have issued, and the Chinese filings are outpacing America almost three to one in the Patent Cooperation Treaty (PCT) nations. Lack of issuance may have as much to do with when the applications were filed, as well as patent offices, especially the USPTO, which since Alice regards software-related applications very carefully. It also may have to do with reluctance to award ownership of fundamental invention rights to a few early filers.

The lack of blockchain patent grants begs the questions: Will those with a few issued distributed ledger patents be in the best position to control and profit from the expected growth? Will blockchain patents be used primarily defensively, to keep distributed ledgers open, or offensively to secure licensees, block competitors and generate direct income?

China’s Blockchain Dominance: Can the U.S. Catchup? published on April 23 in Knowledge@Wharton, a business school blog, adds fuel to the fire.

“Some of the biggest names in the blockchain and cryptocurrency community are Chinese firms,” reports the un-bylined post. “What’s more, blockchain is also a national priority: The Chinese State Council included its development in the nation’s 13th Five-Year Plan. And last year, President Xi Jinping said China seeks to lead in innovation worldwide, citing blockchain, AI, the Internet of Things and other technologies as the driving forces.”

The Digital Chamber of Commerce has published an innovators’ guide to block chain development, with PCT patent filing data showing China ahead of all nations, with almost three times as many applications in 2017 as the U.S.  Obviously, quantity does not mean quality, especially in an area of invention art as tenuous as blockchain. The Chinese may be more generous in terms of issuance and enforcement, especially if local patent holders are there first.

Patent War?

With mostly financial institutions like Bank of America and their advisers, such as IBM, doing the bulk of the filing to date, the likelihood of a blockchain patent war is low. Even famously skeptical JP Morgan has filed blockchain patent apps. Microsoft, Google and Amazon have either filed for or received blockchain patents, too.

But never say never.

The USPTO has published nearly 700 blockchain-related applications it received between January 2011 and April 30 of 2018, according to Bloomberg News. It has granted 70 patents on blockchain technology during that time, Bloomberg Law data show.

It’s unclear how many applications the patent office denied, received confidentially, or stopped processing because applicants abandoned them.

While it can take as long as three years for software-related patents to issue, they also are being issued less frequently — and Chinese companies, which are sometimes controlled by the State, have been receiving patents, too.

Top Filer

China currently has the largest number of blockchain patents in the world, reported IAM, having raced ahead of other  countries such as the US and Japan. That may not mean too much today. It could mean a great deal in a couple of years.

In 2017, China was the most active filer of blockchain patent applications and by 2020 the country’s blockchain market is expected to reach 10 billion yuan (€1.3 billion).

The Chinese blockchain industry can be categorized into three branches, said IAM managazine: upstream (eg, mining rig and hardware), middle stream (eg, data services), and downstream (eg, financial service, medical service, energy industry) enterprises. As of 2018, commercial use in blockchain receives the most patent applications, followed by communication use and calculation use.

Image source: Juristat via jdsupra.com; cointelegraph.com; BitCoin Patent Report

China’s growth in European patent apps was three times the U.S. in 2017

The European Patent Office (EPO) 2017 annual report, recently published, revealed several surprising patent filing trends, including the rapid growth of China .

The People’s Republic of China filed 16.6% more applications last year than in 2016, three times more than the U.S., which filed 5.8% more.

The five most active patent filing companies were Huawei (China), Siemens (Germany), LG (Korea), Samsung (Korea) and Qualcomm (U.S.).

The U.S. comprised 26% of all European applications submitted in 2017; Japan 13%. German was the lead European filer with 15% of those coming from Europe and about 7% overall.

2017 European Patent Office Annual Report

Infographic with highlights of the EPO Annual Report 2017

 

After European patent filings dropped slightly in 2016 from 2015, they were up overall by 3.9% in 2017.

Top fields were Medical Technology, up 6.2%, and Digital Communication, up 5.7%. Transport was down 4.2%.

SMEs, individual inventors, universities and research institutions, comprised 31% of applications; larger enterprises 69%. Grants were up 10.1%. Among European nations, Denmark experience the greatest application growth, 13.1%

For the full 2017 EPO Annual Report, go here.

Image source: epo.org 

Pace of patent litigation declines; 2018 applications still flat

Early indications are that U.S. patent litigation for 2018 is on track to be among the lowest in since 2005.

So far in 2018, approximately 555 patent infringement suits have been filed (3,330 on an annualized basis). This is off from a peak of 5,874 in 2015, or an average of 979 every two months. In 2005, the lowest litigation filing year in recent memory, there were just 2,582 suits. In 2017, there were 4,072. January and February are early indications, and there is time for the rate to increase.

According to statistics provided by intellectual property research firm Patexia, January 2018 patent applications came in at 27,720, just 631 higher than 2017, 27,089, which was the lowest year for that month since 2012. February applications are running behind last year, which came in at 28,329 for the same month. Final figures are not yet in.

This trend in patent applications and litigation has been accompanied by a flattening of Inter Partes Review (IPR) petitions filed. IPRs have been fairly level for the past three years, peaking in 2017 at 1,725. So far this year (through February) there have been approximately 250 IPRs filed, putting 2018 on track for about 1,500, slightly below the last two years on an annualized basis. No information on the number or percentage of instituted petitions was provided.

Litigation, IPRs and CBMs Filed to Date

IPRs and Litigation

Difficulty obtaining software and business methods patents are a likely reason for the drop in U.S. patent applications, as well as the increased difficulty defending patents. Patent uncertainty and decreased need for defendants to take a license or engage in licensing discussions, as well as the high cost of litigation, are possible reasons for an increase in IPRs.

For Patexia live litigation statistics, go here.

Image source: patexia.com

Accenture upsets blockchain believers with patent filing

Consulting giant Accenture has rattled the cage of the fintech community by filing a patent for an “editable” blockchain that would allow a central administrator to edit or delete information stored in a permissioned blockchain system.

Business Insider cites a Financial Times report that states a permissioned system is governed by a central administrator using agreed upon rules. This differs from permissionless systems, like those used by blockchain pioneers such as Bitcoin, which have no central authority. A key feature of permissionless systems is that the records they contain cannot be changed.

Accenture unveiled a prototype of the blockchain on Tuesday developed jointly by Accenture and Giuseppe Anteniese, a Stevens Institute of Technology professor.

accenture-quarterly-revenue-rises-97-percent-2014-9

Undermining Immutability?

“An editable system goes against one of blockchain technology’s key principals — immutability” reports Business Insider. The move is controversial to many because blockchain was conceived as an immutable, tamper-proof ledger, which eliminated the need for a centralized authority.

Accenture insists that immutability is not necessary in permissioned systems because everything is overseen by a single governing authority, and argues that the need for it in a permissionless system is part of the reason banks have been slow to create viable use cases with blockchain technology.

Business Insider thinks the success of Accenture’s system will depend on “whether or not financial services firms intend to use blockchain for use cases that require flexibility. Should they decide to implement the technology in more straightforward capacities, like managing their customers’ personal details, Accenture’s functionality would not likely be especially useful.”

Patent Application

There is no indication why a mere patent application — not a publication, notice of allowance, grant or successfully adjudicated right —  has reached this level of media coverage. Of late, blockchain-related patent filings, as well as issuances, have received significant coverage, prompting some to question where blockchain is headed.

Image source: businessinsider.com; bitcoinmagazine.com

IBM Files Patent on Patenting Process

Is Big Blue Co-Opting Innovation?

It was reported in early 2011 that an application has been published for an IBM patent that apparently attempts to secure rights on the patent process.

As best I can determine the original source of the story is Wolfgang Gruener in Conceivably Tech.  Douglas Perry of Tom’s Hardware amplified it.

Aside from the audacity of such a broad patent, what I find interesting is the timing of the publication. Was the application filed in late June of 2009 (June 24 to be precise) so it would publish 18 months later, post-Christmas 2010, when business news and browsing are way down?

Click here for the published application, Intellectual Property Component Business Model for Client Services.

If IBM’s process patent issues, it will have symbolic if not literal value for a while. That it should issue at all is another matter. Can the company be faulted for trying?

Below is a reply from an IBM employee to Gruener’s post:

Chris@IBM says:

Wolfgang, I work for IBM and I’m glad you see some ingenious ideas in this patent application. We have thousands of inventors who file for and receive patents every year, backed by a $6 billion investment in R&D. Of course, you can’t receive a patent on filing for a patent because there’s obviously nothing new or novel about that. What this application is for is an IP management system, and how a company goes about making strategic decisions that may or may not lead to an application for a patent being filed, as well as for managing an IP portfolio. We’ve had many clients ask us for this kind of service, and since IBM actually practices its inventions, it is only natural that we’d file for patent protection so no one can prevent us from serving our clients.

Reply this comment (to Conceivably Tech).
To reply to this IP Insider post, see below.

Illustration source: kara.allthingsd.com


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