Raina Haque

The SEC has landed on a definition which includes both permissioned distributed ledgers and permissionless distributed ledgers in the term “blockchain.” This is not surprising, nor is it necessarily the result of a misinformed view. There are lots of market opportunities and reasons for enterprise permissioned distributed ledgers, as there was always market appetite for permissioned systems in general. These ventures use the term “permissioned blockchain” intentionally and purposefully. After all, the transactions are batched in blocks that are linked to each other. So, there is a chain of blocks, and some kind of consensus protocol. But is that sufficient for a blockchain, really? And what ‘blockchain’ is the SEC referring to when it references “the blockchain”?

A blockchain is a subtype of distributed ledger data structure, in which transactions are grouped into “blocks” that reference each other in cryptographic hashes. Technologies are developing that implement blockchains to solve all sorts of problems related to transactions: privacy, security, data integrity, double-spending, dynamic/smart contracting, payments, interoperability, etc. I started in this space over a year ago, when there was very little published literature on blockchain technologies, including published patent applications. Times have changed; now patent applications for blockchain technologies are readily available, with many patents granted. Blockchain technologies are a red-hot investment and development space right now and will be for at least the next couple of years. Many blockchain technology innovators begin with the same concerns. These concerns inspire the following five points of considerations for innovators in blockchain technologies who are interested in securing intellectual property rights.

Somehow a culture of Examiner v. Applicant has evolved. There doesn’t seem to be much in examiner training to pit them against external stakeholders. No evidence there of USPTO-endorsed nefarious agenda! Examiner training directives regarding external stakeholder interaction are in-line with what the stakeholder should reasonably expect. Still, it seems every patent practitioner has a story of examiner absurdity to tell.

Examiners are not supposed to think about the nebulous areas of 101, 102, or 103, nor are they to interpret case law from judicial opinions. Instead, the USPTO has already determined how they intend to interpret these sources, and has distilled these decisions into memos for their examiners to follow. To the examiners, an attorney putting forth arguments on such grounds is arguing issues that have already been settled. There are appropriate periods in the pursuit of patent protect for attorneys to argue the grey areas of law, but the exchange with the examiner is not the time to do that advocacy to any great extent. Arguing those grey areas in prosecution wastes clients’ resources and everyone’s time.