Bonum Certa Men Certa

Blockchain Becomes the Target Not Only of Financial Institutions With Software Patents But Also Trolls

Background reading:

  1. Blockchain and Bitcoin Patents Help Demonstrate How Software Patents Get Used by Giants to Crush Emerging Technologies ('Threats')
  2. Blockchain Domain Infested With Software Patents, MasterCard Among the Culprits
  3. Financial Giants Will Attempt to Dominate or Control Bitcoin, Blockchain and Other Disruptive Free Software Using Software Patents


Blockchain



Summary: Blockchain software, which is growing in importance and has become ubiquitous in various domains other than finance, is perceived as an opportunity for disruption and also patent litigation; CNBC continues to publish puff pieces for Erich Spangenberg (amid stockpiling of such patents)

THE gold rush for software patents has recently morphed. Opportunists have been attempting all sorts of buzzwords to characterise the algorithms; sometimes they're disguised as "AI" (more on that in our next post) and sometimes they're disguised as something more concrete such as "Blockchain".



Over the past week the patents-centric sites wrote a lot about blockchains -- a concept which we doubt the authors even understand (they rarely have scientific background). In the words of a new headline from IP Watch, "Blockchain-Related Patents On Exponential Rise, Lawyer Says."

"Those are all software patents, with the exception of rare cases like hardware optimised for encryption and/or mining."Does the lawyer know what blockchains actually are? How about Watchtroll, which yesterday wrote that "Cisco’s IoT Blockchain Merely Scratches the Surface of Distributed Ledger Technologies" (another buzzword in there, "IoT").

2 days ago another patent maximalists' Web site went with the headline "Blockchain Patent Filings Dominated by Financial Services Industry" (we already wrote, several years ago as a matter of fact, about how big banks and other financial institutions try to guard their monopoly/oligopoly from new technology, using these patents). To quote from the article:

With the recent surge in cryptocurrencies, as well as companies in the blockchain ecosystem, Envision IP analyzed the US patent landscape of the industry. We reviewed patenting activity for all aspects of the blockchain industry – digital currency standards, digital currency exchanges, blockchain algorithms and infrastructure, blockchain front- and back-end applications, and blockchain-related enterprise technology.


Those are all software patents, with the exception of rare cases like hardware optimised for encryption and/or mining.

"So even a patent troll says that Spangenberg is "becoming the Jim Malackowski of IP" and does not deserve the press coverage he has been getting."What's probably worrying right now is that there's a patent troll who sends me hate mail trying to engulf the market, probably in his aggressive old ways (which he conveniently denies in spite of all the evidence). His efforts are now promoted by lovers of patent trolls from IAM and in turn by Alexander Esslinger, who is linking to the troll (Erich Spangenberg) as well as to various UPC boosters (like "IP Litigator at Bristows" Annsley Merelle Ward). These are people who are suing, not defending or passing knowledge. They're aggressors.

And speaking of aggressors, watch Tom Hochstatter (Dominion Harbor) promoting this new puff piece of Spangenberg (the second in a row from the same network). Hochstatter, who himself works for a patent troll, complains that other patent trolls are dead (or dying). Here is what he said: "Can I be honest here...what has Erich really done in the last 7-10 yrs? IPNav is DEAD. Kyle Bass deal DEAD. IPwe? AYFKM Seriously, why's he getting the press. He's becoming the Jim Malackowski of IP. Please, for '18, let's find a young up-&-comer to pin the Pied Piper label on."

So even a patent troll says that Spangenberg is "becoming the Jim Malackowski of IP" and does not deserve the press coverage he has been getting. What did the press say? It's just copy-pasting whatever Spangenberg wants to say and whitewashing his track record of trolling.

"...these patents are likely invalid under Section 101 and are only useful as long as he avoids the courtroom, i.e. by going after cash-strapped firms behind the scenes (or sending them nasty letters).""By his own account," it says, "he didn't make his IP fortune by not being aggressive. But Spangenberg describes his latest, and what he thinks will be the biggest and longest-lasting investing idea he has ever had, as something he stumbled into as a result of a friend convincing him to buy bitcoin."

So rather than waste on crap (like dozens of luxury cars) over $100,000,000 he took from companies that actually make stuff (by threatening them) he now buys digital currencies. And on it goes: "When I first came across IPwe and Spangenberg's own initial, broad brushstroke blog post about the "misfit trolls, geeks and wonks" getting into the blockchain, I assumed he was amassing patents in the space to repeat his software strategy — and so did some patent experts whom I consulted. I was wrong. While firms that have a history of monetizing patents they didn't create are in fact major players in cryptocurrencies and the blockchain — Intellectual Ventures, which has had its fair share of critics over the years, is among the top five holders of bitcoin patents, according to Patexia research — Spangenberg views IPwe's own patents in this space as a secondary aim."

In his E-mail to me Spangenberg insinuated that I was wrong to assume he would use patents against players in the space, but that remains to be seen. Either way, watch this space as many of these patents are likely invalid under Section 101 and are only useful as long as he avoids the courtroom, i.e. by going after cash-strapped firms behind the scenes (or sending them nasty letters). He has done that before, so why not again?

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