Prior to filing a patent application, it can be very useful to conduct a search of existing filed patents and patent applications that may be related to the technology under consideration. This search often lets clients better determine whether it is worth the time and money to follow through on filing a patent application. For example, someone may have already filed a patent application directed to the client’s idea, or the particular technology space may be very crowded with a lot of related filings. Often with a new technology, few filings exist and clients rightly move to establish priority before a technology space becomes crowded. Today, few technologies have more hype surrounding them than blockchain technology. Blockchain technology is promised to solve problems related to finance, insurance, identity, supply chain management, logistics and other businesses. This article discusses the results of a high-level search for blockchain-related patent filings, and shows that the number of people and companies filing for patents on blockchain-related technology has been steadily increasing each year.

Blockchain technology is a misunderstood technology. This is due to the fact that there is no agreed upon standard definition for blockchain technology, which many people refer to simply as blockchain. The most commonly known implementation of blockchain technology is bitcoin, and this is why you will often hear people refer to blockchain as the technology behind bitcoin. A minimal definition of blockchain technology should include the following: a distributed ledger network using public-key cryptography to cryptographically sign transactions that are stored on a distributed ledger, with the ledger consisting of cryptographically linked blocks of transactions. The cryptographically linked blocks of transactions form what is known as “a blockchain.” The benefits of this technology are that it removes the need for a trusted third party to act as an intermediary for participants that do not trust each other, and allows for an emergent consensus among participants in the network as to the veracity of transactions conducted on the network. There are many variants of blockchain technology that deal with who is allowed to participate in the network, who may view transactions on the network, and how the emergent consensus is achieved.

Turning back to why a search, or patent landscape analysis, is useful for understanding activity in the blockchain technology space, a search allows a client to get a better understanding of how many patent applications have been filed, and how many patents have been granted in the technology space. Additionally, patents and patent applications are both a leading indicator of where a technology space is going, and a trailing indicator of where the technology space has been. Many times, patents are the focus of research and development efforts that have not yet found their way into a product or service at an organization. Other times, patents are used to cover technology that is under development, or in some cases has already been deployed into the marketplace after the patent has been filed. For purposes of this article, the number of patent filings year over year, and the subject matter class for these patent filings are useful information to understand what is going on in the blockchain patent world.

The search conducted for this article consisted of searching for all U.S. patent filings that contained the words “blockchain,” “bitcoin” or “distributed ledger,” that were filed between Oct. 31, 2008, and Feb. 16, 2017. Given the typical 18-month delay in publication of filed patent applications, the search likely did not capture all applications filed after Aug. 17, 2015, if they have not yet published. Filing dates were used instead of priority dates because priority dates for what is covered by an application are not always straightforward, and priority dates need to be verified in the case of litigation. The reason that Oct. 31, 2008, was chosen for the beginning of the search is that was the day bitcoin was disclosed to the world via a whitepaper distributed on a cryptography email list. To date, bitcoin is the most successful implementation of blockchain technology. Accordingly, it makes sense to search for all filings directed to bitcoin, because they are using a blockchain technology. Recently, distributed ledger technology has been popping up in the news as a way to talk about blockchain related technology without talking explicitly about a blockchain, so that is why distributed ledger was included in the search.

The search returned 879 filings that mention bitcoin, blockchain or distributed ledger. The search results consist of both issued patents and published patent applications. Of the 879 filings, 824 mention the word “bitcoin,” 159 mention the word “blockchain,” and 55 mention the words “distributed ledger.” Of the 879 filings, there have been 150 issued patents, and 729 published patent applications. In total there were 468 unique filers (e.g., inventors and organizations) for the 879 filings. In some ways, 879 filings seem like a lot, until one realizes that there are likely thousands of patents covering the technology contained in a smartphone. That example disparity in the number of patent filings shows that the blockchain technology space is still very new.

Before breaking down the results by year, and technology subject matter class, it is important to make note of several things. Issued patents are those that have successfully survived examination by the U.S. Patent and Trademark Office and have been deemed worthy of patent protection. Additionally, a patent application will typically publish 18 months after the patent application is filed with the USPTO unless a request is filed to not publish the pending patent application. As such, there are most definitely more than 729 pending patent applications that mention bitcoin, blockchain or distributed ledger that have been filed with the USPTO. The exact number is not known because until a filed patent application publishes, the contents of the file related to the application are private to the attorney, or agent, representing the inventor or inventors. With respect to subject matter class, the search results were analyzed to determine the most common subject matter classes for the filings as categorized by the USPTO. To do this, the main class for each patent filing as designated by the USPTO was used. This is not a perfect way to determine the technology area for the filing, but it is a good estimate of the subject matter being covered by the filing. Also, in the results, not every patent filing had a classification, so some filings are omitted.

Issued Blockchain Patents

As shown in the following chart, the earliest filing date for any issued patents related to blockchain technology is in 2011. The chart depicts the number of issued patents from the first few years is small and proceeds to grow from there.

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The number of issued patents by year will increase as time goes on because there are many patents still under examination. Similarly, the numbers for 2015 and 2016 are smaller than 2014, because the majority of those patent applications in 2015 and 2016 are still under examination. Ultimately, the number of patents being issued by the USPTO relating to blockchain technology is trending upward. This is to be expected given the potential of this new technology and the amount of hype surrounding the technology.

The USPTO organizes patents and patent applications into a class system that uses classes organized by technical subject matter. Therefore, patent filings that have been categorized in the same class as each other are supposed to broadly relate to the same subject matter.

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The pie chart above shows that the USPTO has given the majority of issued patents a classification of 1/1, which means the USPTO was not yet able to classify the subject matter of the patents. These unclassified patents may be reclassified at a later date as the USPTO periodically adds classes and subclasses. The next most common occurring class is a group of applications in the 700 classes, which are directed to the things expected from blockchain technology: data processing and information security. After the patent filings in the 700 class series, class 463, which has to do with gaming devices, frequently shows up. This makes sense because many of the gaming companies were among the first to file patent applications that covered blockchain technology allowing their players to use bitcoin to place bets.

Published Blockchain Applications

Similar to the chart above, “Issued Patents by Year Filed,” the chart below, “Published Applications by Year Filed,” indicates there is not a lot of activity in years 2011-2013 for published patent applications related to blockchain technology. Part of the reason for this is that some of the filings from those years have now become issued patents. The year 2014 is when things really begin to pick up in terms of the number of filings. This chart is also necessarily incomplete because, as discussed above, there are still patent applications filed with the USPTO related to blockchain technology that have not yet published. In another year, the numbers for 2015 and 2016 should be much higher. Looking at the chart below it is clear that the number of filings is trending upward.

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The chart below breaks down published applications by subject matter class. Considering the classification of published applications shows the stark contrast between the subject matter class chart for issued patents and published applications, and the emerging dominance of filings in class 705. According to the USPTO, class 705 is directed to “Data processing, financial, business practice, management, or cost/price determination.” More broadly speaking, class 705 is directed to financial matters, and this is perfectly in line with expectations surrounding blockchain technology.

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Isolating the patent filings by the year in which they were filed shows the maturation of the blockchain technology space starting to become clear. More filings indicate more investment, more planning, and more established businesses entering the technology space. Some of the most well-known companies appear in the patent filings, such as Inc., Apple Inc., Bank of America Corp., Facebook Inc., Dell Inc., Goldman Sachs Group Inc., IBM Corp., MasterCard Inc., Visa Inc., Wells Fargo, and many more. The total number of filings has increased approximately three-fold each year. It is apparent that the blockchain technology space is steadily growing, and as more and more companies experiment with the technology one should expect to see an increasing number of patent filings covering the technology.

This article was originally published on Law350