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Blockchain: patenting of the technology behind Bitcoin is soaring

26. april 2018

783. That is the number of patent applications filed worldwide in 2016 and 2017 in which the word "blockchain" occurs. In the previous eight years, the corresponding number was only 150. In other words, we are experiencing a soaring interest in a technology no more than 10 years old. And there is every reason to expect an even larger increase in 2018.

"From a European perspective, the statistics nevertheless show some disquieting tendencies. Europe seems to watch passively while the US and China invest massively, both publicly and privately, in the blockchain technology,” says Patent Attorney at Chas. Hude Niels Peder Møller.

According to a survey conducted by the Chinese patent database IncoPat, a list of the 50 most patent-active companies in 2017 within blockchain technology only contains three European companies, Accenture, British Telecom and Nokia.

A major factor behind China's patent activity is that the Chinese government supports the development financially – something that several states have begun to do. Obviously, the reason is that blockchain enables many of the procedures, for which a state is currently responsible, such as handling of health data and taxes, to be optimised and made more secure than the systems currently used.

"In a country like Denmark, where knowledge is one of our main export products, it is vital that we jump on the bandwagon. This could very well be through public investment in blockchain technology, but also private companies should see the market opportunities. Since it is also a relatively young technology, there are great opportunities to take on a significant share of the market. An issued patent on your blockchain solution can give you a 20-year exclusive right and, at the same time, serve as a valuable asset in your company that can attract the attention of major players on the market," explains partner at Chas. Hude, European Patent & Design Attorney Jesper Mark Wenzel. 

The financial sector is aware of the threat
Once, a Kodak moment meant a moment worth immortalising with a photograph. Today, the term also refers to a company that fails to predict changes in its industry and therefore loses its dominance on the market.
"Blockchain may just be the change that can cause a large number of companies in the financial sector to disappear in a Kodak moment if they are not proactive," warns Jesper Mark Wenzel.
However, it seems that the companies take their precautions: according to a study conducted by Envision IP, 20 percent of patent applications concerning blockchains filed in the US are filed by companies in the financial sector. However, the vast majority, 59 percent, are filed by blockchain-specific companies – and the giants of the future might well be found among these.

Therefore, if you are considering blockchain, and maybe even have some ideas how it can be implemented or designed, it might be advisable to turn these ideas into a patent application today rather than tomorrow.

Blockchains, and especially the cryptocurrency bitcoin, have quickly started to figure in the media headlines. In a series of articles, Chas. Hude will draw an IPR-relevant picture of the technology that is predicted to become just as important as the advent of the internet in the 1990s.

Facts about blockchain:
In short, a blockchain is a digitally distributed database, where a cryptocurrency – such as bitcoin – is used as compensation for the work required for its maintenance. The digitally distributed aspect means that the blockchain relies on a large network of computers cooperating to verify the authenticity of the blockchain.

Figuratively, a blockchain consists of a series of digital blocks linked together in a chronological chain. Each block can store specific information – such as information about a specific transaction or part of a medical register. Due to the technical means by which a blockchain is built, it is not possible to go back and change the information stored in a specific block. This means that blockchains can increase the transparency and authenticity of the stored information – something that is not necessarily given by already known systems typically managed by a central institution, such as a bank.