The Hidden Blockchain Patent Minefield: A $100M Risk You're Ignoring

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Reviewing a LinkedIn Article "The Hidden Patent Minefield in Blockchain: A $100M Risk You're Ignoring" written by Todd Price

The article warns of a significant patent minefield in the blockchain and Web3 space, where over 4,000 patents cover fundamental technologies, potentially exposing projects to licensing fees amounting to 5-10% of transaction volumes or damages exceeding $100 million.

Highlighting the Veritaseum vs. Coinbase lawsuit as a cautionary example, it emphasizes how even major players face risks from patents on "secure methods for processing digital-currency transactions."

The author argues that many enterprises unknowingly infringe on these intellectual properties while building implementations, with patents spanning areas like multi-signature wallets using Shamir's secret-sharing, transaction validation processes, smart contract logic involving Boolean gates, oracle integrations for external data, cross-chain bridges with threshold signatures, and privacy techniques like garbled circuits.

A key focus is on the fallacy of Open Source, described as a delusion where developers mistakenly believe that open-sourcing code provides protection against patent claims. However, patents target methods, processes, and architectures rather than specific code implementations, rendering GitHub publications or MIT licenses irrelevant.

In fact, open-sourcing can exacerbate issues by documenting infringement, facilitating wider distribution of violating technology, increasing liability for damages, and making detection easier for patent holders.

The hidden risks associated with ignoring patent licenses are amplified by entities like nChain, which holds over 1,250 patents on core blockchain operations, alongside portfolios from IBM and Bank of America.

The article notes the collapse of IPwe's Blockchain Smart Pool in 2024 due to bankruptcy, which previously offered affordable licensing options—such as free access for small companies or $225,000 annually for large ones—leaving projects without this "patent peace" and more vulnerable to litigation. Overall, the piece urges blockchain builders to conduct thorough patent analyses to mitigate these overlooked threats.

Link to Article
https://www.linkedin.com/pulse/hidden-patent-minefield-blockchain-100m-risk-youre-ignoring-price-0elrc/

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DISCLAIMER:

I’d like to advise that the content provided in this video is intended strictly for informational and educational purposes only. This video constitutes a research opinion and should be regarded as such. All claims, statements, allegations, and opinions contained within are based on publicly available information and are allegations unless and until proven in a court of law and are not intended to malign, defame, or harm the reputation of those mentioned. All such statements are offered solely as opinions protected under the principles of free speech. Adding, I am not a lawyer or financial advisor and I’m not employed by Veritaseum or paid by anyone for my efforts.

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