Blockchain has become synonymous with cryptocurrency and bitcoin, in particular. While the first blockchain distributed ledger was developed for bitcoin by Satoshi Nakamoto (an alias) to address trust, transparency and accountability, applications for blockchain are more diverse.

A distributed ledger is a database that records transactions between participants (also known as nodes) in a decentralised network, such as a peer to peer network. This distributed ledger is shared, replicated and synchronised amongst the participants, thereby replacing a centralised authority. Updates to the distributed ledger are agreed by consensus of the participants, lowering the risk of fraudulent transactions. Records in the distributed ledger are added in a sequential chain of cryptographic, hash linked blocks, providing an audit trail of the entire history of all the transactions in the distributed ledger. In this way, retrospective changes to transactions are immediately evident, since different hash values would be computed, preventing against fraud. New transactions are validated and included in a new block on the blockchain by mining, in which miners compete to find a random nonce that is block-specific. A nonce is data that when added to the block, gives a hash value for the block that starts with a certain number of zeros.  Since nonces are random and unpredictable, mining is resource intensive. In addition, digital signatures authenticate the transactions, thus providing transparency.

Generally, businesses can benefit from blockchain to mitigate risk while saving time and reducing costs. If your business is dependent upon network transactions and if validation of these transactions requires consensus, immutability, an audit trail or dispute resolution, blockchain may be a target technology for you. Even if it is not, it may be for your business partners, bringing you with them.

Examples of the more diverse applications for blockchain include:

  • In the food industry, guaranteeing the origin of food for consumers may be facilitated through use of blockchain. Furthermore, in the event of a food scare, blockchain would enhance efficiency in identifying the source of contamination and every distributed food stuff.
  • Patient records span decades of health care for individuals. By securing these records blockchain, patient control and health care provider access are improved. In addition, anonymized analysis by artificial intelligence (AI) of the records may discover medical trends, leading to new treatments.
  • Despite their outstanding contributions to society, many donors still do not trust that charities spend the donations as expected. Blockchain may increase transparency, allowing donors to see how their donations are spent.
  • For intellectual property rights, blockchain could link creators, proprietors and consumers, combating counterfeiting while channelling royalties back to the creators.

Of the registered intellectual property rights, patents for blockchain are perhaps most keenly of interest. Generally, blockchain relates to a method of doing business as such and hence is often excluded subject matter in many jurisdictions, such as before the European Patent Office (EPO). However, by solving technical problems related to malicious threats, verification, validation or authentication, for example, security -related aspects of blockchain may be patentable. By way of example, European Patent EP3257191B1 was granted on 11 April 2018 and relates to a method of controlling the visibility and/or performance of a contract, such as a blockchain-enforced smart contract. Granted patents EP3295349B1, EP3295362B1 and EP3295350B1, for example, relate to verification.  

Meanwhile, patent applications for blockchain globally continue to rise and while the US has a historical lead, over half of the top 20 applicants in 2017 were Chinese. Alibaba is now ahead of IBM in terms of blockchain patent applications, followed by Mastercard, Bank of America and People’s Bank of China. As blockchain reaches out beyond cryptocurrency , we can expect patent applications to also lead this rapidly-evolving technology. 


Author: Howard Read

Associate Appleyard Lees| European Patent and Trade Mark Attorneys

Manchester, Uk