A study of the patent landscape related to blockchain technology The Emerging Risk A study of the patent landscape related to blockchain technology

$20 Billion Per Year $14 Billion Per Year $5 Million in Legal Fees Why should we worry? $20 Billion Per Year $14 Billion Per Year $5 Million in Legal Fees 83 billion is the cost publicly traded companies by patent assertion entities between 2007 to 2011 according to study by Boston University (Bessen and Meurer). This includes litigation and licensing costs. No more recent studies. While this number is likely lower recently due to changes in US Patent laws, it is still likely substantial. 14 billion is the annual IPR Licensing revenue in mobile networking space 2014 to 2016. Almost all of it to Qualcomm, Ericcson, Nokia. This huge amount of licensing revenue, paid to a small cadre of players has arguably been a drain on the industry and could have been avoided if the industry had an early IP strategy. Only two players are successful selling handsets. Apple and Samsung. 5 million is the median cost for a patent litigation (AIPA_

But Blockchain is open source! An Open Source license is: (a) from the contributors to the code (b) to use the code An Open Source license is not: (a) valid against non contributors (b) a license to practice the functions of the code with alternative code

What is a patent? Right to exclude others Limited in time Country by country basis Requires full disclosure

Top 30 Patent Owners

First Publication Trend

Origination Trend

Top 20: Technology Scope

Tech Concepts Over Time

Top Inventors Coinplug EITC Walmart B of A Cognitive Sciences

Citation Analysis

Continuing Patent Strategy: The Patent Time Machine “Placing a toll booth in the paths worn in the grass”

Coalition Patent Challenges “Open Source” Strategies What can we do? Innovator Agreements Coalition Patent Challenges “Open Source” Strategies Royalty-Based Patent Pools

But what about PAEs? PAEs usually purchase patents from failed operating companies “License on Transfer Model” can reduce the supply side and inoculate members LOT Network has hundreds of members and is adding blockchain assets

Players are filing a lot of patent applications Use of open source software is not protection Participants should be part of an industry-led strategy

Marc Kaufman marc.kaufman@rimonlaw.com 202-459-9882