“What is the future of blockchain?” It’s a question that comes up often when I speak to professionals. There’s obviously no way to know, especially with a technology that is innovating so rapidly and constantly evolving.
One way to predict the future of technology is by looking to patent filing trends. It’s like an ultrasound during pregnancy: you can get a glimpse of what’s developing.
Here are six trends in patent filings that Marc Kaufman, a Partner at Rimon Law, thinks might illuminate the path ahead for blockchain.
- Blockchain patent filings are increasingly popular and common.
There are many players in the blockchain community who believe that, for various reasons, they will be generally immune to patent risks with the technology. Kaufman cautions that that assumption is wrong and that working with blockchain technology might be like walking across a minefield of patents. According to him, “A lot of parties are filing a lot of patent applications to cover a lot of aspects of blockchain technology.”
- There has been an exponential growth of blockchain-related patents.
“Some parties, especially early on, purposely did not seek patents,” Kaufman explains. “For example, Satoshi, whoever this person is, never patented Bitcoin. Beginning around 2013 or 2014, when the technology really started to explode, this started to change. At first, we started to see a small number of filings. But since then, the increase in numbers of patent publications worldwide has really taken off. In 2018, we saw roughly 2,700 new patent publications worldwide. A conservative prediction is that we will see 4,000 new patent publications in 2019. We have observed almost exponential growth in blockchain patents filings since 2013. I don’t see a reason why it would slow down any time soon.”
- The United States and China are leading the blockchain patent filing trend.
“We’re seeing blockchain patent applications in all the major markets of the world, but especially in the U.S. and China. We’re also seeing more and more patents filed in Australia, some European countries, India, Brazil, and a few others,” Kaufman explains. “Companies are most interested in filing where they think there will be a large market and/or they will find a friendly, or at least predictable, regulatory framework because they think their competitors will set up shop there soon.”
According to Kaufman, “You see patent filings, and corresponding registrations in Switzerland, Malta, Hong Kong, Japan, Singapore, and the Cayman Islands. We have already seen compelling commercial applications. It just makes sense to protect the revenue. It’s the same cycle we’ve seen with many other technologies before, like web technology, mobile networking, and semiconductors. It’ll likely be a five to 15-year hockey stick kind of rise in patent filings. We’re only seeing the beginning of this trend.”
- Blockchain seems to attract unlikely competitors from across different industries.
“We see filings for blockchain patents from IBM, Accenture, Bank of America, Walmart, Alibaba, Microsoft, Mastercard, and a number of FinTech companies,” Kaufman observes. These companies are not traditionally competing in the same industry. Where else would you see all these companies listed next to each other? Kaufman predicts that this trend of new competitors may continue.
- Three years ago, the top 20 patent filers were dominated by research and academic institutions. Now the top 20 are mostly commercial institutions.
Kaufman says, “The top filings today are mostly commercial, whereas in the past they tended to come from research and academic institutions. We’ll likely see more patents coming from companies for the purpose of commercializing them.” This is a clear indicator that blockchain technology is becoming widely perceived as commercially valuable. He explains, “For most technologies, you see universities and other research institutions doing most of the development in early stages. This was certainly true for the internet. But as technologies are developed, companies increasingly file patent applications as part of their commercialization efforts. It seems that that is where blockchain technology is now and will be for the foreseeable future.”
- The top areas of focus for current patent filings are authentication, payments, security, consensus, and smart contracts. The top filers tend to file across most, if not all, of these categories.
“We see a lot of patent filings in authentication, payments, security, consensus mechanisms, and smart contracts. We’ve seen a lot of filings related to authentication, payments, and security in the past five years. The others — around consensus and smart contracts — are more recent,” Kaufman observes. Companies tend to patent across a broad spectrum of technologies. It’s typical of early-stage technology when innovations occur across a broad spectrum of aspects of and uses for that technology.
Olga V. Mack is an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor at Berkeley Law, and entrepreneur. Olga founded the Women Serve on Boards movement that advocates for women to serve on corporate boards of Fortune 500 companies. Olga also co-founded SunLaw to prepare women in-house attorneys become general counsel and legal leaders and WISE to help women law firm partners become rainmakers. She embraces the current disruption to the legal profession. Olga loves this change and is dedicated to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and inclusive than before. You can email Olga at email@example.com or follow her on Twitter @olgavmack.