PTAB Decision Highlights Blockchain Patentability

Blockchain patent functions could also be divided into two varieties: underlying applied sciences of blockchain, comparable to consensus strategies, safety, and so on., 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 thought. This text analyzes a current Patent Trial and Attraction Board (PTAB) choice in a blockchain patent software and explores drafting and prosecution methods to anticipate material scrutiny.

Patent Eligibility Below 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 cross this primary step, some face scrutiny underneath the second step of the § 101 summary thought exception evaluation.

The USPTO basically splits the second step into 2A (is the declare directed to an summary thought (a judicial exception)?) and 2B (does the declare recite further components that quantity to considerably greater than the judicial exception?). Step 2A additionally has two prongs. For blockchain software, the primary prong basically is to find out whether or not the claims recite an summary thought, i.e., (1) mathematical ideas; (2) sure strategies of organizing human exercise; and (3) psychological processes. If a blockchain patent software just isn’t directed to any of those classes, it’ll 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 software. To this finish, the Examiners ought to (1) determine whether or not there are any further components past the summary thought, and (2) consider these components to find out whether or not they combine the exception right into a sensible software. Two examples of sensible software supplied by the USPTO are most related to blockchain patent functions: (i) an enchancment in pc functionalities, and (ii) limiting the judicial exception in another significant manner past typically linking to a technological atmosphere. See MPEP § 2106.04(d)(I).

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

Attraction 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 software. This patent software 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 applying acknowledges disadvantages of blockchain transactions comparable to lengthy processing time, payee’s incapacity to determine payor, and sole reliance on digital credentials to determine possession to digital currencies. The invention addresses such points by combining the blockchain community and the standard fee community.

Declare 1 of the applying 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 through a fee community, whereby the transaction message is formatted primarily based on a number of requirements and features a plurality of knowledge components together with not less than a primary information ingredient configured to retailer a private account quantity, a second information ingredient configured to retailer a service provider identifier, and a 3rd information ingredient configured to retailer not less than a blockchain community identifier and the place the third information ingredient or a fourth information ingredient 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 ingredient included within the obtained 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 ingredient included within the obtained 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 ingredient included within the obtained transaction message and consists of not less than a transaction identifier and an handle identifier related to one of many first account profile and the second account profile, and the place the handle 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 obtained transaction notification and not less than one among: the handle identifier, the non-public account quantity, and the service provider identifier.

            (Emphases and labels of declare limitations added)

Below Step 2A Prong 1, the PTAB agreed with the Examiner on discovering the claims directed to an summary thought 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, particularly “business transaction processing comparable to blockchain fee transaction, utilizing each customary fee and blockchain fee components to confirm the id of the payor.” Accordingly, the PTAB decided the claims to recite elementary financial observe, which is an summary thought.

Below the identical prong, nonetheless, the PTAB rejected the Examiner discovering that the claims had 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 lot of applied sciences that can’t be carried out by human work or mentally, even given a big period of time,” as a result of “digital signatures are of ample information dimension and complexity to not be understood by human psychological work, not to mention verified by using a public key and overly advanced (by design) signature algorithms” and that “transaction messages are processed in speeds that must be measured in nanoseconds for community reliability and because of the overwhelming variety of transaction processed every day, necessitating using specialised pc programs, which is not possible to copy by 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 further components integrating the summary thought right into a sensible software that mixes benefits of each blockchain processing system (e.g., anonymity) and customary fee processing system (e.g., pace, safety, fraud prevention).

When figuring out further components past the summary thought, the Examiner solely discovered “a database,” “a pc system,” and “a processor” are positively recited within the claims. Though circuitously addressing the optimistic recitation challenge, 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 occasion 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 thought right into a sensible software, the Examiner concluded that the database, the pc system, and the processor merely served as instruments for implementing the summary thought and don’t enhance the capabilities of the pc system or in any other case. The PTAB, alternatively, 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 pace, 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 normal fee processing programs (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., by utilizing a blockchain community to generate an handle 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 further components and clear assist for the enhancements to the blockchain system seem 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 comparable to digital signature and consensus verification in claims might make it seem even much less accomplishable with pen and paper in observe.

Enchancment to pc performance such because the safety and pace of processing blockchain transactions is prone to be acknowledged as a sensible software. Particularly, enhancing the blockchain community with a typical kind of pc community will seemingly be discovered as a sensible software. It will be important for blockchain patent drafters to consider how the combination of various pc networks improves the performance of every community and clarify clearly within the specification.