Blockchain’s beginnings lie in open source; in 2009, its founder, Satoshi Nakamoto, released the software as open source, together with the first units of the Bitcoin cryptocurrency. Since that time, Bitcoin usage has grown, other cryptocurrencies have gained attention, and the underlying distributed ledger technology (DLT) has been recognized as a tool for improving all transactions.

Perhaps the greatest indication of blockchain’s value is the number of firms rushing to file DLT patents. While the core technology is open source and in the public domain, complementary and supplementary technologies are being patented and there has been a “land rush” to develop and secure DLT-related patents.

According to the World Intellectual Patent Organization, a self-funded group under the United Nations, China was the world leader in DLT patent applications in 2017, with more than half of the 400 filings. The U.S. came in second place, with 91 filings (22 percent of the total).  This is more than a threefold increase in DLT patent applications since 2015.While the ranks of the top DLT patent holders are dominated by U.S. technology companies, 2017’s patent filers were primarily financial services companies and technology companies based in China.  The following is a table showing Top-10 DLT Patent Owners (2017) vs. Patent Applicants (2017): Data Published by Clarivate, IPR Daily and incoPat Some of the previously listed organizations, including IBM and Qualcomm, are perennial global leaders in patent applications and awards.

What is striking is the number of financial institutions that have seen the value in DLT and have sought to mitigate their potential exposure to patent lawsuits through patenting. It is important to note that the data above may relate to patents and patent applications that generally mention DLT but do not necessarily disclose DLT in the patent.   It is, nonetheless, directionally indicative of the global nature of those seeking to develop blockchain-related patents and the diverse set of industries/market segments from which the inventing companies are drawn.

Just as the telecommunications and wireless communication sectors experienced contentious and costly patent wars as the mobile market grew, there is a growing risk of these occurrences in the DLT space. While it has experienced nearly exponential growth, the successful adoption and use of open source by banking networks, mobile phone manufacturers, telecom networks, smart cars, cloud computing and blockchain platforms, among numerous others, was not a foregone conclusion. Read more from…

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