When a patent-happy industry meets open-source technology _ american banker

When the financial services industry started paying attention to blockchain technology, many companies, seemingly as a reflex, sought patent protection for their ideas.

It was ironic, since the original bitcoin blockchain was a breakthrough of open-source development, in which software code is made freely available for anyone to use or modify. Bitcoin value in dollars As the industry has gained a clearer understanding of how distributed-ledger technology could change its business, it’s begun to see the merits of such openness in supporting collaborative innovation, and the limitations of the traditional, you-can’t-touch-this approach.

Some are even using a hybrid strategy, pursuing patents to secure a competitive advantage – or at least protect themselves from legal challenges – while publishing code and inviting others to improve it by submitting fixes or patching bugs.


Bitcoin price blockchain The situation underscores the cultural differences between the banking and technology fields as the former looks to the latter for help meeting the demands of an increasingly digital world.

While patents reflect serious competitive considerations, they have become more difficult to grant because it is harder to establish boundaries in the software and Internet fields. Bitcoin charts Further, simply pursuing them can be a drag on innovation, since time and money are spent on an effort that, at best, just slows down other firms.

“The reality today is you probably should be building software patents if only for their defensive purposes, but used in the wrong places [patents] can limit innovation, rather than encourage it,” said Brian Behlendorf, the executive director of the Hyperledger Project, an initiative to advance blockchain technology for recording and verifying transactions across multiple industries.

There is a line somewhere between the things banks should be building with other parties and what they should keep as intellectual property, said Behlendorf, who also sits on the board of the Electronic Frontier Foundation, a tech advocacy group that has campaigned against questionable patents.

“What you have to do is paint a picture of technology as a stack, with the lower bits being the plumbing and the higher bits being the parts that actually talk to end users and are more about the interface,” he said. Bitcoin rate graph “Those are all end user systems that are best left to companies to do.”

Patenting open source software is fundamentally oxymoronic, said Hu Liang, senior managing director of State Street Bank’s Emerging Technology Center.

“In the spirit of open source, you’re getting [an invention] for free,” he said. Define bitcoin “Maybe you want to take that and not share it with everyone else, but to go build a patent on top of that kind of counters what this is.”

“The right way we build our applications on top of [blockchain technology] is our advantage. Bitcoin exchange singapore Do we need to patent everything that we do? You create it and you use it – that’s your competitive advantage, building a better product. What is bitcoin video You don’t necessarily need to create a barrier through a patent to recognize the benefit of creating a certain product.”

Wall Street is one of the largest holders of patents pending in the U.S., and there hasn’t been a lack of technological innovation because of it in the last 20 years, said Richard Levin, chair of the fintech and regulation team at law firm Polsinelli. Bitcoin exchange sites The patent activity in the blockchain space is just part of the natural competition system, he said at the Wall Street Blockchain Alliance conference in November.

“Patents are just a very aggressive form of intellectual property protection,” Levin said. Value of bitcoin graph “One of the best things patents do is slow competitors down while a company has a patent pending, or one that’s been approved. Bitcoin exchange south africa That may give a company six months to two years to get ahead of its competitors.”

Large institutions, like Bank of America, have been pursuing patents aggressively in recent years in new banking and payments technologies, financial products and business techniques. Bitcoin daily chart Last December, the U.S. Value of bitcoin Patent and Trademark Office published a patent filing by Goldman Sachs for a distributed ledger-based settlement platform. Bitcoin price prediction In January Bank of America said it was seeking 20 blockchain-related patents in addition to the 15 it previously filed in 2014. Bitcoin c JPMorgan Chase and MasterCard have also sought blockchain patents; Nasdaq has said it plans to. Bitcoin price after halving None have been granted yet.

The most high-profile blockchain technology vendors and bank consortiums have gotten in the game too. Bitcoin value trend Digital Asset Holdings’ patent application was made public later this year. Price of bitcoin now In October, R3 revealed that it had filed a patent application for Corda, a distributed ledger platform designed to manage financial agreements. Bitcoin location Yet R3, Chain and Symbiont also released code as open source this fall. Meaning of bitcoin Digital Asset Holdings has said it plans to as well.

Caitlin Long, president of blockchain technology vendor Symbiont, can attest to that from her experience filing patents when she worked at Morgan Stanley.

“[Patents] are really not very valuable,” she said. Bitcoin usd chart “You just make better software. Bitcoin gbp chart This market is moving so fast that the patents — by the time they’re granted in this area — are just going to be irrelevant… Don’t slow down and apply for a patent. Bitcoin price index It’s not going to be helpful. Exchange rate for bitcoin It’s not going to be relevant by the time the patent office gets through the process.”

“In these complex systems all you have to do is change one important term and then the patent doesn’t apply, so there’s an awful lot of money being spent by players in this industry,” she said. Bitcoin prize “If you raise too much money, you spend it too fast. Best uk bitcoin exchange If you spend all your money filing patents you slow yourself down. Bitcoin price yesterday At this point the race is on to build production-ready software. Bitcoin live exchange That’s what we’re focusing on as a company.”