By Steve Snyder

As I continue to stay abreast of the latest technical developments involving computer related technology, the IP implications are becoming less clear.  Being heavily involved in cybersecurity, I have been making the case that the cybersecurity field needs IP attorneys to bridge gaps that we are used to bridging—such as being a liaison between the highly technical engineers and the rest of society.  Aside from cybersecurity, the technology I hear being discussed most is blockchain.   As you may know, blockchain is a fundamental aspect of cryptocurrencies like Bitcoin and Ethereum. However, blockchain has much broader implications that will, in my opinion, pervade the practice of IP attorneys.

There are two important aspects of blockchain as it is being used today.  The first is a concept known as hashing.  Hashing can take a sizeable input and generate a smaller unique string of characters, i.e., the “hash”, based on an algorithm that is essentially impossible to reverse.  This means you can verify the integrity of the input—i.e., that the input you are given has not been modified—by running it through the algorithm and getting the same hash.  A good hashing algorithm will produce a very different hash even when you change only a single character in the input.  Thus, hashing allows bigger chunks of data to be digested and memorialized with the knowledge that if the input produces the hash, the input is the same as it was when the hash was generated.

The second aspect, and where blockchain derives its name, is the process of serially connecting transactions to produce one verifiable ledger of all transactions to date.  This is done by employing the attributes of hashing just mentioned by taking information from the prior transaction in the hash for the current transaction.  This results in being able to ensure the integrity of not just the last transaction, but all prior transactions, because even one small change in any prior transaction would carry through in a significant way making the last hash computation incorrect.  Not only does such “chaining” preserve the integrity of all the transactions, it also acts as a timestamp as the transactions will be added to the blockchain in the order they are processed and will be indefinitely preserved that way.  Of course, the actual implementations and variants are far more complex and beyond the scope of this post.  I also left out a discussion of how encryption can be used with blockchain.  Hashing is not about confidentiality or attribution to a particular user, it simply allows people to verify that the input data they are seeing is the exact same as what was used to generate the hash.  Encryption, on the other hand, can be used to control who can make a particular transaction on the blockchain as does with Bitcoin, or also to conceal the data contents.

While cryptocurrencies like Bitcoin use the transactions solely for financial reasons, the same blockchain techniques can be used to memorialize data records.  Consider instances in patent law, where companies may want to memorialize invention disclosures, evidence of use, or evidence of publication in a way that demonstrates the document in its exact precise form existed at a particular point in time.  I can personally think of a few times over the years where there was a dispute as to when a particular document was created or published in the form it was in at the time. Blockchain makes this easily accomplishable.  In fact, one could even use the Bitcoin blockchain to do this right now if they were willing to pay to make a small transaction each time they wanted to record something.  In any case, there are many possible implementations of blockchain technology to fulfill such a goal.

Another interesting question for IP attorneys is the patentability of blockchain related technology.  Anyone who has scratched the surface on encryption and blockchain has undoubtedly run into examples using the same two individuals, Bob and …. Alice.  I could not help myself and did a little searching on the USPTO website and I have to give a tip of the hat to whoever prosecuted U.S. Patent No. 9,705,851 that uses an Alice example in a patent that mentions blockchains and claims a “method of providing data.”   I will leave it to those with more prosecution experience than me to noodle on where the bounds of blockchain patentability lie.

In any case, I believe blockchain technology is in its infancy and there will be many more applications realized in the next few years.  So, if you are technically inclined or just curious, now is a good time to learn more about it and follow its development.