Twitter is defending its patents, Square has formed a consortium that includes Coinbase, to standardize cryptocurrency patents, and Alibaba is moving steadily toward its mission to bypass IBM in the blockchain patent war.
Many startups fail to take the necessary steps to protect their innovations, and that’s a big mistake. Especially in the blockchain, an open source philosophy embedded in the space forces many entrepreneurs to avoid the competitive regional landscape of patent applications. In fact, many startups believe that patents cannot be applied to autonomous, decentralized technologies. this is not true. By keeping their distance, they are doing harm to themselves and society.
If founders and entrepreneurs move away from patents, they will lose the benefits of their innovations and inventions to the tech giants, which will unfortunately dislodge them and absorb more markets.
Blockchain companies should also be careful about stealing their ideas. Steve Jobs, the late Apple CEO once said:
“We have always shamelessly robbed us of good ideas.”
In 2017, the Wall Street Journal wrote that the new slogan for Facebook employees is “Don’t be proud to copy.” But so far, there is evidence that very few blockchain startups are paying enough attention to potential threats.
In our patent study, we found that the number of blockchain patents is growing rapidly. In the first half of 2020, more blockchain-related patents were published compared to the whole of 2019, resulting in three times as many blockchain patents being published compared to 2018. Alibaba and IBM are the best patent issuers, and the Chinese giant is on the way. Correct to beat its American rival. Mastercard said in a recent profit statement that it has pooled blockchain patents for payments that make it possible to tap into central banks’ appetite for digital currencies.
While the largest companies want to expand into new markets, only the blockchain-based companies have not applied for patents.
One of the most important strategic decisions a company can make is obtaining a patent. The grant of a patent affects the value of the company. Not only does it protect it from counterfeiters, it also prevents others from accessing a specific market.
The issue of patent applications can be controversial in a room filled with a passion for cooperation and decentralization. But the relationship is not monolithic, and in recent years I’ve seen more recognition that blockchain companies cannot ignore patent wars.
Of course, there will always be people who will oppose anything related to patents, which is respectful. The problem is that it helps multinational companies pave the way for technology dominance.
At the other end of the spectrum, pragmatic business leaders have decided that the world of innovation will always be associated with patents. They may be in the minority at this point, but they are determined to apply for patents and defend their ideas and potential advantages.
Third, it is a group in the golden mean. They maintain the open source philosophy, but make practical decisions from the real world. Given the balance of interests in the industry, their interests are the best way forward. Blockchain companies should play the defense.
The defensive model is illustrated here by Red Hat, who admires the open source. Red Hat has been a center of invention and Linux innovations that are protected from patent attacks. Following this model means that companies can obtain patents and then merge them, which gives the numerical strength to defend themselves against large firms, while retaining flexibility in using patents.
Twitter has also been a pioneer in defensive patents, creating a patent agreement for the innovator with a clear goal: “Patents will only be used as a shield, not as a weapon.” Twitter CEO Jack Dorsey also chairs payments company Square, which has formed a consortium of blockchain companies to standardize patents and create unified protections in the event that big tech companies try to take advantage of the innovation. Coinbase was one of the first major blockchain companies to join the Cryptocurrency Open Patent Alliance.
This display of collective strength is a step in the right direction. If blockchain companies truly start enjoying the benefits of patents, they will be able to identify business growth strategies armed with the knowledge and confidence that no one can steal their invention.
Patents can help make blockchain companies commercially viable. This is beneficial for companies, the blockchain industry, and a world that wants to enjoy the fruits of innovation.