Blockchain Patents: Secure Them Now or Be Left Behind.

As we meet with countless CEOs and IP managers, it's clear that blockchain is no longer just the underlying technology for cryptocurrency. It is now recognized as a game-changer, set to transform the paradigm of entire industries, including finance, logistics, healthcare, content, and manufacturing.

Many companies are investing heavily in adopting blockchain technology and developing innovative services. However, it is often disheartening to see that the most powerful tool to fully protect the fruits of that innovation and secure a leading position in the future market—the blockchain patent—is frequently overlooked.

In this column today, from an expert's perspective, we aim to clarify why you must secure your blockchain technology with patents now and what constitutes a successful patent strategy.

Why Must We Focus on Blockchain Patents?

While technology itself is intangible, a patent is a tangible and powerful asset. When blockchain technology exists merely as an idea or code, it is akin to a public good that anyone can copy and use. However, the moment it is registered as a patent, that technology becomes an exclusive right—private property—that can be used monopolistically.

Global tech giants have already entered the blockchain patent war. Companies like IBM, Alibaba, and Mastercard have filed thousands of blockchain-related patents, expanding their technological territories. This is not merely a display of technological prowess.

• Market Preemption and Exclusivity: By securing core technology patents first, you can block latecomers from entering the market or demand royalties for technology use, generating substantial revenue.
• Competitive Deterrence and Defense: Patents serve as the most effective shield against competitors imitating your technology or, conversely, filing infringement lawsuits against you.
• Enhancement of Corporate Value: A strong patent portfolio acts as a key indicator of a company's technological strength and future value during M&A or investment rounds.

Even as you read this, patents are being filed to claim the uncharted territories of blockchain technology. To avoid the worst-case scenario where your innovative technology is suddenly blocked by a competitor's patent barrier, you must proceed with patent acquisition in parallel with development.

Blockchain Patents: What is Patentable?

A common question we hear is, "Blockchain is a decentralized, public technology, so how can it be patented?" The short answer is: it is highly possible, and the scope is broader than you can imagine. This is because the core of a patent lies in a new and inventive technical idea.

Blockchain patents can be broadly divided into three categories:

1. Core Foundational TechnologyThis includes fundamental technologies that improve the performance, security, or scalability of existing blockchains.

• New Consensus Algorithms: Improvements on existing PoW or PoS, or entirely new consensus protocols.
• Data Processing and Storage: Technologies that increase transaction processing speed, such as Sharding and Layer 2 solutions.
• Enhanced Security: Cryptographic techniques to counter quantum computing attacks, or technologies to analyze and prevent smart contract vulnerabilities.

2. Applied Technologies and ServicesThese are technologies that solve existing problems by applying blockchain to specific industrial fields.

• Finance (DeFi): The operational methods of decentralized lending, deposit, and derivative trading platforms.
• Logistics/SCM: Systems that transparently track a product's entire journey from production to the consumer.
• Copyright (NFT): Technologies for creating and verifying NFTs to prove and trade ownership of digital assets.
• Healthcare: Platforms that prevent the falsification of personal medical information and manage it securely.

3. Business Model (BM) PatentsThis is the area demanding the most attention. A new profit model, created by combining the technology of blockchain with a business idea and implemented via computers (servers, networks, etc.), is a strong candidate for a BM patent. For example, the entire service model of a blockchain-based system for verifying used car transaction histories and automating settlements can be protected. This is the most effective way to safeguard a company's unique business logic.

[Case Study] What Could Hyperliquid Patent?

To make this easier to understand, let's take the case of Hyperliquid, currently one of the market's most prominent decentralized derivatives exchanges (DEX).

Hyperliquid's core competitive advantage is that it achieves the high speed and performance of a centralized exchange (CEX) in a fully on-chain environment. It represents a technical breakthrough, overcoming the limitations of existing DEXs that processed order books off-chain due to speed issues.

If Hyperliquid were to secure patents, it would not stop at the mere idea of a "fast, on-chain order book exchange." It would build a powerful patent portfolio by specifying the HOW:

• Patent Target 1 (Foundational Technology Patent): A proprietary L1 blockchain architecture specialized for the exchange.To solve the speed problem of conventional blockchains, Hyperliquid could patent its unique node operation method, which prioritizes exchange order transactions over others and records them first in a memory-based state ledger. This protects the core technology behind how it processes transactions so quickly.
• Patent Target 2 (BM Patent): A fully on-chain order book and real-time risk management system.The smart contract logic—where all orders, executions, and liquidations are transparently recorded on-chain while simultaneously calculating user margins in real-time and automatically liquidating at-risk positions—is in itself an excellent business model (BM) patent. This would be the most powerful weapon to protect the service's core operational logic, fundamentally blocking competitors from creating a similar on-chain exchange.

As you can see, Hyperliquid's innovation contains the seeds of numerous patents. Your company's services are no different. The unique operational logic and the system architecture you are developing right now are the patent assets that will secure your future.

Three Key Strategies for Successful Blockchain Patent Acquisition

Simply filing an idea is not enough to obtain a strong patent. To pass the rigorous examination by the patent office and become a practical means of business protection, the following three strategies are essential.

1. Clearly Define the Technical Idea: Mere Concepts Are Not Patentable.You cannot receive a patent for a simple idea like "I will do X using blockchain." You must present a clear logic and flowchart detailing the technical problem the idea solves, how the system is specifically configured to provide that solution, and how each component interacts. This is why developers and patent attorneys must work together as one team.

2. Emphasize the Inventive Step (Non-Obviousness) Over Prior Art.One of the most critical criteria in patent examination is the inventive step. In other words, there must be a point of differentiation that is not easily conceivable from previously disclosed technologies. For this, a thorough prior art search is essential. Based on the search results, you must logically and persuasively argue how your technology is more efficient, more stable, or creates new effects compared to existing technologies.

3. Design a Broad and Solid Scope of Rights.The value of a patent is determined by its claims. If the claims are written too narrowly, a competitor can easily circumvent the patent with minor modifications, rendering it useless. Conversely, if they are written too broadly, there is a high risk of rejection based on prior art. Therefore, the expertise of a professional is absolutely necessary to strategically design a scope of rights that is centered on the core technical idea but is also broad enough to cover various alternative embodiments that may emerge in the future.

Turn Your Technology into a Future Asset

Blockchain patenting is a highly complex field that demands a deep understanding of both IT and patent law. You need a partner who goes beyond simply handling paperwork—a partner who can see through to the core of your business model and technology to propose an optimal IP strategy.

At Pine IP Firm, we promise to protect your valuable technological assets with our unparalleled expertise, accumulated through countless successful IT and BM patent cases. We will be more than just your filing agent; we will be your strategic IP partner, committed to your technological innovation and business growth.