Research in blockchain technology continues to expand with Chinese companies dominating the number of patents filed for applications in 2020.
Blockchain technology has been used in financial technology, the Internet of Things (IoT), digital property, domain name registry, and supply chain management.
Chinese Companies Lead Blockchain Patent Filings for 2020
In a bid to increase development in the blockchain industry, Chinese President Xi Jinping encouraged Chinese companies to intensify their blockchain-related projects. Blockchain research can require establishment of funding programs that can help small companies pursue promising projects, and local companies in China that cannot finance their own research on blockchain can tap into a $1.6-billion fund available for startups. The Xiong'An Global Blockchain Innovation Fund is partly funded by the city of Hangzhou. Innovators that want to avail of the funding can also set-up their businesses in the Blockchain Industry Park in Hangzhou.
The President’s endorsement, as well as the availability of public funds for blockchain-related projects, has been productive as it resulted in an increase in the filing of blockchain patents by Chinese companies in 2020.
Tsinghua University published a study that showed 4,435 blockchain patent applications filed by Chinese companies from January to October of last year. Of these applications, 200 patent applications were from the Alibaba Group. This number is ten times higher than what IBM filed for the same period. One patent granted to IBM late in 2020 is for an application called the “gaming consensus protocol for blockchain.” This technology is envisioned for use in handling transactions within multiplayer games that have larger user bases like Fortnite or Call of Duty.
As for multinational companies that operate in China, they were able to apply for 212 blockchain-related patent applications. These companies include Microsoft, Walmart, Mastercard, Sony, and Intel, among others.
Notably, Alibaba has already received 191 U.S. patents related to blockchain technology since August 2019. The Chinese company had not received any before that time despite having filed more than 2,000 blockchain patent applications. Alibaba further received eight additional patents in the U.S. in 2020, allowing it to overtake both Bank of America and Craig Wright for the most number of patents received in the U.S. Alibaba was able to acquire these new patents through its Cayman Islands subsidiary, Advanced New Technologies, possibly to avoid facing challenges, if it registered them under its own name.
Verisign Gets U.S. Patent for Blockchain-Powered Domain Names
The U.S. Patent and Trademark Office granted Verisign a new patent that applies blockchain technology to domain names. The Virginia-based company has been exploring the use of blockchain in the field of domain name services since 2017.
Verisign's patent is titled "domain name blockchain user addresses." Domain name owners can use their domains as their blockchain user addresses. This allows them to interact with other blockchain participants without the need for numbers.
Aside from this use, the patented technology allows for the management of public and private keys using a DNS registry. It can also be used as a two-factor identification system. If an address has a piece of attached information, for example, this can be consulted and used as proof of ownership.
Blockchain technology ensures that objects stored in the public ledger are immutable, securing them from hacking or any other type of malicious attack. This also keeps site visitors from unintentionally accessing malicious websites posing as real ones.
Tencent Files New Distributed Ledger Technology-Based Solutions
Tencent Holdings, a Chinese multinational technology conglomerate holding company, has filed a series of patent applications that use distributed ledger technology-based solutions for fund management, advertising, and media storage. The company has also filed patents for consumer applications and hardware devices that use blockchain technology.
Tencent's recent patent filings are in line with its $70-billion plan to invest in emerging technologies in the next five years. Aside from blockchain, the company intends to expand its research and development on artificial intelligence, cloud computing, and IoT.
Last year, Tencent was second in global blockchain invention patent rankings, with 724 patent applications. It is second only to Alibaba that applied for a record 1,505 patent applications in 2019. Tencent’s number of patent filings this year will continue to make it one of the top Chinese companies dominating blockchain patent filings.
Sony, Other Multinational Companies Filed for Blockchain Patents
Between 2017 and 2019, the Chinese National Intellectual Property Administration has awarded 2,191 blockchain patents. Last year, Chinese companies continued to dominate in terms of the number of patent applications filed involving blockchain technology. The increase in number of approved patents could partly be attributed to the streamlined process in registering one’s patents in the country.
Domestic companies in China continue to move quickly to protect their innovations. China has three types of patents: invention patents, utility model patents and design patents. A Chinese invention patent is similar to a U.S. utility patent and protects a new technical solution relating to a product, a process or an improvement thereof. A Chinese utility model patent, on the other hand, covers a new technical solution relating to a product's shape, structure or a combination thereof.
Utility model patents, which have a 10-year term, are not substantively examined and are granted after a formal examination, which generally takes about one year to 1.5 years or less. In contrast, invention patents, which have a 20-year term, are substantively examined and can take three years to five years to grant.
Aside from local companies, multinational companies (MNCs) have also shown interest in securing blockchain patents in China. MNCs have filed 212 blockchain patent applications in China from January to October 2020. Sony Corporation, a Japanese corporation, is among the 35 multinational companies that filed their blockchain patent applications in China. These companies recognize the importance of having their innovations secured in one of the largest economies in the world.
Among the 35 multinational company filers in China, Mastercard tops the list with 46 patent applications to its name. Mastercard's patent applications in China can potentially help it operate a global blockchain payment initiative. Mastercard is followed by Nokia, Intel, and Oracle with 13, 12, and 9 applications respectively.