Despite the open-source nature of blockchain technology, increased interests to navigate the intellectual property of its applications is gaining momentum. Earlier this year, the Blockchain Intellectual Property Council was founded in attempts to ward off so-called patent trolls from capitalizing on the IP of digital ledger systems and technology. The council͛s executive committee includes companies like Cisco, Microsoft, Wells Fargo and IBM.
The concept of cryptocurrencies made big waves in 2008 with the release of a whitepaper on Bitcoin, which is considered the first decentralized digital currency and a type of blockchain. Blockchains are essentially decentralized and distributed records. Each record, called a block, is connected or chained together to the previous record, hence the name. Copies of the ledger can exist on different computers, or nodes, and the chains are encrypted and considered nearly impossible to break or falsify.
Its very difficult to actually alter a chain, Raymond Tabandeh, Lewis Roca Rothgerber Christie intellectual property partner said. By its nature or configuration, it is actually a one-time transaction.
Since every transaction in a block, you have to add a new block, and you can͛t use the same bitcoin twice for the same transaction. There are several areas of application for blockchains and different types of cryptocurrency that are eligible for patents, even though systems like Bitcoin are open-source software.