AN INSIGHT INTO BLOCKCHAIN AND IP'S CRYPTIC RELATIONSHIP

INTRODUCTION

Blockchain has been one of the most exciting and emerging technologies in recent times garnering a plethora of attention from various market players such as financial institutions, healthcare providers, start-ups, sovereign governments, etc. Blockchain technology has immense potential which can be harnessed in several sectors such as banking, supply chain, healthcare, retail, travel, etc. Consequently, with the advent of Blockchain technology, its interplay with patent and trademark law is rapidly increasing.

Before diving into the interplay of trademark and patent law with Blockchain, it is imperative to define what exactly is the concept of Blockchain. “A Blockchain is a digital, immutable, distributed ledger that chronologically records transactions in near real time. The prerequisite for each subsequent transaction to be added to the ledger is the respective consensus of the network participants (called nodes), thereby creating a continuous mechanism of control regarding manipulation, errors, and data quality.”[1] Blockchain is of three types: public, permissioned and private. As the name suggests in a public Blockchain anyone from around the world can participate whereas in a private blockchain only the chosen participants can participate and authenticate the transactions.

TRADEMARKS AND BLOCKCHAIN

Trademarking Blockchain related technology is tricky considering that anonymity or pseudo anonymity is at the heart of Blockchain related technology, which directly clashes with trademark law wherein the point of a trademark is to identify the particular source wherefrom the goods or services originate. Public Blockchain related technologies are built on the decentralised system wherein the Blockchain is not owned by any one particular entity. The community based Blockchain thrives on participation by the public and such participants cannot be identified as Applicants’ of the trademark as the participants can change at any point of time. Further, in several countries, cryptocurrencies, which have been one of the most popular uses of the Blockchain related technologies, have been declared illegal. In India, though the Supreme Court of India has lifted the blanket ban imposed by the RBI (Reserve Bank of India) on virtual currencies, however in the same breath the Supreme Court has cleared the way for RBI to formulate stringer policies while admitting that the RBI has the authority to regulate cryptocurrency.[2]

Therefore, trademarking Blockchain technologies/ cryptocurrencies which are decentralised may be difficult owing to the above challenges. However, the name of a centralised cryptocurrency which emanates from and is distributed by one single source can be protected. It is pertinent to note that the terms ‘BLOCKCHAIN’ and ‘BITCOIN’ have been granted registration by the Indian Trademark Office as per the details below:

PATENTS AND BLOCKCHAIN

Patents for Blockchain based technology come within the realm of computer software as it involves the combination of a computer application and cryptography. However, vide Section 3(k) of the Indian Patents Act, 1970, computer programme per se is non- patentable in India. In the case of Telefonaktiebolaget Lm Ericsson v. Intex Technologies[3], the Delhi High court while interpreting the term per se stated, “any invention which has a technical contribution or has a technical effect and is not merely a computer program per se” is patentable. This interpretation was once again upheld by the single judge of the Delhi High Court in Ferid Allani vs Union Of India & Ors.[4] ,wherein it was held “If the invention demonstrates a “technical effect” or a “technical contribution‟ it is patentable even though it may be based on a computer program.” Further, the judge also observed, “Innovation in the field of artificial intelligence, blockchain technologies and other digital products would be based on computer programs, however the same would not become non- patentable inventions - simply for that reason.”

Thus, as long as the Blockchain technology has a technical effect or a technical contribution and is not merely a computer software, it may be considered to be a patentable subject matter. Apart from being a patentable subject matter, it is necessary that the Blockchain technology passes the tri- test of novelty, non- obviousness and industrial application. Though there is no doubt of the industrial application of Blockchain technology as it can be seen in the form of cryptocurrencies, smart contracts etc., there can be hurdles in passing the test of novelty and non- obviousness. Blockchain in itself is said to have limited novel features as Blockchain is an already established medium for conducting transactions.[5] Therefore, for the innovators it is advisable that they direct the existing Blockchain medium towards new technologies, or towards improvements in the computer functionality or the underlying Blockchain technology itself in order to obtain patents. The Indian IPO appears to be welcoming Blockchain related Patents as in the year 2018, India was ranked at number 6 in the number of Blockchain based patent approvals with 67 Patent applications being approved.[6] As on today there are more than 300 published Patent Applications based on Blockchain technology in India.

It is interesting to note that the Indian Intellectual Property Office (IPO) is itself open to embracing Blockchain related technologies to expedite and strengthen its processes. In 2018, the office of the Controller General of Patents, Designs and Trademarks floated a tender inviting eligible parties to submit their proposals for making use of Artificial Intelligence, Blockchain, IoT and other technologies in the Patent Processing System of the IPO.[7] From the tender it can be gathered that the IPO intends to utilize Blockchain based technology to streamline the registration process by encouraging information sharing by the rights holders.

CONCLUSION

The advent in the digital space calls for an overhaul in the IPO guidelines and proper training of the Examiners and Legal Practitioners for both patents and trademarks so as to fully clinch the wonderful possibilities that Blockchain technology can open up and it will be interesting to see the future trend of grants of patents and trademarks for Blockchain related technologies.

[1]https://www2.deloitte.com/content/dam/Deloitte/de/Documents/technology-media-telecommunications/PoV_Blockchain_Media_interaktiv.pdf

[2]https://www.livemint.com/opinion/columns/what-the-top-court-s-order-means-for-virtual-currencies-11584474850149.html

[3] I.A. No. 6735/2014 in CS(OS) No.1045/ 2014

[4] W.P.(C) 7/2014 & CM APPL. 40736/2019

[5]https://ipspotlight.com/2018/01/18/intellectual-property-strategies-for-next-generation-cybersecurity-technologies/

[6]https://inc42.com/buzz/blockchain-this-week-india-ranked-6th-in-the-no-of-blockchain-patent-approvals-and-more/

[7] http://www.ipindia.nic.in/writereaddata/Portal/Tender/175_1/1_Expression_of_Interest-AI-02-08-2018.pdf

The article was originally published in www.lexology.com on July 10, 2020 and can be accessed here.