PTO’s Handling of Patent Eligibility for Blockchain Applications | Kramer Levin Naftalis and Frankel LLP

PTO’s Handling of Patent Eligibility for Blockchain Applications | Kramer Levin Naftalis & Frankel LLP

After reviewing the First District court case on 35 U.S.C. 101 for a blockchain patent, we needed to check in and perceive how the U.S. Patent and Trademark Office (PTO) has been dealing with blockchain-related patent applications. Specifically, over the course of the last year, the Patent Trial and Appeal Board (PTAB) has given a few choices on allures of inspector dismissals of blockchain licenses under Section 101. Of these, the PTAB has not switched any dismissals made on Section 101 grounds: https://developer.uspto.gov/ptab-web/#/search/decisions (search “blockchain”). This, obviously, doesn’t imply that no blockchain licenses are being given; it just implies that the choice to dismiss cases of specific patent applications is left in the analysts’ hands. Nonetheless, this uniform affirmance of the dismissals of blockchain applications isn’t surprising given the refreshed PTO Section 101 direction distributed in January of 2019 and the ongoing conflicting treatment of Section 101 in the courts. See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019). Given the current vulnerability in the law, the PTAB seems, by all accounts, to be passing on the choice to the inspectors, who are nearest to the genuine topic of the applications — and which might appear to be the most secure strategy for the PTAB.

A ongoing choice that reveals some insight into this steady affirmance of 101 dismissals for blockchain applications is Ex parte McCann, No. 2021-003397 (P.T.A.B. Walk 7, 2022). There, the PTAB evaluated guarantee 1 of the ‘824 application and found it coordinated to the theoretical thought of “certain methods of organizing human activity as exemplified by the commercial and legal interaction of managing commercial payment transactions by advising one to process payments with an available payment instrument and post the payment to a ledger, without significantly more.” Id. at 20. The PTAB made sense of why the cases were ineligible, despite the fact that the cases incorporate a presentation of a blockchain and cryptographic data:

As to the presentation of a square chain [sic], a square chain fundamentally is nonexclusive and customary and is basically a bookkeeping record. The cases discuss no mechanical execution subtleties. Rather the cases present something like the calculated thought of utilizing a square chain for capacity. Litigant [sic] don’t battle they developed block chain technology.

Similarly, the presentation of cryptographic information is both nonexclusive and regular. Such presentation does something like summon the calculated thought of cryptography without discussing any innovative application or execution details.

Id. at 14-15. The PTAB proceeded to find that the cases neglect to give a creative idea since they don’t give essentially more than the recounted unique thought. Id. at 17-19. The PTAB found that when the cases are investigated independently and as an arranged mix, they are “purely conventional” and common. Id. at 17-19.

This choice is enlightening for how to continue before the PTO. Specifically, one ought to be careful about conjuring blockchain innovation as an approach to further developing current strategic policies. All in all, guarantees that take a current monetary practice and “do it with a blockchain” are unable to pass Section 101 examination. All things considered, claims have a superior opportunity assuming they feature how their cases work on the activity of the basic blockchain technology.

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