Category Archives: Patents

Trends in Patenting Blockchain Technologies

With the recent rise in values of cybercurrencies such as bitcoin, and with increasing interest in initial currency offerings (ICOs), businesses around the world are rushing to build value with new blockchain technologies and applications.

This presents many opportunities to patent innovative blockchain and other distributed ledger technologies. This is a relatively recent trend. The first recorded appearance of the word “blockchain” in any U.S. patent or published patent application was in 2012, approximately three years after the launch of bitcoin.

As of January 2018, United States Patent and Trademark Office (USPTO) records revealed:

  • 25 granted patents with the term “blockchain” or “distributed ledger” in their title, abstract or claims; and
  • at least 275 published patent applications include one or both of those terms in the title, abstract or claims.

When the data set is expanded to patents and applications that include the word “blockchain” anywhere in the text, the list grows to 56 granted patents and over 500 published applications. These include:

Patent Number Title Grant Date Assignee
US9862222 Digitally encoded seal for document verification 2018-01-09 UIPCO LLC
US9853819 Blockchain-supported, node ID-augmented digital record signature method 2017-12-26 Guardtime IP Holdings LTD.
US9836908 System and method for securely receiving and counting votes in an election 2017-12-05 Blockchain Technologies Corporation
US9824031 Efficient clearinghouse transactions with trusted and un-trusted entities 2017-11-21 International Business Machines Corporation
US9807106 Mitigating blockchain attack 2017-10-31 British Telecommunications PLC
US9785369 Multiple-link blockchain 2017-10-10 Accenture Global Solutions Limited; GSC Secrypt LLC
US9794074 Systems and methods for storing and sharing transactional data using distributed computing systems 2017-10-17 Nasdaq Technology AB
US9747586 System and method for issuance of electronic currency substantiated by a reserve of assets 2017-08-29 CPN Gold B.V.
US9749140 Systems and methods for managing digital identities 2017-08-29 Cambridge Blockchain LLC
US9722790 Identity management service using a blockchain providing certifying transactions between devices 2017-08-01 Shocard, Inc.
US9641338 Method and apparatus for providing a universal deterministically reproducible cryptographic key-pair representation for all SKUs, shipping cartons, and items 2017-05-02 SkuChain, Inc.
US9338148 Secure distributed information and password management 2016-05-10 Verizon Patent and Licensing Inc.; Cellco Partnership

Most of the granted patents cover new or improved aspects of the blockchain itself. Only a small number of U.S. patents have issued to date for new applications of existing blockchain technologies. This is likely because many companies are merely using existing blockchain technologies to implement different types of transactions.

Over half of the granted patents were examined within the USPTO’s Technology Center 2400, which covers networking, multiplexing, cable and security technologies. TC 2400 includes over 200 examiners who focus on security technologies.

In each of the past three years USPTO Examiners from TC 2400 have participated in a Cybersecurity Partnership meeting, in which the USPTO has interacted with stakeholders in the cybersecurity and network security sector to share ideas, experiences, and insights. Information that the USPTO shared in these meetings includes:

  • The top 15 filers of patent applications for information security and cryptography technologies in each year during 2014-2016 included Amazon, Google, IBM, Intel, Microsoft, Qualcomm, Samsung, Symantec, and Tencent. Top filers in 2015 and 2016 also included Bank of America, Cisco, and EMC.
  • While the vast majority of U.S. patent applications for information security and cryptography technologies have been filed by U.S. companies, the USPTO has also received a significant number of filings from companies that are based in Japan, China, Korea, Germany, France and Israel, among other countries.
  • The average pendency (time between filing and either grant or abandonment) of patent applications for information security and cryptography technologies was approximately 27 months in 2016.

Globally, as of January 2018 World Intellectual Property Office (WIPO) records show 197 published Patent Cooperation (PCT) applications with the term “blockchain” or “distributed ledger” in their title, abstract or claims. However, relatively few of these PCT applications have reached the national stage. The European Patent Office database includes only 21 such patents and published applications. According to a recent report from Clarivate Analytics, in 2016 China experienced significant growth in new patent filings for blockchain technologies and is second only to the U.S. for new filings involving blockchain technologies.

This post is the second in a four-part series. For other posts in this series, see:
Intellectual Property Strategies For Next Generation Cybersecurity Technologies
Defensive Patent Strategies For Blockchain and Distributed Ledger Technologies
Cybersecurity Patent Strategies vs. the Growing Barriers to Software Patents 

Intellectual Property Strategies for Next Generation Cybersecurity Technologies

Cybersecurity technology has become one of the most important industries in the world today. With products that are critical to businesses in countless fields, including finance, healthcare, transportation, public utilities, manufacturing, defense and government, experts have predicted that the global market for cybersecurity technologies will grow by 10% per year through 2020.

Cybersecurity technologies are also one of the biggest drivers in corporate value today. 129-year-old Eastman Kodak Company recently saw the value of its stock jump by 200% after announcing a new service that will use blockchain technologies to help photographers get paid in a new cryptocurrency when others use their photos. A New York-based beverage distributor experienced a 289% share price increase after it simply renamed itself from “Long Island Iced Tea Company” to “Long Blockchain Corp.” and announced that it would start to offer blockchain technology solutions.

Next generation cybersecurity technologies include more than just blockchain-based payment systems. Distributed ledger technologies have applications in multiple fields, including document sharing, video and audio streaming, and biomedical applications. And although blockchain is all the rage at the moment, other cybersecurity technologies such as network attack simulations, network security awareness training through methods such as simulated phishing, and real-time analytics are equally important, if not more so.

With this background in mind, what intellectual property protection options are available for next generation cybersecurity technologies? Continue reading

How long does it take to get a patent or trademark registration? (2017 update)

At the end of each fiscal year, the USPTO releases a Performance and Accountability Report, with statistics about patent and trademark allowance rates, average pendency, and other details. The USPTO recently released its Performance and Accountability Report for Fiscal Year 2017. This means that it’s time for IP Spotlight’s annual review of the question:  “how long does it take to receive a patent or register a trademark?”

To answer that question, here are a few highlights from the USPTO’s FY 2017 report:

Patents:  The USPTO continued a six-year trend of reducing overall patent application pendency in FY 2017. The average time between filing and first office action was 16.3 months, which is about the same as last year. However, average total pendency decreased to 24.2 months (down from last year’s 24.2-month average pendency, and down from a high of 33.7 months in 2012).

The report did not discuss the effect of the USPTO’s “Track 1” expedited examination option on the overall timeline. Applicants who pay the additional fee for Track 1 processing typically receive a first action within 4-6 months of filing, and allowance or final action within 12 months of filing.

The wait times vary depending on the technology involved. Patent applications for computer architecture and mechanical engineering inventions generally experienced the longest waits, while applications in the biotech and organic chemistry fields moved relatively quickly. The breakdown by technology included: Continue reading

Why do patents often include method claims and apparatus claims?

When I send a draft patent application to an inventor who is new to the patent process, the inventor often asks why the claims seem to repeat themselves. A patent application often has one group of claims directed to a method, and another group directed to an apparatus or system. This can confuse new inventors because the two claim groups often appear to be very similar.

Why the duplication?  There are several reasons.

One reason is that method and apparatus claims can be directed to two separate groups of infringers. A patent gives its holder the exclusive right to make, use and sell the invention. Method and apparatus claims may each define the invention in a slightly different way. Some entities — such as a distributor or retailer — may sell an apparatus, but they will never practice a method of making or using the apparatus. Other entities (such as end users) may use the invention but not make or sell it. Depending on the situation, one set of the claims or the other could be more useful to assert against a particular infringer.

Another reason to include two groups of claims relates to the point in time at which damages start to accrue for infringing activity. Section 287 of the Patent Act limits recovery of damages for making/using/selling a patented article to the point in time where the infringer had actual notice of the patent, or constructive notice of the patent through marking. Because Section 287 refers to “articles” but not methods, courts have generally limited the notice requirement to apparatus claims, not system claims.

This interpretation by the courts dates back to at least 1936, when in Wine Railway Appliance Company v. Enterprise Railway Equipment Company, the Supreme Court said that Section 287 does not limit damages if the patent holder isn’t actually making articles to mark.

More recently, courts have clarified that if a patent is directed only to a method (i.e., there are no apparatus/article claims), Section 287 does not apply and notice is not required. (See Bandag, Inc. v. Gerrard Tire Co.) If a patent includes both apparatus and method claims, then Section 287 does not apply if only the method are asserted. (See, for example:  American Medical System Inc. v. Medical Engineering Corp., Crown Packaging Technology Inc. v. Rexam Beverage Can Co. and Hanson v. Alpine Valley Ski Area, Inc.) Whether or how Section 287 would apply if both types of claims are asserted has not yet been fully addressed by the Federal Circuit. (See Rembrandt Wirless Technologies, LP v. Samsung Electronics Co., Ltd.)

Because of this method/apparatus dichotomy, as well as the fact that Section 287’s notice requirement does not apply to an entity that holds — but does not practice – the patent, the notice requirement has been criticized as primarily benefitting non-practicing entities. However, so far Congress has not considered this issue to be worthy of an amendment to the Patent Act.

In addition, to avoid issues associated with the notice requirement some patent applicants may consider filing patent applications with only method claims or only apparatus claims. This may mean filing two applications on the same day, or filing a second application that claims priority to a first application. This adds to the expense, but it can help reduce the worry that insufficient marking will limit damages when asserting both method and apparatus claims.

New USPTO fee schedule increases fees for challenging granted patents, adds streamlined reexamination option

The USPTO recently published an adjusted fee schedule for certain patent fees. The new schedule significantly increases the fees for challenging the validity of a patent in inter partes review (IPR), post-grant review (PGR) and covered business method (CBM) proceedings. (A comparison of these three types of proceedings is available from the USPTO at this link.)

The new fees for an IPR proceeding (request fee + post-institution fee) total $30,500 — an increase of $7,500. Additional fees apply if the IPR proceeding involves more than 15 claims.

The new fees for a PGR or CBM proceeding (request fee + post-institution fee) total $38,000 — an increase of $8,000. Additional fees also apply if the PGR or CBM petition involves more than 15 claims.

The office also established a new “streamlined reexamination” option for ex parte reexamination requests that do not exceed 40 pages. Line spacing (double-spaced or 1-1/2 spaced), font size (12-pt non-script), and margin requirements apply. The fee for a streamlined reexamination is $6,000, compared to the standard $12,000 ex parte reexamination fee.

The fee hikes also include:

  • a $100 increase (to $1300) in the fee for filing a first request for continued examination (RCE);
  • a $200 increase (to $1900) in the fee for filing a 2nd or subsequent RCE;
  • a $180 increase (to $760) for the search and examination fees required for new design patent applications;
  • a $240 increase (to $2,240) in the cost of moving an appeal of a final rejection from the briefing stage to the Patent Trial and Appeals Board for review; and
  • other fee increases for various petitions, such as petitions to revive an abandoned patent application and petitions to accept a delayed maintenance fee payment.

The costs listed above are the standard fees. Small entities and micro-entities may qualify for 50% or 75% reductions of certain USPTO fees.

The new fee schedule will take effect on January 16, 2018.

One step forward, two steps back for software patents at the Federal Circuit

In the past year, several Federal Circuit decisions defined situations in which software inventions could be eligible for patenting in the United States. However, two recent Federal Circuit decisions show that the path for patent-eligibility is not yet clear, especially for patents that claim methods of processing or presenting data.

In Secured Mail Solutions LLC v. Universal Wilde, Inc. (Fed. Cir. Oct. 16, 2017), the court considered seven patents covering the use of intelligent mail barcodes, QR codes, and personalized URLs on a package to communicate information about the package. The court considered a representative claim of U.S. patent 8,429,093 that read:

1. A method for providing electronic data to a recipient of a mail object, comprising:

   Generating, by a processor, a barcode for a mail object, said barcode including at least a first set of mail data, said first set of mail data including data corresponding to said recipient of said mail object;
affixing said barcode to said mail object;
   submitting said mail object to a mail carrier for delivery to said recipient of said mail object;
receiving said first set of mail data, including data corresponding to said recipient of said mail object, from a reception device of said recipient via a network;
   providing said electronic data to said reception device via said network in response to receiving said first set of mail data, said electronic data including a content of said mail object;
   wherein said reception device displays said electronic data to a recipient of said mail object by displaying said electronic data on a screen of said reception device.

The district court found all of the patents’ claims to be directed to the abstract idea of “communicating information about [a mail object] by use of a marking.” The Federal Circuit agreed and explained that the claims “are not directed to specific details of the barcode or the equipment for generating and processing it.” The Federal Circuit also noted that in the claims there “is no description of how the unique identifier … is different from a personal name, or return address.”

After agreeing that the claims were directed to an abstract idea, the court noted that the claims did not include sufficiently more than the idea because they were “‘replete’ with routine steps, including ‘affixing mail identification data,’ such as a barcode, to a mail object.” The patent holder argued that the generation of the unique identifier is inventive, but the court noted that “the use of barcodes was commonplace and conventional” when the patent applications were first filed, and “sending a personalized URL to a recipient was not an unconventional use of the Internet” at that time.

In Smart Systems Innovations, LLC v. Chicago Transit Authority (Fed. Cir. Oct. 18, 2017), the court considered four patents relating to open-payment fare systems in mass transit networks. A representative claim from U.S. patent 7,568,617 read:

13. A method for validating entry into a first transit system using a bankcard terminal, the method comprising:
downloading, from a processing system associated with a set of transit systems including the first transit system, a list of bankcards comprising, for each bankcard in the list, a hash identifier of a bankcard previously presented, by a respective holder of the bankcard, to the processing system, wherein the bankcard comprises one of a credit card and a debit card;
receiving, from a bankcard reader, bankcard data comprising data from a bankcard currently presented by a holder of the bankcard;
generating a hash identifier based on the bankcard data from the currently presented bankcard, wherein the hash identifier comprises a hash of at least part of the bankcard data;
determining whether the currently presented bankcard is contained in the list of bankcards;
verifying the currently presented bankcard with a bankcard verification system, if the bankcard was not contained in the list of bankcards; and
denying access, if the act of verifying the currently presented bankcard with the bankcard verification system results in a determination of an invalid bankcard.

The court found the claims to be directed to the formation of financial transactions in the field of mass transit. The court stated: “[t]he Asserted Claims are not directed to a new type of bankcard, turnstile, or database, nor do the claims provide a method for processing data that improves existing technological processes. Rather, the claims are directed to the collection, storage, and recognition of data.” The court also stated that the claims’ improvement on the operation of existing fare collection systems, and their limitation to the field of mass transit, did not save them from being considered an abstract idea.

Notably, in Smart Systems Innovations the court stated: “[o]ur mandate from the Supreme Court under Alice step one is to ascertain what the claims are ‘directed to,’ not the ‘thrust,’ ‘heart,’ or ‘focus’ of the invention.” The court also appeared to limit the applicability of its previous decisions in Enfish Corporation v. Microsoft LLC and DDR Holdings, LLC v. Hotels.com, L.P. to the specific “claims [that the patentee shows] are directed to an improvement in computer technology.” The court also suggested that its McRO v. Bandai NAMCO Games America, Inc. decision was limited to a particular “claimed process us[ing] a combined order of specific rules [that] improved upon existing technological processes.” Continue reading

Patent lawsuit map may shift as Supreme Court restricts venue in patent infringement cases

A much-anticipated decision from the U.S. Supreme Court has scaled back the ability of patent plaintiffs to choose the forum in which they file suit. By limiting a practice that many defendants consider to be forum shopping by patent plaintiffs, the Court’s decision may shift the geography of patent infringement lawsuits from the East Texas heartland to the coasts.  

In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Court considered the patent venue statute, 28 U.S.C. § 1400(b), which states: “Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” The Court held that a patent infringement defendant “resides” only in its state of incorporation, and that “residence” does not include states where the defendant merely conducts business.

In the case, the defendant was organized under Indiana law and headquartered in Indiana. The plaintiff filed suit in Delaware, into which the defendant shipped product but otherwise had no physical or legal presence. The defendant argued that venue in Delaware was improper under the patent venue statute.

The Court agreed with the defendant. Focusing on the meaning of the phrase “where the defendant resides,” the Court held that the term “residence” means only an entity’s state of incorporation, and the term does not include states where an entity merely does business.

The case may deal a blow to the Eastern District of Texas, which has served as the epicenter of patent patent infringement litigation in recent years. However, the Court did not negate the second half of the patent venue clause, which also supports venue “where the defendant has committed acts of infringement and has a regular and established place of business.” Texas ranks second in a list of states where the most Fortune 500 companies are headquartered. Thus, at least some new cases that previously would have gone to the Eastern District of Texas may now shift to other Texas district courts such as the Northern District of Texas (in which Dallas is located) or the Western District of Texas (in which Austin is located).

It is even more likely that new patent filings will spread out to other venues such as the District of Delaware (where more than 2/3 of the Fortune 500, and more than 1 million companies in total, are incorporated) ; the Northern District of California (home to the tech giants of Silicon Valley); or the Southern District of New York (where more Fortune 500 companies are headquartered than in any other state).

The new decision also will make it harder for patent plaintiffs to sue multiple defendants in a single case. If the accused infringers are organized in different states and have different corporate office locations, the patent holder may need to file multiple suits in multiple states.

[Image credit:  Bram Janssens]