Will Patent Wars Bog Down the Blockchain Movement?
As we've reported, if you ask some people, they'll tell you that the concept of the Blockchain is as dramatic as the creation of the Internet. A continuously growing group of top technology and finance companies including IBM, Wells Fargo and the London Stock Exchange Group is partnering and working with The Linux Foundation to advance blockchain technology, which is central to how many businesses process transactions.
Blockchain initiatives have stayed closely tied to the open source community so far, and The Linux Foundation has done an outstanding job as steward of key initiatives, but some are questioning just how open the blockchain arena might actually stay going forward. Are we about to see a slew of blockchain patents come down the pike?
The Hyperledger Project, a collaborative cross-industry effort created to advance blockchain technology, has remained quite open thus far. According to project leaders:
"By creating a cross-industry open standard for distributed ledgers, any digital exchange with value can securely and cost-effectively be tracked and traded."
"Working towards an automated, more secure, reliable and transparent way of exchanging and tracking data and assets, new members join an already diverse group across finance, banking, Internet of Things, supply chains, manufacturing and other technologies."
But, as Fortune notes, Blockchain technology is at a crossroads where we may witness some patent wars arriving:
"On one hand, the technology, which promises to revolutionize record-keeping in businesses like banking and farming, is more open than ever with firms including Chain and R3 saying they would make their blockchain software code open to the public."
"But there is another force at work that could close off access to the technology. That force comes in the form of patents as big banks and others file applications that seek 20-year monopolies over various aspects of blockchain."
"The most prominent example is an application in which Goldman Sachs seeks a patent for “processing financial transactions using a … distributed ledger … [to] store a portion of the ledger corresponding to a respective asset” — in other words, using blockchain tools to settle transactions."
There are of course, key players who can help keep the blockchain ecosystem open, but proprietary interests are already emerging. Fortune also noted that Bank of America, Morgan Stanley and other institutions have filed for patents. Stay tuned for more.