Critical Emerging Technology: Claiming and Disclosing Blockchain, Fintech and Cryptocurrency

A blockchain is a digital ledger comprised of so-called “blocks.” Every piece of new information uploaded to the digital ledger is a block having a set of data. Once these blocks are linked – that is, every time that new information is uploaded via a block – it becomes part of the digital ledger for forever and all time; the blocks cannot be edited, deleted or modified, even by the company or person who initially created the blockchain. Because the history and genesis of blockchain data cannot be altered or deleted, blockchains are a valuable tool for identifying the provenance of an item and tracking the path from its original source to its ultimate destination.

A first example of blockchain usage is that blockchains can be implemented for understanding the genesis and lifespan of electric vehicle (EV) batteries. EV batteries are comprised of battery modules and battery cells, which can be either recycled or refurbished through multiple uses. Imagine the scenario in which an owner of an EV vehicle would like to know whether a battery that has been used over a certain lifetime can now be refurbished or partially refurbished in order to save cost. To do so, the owner wants to check if it is possible to replace some of the modules in the battery rather than the entire thing, which is far more expensive. Alternatively, the dealership may want to check whether an EV battery can be recycled for environmental purposes. But in order to make these kinds of decisions, a thorough diagnosis of the battery involving a comprehensive history of the battery and its physical components is desired.

By utilizing blockchain, each time the battery is charged, new data can be inputted to a blockchain for the battery. Other uploading events can include whether the battery has died or when the vehicle turns OFF and ON, indicating initiation or termination of use, etc. All of these events stimulate an automatic uploading of battery state information to the blockchain. Over time, the compendium of this information can be used to deduce the charge capacity of the battery components and how that has changed over its lifespan. This way, a decision can be made as to whether the battery needs full refurbishment or partial refurbishment, or whether the battery should be recycled or just tossed out. This will save money and lead to environmental benefits when implemented on a large scale.

As a patent practitioner, how would you claim the system just described? The first thing to think about when confronted with this question is to imagine the components involved for someone (like a potential infringer) to practice this type of invention. Specifically, what are the physical components needed? With the EV battery example, you can claim this as a system claim having at least one EV battery. Because the purpose of the entire system is to understand the chargeability capabilities of the battery over time, an electronic controller (ECU) with a processor and computer memory that stores the state of charge information is needed. The ECU will likely be part of a vehicle that has the battery, a mobile device with an app for the EV battery ledger, or it can be a central processing unit (CPU) on a cloud server. The system will also need a wireless communication unit to upload the information to the blockchain. An alternative to a system claim is an apparatus claim directed to a vehicle equipped with at least one EV battery, an electronic control unit and a wireless unit for uploading information to the blockchain.

Blockchain can also be used in FINTECH (financial technology). Banks can use blockchain to request confirmation of security information with immediate response using blockchain in order to expedite transactions. When thinking about what components to claim with FINTECH, software example components (e.g., parts of a computer or a computer program) can be algorithms and applications for a processor, the processor or microprocessor itself, or virtual reality (VR) trading platforms. All computers have some kind of storage that stores transitory or long-term computer-readable media. You can also think about claiming external storage such as memory that is not part of the computer the user is using (i.e., the blockchain or a cloud). Wireless communicators will be needed to upload the information to the blockchain so you can claim receivers and transceivers or Bluetooth capabilities.

When considering hardware components to claim, always think about what parts will be used by the user, what is gathering information or input. Think about claiming scanners (such as eye scanners or fingerprint scanners), sensors of all types, cameras, etc. Also think about whether the information to be processed will be inputted manually by a user or an operator, such as via a keyboard or a touchscreen. With mobile banking, the user is likely using an app like Venmo on a mobile device and will be inputting information via the touchscreen. Also, there has to be a display screen for the user to receive messages or information whether that be on a mobile device, an ATM or a computer screen. So a display screen is a physical component that can be claimed as well.

Recently, the Southern District of New York granted a motion to dismiss in favor of Block Inc. against AuthWallet’s patent assertion on the grounds that AuthWallet’s asserted claims are patent ineligible subject matter under the Alice Doctrine. AuthWallet owned a patent for a method and system for processing financial transaction data that involves a process of confirming authorization for transactions by the user. AuthWallet’s system included a processor, a storage component, a communications module and a stored value module. The court found that the claims only recited “generic computer functions to be carried out by conventional computer components.” What is the court saying here? The court is essentially saying that there is no technical improvement recited in these claims. Since there is no special purpose computer but only generic computer processes in AuthWallet’s claims, the claim needs to recite some kind of technical improvement to the way the computer functions. End user benefits are not considered technical improvements either at the Federal Circuit or at the Patent Trial and Appeal Board. Here, arguably a human brain can be a “storage component,” “a communications module” or a “stored value module,” as claimed in AuthWallet’s patent. It can be difficult to see the technical improvement in these kinds of claim recitations.

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Join the Discussion

2 comments so far.

  • [Avatar for Anon]
    June 4, 2022 09:13 am

    Dave R,

    You raise a very “politically correct” point vis a vis energy consumption.

  • [Avatar for Dave R]
    Dave R
    June 1, 2022 10:20 am

    It’s also an approach that will necessarily consume ever greater quantities of memory and energy as the blockchains increase in number and length.