Blockchain Patent Wars Heating Up Among Big Banks

Some of the largest banks already involved in blockchain development are now in a race to snatch up patents from the technology, reports said.

The Boston Globe reported Wednesday (Dec. 28) that Bank of America and Goldman Sachs are just two of the top banks to begin pursuing the acquisition of blockchain patents. Doing so could give them a competitive advantage, reports said, as many developers of blockchain-based solutions depend on open-source technology technically owned by someone else.

According to law firm Reed Smith, the number of patents pursued by businesses has just about doubled through November since the beginning of 2016. Failing to grab up those patents, some experts say, could mean trouble ahead.

“Open-source code — that doesn’t necessarily restrict the ability to patent the underlying innovation,” Patrick Murck, a blockchain legal expert at Cooley LLP, told the publication. “Anybody who’s investing in the ecosystem, anybody who’s interested in the technology should be worried about this.”

Earlier this year, Verizon Communications filed for its own blockchain patent. Mastercard is another top financial services player looking to grab blockchain patents. The firm’s head of payments innovation at Mastercard Labs, Justin Pinkham, said the company has been filing patents to protect the blockchain inventions developed by the company. According to Pinkham, Mastercard has already filed more than 30 patents pertaining to blockchain.

“We have expanded our patent portfolio to protect the company’s thinking, innovations and intellectual property,” he told the newspaper.

And as blockchain technology continues to shift center stage for FinTech innovators, the legal challenges associated with open-source technology — which many blockchain solutions are built on — is likely to reach a fever pitch in the near future.

“We are seeing an increase in filings that’s exponential,” reflected Reed Smith’s Marc Kaufman. “I predict that we’ll see in five years thousands of patents. It’s an emerging risk, no doubt about it.”