Bitcoin has long suffered the slings and arrows of being derided variously as “internet funny money”, “math-based beanie babies” and our personal favorite, “buttcoin.” While the cryptocurrency itself is notoriously unstable—with its wildly fluctuating value, scalability issues and various associations with conmen and criminals—its underlying, elegant math architecture, the blockchain, could prove to be immensely valuable, with potential applications touted in everything from banking to insurance, healthcare and voting. And so the race to patent these decentralized applications is on. Scanning global patent registries turns up dozens of active claimants filing patents on blockchain tech, including teams from major corporations. If granted, anyone who wanted to use a blockchain technology like any one successfully patented would have to pay that patent holder a license fee. And with major banking institutions looking to get in on the blockchain action, the money involved in those licenses would likely not be inconsiderable. The appeal is evident even to non-geeks. The blockchain is a theoretically tamper-proof verification ledger that publicly keeps track of transactions without the need for a middleman. You'll also hear people refer to this as ‘smart contracts’. The publicly distributed nature of the ledger—it’s visible to everyone—should make fraudulent transactions impossible. One obvious non-monetary use would be in elections so the outcome could be seen by all and not disputed. These Waffle-Weave Towels Are Like Giant, Soft Sponges While proving a patent-level novel use of a technology is difficult, this has not stopped a digital gold rush from popping up around the blockchain. Banks, once threatened by the blockchain's potential to do away with swathes of their business have instead started looking for ways to control the tech, making enormous investments in blockchain application development. Bank of America has filed 20 blockchain patent submissions. JP Morgan, Mastercard and Western Union have all filed similar claims, along with AmEx, Visa and Wells Fargo. One of the most prolific small time patent filers is Craig Wright, the man who claimed to be Bitcoin creator Satoshi Nakamoto. He's been on a spree in the UK, so far registering more than 50 patents in relation to blockchain technologies. And while bitcoin’s source code itself cannot be patented—it was released seven years ago under an open source license—any provably novel applications of the blockchain algorithm granted patents could make a lot of money for whoever first legally claimed to have invented those uses. Who will get there first is anyone’s guess; having a patent successfully granted takes anywhere from one and four years, depending on where in the world the patent is filed and assessed. For a patent to succeed it must meet these criteria: The downside of playing the blockchain patent lottery is that filing patents can be fantastically expensive, explained Bernard Chao, associate professor of patent law at the University of Denver, speaking over the phone. “Filing a patent across the world may end up being a couple of hundred thousand dollar exercise,” he said. For banks that's pocket change, but for individuals, it could be a significantly more risky proposition. Chao explained that patents are granted and recognized only in the countries where they are filed. In the US, applications are assessed by the 9000 patent examiners at the USPTO, and awarded on a ‘first to file’ basis—though you can pay more to skip the line and fast track your application. An inventor looking to globally patent their invention would need to simultaneously file their application in each market territory, Chao said. He said the costs of filing varies from $20,000 to $30,000, depending on the jurisdiction. Whoever released bitcoin originally did so anonymously and freely for anyone else to build on and modify in any way they wanted. They decided not to profit from their invention, at least not through holding the legal rights to it; perhaps they never thought it would succeed, or perhaps they weren't motivated by money. But now a raft of individuals and major financial corporations are racing to profit from the concept behind Satoshi Nakamoto's virtual currency. It could translate to very real profits for whoever successfully gets there first. And if it is banks who come out on top, the irony in their profiting from a technology that was once put forth as the end of money as we know it would be very rich indeed. Elmo is a writer with Real Future.
The race is on to patent blockchain technology, the "elegant mathematics" behind distributed ledgers. Big institutions such as JP Morgan, AmEx and Mastercard are vying alongside individuals, including controversial entrepreneur JP Morgan, to file patents on the tech, which could be highly lucrative. To be granted a patent, which will only be recognised in the country where it is filed, it must be proved as "statutory, new, useful and non-obvious". Patents can take up to four years to process.