Overcoming roadblocks to blockchain inventions

By Cici Cui, Rob Vienet
Intellectual Property Patents & Trade Marks

Patenting blockchain inventions 2 min read

In welcome news for technology innovators, a delegate of the Commissioner of Patents recently determined that certain blockchain inventions constituted patentable subject matter.

Key takeaways

  • Blockchain inventions, as computer implemented inventions, are not inherently unpatentable.
  • According to Delegate Subbarayan, computer implemented inventions can constitute patentable subject matter even if they only utilise generic computer implementation (and particularly if the inventions provide a technical solution).
  • However, it is unclear whether the delegate would have reached a different conclusion if he had the benefit of more recent legal authority which emphasised the need for computer implemented technologies to represent an advance in computer technology.

Who in your organisation needs to know about this?

Legal counsel; patent attorneys; innovators in technology.

Blockchain technologies 

Building blocks to blockchain technologies

Broadly speaking, blockchain technologies provide a means of recording, verifying and disseminating information across a network. They typically include the features described below.

  • Peer-to-peer networks which comprise a number of nodes between which information – such as transaction data – can be recorded, verified and disseminated.
  • Storing information across that network in segments (ie blocks) that are sequentially linked together (ie in a chain).
  • Each node contains identical copies of the chain of blocks (ie the blockchain) which are continuously updated and disseminated across the network.
  • Certain algorithms prescribe the circumstances in which further blocks of information can be added to the blockchain. Generally speaking, the nodes across the network must reach 'consensus' that the proposed addition to the blockchain is valid before such addition is accepted as valid. This occurs via mathematical calculations and by reference to the digital copies of the blockchain which each node contains.
Patentable subject matter

Recently, blockchain inventions were the subject of two separate decisions before the same delegate of the Commissioner of Patents. Those decisions are Advanced New Technologies Co. Ltd. [2021] APO 29 and Commonwealth Scientific and Industrial Research Organisation [2021] APO 43.

The patent application in the first decision purported to minimise the risk of security breaches with respect to private and confidential information in the blockchain. In essence, the claimed invention avoided the recording and dissemination of raw transaction data across the entire network by irreversibly converting the raw information into a non-recognisable form which was then used to confirm consensus between nodes.

The patent application in the second decision purported to improve the ability of an entity to monitor the compliance of other entities that were a party to a process in a way which would not cause the monitoring entity to reveal its own confidential information. The claimed invention did so by, among other things, utilising blockchain technologies to compare the actions of the monitored entity against a machine-readable version of the desired process.

In each decision, the delegate considered that blockchain inventions are computer implemented technologies that are not inherently unpatentable. Notwithstanding that the claimed inventions utilised generic computer implementation and were not necessarily directed to solving a technical problem, the delegate considered that the claimed inventions constituted patentable subject matter for the principal reason that they each provided a technical solution to a problem.

Other considerations

Though these decisions are certainly welcome news for technology innovators, we note the following precautions.

  • First, though the patent applications satisfied the manner of manufacture requirement under s 18(1)(a) of the Patents Act 1990 (Cth) (the Act), the delegate remitted each patent to examination on suspicion that the inventions were obvious and therefore invalid under s 18(1)(b) of the Act.
  • Secondly, the delegate delivered the decisions before the Full Federal Court of Australia delivered their judgments in Commissioner of Patents v Aristocrat Technologies Australia Pty Ltd [2021] FCAFC 202 (per Middleton, Perram and Nicholas JJ) and Repipe Pty Ltd v Commissioner of Patents [2021] FCAFC 223 (per Perram, Nicholas and Burley JJ). Those decisions emphasise that computer implemented inventions must represent an advance in computer technology (and not merely provide a technical solution to a problem which does not lie in the field of computer technology).

Altogether the decisions indicate that blockchain inventions (as computer implemented inventions) are not inherently unpatentable. However, patentability under s 18(1) of the Act might require more than the mere provision of a technical solution. This is particularly so if the problem which the invention solves does not lie in the field of computer technology.

Actions that you can take now

A patent specification directed to a computer implemented invention should be drafted in a way which emphasises that the invention, as a matter of substance and not merely form, represents a technological advancement in response to a technical problem.