Lawyer Monthly Magazine - March 2019 Edition

45 XXX FEB 2019 www. lawyer-monthly .com www.lawyer-monthly.com World Report - Asia & Australa- sia MAR 2019 Michael R. Casey, Ph.D., Patenting blockchain is different than patenting a number of other engineering techniques because it is a technology that can underlie the solutions to so many different problems. Not only can it be used to track and control the exchange of cryptocurrencies like bitcoin, but it can also be used to track and control any kind of information (e.g., financial and medical information; or where goods and foods were manufactured or grown). As the technology is spurring innovation in so many different areas simultaneously, the Patent Offices in various countries are going to have to give increased scrutiny to whether there are yet unpublished patent applications that they do not yet know about that may predate the patent applications they are currently examining. Also, searching for earlier publications may be more difficult as innovations in the technology may come from very different industry sectors. For example, while innovations in farm equipment may traditionally come from known farm equipment manufacturers and patent examiners know to consult the pending applications of those manufacturers before granting patents in that area, for some blockchain patents the innovation may come from a different industry. So, a patent examiner looking for patent applications relating to a medical record system that reliably stores patient information may not know to look for the patent applications of a designer goods company that is building a database of luxury goods that have been sold to reduce counterfeiting -- even though both problems actually can use blockchain-based systems for the underlying data tracking. In addition, unlike technologies that relate to database servers that run in one place at a time, such as in the United States, one of the main benefits of blockchain-based systems is that they utilize a distributed network of computers, not all of which are necessarily going to be in a single country or governed by a single set of patent laws. What is the process if someone violates said Blockchain patent? Is the process the same? Under US law, the process of enforcing a blockchain patent starts with filing a complaint in a U.S. Federal Court alleging that one or more named defendants infringe the patent. However, as noted above, not all of the participating nodes that are keeping redundant copies of the underlying data need to be in the same country, and it is an open question about how a Court might handle a situation where a named defendant has intentionally distributed its network so that no two servers implementing the blockchain ledger are in the same country for patent infringement purposes. How will the Patent Office and respective regulatory bodies decipher between advanced tech in this field and decide whether to grant the patent? The U.S. Patent and Trademark Office (USPTO) is the only US regulatory body to decide whether to grant a patent, and it will do so by reviewing what technology pre-existed before the patent blockchain patent applications were filed. If it determines that the patent application represents a nonobvious improvement over previous technology, then it can grant the patent. However, given how relatively new the blockchain technology is, the USPTO may not have a sufficiently complete repository of blockchain publications to really know “what technology pre-existed before the patent blockchain patent applications were filed”. The USPTO may need to rely on the public (e.g., by setting up information sharing programs) to help it determine “what technology pre-existed before the patent blockchain patent applications were filed.” Should lawyers become part programmers? Why? Blockchain-based systems can implement “smart contracts” which are self-executing agreements based on conditions specified when the contract was agreed to by the parties. This process is fine when the code to implement the transaction matches the intent of the parties, but what if it doesn’t and the parties have had a lawyer review the smart-contract. Is the lawyer liable for legal malpractice or is this a liability that will be incurred by the programmers involved with the implementation of the contract? For example, although this is overly simplistic, Party A and Party B want to enter into a contract that implements the agreement that Party A will sell 100 shares of Company X to Party B for $1,000 if the stock price of Company X reaches $10. If the smart contract is mis- programmed and the payment goes to Party C instead or Party B’s account is debited $10,000 and then Party A refuses to return the additional $9,000, who is responsible? So, if lawyers are going to review smart contracts, they will need to be part programmer to be safe. LM MICHAEL R. CASEY With more than 20 years of experience in patent law including experi- ence in patent prosecu- tion, post grant proceed- ings, patent litigation, and patent interferences, Dr. Casey’s practice fo- cuses on all aspects of computer hardware and software, as well as cir- cuit design and telecom- munications. Dr. Casey has experi- ence representing and counseling telecom- munications, electronics and computer-technolo- gy clients -- both foreign and domestic -- on intel- lectual property law and related issues, including procurement, valuation, licensing and enforce- ment of intellectual prop- erty. His representations include intellectual prop- erty strategies; drafting patent opinions relat- ing to invalidity, non-in- fringement, and product clearances; patent prep- aration and prosecution (U.S. and foreign); patent interferences; and patent litigation and trial prac- tice, including appellate work before the Federal Circuit. Michael R. Casey, Ph.D. Partner mcasey@oblon.com US Office Tel: (703) 412-6011 Fax: (703) 413-2220 www.oblon.com