2017 was a very active year for blockchain and cryptocurrency patent filings. The number of significant patent applications appears to be on the rise throughout the first few months of 2018. Here are some of the highlights that you should know about.
Highest Blockchain/Crypto Patent-producing Nations
According to an analysis recently released by Thomson Reuters, 225 out of the 406 blockchain patents (55.4%) filed in 2017 came from China. The U.S. came in second with 91 (22.4%) and Australia came in third with 13 (3.2%). China’s dominance in this category comes as no surprise given the fact that six out of the top nine blockchain patent filers from 2012 to 2017 were Chinese companies.
It will be interesting to see whether this trend will continue in 2018 and beyond. While China’s national ban of all cryptos and ICOs could affect the number of patent applications in the future, it appears that the Chinese government still has an overall positive outlook for the potential solutions that distributed ledger technology can offer.
Biggest Trends from Recent Patent Filings
Types of Patents
It is important to note that there are two distinct patent category types: blockchain-specific and cryptocurrency-specific. Both patent categories are increasing in popularity. Blockchain-specific patents increased by 300% in 2017.
Despite increasing regulations/bans and price volatility, crypto-specific patent filings rose by 16 percent to a total of 602 patent applications in 2017. This shows that, while the current market does have a lot of instability, there are still many large companies dedicated to investing in the future of crypto. Most of these patent filings aren’t associated with existing cryptocurrencies; however, they could very well be implemented as the foundations for some of the biggest cryptocurrency projects of the future.
Types of Companies
It’s easy to see why large, well-established fintech companies (i.e. JPMorgan, Mastercard, Bank of America, etc.) would want to file patents for blockchain and cryptocurrency technologies. However, the types of companies filing such patents appear to be increasing in diversity each year.
For example, we are beginning to see the emergence of companies like nChain Holdings, which was originally founded for the sole purpose of researching and developing blockchain solutions. Instead of trying to keep up with advances in technology to be more competitive in an existing industry, nChain established an entire business model around blockchain and cryptocurrency technologies (even without tokenization). This is a business model that will likely become an even more popular option for startups in the future.
Companies from “traditional industries” are also beginning to file more blockchain and cryptocurrency patents. For instance, Zhong An, a large Chinese insurance company, is working on a number of innovative blockchain technologies. The increase in patent applications from companies which were once considered to be in non-tech sectors is helping re-shape the way people look at the future of business and tech in the global economy.
Most Significant Patents from 2017/ Early 2018?
While this is not a comprehensive list, these patents are some of the most notable to date and have the potential for large-scale, global impact.
Cryptocurrency- Bank of America
Thus far, Bank of America has filed the most cryptocurrency-related patents to date (at least 45) than any other U.S. firm. One of its most significant patents in 2017 revolves around the creation of an automated cryptocurrency exchange system that establishes optimal exchange rates between two currencies based on external data feeds.
Bank of America plans on offering this technology as an enterprise-level service. According to the patent description, this technology will utilize a three-account system that include the customer’s account and two “float accounts” belonging to the business using this technology. While this patent alone sounds quite promising, it is important to look at the big picture of what Bank of America has been doing to become a leader in cryptocurrency. The company has filed patents for securing wire transfers of crypto, utilizing digital currencies for sending funds across countries, and more.
Even though it’s uncertain whether patent pending applications will ultimately be approved, Bank of America has already shown that it has the potential to become a global leader of cryptocurrency/payment processing.
Food Security- Zhong An
On September 19, 2017, Zhong An announced it had filed a very interesting and innovative blockchain patent. According to the project website, Zhong An’s Gogo Chicken integrates the Internet of Things, blockchain, artificial intelligence and internationally patented anti-counterfeiting technology together to create a facial-recognition system that will monitor the life cycles of poultry.
The idea behind this project is to increase China’s food security and to avoid the future possibility of another crisis like the one in 2014 when KFC and McDonald’s were caught selling rotten and expired chicken in China. 100,000 chickens have already been incorporated into this new system, and there are plans to have around 23 million chickens become a part of the project within the next three years.
Global Supply Chain- Walmart
On March 1, 2018, the United States Patent and Trademark Office released information related to Walmart’s new “smart package” technology patent. Walmart is one of many companies partnering with IBM to deliver solutions that could change the future of the global supply chain.
As detailed in an earlier blog post, IBM and Maersk are also working on a project in this area and have already made significant progress. As giants in retail and shipping form new collaborations, patents could be important for determining the ultimate winner in blockchain-based shipping industry.
What to Watch for Throughout the Rest of 2018
Will cryptocurrency price volatility and crypto regulations/bans affect the number of patents moving forward?
Currently, there still appears to be a significant amount of patents being filed in early 2018. We’ll have to wait until the official patent filing statistics are released, but it appears that most companies still have an optimistic outlook for the long-term.
Which companies will use blockchain/crypto patents to re-gain momentum over competitors?
As noted above, Walmart’s patent is a good example of a traditional company that is beginning put more focus on technological innovation in order to keep up with industry competitors. PayPal’s recent patent filing could also be a significant move to take back some lost market space in the payments industry. Hopefully, market competition will lead to the production of more innovative technologies which can be used across wide range of industries.