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Advanced New Technologies Co., Ltd. [2021] APO 29

Blockchain technology gets a nod as patentable subject matter

by | Jul 21, 2021

Date: 21 July 2021
Forum: Australian Patent Office
Delegate: Ranganath Subbarayan

Background

Australian Patent Application 2018243625 (Application) in the name of Advanced New Technologies Co., Ltd relates to methods and systems for processing transaction requests in a blockchain network.  Objections were raised to the Application by the Examiner on the basis of lack of manner of manufacture.

Key Issues

The invention sought to solve security issues associated with current transaction processes used in a blockchain system. Blockchain processes use ‘nodes’ (computer devices) to communicate and store data in a particular format that allows transactions to be verified and traced. The specification described the blockchain process as one in which a ‘transaction node’ broadcasts a transaction request to one or more ‘consensus nodes’ to verify a transaction. As part of the transaction request, data relating to the transaction is broadcast to all consensus nodes and is stored in the blockchain network.

However, the consensus nodes can synchronise with the blockchain to obtain transaction data stored in the blockchain, leading to privacy issues.

The invention solves this issue by converting the transaction data to a ‘data abstract’ which does not contain personal information. The data abstract is then broadcast for verification, and the transaction data cannot be obtained in reverse from the data abstract by the consensus nodes.

Outcome

The Delegate addressed a number of inquiries as relevant to the question of manner of manufacture:

  1. The substance of the invention – the substance lay in a new method of processing a transaction request within an otherwise standard blockchain infrastructure wherein the transaction data is irreversibly converted into a non-recognisable form (data abstract) and using this data abstract to get approval and consensus validation for the transaction. When characterised in this way, the new method included elements that were technical, such as the conversion of the data using cryptographic techniques, and elements that might be considered an abstract scheme, such as the modified procedural rules for obtaining consensus validation.

  2. Whether the invention solves a technical problem – the problem to be solved was the design of a method for verifying a transaction request, which avoided risk of privacy breach. A reading of the specification indicated that any such privacy breach would occur not because of any technological deficiencies but rather because of the administrative rules employed within a typical blockchain. This was more of a business problem than a technical one.
  1. Whether the invention provided a technical solution to the problem – while not all steps of the claimed method were technical, the critical steps of converting the transaction data into an indecipherable data abstract and then generating a transaction abstract based on digitally signed approvals from the transaction nodes involved the application of information technology techniques. On balance, the claimed invention provided a technical solution to the problem of breach of privacy information.
  1. Whether the claimed method required only generic computer implementation – it was readily determined that the computer implementation was generic. However, the focus of the invention was not the computer program to carry out the method and so the weight given to this factor was minimal.
  1. Whether there was a practical and useful result – the invention yielded such a result in providing greater security for information stored in the blockchain.
  1. Whether the invention lay in the generation, presentation or arrangement of intellectual information – each node was required to validate the transaction by doing consensus verification and storing the transaction abstract in the blockchain. The invention was not only in the generation and arrangement of intellectual information.

In balancing these considerations, the Delegate concluded that technical improvements to fundamental blockchain mechanisms were patentable even if not addressing technical problems.

However, the Delegate noted various prior art, leading to serious concerns about the inventiveness of the claimed invention. The Application was referred back to the Examiner to reassess inventiveness in light of that prior art and further searching.

Implications

This is the first Australian decision confirming the patentability in principle of technical improvements to blockchain technology. However the referral back to the Examiner for inventive step highlights the risk that the use of generic computer implementation in such cases may pose to establishing inventiveness.

Naomi Pearce

Naomi Pearce

CEO, Executive Lawyer (AU, NZ), Patent & Trade Mark Attorney (AU, NZ)

Naomi is the founder of Pearce IP, and is one of Australia’s leading IP practitioners.   Naomi is a market leading, strategic, commercially astute, patent lawyer, patent attorney and trade mark attorney, with over 25 years’ experience, and a background in molecular biology/biochemistry.  Ranked in virtually every notable legal directory, highly regarded by peers and clients, with a background in molecular biology, Naomi is renown for her successful and elegant IP/legal strategies.

Among other awards, Naomi is ranked in Chambers, IAM Patent 1000, IAM Strategy 300, is a MIP “Patent Star”, and is recognised as a WIPR Leader for patents and trade marks. Naomi is the 2023 Lawyers Weekly “IP Partner of the Year”, the 2022 Lexology client choice award recipient for Life Sciences, the 2022 Asia Pacific Women in Business Law “Patent Lawyer of the Year” and the 2021 Lawyers Weekly Women in Law SME “Partner of the Year”.  Naomi is the founder of Pearce IP, which commenced in 2017 and won 2021 “IP Team of the Year” at the Australian Law Awards.

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