Current Hurdles in Cryptocurrency and Intellectual Property

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As the field of digital currency evolves, numerous issues and conflicts are bound to arise. With that, the ways those issues are resolved are likely to morph over time as well. This includes issues related to intellectual property.

While long-standing policies and practices have been applied to various IP-related matters that have sprung up over the last few years, there isn’t much in the way of either case law or rigid policy when it comes to cryptocurrency itself. These areas are likely to evolve as time progresses. In this article, we’ll discuss some of the ways IP law has been applied to virtual currency.

Secure IP Early On – If Possible

One matter that has recently come up is the matter of securing specific intellectual property early on. It’s important to make sure your IP (such as trademarks and patents) is safeguarded as early in the process as possible.

Perhaps the clearest example of this is the recent dispute regarding the meme-based Dogecoin. The original Dogecoin Foundation never secured its name with a trademark, and countless other virtual currencies with the same name have appeared as a result. Now as the Dogecoin Foundation tries to enforce their rights to the name, they’re encountering difficulty in doing so.

At this point, there’s also a chance that the term “Dogecoin” may be considered a commonly used term (much like the name “Bitcoin”), and therefore not subject to protection under trademark law. They also need to demonstrate that there are some form of goods or services connected to their currency. Otherwise, it would not count as a trademark.

Patents May Not Always Apply

Another issue that has come up is that of patents. While the original blockchain technology may be patentable, not everything that new firms or exchanges develop can be covered by a patent. Often, it’s merely a repurposing of existing technology rather than any real innovation, which would disqualify it from protections under patent law.

The development must also be considered a concrete solution to a real problem rather than an abstract concept. The litmus test used here is the Alice decision, from the case Alice Corp. v. CLS Bank Int’l, in which methods used to create virtual account ledgers were deemed to be basic abstract concepts, not a new invention.

Trade Secrets and Licensing

Finally, trade secrets and licensing matters have become a major concern for cryptocurrency, especially when it comes to using open source software. Much of the code used in blockchain technology has become open source, with the two most significant licenses being GPLv3 and the Apache License. Each has its own rules attached, such as GPLv3’s requirement that all code be made publicly available at no charge. The Apache License is much more flexible, but it still has certain limitations.

These open licenses can prevent developers from keeping their code as a trade secret, potentially limiting one’s ability to secure a competitive edge by withholding information from the public.

Navigating the Hurdles

As these matters develop and additional hurdles and complexities arise, it’s important to stay on the cutting edge. Virtual currency is an evolving field, and you’ll need a competent attorney to help you navigate the process. Hart David Carson, LLP can help you through this process, so contact us for a consultation.

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