Blockchain is an emerging technology poised to disrupt the way companies manage almost any transaction used to conduct business. While best known as the backbone behind Bitcoin, the technology can be used for more than cryptocurrency. With the use of smart contracts or by taking advantage of any business process that involves the use of a secure ledger, blockchain is on the tipping point of wide-scale deployment. For instance, blockchain is behind the recent NFT boom including the recent ‘Museum of Mahomes’ digital collectibles.
Blockchain is a fundamental technology and CIOs can use it to create custom solutions for many different industries and individual organizations. The basic building blocks for developing new products have already been created for this new approach to managing business processes. As is the case with many new technology solutions, there has also been a race to cover these innovations with patents. Organizations that haven’t already started filing patents on applications from these technologies might find themselves at a disadvantage. One solution to this dilemma is for CIOs to take advantage of patent pools. The use of patent pools can also create an opportunity to develop new products more efficiently and with lower risks.
Stated simply, a patent pool is a collection of companies that agree to cross-license or out-license patents associated with a given technology. Patent pools are not a new idea and the first acknowledged one covering sewing machines dates back to 1856. This patent pool helped usher in a new age for home sewing making these machines available at a reasonable cost to the consumer while still providing a profit to the manufacturers.
Here are five reasons why CIOs should consider investing in a patent pool for access to blockchain technology:
- They provide a technological head start: CIOs can license fundamental building blocks instead of building them from scratch. This is an efficient use of available resources and brings products to market faster.
- They provide access to new improvements in a technological area: After getting a jump on new product development, custom solutions can be rapidly updated and improved by always having access to the most recent patents. New patents are generally added to a pool as they are granted.
- They allow organizations to focus on custom applications specific to their business: Instead of spending valuable R&D time and money on creating unique blockchain technology, CIOs can concentrate on developing custom solutions with licensed technology. Technologists can focus on their specialized area of expertise instead of blockchain fundamentals.
- They give a license to use the technology building blocks at a lower price: Negotiating licenses with multiple blockchain organizations is time-consuming and expensive depending on the relationship the companies have with one another. Joining a patent pool provides a license to an extensive collection of patents at a price distributed over all participants.
- They keep patents from small players from falling into the hands of litigious organizations: The organizations that operate patent pools are always on the lookout for exposed technology that litigious organizations could purchase. With their collective buying power, these pools’ organizers can get these patents out of play. A license from a patent pool provides a company with the freedom-to-operate and lowers the overall risk of litigation from outside entities.
To get started, here is a list of organizations that offer patent pools in the blockchain space:
LOT Network: a generalist in the field of patent cross-licensing and a provider of patents across an extensive collection of technologies.
Cryptocurrency Open Patent Alliance (COPA): developed by Jack Dorsey, the founder of Square, focused on cryptocurrency.
IPwe Smart Pooling: a private organization, specializing in blockchain technologies with a pool focused exclusively on the broad implementation of this technology.
Patent pools provide significant advantages to companies that want to use fundamental technologies to build custom products. They lower development costs and provide state-of-the-art improvements as a technology continues to improve. They also offer peace of mind that an organization can create products to support their business and customers without the fear of litigation from other competitors. Overall, companies can innovate faster and with less risk when they take advantage of technologies covered by a patent pool.