Abstract
The rapid development of blockchain technology demands more sophisticated protection mechanisms. To address challenges like vague legal protection scope, insufficient safeguards, and uneven technological advancement across sectors in China, improving patent protection pathways that align with blockchain's operational principles has become crucial. Our research demonstrates that blockchain technology must meet two fundamental patentability standards: eligibility criteria for patentable subject matter and substantive examination conditions. The study proposes appropriately relaxing subject matter eligibility standards while implementing stricter substantive examination requirements—refining utility standards, enhancing creative judgment capabilities, and clarifying the role of secondary considerations in creativity assessment—to prevent potential pitfalls in blockchain patent protection.
1 The Blockchain Boom and Its Legal Protection Dilemma
Blockchain, also called Distributed Ledger Technology (DLT), enables decentralized, trustless data transmission and recording through specific incentive mechanisms that mobilize network nodes to collectively maintain an immutable database.
Originating from 1997 research by Haber and Stornetta on digital timestamping for document authentication[1], blockchain gained traction after Bitcoin's 2008 launch. Its innate compatibility with financial applications spawned innovations like Ethereum and Hyperledger by 2014[2]. By 2017, blockchain applications expanded beyond finance, earning recognition as a core innovation driver due to its decentralization, tamper-resistance, and distributed sharing features[3].
This technological surge triggered intense global patent competition—the U.S. began blockchain patent filings in 2011, while China followed in 2013[4]. Current blockchain patents cover:
- Foundational technologies (data layers, consensus mechanisms, networking protocols)
- Application technologies (smart contracts, incentive systems)
However, with only 2,667 authorized patents globally by 2020 (merely 15% of 18,000+ applications)[5], establishing appropriate intellectual property protection frameworks has become imperative.
2 Comparative Analysis of Blockchain Protection Pathways
2.1 Trade Secret Protection: The Innovation Lockdown
While blockchain code may qualify as trade secrets, this approach contradicts blockchain's decentralized ethos by:
- Creating proprietary barriers in public/permissioned chains
- Lacking enforceable exclusivity against reverse engineering
2.2 Copyright Limitations: Form Over Function
Copyright protects code expressions but not underlying technical concepts—allowing competitors to replicate functionality through different implementations without infringement.
2.3 Trademark Inadequacy: Symbolic Protection
Trademarks safeguard brand identifiers rather than technological innovations, offering minimal defensive value against patent claims.
2.4 Patent Protection: The Optimal Solution
Patent law uniquely protects technical solutions at the conceptual level through:
- Time-limited monopolies in exchange for disclosure
- Mechanisms preventing technology hoarding (e.g., compulsory licensing)
- Standard-essential patent considerations for global competitiveness
3 Patent Eligibility Standards for Blockchain
3.1 Subject Matter Examination
China's strict "technical solution" requirement (Patent Law Article 2) poses challenges for blockchain innovations combining algorithms and business methods. Recommended improvements include:
- Adopting the EU's bifurcated approach (liberal eligibility + rigorous creativity examination)
- Incorporating the U.S. "significantly more" test (Alice Corp. v. CLS Bank) for abstract concept differentiation
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3.2 Public Interest Considerations
While most blockchain applications qualify, exceptions include:
- Illegal cryptocurrency schemes violating financial regulations
- Technologies threatening public order/morality
3.3 Software Patent Nuances
Unlike conventional software patents, blockchain inventions require:
- Concrete technical problem-solving applications
- Demonstrable interactions between algorithmic and technical features
4 Substantive Examination Conditions
4.1 Utility Standards
Current utility assessments need refinement to address:
- Blockchain's decentralized nature versus centralized governance models
- Evolving regulatory expectations about technological benefits
4.2 Novelty Assessment
Examiners must apply the "whole contents" approach while maintaining:
- Single-document prior art comparisons
- Technical feature-by-feature analysis
4.3 Creativity Evaluation
4.3.1 Person of Ordinary Skill Adjustments
Chinese examiners should emulate the KSR v. Teleflex "ordinary creativity" standard—recognizing that skilled technologists possess basic innovative capacity.
4.3.2 Secondary Considerations Enhancement
Factors like commercial success and unexpected technical effects should carry greater weight in blockchain cases to:
- Mitigate hindsight bias
- Validate real-world innovation impact
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5 Conclusion
Blockchain patentability hinges on progressive analysis of:
- Subject matter eligibility (avoiding exclusions while demonstrating technical character)
- Substantive conditions (utility, novelty, non-obvious creativity)
As blockchain evolves, patent standards must dynamically adapt—balancing innovation incentives with quality control through:
- Flexible subject matter interpretation
- Contextual creativity assessments
- Enhanced examiner technical training
FAQ
Q: Can pure blockchain algorithms receive patents?
A: Only when integrated with concrete technical applications that produce tangible improvements.
Q: How does China's approach differ from the U.S.?
A: China maintains stricter technical solution requirements versus the U.S.'s more flexible "significantly more" standard for abstract concepts.
Q: What blockchain elements are unpatentable?
A: Illegal applications (e.g., unauthorized cryptocurrencies) and abstract mathematical methods without technical implementation.
Q: Why is patent protection superior for blockchain?
A: It safeguards core innovations (unlike copyright), prevents technology lockdown (unlike trade secrets), and supports standardization efforts.
Q: How can blockchain patents demonstrate creativity?
A: Through technical synergy evidence, solution unpredictability, or demonstrated commercial adoption.
Q: What's the biggest patent challenge for blockchain startups?
A: Navigating global differences in subject matter eligibility while meeting rigorous utility requirements.
[1] Haber S., Stornetta W.S. Secure names for bit-strings. Proceedings of the 4th ACM Conference on Computer and Communications Security. 1997.
[2] Huawei Technologies. 2018 Huawei Blockchain White Paper. 2018.
[3] Xi Jinping. Emphasizing blockchain as core innovation breakthrough at 18th Politburo study session. Xinhua News. 2019.
[4] China National Intellectual Property Administration. Industrial Patent Analysis Report (Vol.66): Blockchain. 2019.
[5] China Patent Protection Association. 2020 Global Authorized Blockchain Patent Report. 2020.