India: Is It Possible To Patent A Cryptocurrency?
A cryptocurrency is a digital or virtual currency that issecured by cryptography and is based on blockchain technology thatuses a network of computers to keep a public ledger of pasttransactions. There are many different cryptocurrency brands, andmany new ones are continuously being created. Bitcoin, Ethereum andStellar are popular cryptocurrency brands.
WHAT IS BLOCKCHAIN TECHNOLOGY?
A blockchain is essentially a digital ledger of transactionsthat is duplicated and distributed across the entire network ofcomputer systems on the blockchain. Each block in the chaincontains a number of transactions, and every time a new transactionoccurs on the blockchain, a record of that transaction is added toevery participants' ledger. The decentralised database managedby multiple participants is known as Distributed Ledger Technology(DLT).
Blockchain is one of the most notable new technologies of ourtime. It has triggered a paradigm shift in the way in which theworld conceives of financial transactions and digitalidentities1. Its rapid growth, and its speculated value,have made it attractive to investors and companies who see itsinfinite potential.
BLOCKCHAIN AND CRYPTOCURRENCY
Cryptocurrency is built on this foundationalconcept of blockchain, and grows by utilizing the methodology as adistributed-ledger based transaction system. This systemenables the ownership of non-centralized accounts with real value,founded upon the idea of utilizing decentralized andencrypted currencies in monetary transactions. Bitcoin isentirely deterministic, as it is governed bymathematics, encryption, and the rules set forth by itsusers.2
CRYPTOCURRENCY + INNOVATION = PATENTS
Innovations in the world of blockchain-based currency focus onevolving original methodologies into simpler processes. This placewhere cryptocurrency overlaps with innovation is where patents playa central role.
The growth figures demonstrate that there are many largecompanies dedicated to investing in the future ofcryptocurrency.
CHALLENGES IN PATENTING CRYPTOCURRENCY?
Under the Indian patent law the invention must be non-obvious,must be new, and should have industrial applicability.
Blockchain patents can be likened to softwarepatents since they attempt to protect a combination ofapplication software and cryptography. Blockchainservices are primarily based on algorithms involving mathematicaltheory and/or computer programs. Algorithms and computer programsmay not be considered as inventions within the meaning of theIndian Patents Act as per Section 3(k). Section 3(k) of theIndia Patents Act lists that 'computerprogrammes, per se' are not patentable subjectmatter.
Although this is certainly a technology that can fit under thelabel of patents if only it did not deal in crypto.Cryptocurrencies are a judicial exception under patenting law,which implies that it is not eligible.
A few examples of cryptocurrency patent applications arefollowing:
As evidenced by the complexity of each innovation, theseapplications include the inventive step. Each makes processes moreefficient or solves an industry-wide problem.
There is a need of legal practitioners in this specialized areaso that innovators are provided with quality legal advice aspatentability of block chain technology involves complicated legaland technical issues. The advent in the digital space calls for anoverhaul in the IPO guidelines and proper training of the Examinersand Legal Practitioners for both patents and trademarks so as tofully clinch the wonderful possibilities that Blockchain technologycan open up and it will be interesting to see the future trend ofgrants of patents and trademarks for Blockchain relatedtechnologies.
Further, the innovators need to be made aware that patentprotection can also be used as defence against infringement actionfiled by competitors. Therefore, the innovators in the field ofblock chain technology need to be proactive when it comes to filingpatent applications for improved techniques and systems.
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.