This post is the second Part of a three-part Blockchain Patents series. If you haven’t read Part I yet, click here to read it.
Last week, we covered why it is important to consider patent protection for blockchain inventions. In that post, we discussed the importance of being first and why top startups understand this—you don’t want to be last (or even second) to the patent office with your invention. This week, we are covering broadly how to go about obtaining a blockchain patent.
Are Blockchain Patents Considered Software Patents?
You bet. And in the rare circumstance that someone has invented a blockchain solution using actual delivery boxes and duct tape, it’s likely the invention would face similar scrutiny because of the very loaded phrase “abstract idea” (more on that later).
The actual lines of code, what language they are in, or platform you’ve written the application on, are not what a patent application seeks to protect, rather, we claim around the functionality of the blockchain software (in a utility patent) or the design of an interface (in a design patent). This is actually a good thing, as doing so can protect you from competitors making small changes to code engineer around your patent. Further, this can increase the value of your patent and—more importantly—of your startup.
Often, we have to tie the software to hardware or show how the software improves the functionality of a computer. This may seem odd, but it is the paradigm we must presently work within until the law changes (we’re working on it — Mertzlufft Law has presented formal argument to Congress and the Patent Office to get this law changed). Thus, properly understood, the phrase “software patent,” may be a summary of a broader concept of patenting a software’s functionality and application.
Even though patenting software presents a high hurdle to clear, it’s one we can often clear. This paves the way for patent protection for the core intellectual property of many blockchain startups and large companies alike.
How Do I Patent a Blockchain App?
The process of patenting blockchain software can be summed up in five top-level steps: (1) identify the invention; (2) strategize; (3) describe the invention; (4) apply; and (5) prosecute the application.
Identify the Invention.
The first step is to identify the blockchain invention. It’s important to note that the invention is not necessarily the entire software application. Specifically, it can help to think about what problem has been solved, and what is unique about the solution. A patent practitioner can help with this question.
Having an understanding of what your patent strategy is will guide decisions you make, as well as how you write your patent application. For example, are you looking to increase your valuation for fundraising or exits? Are you looking to police the marketplace and enforce your patent? Plotting a strategy up front can save significant time and money when embarking on the patent process, and can help you make decisions such as whether to begin with a provisional patent application.
Describe the Invention.
Whether working alone or with a patent practitioner, developing a coherent description of the invention is the next step of the process.
A patent application comprising a specification, one or more claims, drawings, and associated forms is prepared & filed with the USPTO.
Prosecute the application.
Commonly referred to as the “back-and-forth” process with the USPTO, the application is fully examined for patentability.
Is It Hard to Patent Software?
It is. But we’ve done it many times. It’s said far too often that software is not patentable. Whether this stems from a misunderstanding of the state of the law or the law’s seemingly ever-evolving nature, it’s a misconception nonetheless. While it is indeed difficult and tricky to patent software-related inventions, finding success in doing so can add immense value to a startup whether the founders are in it for the long haul or looking to set up an exit strategy.
In 2014, it seemed that hope was lost for patenting software-related inventions with the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l1573 U.S. 208 (2014)., which caused many software inventions to be rejected as “abstract ideas.” Reforms are underway, though. Mertzlufft Law’s recent comment cited by the USPTO to the United States Congress explained this problem for software and artificial intelligence patent applications as such:
The rejections seen by applicants in such applications can be gratuitously difficult to overcome, and sometimes result in the need to add otherwise extraneous limitations to claims for the sole purpose of satisfying an undefined standard.2Joshua Mertzlufft, Mertzlufft Law PLLC, Response to Notice Regarding the Patent Eligibility Jurisprudence Study 3 (Oct. 15, 2021), https://www.regulations.gov/comment/PTO-P-2021-0032-0129.
While Alice and what has followed has arguably increased the difficulty in obtaining patent protection for software, software patent practice has adapted. Experienced practitioners have found ways through this thicket of law and by doing so, provide great value to clients seeking to protect blockchain software. In other words, while the Supreme Court in its Alice decision set a high hurdle for patenting blockchain software, it’s a hurdle we can in many cases clear.
Blockchain inventions, while difficult to protect, are more often than not worth the efforts of doing so. Young startups’ value is often inordinately housed in their intellectual property, and thus it is important to ensure that this intellectual property is adequately protected.
Click here to check out Part III in this blockchain patents series, where we focus on what a blockchain patent is and what it does for a startup.