Overview of the Patent Landscape in the Blockchain, Cryptocurrency, and Cryptographic Token Space

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Overview of the Patent Landscape in the Blockchain, Cryptocurrency, and Cryptographic Token Space

Overview of the Patent
Landscape in the
Blockchain, Cryptocurrency,
and Cryptographic Token
Space

CLIENT ADVISORIES

October 12, 2018

A. Overview of the Analysis

This analysis identiﬁed and processed over 8,000 patents and patent applications worldwide
relating to blockchain, cryptocurrencies, and cryptographic tokens as of July 2018. The analysis
did not include patents and applications with a priority date before 1998, with the assumption
that patents have a maximum validity of 20 years and therefore patents with priority dates before
1998 have expired.

1. Blockchain Platform Architecture and Scope of Search

Blockchain, cryptocurrencies, and cryptographic tokens leverage a combination of preexisting
technologies to implement distributed information storage and transaction management
processes, including elliptic curve cryptography (ECC) applied to public and private keys,
cryptographic hashes, Merkle trees, emergent consensus based on distributed inputs, dynamic
adjustments to computing diﬀiculty, proof of work concepts (currently driving Ethereum and
Bitcoin), proof of stake concepts (currently driving some cryptocurrencies and planned for
adoption by Ethereum), and conditional contracts that can self-execute.

These fundamental blockchain technologies are deployed in various conﬁgurations for diﬀerent
applications, and the platforms continue to evolve actively. Consequently, an ecosystem patent
analysis focused on blockchain and cryptocurrencies may choose to be more focused on today’s
implementations, or may try to anticipate where blockchain and blockchain-based business
models will be years in the future. For example, Bitcoin and Ethereum do not currently encrypt
the transaction data while stored across nodes, and the ﬂow of crypto funds can be traced
sequentially by examining the transaction ledger at any time. This means that to maintain
privacy for ﬁnancial transactions, the accounts themselves must be secured and anonymized, and
data stored within crypto wallets must be encrypted. Techniques exist to transmit or store
encrypted data across the blockchain (e.g., via message payloads, through smart contracts, etc.),
but those are ineﬀicient methods for managing encrypted information and are not logical
applications for the current Bitcoin or Ethereum frameworks. A proposal exists, however, to
deploy encryption more broadly across Ethereum, which would alter the data architecture of the
Ethereum blockchain platform, change the dynamics of privacy, and enable a new class of
blockchain applications centered on encrypted data.

To select the dataset for this analysis, the patent search focused on the fundamental aspects of
blockchain technology, cryptographic currencies, and cryptographic tokens, as currently
implemented in existing blockchain applications and as expected to evolve in the foreseeable
future. The search focused on claims of pending patent applications and issued patents,

                                                                        Copyright © 2021 Wilson Sonsini Goodrich & Rosati. All Rights Reserved.

worldwide, and sought to identify applications and patents related to blockchain architecture,
distributed ledger technology, competing and parallel consensus algorithms, and smart
contracts.

A broader search identified an additional 5,000 patents and applications by expanding the scope
of the analysis to include patents from related fields while also searching within the
specifications of applications and patents. To achieve a sharper focus on the core aspects of
blockchain, cryptocurrencies, and crypto-tokens, these results were not included in the dataset
analyzed below, but may be considered in a follow-up analysis.

Depending on applications of blockchain, additional applications and patents may be relevant.
For example, a previous analysis of patenting activities in the payments and omnichannel
commerce space identiﬁed over one million applications and patents (more details here), and to
the extent that blockchain business models include commerce aspects, a subset of these
application and patents may also be of interest. A follow-up to this analysis may also include
other industry segments in which blockchain and cryptocurrency/tokens are likely to be deployed
in the future.

2. Limitations of this Study

Patents are an indicator of technical innovation and business activities in speciﬁc industry areas,
and can be used as a metric for R&D investment (see, e.g., the discussion of the relationship of
patents and R&D here). But it is important to understand that the correlation between patenting
and business operations is imperfect, and therefore patent-based Key Performance Indicators
(KPIs) should not be used as stand-alone metrics to evaluate or compare any entity. Please see
Section C (About This Analysis) below for a deeper discussion of how patent-based metrics can
understate or overstate the business activities and technical innovation of speciﬁc entities.

It is also important to understand that any patent search in high-growth areas like blockchain
and cryptocurrencies is just a snapshot in time based on then-current public data, and that the
figures and rankings presented in this study are likely to change significantly within the next 12
months. Rather than focusing on any particular ranking or number, the data below should be
reviewed more for trends. For example, it is interesting to note that entities from the financial
space, like MasterCard, Visa, Bank of America, and Nasdaq, are among the top patent filers in
emerging technology areas like blockchain and cryptocurrencies, along some of the largest
traditional patent holders like Microsoft, Samsung, and Intel, which was not common in the past
in other traditional industries.

Another important observation when reviewing the results presented below is that some entities
are unexpectedly missing from the rankings or are ranking lower than expected. It is virtually
certain that many prominent companies and organizations have a strong pipeline of patent
applications that were filed in the past 12-18 months, and because those applications were not
public as of the date of the search, they are not reflected in these figures. This means that many
other patent applications in the blockchain and cryptocurrency space will likely be published in
the next few months, and therefore the results shown here will probably evolve rapidly over the
next 12-24 months. Any patent search in high-growth areas like blockchain and cryptocurrencies
should be perceived as a snapshot in time and not as a definitive ranking.

As a ﬁnal introductory note, this analysis was performed using Boolean searches across large
patent databases and techniques for automated processing of large datasets, without a review of
actual claims. Consequently, individual patents and claims were not reviewed, and therefore no
knowledge of any particular patent or application was acquired.

Section C (About This Analysis) below discusses additional limitations in the data and results of
this study.

B. Discussion

1. Global Patent Landscape

Fig. 1 shows the total number of patents granted and pending patent applications for the top 45
patent ﬁlers worldwide as of July 2018.

Fig. 1
Top 45 Worldwide Patent Filers
(Patents Granted and Applications Pending)

Before addressing individual entities from Fig. 1, it is interesting to note that IBM and
Mastercard together account for almost 20 percent of all patents and applications held by the top
45 filers in the blockchain and cryptocurrency/token space. The top five patent filers hold almost
30 percent of the patents and applications shown in Fig. 1, and the top 12 filers hold over 50
percent. In relative terms, this type of concentration is also seen in other technology segments,
with a few prolific patent filers tending to hold a disproportionate percentage of patents and
applications relative to the rest of the industry. This suggests that as the blockchain and
cryptocurrency industries mature, they may also experience strategies and trends similar to
those previously seen in other industries (e.g., licensing programs run by some of the top patent
holders, development of large patent portfolios for deterrence and defensive purposes, patent-
centric technology transactions and acquisitions, offensive and defensive patent assertions and
litigation, etc.).

From Fig. 1, it is noteworthy that financial entities like Mastercard, Visa, and Bank of America
are major patent filers in the blockchain and cryptocurrency spaces. This is a positive surprise
given that financial entities were not patenting heavily in the past. It is not surprising, however,
to see these three companies among the more prolific patent filers since an analysis of
commerce patents from 2017 also identified them as strong patent filers in commerce (see Fig.
1 here). Additionally, since both Visa and Mastercard have a public track record of strategic
acquisitions, it is possible that they may own additional applications and patents that are not
held under their direct names yet, and therefore the number of applications and patents held by
each of them in the blockchain and cryptocurrency/token segments may be even larger than
shown here.

IBM’s top ranking suggests that the company plans to include blockchain in its patent licensing
program going forward, which is something that other entities operating in the blockchain space
may want to consider as they shape their own patent programs.

Other top filers in Fig.1 are also traditional leading patent holders, including Sony, Microsoft,
Panasonic, Canon, Philips, Hitachi, Fujitsu, NEC, Samsung, and Toshiba. The presence of these
household names among the top blockchain and cryptocurrency/token filers is not surprising and
confirms that these companies are continuing to evolve with new technologies. In particular,
Microsoft’s emergence as a leading cloud player in the past few years and its consistently-high
patenting rate make it a predictable presence on this list.

It is interesting to note the presence of Coinplug among the top ﬁlers, a prominent Korean player
in the Bitcoin space that operates a trading platform for Bitcoin and other cryptocurrencies. This
shows that emerging leaders in the blockchain and cryptocurrency segments are learning from
industry leaders in other technology sectors to develop strong patent positions while building

their businesses (e.g., Samsung, also a Korean company, has been a leading patent filer across
many industry segments for years). Of the 73 patents and applications identified for Coinplug, 63
are presently in Korea and 9 are in the U.S., but the proportion of filings outside Korea is likely
to increase as the Korean applications mature into global patent families.

Alibaba and Amazon have been strong patent filers for the past few years in other technology
areas, and given their diversification across additional economic and technology sectors, their
high ranking in the blockchain patent landscape is also not surprising. The geographic
distribution of their patents is quite different, however, with Alibaba showing most patents and
applications in China and Amazon showing most patents and applications in the U.S. It is
interesting to note that Amazon’s portfolio includes filings across a broad range of geographies,
including China, Europe, Japan, Korea, Canada, Australia, and India, which suggests that
Amazon’s business plans are global.

nChain Holdings is not a household name, but is well known within the blockchain industry.
nChain is developing various applications running on top of blockchain. The company was
apparently acquired by a private equity firm in 2017 and continues to execute towards an
“Internet of Transactions.” HP, Intel, and Oracle have always had sophisticated patent programs,
and their leading rankings in this analysis suggest that blockchain and cryptocurrencies/tokens
are definitely part of their future business plans. In particular, it is certainly not unexpected to
see Oracle focused on blockchain given its high patenting rate and increasing focus on
commerce (e.g., consider Oracle’s strong ERP platform and its acquisition of Micros a few years
ago). Same with HP and Intel: as the companies morph into broader technology and services
providers, expanding away from their traditional core offerings, their interest in blockchain,
cryptocurrencies, and cryptographic tokens should be expected.

Google’s broad activities in commerce (e.g., Google Pay) and in other emerging technologies
also make it an expected presence in the top blockchain patent ﬁlers. Google’s patent portfolio
shows a particularly broad geographic dispersion compared to other companies, which suggests
that Google is mapping its interests in blockchain at a global scale. This is not surprising since
Google’s business is global in reach already, and new commerce oﬀerings (e.g., Google Pay) are
natural complements to its suite of products and services across all geographies.

Walmart’s presence among the top 45 blockchain patent ﬁlers may appear unexpected, but it is
not: Walmart has been investing heavily in digital transformation and omnichannel technologies
over the past few years and has developed a signiﬁcant patent portfolio in commerce.

Accenture’s high ranking is also not surprising given its strong global activities in technology
development and professional services in the recent past. This suggests that Accenture is
positioning its business to expand across blockchain and cryptocurrencies, so it will likely be a
leading consulting and strategic adviser in this industry for years to come.

Digital Asset is a strong emerging player in the blockchain space, backed by prominent strategic
and financial investors. Digital Asset seeks to deploy a platform leveraging distributed ledger
technology for regulated financial institutions. The company’s patent portfolio is concentrated in
the U.S., but alludes to global business plans given its other filings in China, Europe, Canada,
Australia, and Singapore.

tZERO’s business model seeks to leverage the immutability of blockchain transactions to
develop a securities trading platform. tZERO’s patent portfolio is a bit unusual because the
company appears to be located in the U.S., but its patent portfolio does not include any U.S.
applications of patents based on the records identiﬁed in this search. Instead, its portfolio is
dispersed across Australia, Canada, China, Europe, Korea, and Singapore.

Finally, the high global rankings of Chinese patent ﬁlers in the blockchain space are noteworthy
and are consistent with the concentration of companies in APAC with activities in the areas of
cryptocurrency, blockchain investments, ICOs, and emerging blockchain-based business models.
Aside from Huawei and ZTE, which are already well-known and leading patent ﬁlers across a
broader technology space, a number of newcomers are making a strong patent showing, such as
Hangzhou Fuzamei Technology, University of Electronic Science, and Tsinghua University
Beijing.

Fig. 2 shows the geographic distribution of patents granted and pending patent applications for
the top 45 patent ﬁlers worldwide as of July 2018.

Fig. 2
Top 45 Worldwide Patent Filers
(Patents Granted and Applications Filed, Worldwide, by Filing Country)

Fig. 2 shows that while the U.S. remains the most popular intellectual property framework for
major patent ﬁlers, China ranks as a strong number two destination, ahead of the European
Union and Japan. This is consistent with the strong activities in blockchain and cryptocurrencies
shown by Chinese entities over the past three years, including a high concentration of Bitcoin
mining, ICOs and blockchain-centric business models. The total number of ﬁlings outside the
U.S. for the top 45 ﬁlers shown in Fig. 1 exceeds the U.S. ﬁlings, which suggests that any
company with global aspirations for blockchain-related business models will see an intricate
international web of patents in three-to-ﬁve years.

Fig. 3 shows the total number of patents granted and pending patent applications relating to
blockchain, cryptocurrencies, and cryptographic tokens, aggregated for all patent ﬁlers,
worldwide, by year. The chart shows the number of patents granted and applications published
during each calendar year. The chart starts with 2007 and shows an annualized ﬁgure for 2018
using the January-June 2018 numbers. This analysis identiﬁed more than 2,800 assignees, which
are included in Fig. 3.

                                                                        Copyright © 2021 Wilson Sonsini Goodrich & Rosati. All Rights Reserved.

Fig. 3
Patents Granted and Applications Published
(Worldwide, All Filers, by Year of Grant/Publication)

To understand the trends shown in Fig. 3, it is important to remember that the ﬁgures shown are
patent publication dates and patent issuance dates, and that the underlying ﬁling dates for each
year shown in Fig. 3 occurred sometime in the preceding ﬁve years, depending on the
publication delay for applications and length of the prosecution stage for patents. Consequently,
the ﬁgures captured in Fig. 3 are a real-time reﬂection of patent grants and application
publications by year, but trail by a few years the underlying industry focus on blockchain and
cryptocurrencies that led to those ﬁlings. To get a better understanding of the annual investment
rate in blockchain R&D as reﬂected by patent ﬁlings, the numbers shown in Fig. 3 should be
viewed in parallel with application ﬁling dates. Fig. 4 provides that information.

Fig. 4 shows the total number of patent applications relating to blockchain, cryptocurrencies,
and cryptographic tokens, aggregated for all patent ﬁlers, worldwide, by ﬁling year. The chart
shows the number of patent applications ﬁled during each calendar year. The chart starts with
2004 and shows annualized ﬁgures for 2018 using the January-June 2018 ﬁgure.

Fig. 4

                                                                       Copyright © 2021 Wilson Sonsini Goodrich & Rosati. All Rights Reserved.

Patent Applications Filed
(Worldwide, All Filers, by Filing Year)

The 2004-2006 years, which are the starting point for Fig. 4, were intentionally selected to
predate by one-to-three years the first data point shown in Fig. 3, and should be a representative
metric for the economic activity that led to the patents granted and applications published in
2007 shown in Fig. 3. This correlation window continues for the figures shown in Fig. 4 relative
to Fig. 3, such that the 2014-2016 numbers from Fig. 4 should be an indicator for the global
investment in blockchain R&D that led to the 2017 number in Fig. 3. Indeed, a higher filing rate
in 2014-2015 coupled with a significant jump in 2016 filings as shown in Fig. 4 explain the jump
in 2017 patent grants and application publications shown in Fig. 3. Analogously, the acceleration
of application filings in the 2015-2017 period shown in Fig. 4 explains the large increase in 2018
grants and publications shown in Fig. 3.

As a side note, the predictive value and the accuracy of the data shown in Fig. 4 ends in 2017,
because many of the patent applications filed in 2017 and most of the applications filed in 2018
have not been published yet and are still confidential as of the date of this article (July 2018),
which is why the 2018 datapoint is not shown in Fig. 4.

Overall, considering the data from Fig. 3 and Fig. 4 together, it is clear that patenting in the
areas of blockchain, cryptocurrencies, and crypto tokens ramped up substantially starting in
2015, and it is safe to predict that when the full ﬁgures will be available for 2018, they will show
a further jump in patent grants and application publications.

2. U.S. Patent Landscape

Figs. 5-a and 5-b show the total number of patent applications relating to blockchain,
cryptocurrencies and cryptographic tokens, aggregated for all patent ﬁlers, in the U.S., as of July
2018. The charts show the number of patent applications pending and the number of patents
issued for each assignee as of July 2018. The ranking sample was selected to include the top 57
U.S. assignees, ordered based on the total number of U.S. applications and patents. For
convenience, the dataset was split in two, with Fig. 5-a showing the top 25 assignees and Fig. 5-
b showing the next 32 assignees.

It is important to note that the numbers shown in Figs. 5-a and 5-b do not include published
applications filed under the Pacific Patent Cooperation Treaty (PCT) system, many of which were
likely filed in the U.S. For example, Visa has 10+ pending PCT applications that were filed in the
U.S. and were not included in this dataset, which would make Visa one of the largest filers in the
U.S. In Figs. 5-a and 5-b, however, only applications directly filed in the U.S. were considered to
narrow down the scope of the analysis and to avoid parsing out PCT application filings. The PCT
applications are included in the numbers from Fig. 1, and therefore Fig. 1 shows all global
applications and patents across individual countries and the PCT framework.

Fig. 5-a
Top Assignees in the US (1-25)
(U.S. Applications Pending and Patents Granted, Excluding PCT/WIPO Applications)

Fig. 5-b
Top Assignees in the U.S. (26-57)
(U.S Applications Pending and Patents Granted, Excluding PCT/WIPO Applications)

As a high-level observation, the presence in this U.S. top ranking of leading commerce and
ﬁnancial entities like Bank of America, Mastercard, Visa, Amazon, and Walmart is consistent
with their strong global showing in Fig. 1. Also, the top rankings for IBM, Microsoft and other
traditional large patent ﬁlers are also not surprising.

An interesting name among the top U.S. patent ﬁlers is Red Hat, a leading advocate for Open
Source software. This is not surprising, however, since Red Hat has been active in the
blockchain space, including its focus on a Blockchain-as-a-Service platform based on Ethereum.
More generally, Open Source is an active ﬁeld in blockchain—see for example Hyperledger, an
industry-wide umbrella project of Open Source blockchains and related tools initiated by the
Linux Foundation. Open Source has a natural synergy with public blockchains given that they

                                                                        Copyright © 2021 Wilson Sonsini Goodrich & Rosati. All Rights Reserved.

share inherent characteristics such as distributed development, transparency to review, and trust
premised on community policing.

With the exception of IBM, the absolute ranking of the companies shown in Figs. 5-a and 5-b is
not meaningful because the total numbers do not vary much among entities next to each other.
Instead, Figs. 5-a and 5-b should be studied for more general trends, such as the types of
entities that are patenting in the blockchain segment (e.g., traditional large ﬁlers vs. ﬁnancial
institutions vs. pure blockchain/cryptocurrency players vs. newcomers).

A deeper analysis of the U.S. blockchain patent ﬁlers is deferred to a follow-up study, including
a segmentation by Cooperative Patent Classiﬁcation (CPC) classes, patent-based KPIs, and
activities in other industry segments related to applications of blockchain and
cryptocurrencies/tokens.

3. Financial Institutions

Fig. 6 shows the total number of patent applications relating to blockchain, cryptocurrencies,
and cryptographic tokens filed by financial institutions, aggregated globally, as of July 2018. The
chart shows the number of patent applications pending and the number of patents issued
globally for a number of entities whose primary business can be determined to fall within the
financial space.

Fig. 6
Top Financial Institution Assignees
(Worldwide, Applications Pending, and Patents Granted)

Fig. 6 shows that financial institutions have embraced patenting in the blockchain,
cryptocurrency, and cryptographic token industries. This is not a surprise given the strong
showing of financial institutions in commerce patent rankings (see, e.g., this article). Banks and
other financial institutions outside the U.S. are heavily represented in this ranking, which is
consistent with the global interest in blockchain applications for financial applications. As banks
and financial institutions experiment with blockchain as a platform for transfer and settlement of
funds across geographies, patenting activities by banks and other financial entities are likely to
increase further and quickly, both in the U.S. and outside the U.S.

4. Universities

Figs. 7-a and 7-b show the total number of patent applications relating to blockchain,
cryptocurrencies, and cryptographic tokens filed by universities, aggregated globally, as of July
2018. The charts show the number of patent applications pending and the number of patents
issued globally for a number of academic institutions. Due to the large number of assignees
identified, the results are shown only for universities with at least three applications and
patents, and were divided into two different charts for clarity.

Fig. 7-a
Top University Assignees (1-24)
(Worldwide, Applications Pending, and Patents Granted)

Fig. 7-b
Top University Assignees (25-49)
(Worldwide, Applications Pending, and Patents Granted)

Fig. 7-a and 7-b show that blockchain, cryptocurrency, and cryptographic token innovation is
occurring in academia on a global scale. The strong presence of Chinese universities in these
rankings is noteworthy and suggests that the Chinese economy will play a major role in adopting
blockchain technologies in the future and shaping the evolution of the industry.

5. Unknown Assignees

A classic problem in any patent search is the inability to accurately identify all assignees for the
patents and applications included in the analysis dataset. The issue may arise either
inadvertently or intentionally. The inadvertent omission or misidentiﬁcation of assignees can
occur due to innocuous issues that occur during the patent prosecution process, such as delayed
identiﬁcation of the actual assignee after the application ﬁling, listing inventors as assignees or

                                                                          Copyright © 2021 Wilson Sonsini Goodrich & Rosati. All Rights Reserved.

joint assignees, or mistakes made by the Patent Oﬀice in the receiving country or in other
countries. The intentional omission or misidentiﬁcation of assignees can occur when a company
seeks to obscure the fact that it is indeed the owner of the patents, in which case patents could
be assigned to a shell entity with an unrelated name or the assignee name may be intentionally
omitted during the prosecution process.

There are techniques to identify the real assignees in interest (e.g., parsing out the applications
and patents by CPC classes and subject matter, searching by inventors, running parallel
corporate entity searches to establish parent-subsidiary relationships, etc.), but such techniques
require significant efforts that go beyond the scope of this project. In this analysis, efforts were
made to consolidate easily ascertainable related entities into a single corporate assignee, but
no attempt was made to identify missing assignees or to correct for unknown entity names.

The inability to identify assignees accurately triggers two immediate concerns. The first concern
is that the patent holdings of any particular entity may be understated. For example, looking at
some of the household names shown in the rankings in Fig 5-b and known to be prolific patent
filers in other technology segments, some of the figures shown are surprisingly low. It is
certainly possible that some of those companies only ramped up their blockchain patenting
efforts in the past 18 months, and therefore their recent applications are not publicly known yet.
But it is also possible that some of those companies already have significant patent portfolios in
the blockchain and cryptocurrency space, whether organically developed or acquired, and they
cannot be identified fully without a concerted effort to identify and consolidate unknown
assignees.

A second concern about unknown assignees is that patents may be aggregating under the control
of entities that could later assert them broadly across the industry, seeking to extract mass
royalties or possibly even injunctions, without early industry visibility.

How signiﬁcant is the issue of unknown assignees in the blockchain and cryptocurrency/crypto-
token space? The search retrieved 355 U.S. patents and 1,115 worldwide patents and
applications with unknown assignees, which is more than 12 percent of the total holdings in both
cases. Many of these missing assignees will be added over time, as applications are prosecuted
towards issuance, but a signiﬁcant level of uncertainty regarding patent ownership will almost
certainly remain in the blockchain and cryptocurrency industries.

It is also worth mentioning that that there are 425 Chinese applications and patents that do not
identify any assignee as of July 2018, so even more than in the U.S. Because many Chinese
companies pursue a China-ﬁrst ﬁling strategy with subsequent expansion into the U.S. and other
countries through the Patent Cooperation Treaty (PCT), these applications and patents are likely
to further compound the level of assignee uncertainty in the U.S. and in other countries around
the world, depending on how many of those families will eventually add accurate assignee
information.

Overall, the issue of patent ownership will likely be a concern for the blockchain and
cryptocurrency industries given these early datapoints, and the industry should consider taking
steps to address this issue sooner rather than later.

6. The Extended Blockchain and Cryptocurrency Patent Landscape

The search discussed in this study identified 8,000 patents and patent applications worldwide
relating to blockchain, cryptocurrencies, and cryptographic tokens as of July 2018, and a broader
search that traded specificity for overinclusion identified an additional 5,000 patents and patent
applications worldwide that have some direct nexus with blockchain technology and architecture.
It is important to understand, however, that a comprehensive analysis of the blockchain patent
landscape needs to consider a much broader patent dataset. For example, since cryptocurrency
transactions rely heavily on encryption, patents relating to elliptic curve cryptography,
cryptographic hashes, and other techniques for efficient data encryption using public and private
keys would also need to be considered as fundamental enabling blocks. Some pioneering
patents that relate to technologies that underpin blockchain have expired, but others remain in
effect and may be relevant.

Also, since blockchain is being deployed globally as a platform that supports a wide range of
business models, patents, and applications that relate to each such business model may deserve
consideration on a case-by-case basis. For example, a 2017 patent landscape analysis focused
on commerce identiﬁed over one million patents and applications relating to a wide range of
commerce technologies and business models (see, e.g., this article), and some of those may be

relevant to speciﬁc applications of blockchain, cryptocurrencies, and cryptographic tokens in the
commerce space.

C. About This Analysis

1. Limitations of Patent-Based KPIs

Using patents as a metric for the business activities of individual companies in the technology
space must be cross-checked against other factors to establish its relevance and accuracy.
Without additional analysis, the patenting rate for any speciﬁc company may understate or
overstate the company’s investment in technology development.

For example, some companies may spend more on R&D while patenting less, in which case a
patent-based KPI would understate their R&D efforts. Conversely, some companies may be
prolific patent filers while spending comparatively less on R&D, in which case a patent-based
KPI would overstate R&D activities. In either case, however, the exclusionary value of patents
and the potential to monetize patent portfolios in the future will likely tend to counterbalance
both under-patenting and over-patenting in the long term. For example, a company that patents
at a higher rate than its natural R&D activities may find out in the long term that its larger
volume of patents are narrower and only incrementally more valuable than a smaller and more
targeted portfolio (e.g., statistically, they may experience ongoing complications with
enablement, double patenting disclaimers, and overlapping claims) or that the return from
patenting is lower than expected, so it may eventually decrease its patent filing rate.

Analogously, a company that patents below its natural R&D investment rate may find in the long
term that its competitors are making more inroads in its R&D space while facing fewer patent
challenges, and may eventually reexamine its patenting strategy, particularly if it becomes the
target of patent infringement litigation and finds itself with limited counterclaim options. As a
special class of patent holders, entities that look at patents as a revenue-generating mechanism
may also find themselves overinvesting in patents relative to their normal revenue-generating
business activities, and while they may be able to indeed generate revenue from patent licensing
and sustain a higher rate of patenting, the sophistication needed and peripheral costs for such
patenting and licensing programs are high. Consequently, in general, the patenting rate is an
imperfect predictor or metric for actual business activities and/or technical innovation for
individual companies at any particular point in time, and therefore patenting rates should not be
used as a stand-alone metric to compare or evaluate any entity.

2. Limitations in Data Accuracy

As another observation about the limitation of patent searches, it is interesting to note that some
entities are unexpectedly missing from these rankings or are ranking lower than expected.
Square, for example, has developed a robust patent program in the past few years and ranked
very high in a 2017 commerce patent analysis (see Fig. 1 here). In parallel, Square has been
expanding its business to cover blockchain and cryptocurrency segments, including obtaining a
virtual currency license from the New York Department of Financial Services that permits N.Y.
users of Square’s Cash app to trade Bitcoin in New York. Consequently, it is highly likely that
Square has filed a meaningful number of patent applications relating to blockchain and/or
cryptocurrencies, which were not identified though this search. This means that those
applications are likely to publish in the next few months, when they would become publicly
known for the first time. This likely also applies to other entities that are ranking lower than
expected in these charts, such as Google and Apple. Consequently, any patent search in high-
growth areas like blockchain and cryptocurrencies should be perceived as a snapshot in time
and not as a definitive ranking, and the figures and rankings presented in this study are likely to
change significantly within the next 12 months.

3. Search Details

This analysis was performed using Boolean searches across large patent databases and
techniques for automated processing of large datasets, without a review of actual claims.
Consequently, individual patents and claims were not reviewed, and therefore no knowledge of
any particular patent or application was acquired.

Note:
The opinions in this article are limited to the scope of this article and to the dataset used
for this analysis, and do not necessarily reﬂect the author’s opinions in general, the

opinions of Wilson Sonsini Goodrich & Rosati (WSGR) or of any attorneys or other
personnel aﬀiliated with WSGR, or the opinions of any WSGR clients or partners.

If you would like to discuss any aspect of this article please do not hesitate to contact Marius
Domokos at mdomokos@wsgr.com or any attorney in WSGR’s technology transactions, patents
and innovations, or blockchain and cryptocurrency practices.

                                                                         Copyright © 2021 Wilson Sonsini Goodrich & Rosati. All Rights Reserved.

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