How to conduct a blockchain IP audit

Protecting blockchain products requires a deep understanding of a company’s relevant assets, so an IP audit can clarify the benefits and risks before proceeding with commercialisation, say Andrew MacArthur and Ralph Dengler of Venable.

The rise of blockchain technology and its many applications, including banking and supply chain, continues to disrupt business. Blockchain provides the benefits of being immutable and decentralised, among others. It integrates distributed networks, cryptography, and consensus algorithms in potentially new and complex ways, forcing companies to reconsider how IP—patents, trade secrets, trademarks, trade dress, and copyright—should be optimised.

This is also true as each IP measure has a different duration. Without underlying IP, the commercialised blockchain product or service could have minimal value. This article provides a background on blockchain and analyses potential IP measures that could apply.

1. Background

A blockchain is generally a network of computers (also called nodes) that share the same chain of blocks. Each block contains several transactions and is linked together by a cryptographic hash, where one block holds the hash of a prior block. This generally makes each block immutable. Cryptocurrency, a blockchain use, involves the transfer of a digital currency. After various users have executed transactions, computers called miners compete to insert the next block in the chain by collecting several transactions into a single proposed block.