Blockchain

PTAB Decision Highlights Blockchain Patentability

Blockchain patent functions could also be divided into two sorts: underlying applied sciences of blockchain, akin to consensus strategies, safety, and many others., and functions of blockchain in, e.g., fintech, authorized, and different industries. In patent examination, the primary kind, as a result of it recites underlying know-how enchancment, hardly ever elicits material rejections. The second kind, functions of blockchain, are sometimes discovered to be directed to an summary concept. This text analyzes a current Patent Trial and Enchantment Board (PTAB) choice in a blockchain patent utility and explores drafting and prosecution methods to anticipate material scrutiny.

Patent Eligibility Underneath the U.S. Patent System

An invention, to be patent-eligible, should first fall inside one of many 4 enumerated classes of patentable material recited in 35 U.S.C. § 101 (i.e., course of, machine, manufacture, or composition of matter). See MPEP § 2106.04. Although nearly all blockchain patent functions move this primary step, some face scrutiny beneath the second step of the § 101 summary concept exception evaluation.

The USPTO primarily splits the second step into 2A (is the declare directed to an summary concept (a judicial exception)?) and 2B (does the declare recite extra components that quantity to considerably greater than the judicial exception?). Step 2A additionally has two prongs. For blockchain utility, the primary prong primarily is to find out whether or not the claims recite an summary concept, i.e., (1) mathematical ideas; (2) sure strategies of organizing human exercise; and (3) psychological processes. If a blockchain patent utility will not be directed to any of those classes, it is going to most probably be patent-eligible. In any other case, the subject material evaluation proceeds to the second prong, the place the Examiners are to find out if the exception is built-in right into a sensible utility. To this finish, the Examiners ought to (1) establish whether or not there are any extra components past the summary concept, and (2) consider these components to find out whether or not they combine the exception right into a sensible utility. Two examples of sensible utility offered by the USPTO are most related to blockchain patent functions: (i) an enchancment in laptop functionalities, and (ii) limiting the judicial exception in another significant means past usually linking to a technological surroundings. See MPEP § 2106.04(d)(I).

Lastly, even when the claims don’t move Step 2A, they’re analyzed beneath Step 2B, the place the Examiner should decide if there’s an ingenious idea such that the extra components recited within the claims present considerably greater than the judicial exception.

Enchantment 2019-004127 (Determined August 19, 2020) Resolution: 35 U.S.C. § 101 rejection of claims 1-16 reversed

This case entails the PTAB’s reversal of the § 101 rejection of claims 1-16 within the 14/719,030 patent utility. This patent utility pertains to “the linking of blockchain transactions to privately verified identities, particularly the affiliation of a blockchain transaction to a shopper or service provider related to a transaction account primarily based on transaction information and saved account profiles.” The appliance acknowledges disadvantages of blockchain transactions akin to lengthy processing time, payee’s lack of ability to establish payor, and sole reliance on digital credentials to ascertain possession to digital currencies. The invention addresses such points by combining the blockchain community and the normal fee community.

Declare 1 of the appliance reviewed by the PTAB recites:

1. A way for linking blockchain transactions to privately verified identities, comprising:
[A] storing, in an account database of a pc system, a plurality of account profiles, whereby every account profile consists of information associated to a transaction account together with not less than an account identifier and account information;
[B] receiving, by a receiver of the pc system, a transaction message by way of a fee community, whereby the transaction message is formatted primarily based on a number of requirements and features a plurality of information components together with not less than a primary information aspect configured to retailer a private account quantity, a second information aspect configured to retailer a service provider identifier, and a 3rd information aspect configured to retailer not less than a blockchain community identifier and the place the third information aspect or a fourth information aspect is configured to retailer a digital signature;
[C] figuring out, by a processor of the pc system, a primary account profile saved within the account database the place the included account identifier corresponds to the non-public account quantity saved within the first information aspect included within the acquired transaction message, and whereby the primary account profile features a public key;
[D] figuring out, by the processor of the pc system, a second account profile saved within the account database the place the included account identifier corresponds to the service provider identifier saved within the second information aspect included within the acquired transaction message;
[E] receiving, by the receiver of the pc system, a transaction notification, whereby the transaction notification signifies a transaction processed utilizing a blockchain community related to the blockchain community identifier saved within the third information aspect included within the acquired transaction message and consists of not less than a transaction identifier and an tackle identifier related to one of many first account profile and the second account profile, and the place the tackle identifier is generated utilizing the general public key;
[F] verifying, by the processor of the pc system, the digital signature utilizing the general public key included within the first account profile; and
[G] storing, by the processor of the pc system upon verification of the digital signature, a linkage between the transaction identifier included within the acquired transaction notification and not less than one among: the tackle identifier, the non-public account quantity, and the service provider identifier.

(Emphases and labels of declare limitations added)

Underneath Step 2A Prong 1, the PTAB agreed with the Examiner on discovering the claims directed to an summary concept of storing information, receiving information, figuring out information, and verification. The PTAB additional agreed with the discovering of the claims directed to sure strategies of organizing human actions, specifically “industrial transaction processing akin to blockchain fee transaction, utilizing each normal fee and blockchain fee components to confirm the identification of the payor.” Accordingly, the PTAB decided the claims to recite basic financial apply, which is an summary concept.

Underneath the identical prong, nonetheless, the PTAB rejected the Examiner discovering that the claims have been additionally or alternatively directed to psychological processes. The PTAB sided with the Appellant who argued that “the claims recite the express use of quite a few applied sciences that can not be carried out by human work or mentally, even given a major period of time,” as a result of “digital signatures are of adequate information dimension and complexity to not be understood by human psychological work, not to mention verified by way of using a public key and overly complicated (by design) signature algorithms” and that “transaction messages are processed in speeds that need to be measured in nanoseconds for community reliability and because of the overwhelming variety of transaction processed every day, necessitating using specialised laptop techniques, which is inconceivable to duplicate by way of human psychological work.” In one other phrase, performing the claimed invention with the human thoughts is impractical.

Transferring on to Step 2A Prong 2, the PTAB recognized extra components integrating the summary concept right into a sensible utility that mixes benefits of each blockchain processing system (e.g., anonymity) and normal fee processing system (e.g., velocity, safety, fraud prevention).

When figuring out extra components past the summary concept, the Examiner solely discovered “a database,” “a pc system,” and “a processor” are positively recited within the claims. Though indirectly addressing the optimistic recitation situation, the PTAB agreed with the Appellant and acknowledged the ordered mixture of “an account database,” “a receiver of the pc system,” “a fee community,” “a processor,” and “a blockchain community” to represent the extra components. The PTAB agreed that the claims require utilizing each networks (i.e., the usual fee community and the blockchain community) with the pc system to make sure that the social gathering within the submitted transaction message was a celebration to the blockchain transaction. Accordingly, the PTAB included “a fee community” and “a blockchain community” within the following analysis of the extra components.

When figuring out whether or not the extra components combine the summary concept right into a sensible utility, the Examiner concluded that the database, the pc system, and the processor merely served as instruments for implementing the summary concept and don’t enhance the features of the pc system or in any other case. The PTAB, however, centered on enhancements to the technological area of blockchain transactions carried out utilizing computer systems, such that the blockchain system can purchase the benefits of velocity, safety, and fraud prevention of the usual fee processing system. To perform these enhancements, the Appellant contended that the ordered mixture of the extra components hyperlinks blockchain transactions to privately verified identities. Particularly, the PTAB agreed with the Appellant that the claims “provid[e] the safety of ordinary fee processing techniques (e.g., by figuring out first and second account profiles in limitations C and D of declare 1), and the privateness of blockchain fee transactions (e.g., through the use of a blockchain community to generate an tackle identifier utilizing a public key in limitation E of declare 1), to confirm a digital signature (e.g., limitation F of declare 1) saved in information components of a receiver of the pc system (e.g., limitation B of declare 1) that’s a part of the account database (e.g., limitation A of declare 1).”

General, the identification of the 2 networks as extra components and clear assist for the enhancements to the blockchain system look like the important thing for the PTAB to seek out for the Appellant.

Conclusions

As proven by the reasonings above, blockchain functions by nature can hardly be directed to psychological processes. Reciting options akin to digital signature and consensus verification in claims could make it seem even much less accomplishable with pen and paper in apply.

Enchancment to laptop performance such because the safety and velocity of processing blockchain transactions is more likely to be acknowledged as a sensible utility. Particularly, enhancing the blockchain community with a regular kind of laptop community will probably be discovered as a sensible utility. It is necessary for blockchain patent drafters to consider how the mixing of various laptop networks improves the performance of every community and clarify clearly within the specification.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.Nationwide Regulation Evaluate, Quantity XI, Quantity 62

Lastly, even when the claims don’t move Step 2A, they’re analyzed beneath Step 2B, the place the Examiner should decide if there’s an ingenious idea such that the extra components recited within the claims present considerably greater than the judicial exception.

Source: https://cryptonewsbtc.org/2021/03/04/ptab-decision-highlights-blockchain-patentability/

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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