Speaker 1  0:00  
Good afternoon, everyone. Welcome to IP opportunities and pitfalls in protecting blockchain technology presented by Autumn. My name is Holly Lundgren autumns online professional development manager. And I'll be your staff host for today. All lines have been muted to ensure high quality audio and today's session is being recorded. If you have a question, you may enter it at any time using the q&a feature. I'd like to take a moment to acknowledge and thank autumns 2020, online professional development sponsors, we appreciate your ongoing support. And now I'll introduce our presenters. Charles Macedo, a physicist by training litigates in all areas of intellectual property law, including patent, trademark and copyright law, with a special emphasis on complex litigation and appellate work. companies and individuals from a wide range of industries turned to him to develop offensive and defensive strategies for the development and enforcement of their patent and trademark portfolios. Isabella Ortiz joined Northwestern info team in 2017. She primarily focuses on technology portfolios in Engineering and Physical Sciences, where she contributes to the management of patent prosecution strategy, licensing and commercialization, engineering and medical devices. Isabella has a strong medical mechanical background and holds a law degree. At this time, I'm going to go ahead and turn it over to our distinguished speakers. Welcome, Charlie. Welcome, Isabella. Thank

Speaker 2  1:33  
you, Holly. Holly, awesome. I'm gonna take over the screen. Hopefully, here we go. Thank you, first of all, to autumn for having us we definitely appreciate it. We are big fans of autumn. And thank you to Holly for your great work in organizing this. And most of all, thank you to Isabella for helping put this together and giving us some in house expertise on the subject. Today we're going to be speaking about IP opportunities and pitfalls in protecting blockchain technology. My name is Charlie Macedo. I'm with Amster, Rothstein and Ebenstein. And while we do a tremendous amount of lots of different things, in particular, I have a extensive experience in protecting computer implemented inventions, including many blockchain technology patents, which we have obtained for our clients and continue to obtain. Isabella, if you want to give a minute just to introduce yourself, that would be great.

Unknown Speaker  2:44  
Yes, my name is Isabella, tes. I've been at Northwestern like Holly said since 2017. I work primarily on Mechanical, Electrical Engineering inventions, but also medical devices and help i i t stuff as well, too. I have an experience with a blockchain startup, I came into Northwestern and licensing that startup and also going through their startups process of an Ico and this will probably be my third autumn presentation about blockchain as well.

Speaker 2  3:13  
Thank you and keep up the great work. So well. First of all, I do want to give the standard disclaimer that this is for educational purposes, we're not giving legal advice. We are just sharing with you thoughts and concepts for you to think about as you think about whether you can or should seek IP protection and what type of monetization opportunities you can get out of that. And our agenda for today is going to begin by just a high level explanation about what is blockchain technology, and then helping you understand what I call the my version of the blockchain stack, as well as Isabelle is going to explain her worldview of how TTS fit into the blockchain world. Then we're going to talk a little bit about what to do to obtain a pot, a patent in blockchain space, and what you should put together to actually get a good pattern and what we typically look for with our people, when we're putting together these things. So we're going to begin by just understanding what blockchain technology is. And we begin in 2009, when a paper was published by Satoshi Nakamoto a pseudonym no one knows if Satoshi Nakamoto is one person that doesn't people or whole Cabal, but he published a paper that was called Bitcoins, a peer to peer electronic cash system. And in this paper, he identified very much like a patent education, technical problems to be sought to be solved. And among those topics, technical problems that he sought to be solved was the inherent weakness of a trust based system. He excuse me, he found one of the major problems was the reversibility of transactions. He didn't like it that if I paid for something, I could then say, Nope, you don't get it. Nakamoto also found that transaction cost of mediating disputes was very expensive, which went hand in hand with the reversibility of transactions. You also thought that the lack of microtransactions was a problem. And he also did not like other people knowing who he was, as evidenced by the fact that even today, we don't know who really is Satoshi Nakamoto. And he also recognized that one of the major problems in a brick and mortar world is that physical cash can't be treated and transmitted over a communication channel. And these were the problems that in developing Bitcoin were identified as the ones that were sought to be solved. So what they said is that what is needed is an electronic payment system based upon cryptographic proof instead of trust. Trust in math was sort of the motto that the motto that underlies blockchain, and Bitcoin, there was no trusted third party. It was relied upon computationally impractical in practicality to prevent reversal. It had routine escrow mechanisms to prevent against fraud. And they used a peer to peer distributed network with a timestamp server to generate the computational proofs of chronological order of transactions to avoid a double spend problem. And they found as a consensus mechanism that the majority of the CPU power would rule. These fundamental process concepts are at the core of the Bitcoin Bitcoin version of blockchain. Although people obviously have thought and deviate against this as we'll get into. So let's just take a simple example of how a block chain a Bitcoin version of blockchain transaction works. Alice wants to send Bob one Bitcoin. So in the wallet, you'll see the little black box where Alice is saying that she has put in her private key information to access her Bitcoins, and is sending it to Bob's public address. And that information then gets sent to the Bitcoin network, where miners compete to solve very difficult math problems. And the first miner to solve the math problem gets to add the block, which would include Alice to Bob, one Bitcoin, that block or that that block with the mathematical solution that the mining miner came up with and gets transmitted to the block train network, which in turn verifies whether or not the blockchain calculation was correct. And if it's verified with over 50%, then the miner gets to add the block the blocks added to the Bitcoin. And then Bob can look up on the chain and see hey, I now have that one Bitcoin. And so is the typical traditional Bitcoin transaction. When we're looking at what the key elements of the blockchain are, we're looking at the authentication mechanism in the context of Bitcoin. It uses public key private key cryptography to authenticate transactions. We look at the consensus mechanism, again, in the context of Bitcoin and its other similar chains like Litecoin, they use a proof of work, which is the miner making the calculations. It also has a network which is a peer to peer network, and in the context of Bitcoin is open and transparent network. For version control, they use the majority of the computing power to adopt a protocol. This means that if there's a minority you can have forks and we'll be talking about that. And each block is tied to the previous block through a mathematical algorithm, usually hashing to verify that this is indeed the next block. And then there is also an issue of how often you add a block and in the context of Bitcoin it was approximately every 10 minutes over time, when less than 50% of the time the computing power decided that they want to have a different protocol. We resulted in splits and this just gives you an example of how Bitcoin split into Bitcoin XT versus bitcoin cash and Bitcoin XT became Bitcoin classic and Bitcoin classic split with Bitcoin Unlimited and then bitcoin cash but with Bitcoin gold and Bitcoin SV, and so on and so forth. Just to show you that when you have one Bitcoin, on the day of the split, then you have one Bitcoin XT, and one bitcoin cash. So you could end up having a lot of stock splits in such things. We also have clone coins, where they would take the basic protocol of Bitcoin and then do a tweak, for example, in 2011 Litecoin decided that 10 minutes was too long, they wanted to have a quicker time period. And they created Litecoin using the Bitcoin protocol, but made the the block process faster and namecoin did other things where it's bought off, and so on and so forth. We also have that other types of coins that have their own protocol that aren't clowns, but are separately written are out there. We have things like Manero and Z cash which offer hidden or shielded wallets Aetherium, which is a big part of the blockchain discussion, because of its use of smart contracts and tokens. We have ripple that tries to do a faster cheaper money transfer mechanism. We have hyper ledger which is formed by the Linux Foundation and includes many brain brand name companies like IBM, Intel, SAP, Cisco domlur, and American Express to develop their own version of blockchains. And, and such, we even had Facebook trying to step in with their libre coin to offer a whole new type of blockchain and and stable ish coin. And we have other things like file coin, where they create a peer to peer file storage system. Ethereum is a important use case, because in theory, I'm using the smart contract language that's out there. You can develop new tokens or you can also develop decentralized apps. These are examples of tokens that you can get through the Gemini exchange, Gemini dollar being a ERC 233, which is a standard type of stable coin that is issued and operated by Gemini. You also have maker and bread and Golem, which are other types of ERC 20 tokens based upon the Ethereum blockchain, which allow people to do things out there and, you know, are just examples.

Speaker 2  13:08  
At this point, we're going to talk move away from what Bitcoin is at the high level, and sort of talk about where people interact with the blockchain stack. And this stack is a blockchain stack that I conceptualize based upon my interaction with people and there are other types of stacks that people use. But at its core, you start at the bottom of the stack with the protocol, which is the software code that's the foundation of the blockchain stack. And that software code is typically run by all participants on the network and it defines how transactions occur. The Bitcoin protocol being the original example of a protocol so software ENCODE, but each coin typically or or network will have its own protocol that will be run on the computers to see how it works. Typically, these protocols involve open source. And while there are times where changing the protocol may result in patentable protection, more often than not, it is more of a public good. Then the protocol is run on computer systems. Those computer systems could be nodes that the administrative computers that are running the Bitcoin software, could be miners. There's a lot of work that's done on ASIC programs to make miners go faster so they can win the Bitcoins. Those could be wallets on your, on your smartphone. Gemini and Samsung recently announced a partnership where you can access the Gemini exchange through your Samsung wallet could be custodial systems where you store your private keys so they don't get lost. Gemini does a lot of that stuff and etc. The cryptocurrencies on top of that, because when you run the protocol on the computer system, you end up with a coin or the cryptocurrency. That's what we call Bitcoin Litecoin Aetherium Z cash. Those are the cryptocurrencies or the digital assets, which are generally available to be exchanged or traded in the peer to peer network. On top of that, when transactions occur in the network messages are sent. In the original Bitcoin, those messages could have included simply an embedded message. A lot of times people would say, you know, happy birthday or thanks for the pizza. Sometimes they will use more colorful language and what they put on there. As time evolved, people changed it from being merely a message to being code that could run as a smart contract, or a decentralized app. And examples would be like the Gemini dollar smart contract, which is a stable coin that allows you to use the theory and blackbutt backbone to transfer money and know that $1 As $1 You also have things like non fungible tokens like the crypto kitty software, which was a very famous and well known where everyone could have their own special kitty digital kitten, and the software would be done as a smart contract. Then, this results in the actual token that is the result of the smart contract, just like the protocol results in cryptocurrency, the smart contract can result in token these tokens are on top of the coin layer. And these tokens can be used and traded like cryptocurrency but often are the subject of more elaborate rules governed by the smart contract. Gas, which is a way that pays is a token that is used to pay for transactions going on the theory of change is an example that Gemini dollar which is establish a stable coin token is that when we start talking about pre sale of inventory, or maybe ICOs, which Isabelle is going to get into those are examples typically where the tokens are used to do that. So this is a little summary showing you all the elements of the blockchain stack against the different layers of the stack, with the stack also comes off ramps, and these are the things that interact with the stack. So businesses may be developed by modifying the original Bitcoin protocol, or by developing new protocols. So Aetherium is a wonderful example of how they developed a whole new network and business off of a new protocol that allowed for smart contracts that proved to be very popular. Z cash and Manero provided shielded wallets as alternative coins. Ai coin run by AI blockchain provides for private blockchain networks, where you start seeing the fundamentals that Satoshi neck Moore put up. Being challenged. Block stack protocol provides a new ecosystem to develop and run decentralized apps. Computer Systems writing the protocol is another place where businesses have developed. So while the miners are using a computer system to run it, people may develop new ASICs so the miners can run faster better and be win the race and mining consortiums could be the business that are developed that don't do that. Better wallets like the one that Samsung is doing with Gemini is an example of something out there better custodial systems like our Gemini protection your your segregated wallets is another system out there that may be part and parcel of an offshoot on this part of the stack. With the cryptocurrency new coins are examples of businesses that develop. You also can have inventory control systems, I like to call it the Whopper coin. I pre buy one Whopper coin and that Whopper coin can now be cashed at Burger King to get a whopper. You can also have exchanges or transfer mechanisms out there. You could have financial products. The original work that I did on this was for the Winklevosses exchange traded fund holding Bitcoin But we've also seen futures and options come out and lots of other things. There are side chains out there square has developed a whole bunch of stuff with side chains and Oracle's and lots of different technologies that come out based upon coins and their options. With the message layer, we ended up mostly dealing with conveying information as the original form or sharing pictures, like with non fungible tokens. You also can have smart contracts to make stable coins, or you can have smart contracts that may make security tokens. You can have electronic contracts, electronic securities, Oracle's are entities which go out there and give you information for you to use to verify transactions that are done. Decentralized apps is another application, which is really big. And then the tokens on top of that are the actual evidence that you own something. And what we have now here is sort of our blockchain stack. And when you are looking at this, this blockchain stack is a nice way to think about what is part of the block what is part of the blockchain stack and was off ramps of the blockchain stack. And this is where you want to look for how do I do a business and do I protect and defend or give away? At this point, I'm gonna let Isabel talk a little bit about some of the applications from her TTL perspective. And Isabel whenever you want the next slide, just say next.

Unknown Speaker  21:38  
Thank you, Charlie, I would definitely will. So thank you for explaining cryptocurrency and tokens. I think that's the most use case of blockchain. However, there are so many more applications of blockchain as you can see in this list, as of 2020. The main areas to focus on if you're to or you're going into blockchain is cybersecurity is really big financial services either through digital banking or asset management, healthcare, through fitness, wearable technology, and medical devices, and supply chain are the one really big areas right now. And in the next slide, I'll go into more detail in the next slides. I'll go into more detail health care and different companies that are using Blockchain right now. So we can go to the next slide. So here's the major advancements of blockchain. You guys probably all know about the Walmart IBM blockchain initiative that was about in 2018. In the summer, 2018, Walmart had an outbreak of lettuce and it took about two weeks to identify which farm it came from. And by then 1000s of people were already affected by the outbreak of the lettuce. But when they were able to implement the blockchain initiative, it took them about nine seconds to figure out exactly which farm in Arizona had the lettuce that was bad. Health care is a really big area, especially right now through the pandemic insurance claims can be fast process faster now with smart contracts. You don't have to wait days or weeks to get an insurance claim denied or approved. You send your information to the blockchain and through the smart contract they either approves or denies it based if you meet based on if you meet the criteria needed for the insurance claim. Retail is really big right now. The jewelry industry is currently tracing where your diamonds can be mined from or Tracy where your are mined from personnel consumers are knowing exactly where the diamond is from and how much it's worth. And if the jewelry is jewelry nurses telling the truth about this smart contracts. This is an older concept. smart contracts came about maybe 20 years ago but now implementing smart contracts and blockchain licenses for services and music can we create a faster? Spotify is one of the companies that is implementing this for copyrights, proper property and land title escrow commission rates are now eliminated through smart contracts, you're able to have a good record keeping of whom the title of the land and the property. Voting is another area that would have been very useful, especially during this pandemic right now. But essentially what the with blockchain and voting you're able to increase the legitimate votes and give access to many people to vote online. And Cloud Storage is another big area. Startups now have a way to pitch to investors. Eastman Kodak is currently using Blockchain to store their stock photos. And another like I said, cybersecurity is really big right now for blockchain, especially during this pandemic right now. A lot of companies are virtual, or have all their information on the cloud. So we need their data, their data is compromised. So there's a lot of data take tampering that's going on. So when the with the cybersecurity and blockchain, you're able to really protect the information that's identifiable for the person. That's the blockchain. So you can go the next slide now So healthcare is one of the bigger areas right now that's that one knee and use blockchain. I mentioned insurance claims but also record keeping. Now doctors, patients and insurance companies have access to all the records instantaneously. You don't have to wait days or weeks to get information from either party. And each party is able to access the record at any given time with with the axis information, fundraising for new r&d. This is a really big one to professional investments supply chain tracking one big area that companies are going into as pharmaceutical supply chain for more for more reliable record keeping, but also to make sure consumers are not getting counterfeit, or contaminated or stolen drugs as well, too. And also for improving financial wellness. But as I mentioned, with trackers and fitness right now, a lot, everyone's wearing wearables or it's a really big area. But there's a lot of identifiable information on these trackers that if they got out it would be very bad. So with the blockchain technology are able to really secure your information in a way that you're able to still use your trackers and feel safe. Another area right now is with the COVID-19 stuff is countries are now starting to implement a social distancing tracker. But if they were able to use this blockchain technology, they're able to really secure the information of everyone that's on this tracker. So there's, in Australia, there's a company that's working with the government to implement the blockchain into their social distance tracker. Right now.

Speaker 2  26:34  
Just one point about these things. Part of where patentability comes in is when you figure out new technological solutions of how to accomplish this using Blockchain, but overcoming technical issues like privacy or confidentiality, where for example, I can access my health record using my my private key, but you can't access My Health Record and find out that information. Or maybe my doctor and hospital a can access the information that he needs without accessing other information, but by doctor and hospital B, which does a different type of thing can access the relevant thing for him without accessing the other thing. So there's a lot of cool technology that cryptology and blockchain technology allows for that, on the one hand, has publicly available information easily verified, but yet can potentially protect it using cryptology in a way that can give you some really cool results. And that's a place where I think universities do allow research and development, and particularly care.

Unknown Speaker  27:45  
Exactly, especially since most hospitals now have a record keeping online. So anyone can access their records if you're a patient online, but there is how safe is that? Currently, so I love this graphic. So this is this charts, a little outdated, about two years old. But I think it's important because it shows you the top universities, I've really started playing a footprint in blockchain. So as you can see, this is a world map of universities I started putting courses in Cornell was one of the bigger and the first schools to really implement blockchain Northwestern. At this point two years ago, we only have one course. But after digging in a little deeper, I realized that we actually have a lot more courses in the undergraduate area. And there's a lot of student organizations around blockchain. And we currently have 10, pending patent applications on the blockchain technology. So my advice to universities is really talk to the students there's a lot of there's a lot going on, especially if you have an AI track, or some sort of student organs organization accelerator program. There's a lot that they're doing the blockchain and but mostly in the undergraduate area, obviously, right now, there's not a master's program in blockchain. But you'll be surprised once a beauty to dig into your school and really see what they're doing in there. I was able to talk to a student organization and realize that they actually hosted a blockchain conference here in Chicago. So that was really cool. So yeah, this is outdated, but as of right now, in the past few years, a lot more universities are implementing blockchain programs in their undergraduate courses. So I think that's good. I know, as you as a TTL. We can't really get ownership of Northwestern what we can get ownership of undergraduate interventions, but this is good that they're able to start at the lower end for undergraduate and hopefully move into master's programs. So um, let's Yeah, I think this chart is really good to show the first people in the blockchain space where universities

Speaker 2  29:44  
right and you know, I like to point out Cornell for a second because the interesting thing about Cornell is they have a very strong active undergraduate program. In the sense of extracurricular activity. There's the Cornell blockchain club which we spoke at last year I think or maybe two years ago. And there were 150 people in the room to listen to the lectures that were going on, including, you know, the developer of crypto kitties, I thought that was really cool personally, because I think that you know, that someone who can write code that can take over the social media and internet, and just be a human. And it was nice to see that. But you had a lot of very entrepreneurial students out there. And even if the class and the courses aren't doing stuff, the people that take the classes and the people that take the courses are the people that you want to work with, because they are your future inventors. Exactly.

Unknown Speaker  30:41  
And that's another issue we have as a university is a lot of stuff is open source. I know you mentioned that previously, Charlie, and I, you know, you have two types of professors. Yeah, the ones are really pro open source and the ones that are against it. And for blockchain, open source is very important because it helps develop technology further. But as a TTL, we are really hesitant about open source, because you really lose a lot of patent protection at that point. So that's one thing you also have to remember is a lot of you students that are working on blockchain technology, they might have open sourced their, their code already. So just you know, it's good to stay on them and see what they are just really keep up to date with them to make sure that maybe what they do have is patentable, what's not patentable? Because we've had two situations at Northwestern where we had patentable blockchain technology on patentable because it was more copyright. So

Speaker 2  31:35  
one of the things that I'd say about open source is there are good times and places to do it, if you're going to improve the protocol on Bitcoin, it's going to be open source for the most part, and it should be. On the other hand, if you're going to do an off ramp where you're going to make a business that interacts with Bitcoin, maybe a minor business or something else like that, maybe you don't want to be open source, if you have new, great software that allows you to solve the math problem faster than the other guy, you probably want to keep that proprietary because that's how you're going to make your business. And you just have to be intelligent about that. You also have to be intelligent when you're dealing with open source to make sure you've been off the proprietary from the from the open source. And you comply with the open source notice and attribution and other obligations that are built in with the specific open source contract. Agree.

Unknown Speaker  32:22  
That's a really good point. So yeah, go to the next slide. So this slide, I just give a little bit about the investing in blockchain. The next slide I will talk about the different types of investing in blockchain. For this one, I wanted to give some stats. So the blockchain hype, it's been around since 2010, with the paper came out or 2009. In maybe in the past three, four years, it's really taken off. I will I want to compare the blockchain hype of the early days of the internet, the blockchain technology is not going anywhere, it might take a little bit longer to develop. But it's something that's going to be very similar to the internet and basically, everyone's gonna be using it every day, and maybe not in the next two, five years within the next 10 years is gonna be in a whole different space. And I was now venture capitalists are also seeing this too. They've tripled their investment in blockchain and crypto related firms I will talk about in the next slide numbers and trading costs will be able to decrease because of this blockchain will also provide basically quick settlements. And then regulators are beginning to realize the benefits of tracking startup companies in the blockchain space. At first. There are a lot of regulations in the US, especially for blockchain, especially in the ICO space. But I think regulators are starting to realize that there is an advantage to the blockchain technology and they're being a little more lenient towards this. This slide to the right is some startups that receive top investors and recent rounds for startups. Um, I can't really read it too much on the slide, but as you can see,

Unknown Speaker  34:03  
the guy about digital currency group Yes.

Unknown Speaker  34:05  
Oh, there we go. Yes. So that was yeah, that was a large player. This was this Charles from 2017 to 2018. So it's a little outdated but not too far off today.

Speaker 2  34:20  
So just so people can read it digital currency group, Blockchain capital plug and play. My eyes aren't that good for the next one, Draper associates. Yeah. There's a fair share of this. And it's good to keep in mind that there's lots of people and it is ever growing to

Unknown Speaker  34:41  
Thank you Next slide. Okay, so there's two types two ways of fun or investing in blockchain. There's the venture capital funding which is more understood ways tech transfer, but there's also an Ico if you're not familiar with ICO. I won't go into details too much, but it's an essential coin offering and it's very similar to an IPL, but also maybe compared to like a Kickstarter. It's, I'll go through the differences in both. There's advantages and disadvantages for going into venture capital funding and ICL route. Both are very prominent right now blockchain have invested in tons of money as a medium bowl. So there's not a preference to which is better or not, it's really your own. It's a case by case all your company wants to do and how you want to raise money in the venture capital fund and you raise it but the group of venture capitalists who are skilled in the field, and they risk their own money for a company equity. However, an ICL, there's no equity commitment, you're able to raise money from anyone anywhere in the world. And anyone that has enough money to buy a token in Ico, you're promising your exchange for money, you're giving a token and the token is going to be valued at a certain amount after you're done raising the money. So it's more hypothetical like a Kickstarter in the way. The goals though for both are no consulting you get the consulting the business guidelines, you get a proof of concept. You get connections and network to industry influencers for venture capital with an Ico it's just a really quick way to raise money. If your goal is to get as many people involved as possible. You will however, get a stronger community within the blockchain space because people who do invest in ICOs usually have a very intelligent understanding of the blockchain space and invest in other ones. So you'll get a strong community within the audience for both is you know venture capital funding get experienced businessman you get. But you like a demo or white paper, you really can't go far you need a business plan with venture capital, and you need pitches. An Ico you can get anyone from anywhere you don't need a working prototype, you don't need a proof of concept. It's really a quick buy process. And the requirements for both reach for venture capital funding you need a strong staff and you know, strong seal is willing to talk to companies, you do need a working prototype and you do need us give a share of your company. However, the ICO there's no formal requirements yet. It's a little up in the air different countries are doing different things with ICOs and really say, if you're really interested in Ico route, really stay on top of the regulations are changing every month. You will you'd be essentially you decide how and why your token holders will get exchanged for their money. You in the next slide now. So here's some stats and a graph of the difference in Ico and venture capital in 2018. About 7.8 billion was raised for ICOs, it went down last year, just a little bit. But that's because it the technology takes a little bit longer to develop. And because of the regulations as well, too, but also because of venture cap, oops, sorry, venture capital started investing more in blockchain at this point. So that was a preferable route for a lot of companies. The success rate actually didn't go down from 2018 to 2019 54, were successful in 2018, and 45%, were successful in 2019. And then, um, so according to CB insights, there's spending surpassed 16 billion by 2023. And they're also suggesting that there's about 58 industries have limitless potential in the blockchain space. So it just shows that it's going to expand more and more. Below go into different areas to so Aetherium, Charlie talked about a lot is the success story of an ICO. So that's a it's not all bad. It's just really you're interested in really do your research on it. And there is there has been bad players and ICOs. But there's also good ones too. So

Speaker 2  38:41  
don't confuse the technology with the participants. Because there's lots of good, there's lots of good and bad people out there. And if something is a hot technology, you'll get good and bad people involved. Just stick with the good people and avoid the bad and you can take advantage of the technology. Exactly.

Unknown Speaker  39:01  
So oh, wait, I'm not I'm not done.

Unknown Speaker  39:03  
I'm sorry. It's okay.

Unknown Speaker  39:05  
So in the venture capital space, VC investing reached about 2.8 billion in 2019. And this came from about 107 separate deals. However, these deals were tied between crypto blockchain technology, it really didn't distinguish between what was just blockchain or just crypto. But one thing to point out, especially when I went into the applications is a lot of blockchain is implemented in a lot of different applications in the one they're doing both supply chain healthcare or some sort of they're implementing two different applications in one and as in the last bullet point there. The reason there was a decline in funding was a lot of products are still trying to find the market product fit. Just like AI technology. If you don't have a target audience for your blockchain, it's really not going to be successful. So from the very beginning, you need to know who you want to target and how you want to target it. Another good point to remember is also Little institutions and corporations are starting to be more comfortable putting their capital into this space, which means that angel investors are falling off, which is a good thing because it shows that the industry is maturing. And so as you can see from the chart on the left, there, the biggest areas for blockchain are business and fintech. Health Education is a little smaller transportation, marketing, social is also in the bigger area. And then leisure retail is going to be bigger this Charles from last year to this year retail gonna be bigger because of the supply chain mechanism of blockchain. So I think that's all I have is like,

Speaker 2  40:38  
Yeah, I mean, the thing that has happened also, since this was done is I think the decentralized apps have become much bigger. And I think that distributed ledger technology is being used more in transactions where people are paying out things. So you could end up owning your securities, and then distributing the payouts for that, using Blockchain technology. We're seeing a lot more of that out there, as well as a lot more new and cool. financial products that are coming out of there with technology and development could be in there. So this is a slightly dated summary, but you can see that people are filing a lot more. Or at least they're using Blockchain a lot more certainly 2018. With all the hype, people went out of their way. But these filings, I believe, are publications as of the dates, not the filing dates, but I'm not positive, but it's something that we took from one of the resources. This chart, I just wanted to briefly point out, and this was done by Intel are those of you that know, Barry Gregor, a good friend of autumn. He has a wonderful platform where he keeps track of different technologies, and they have a blockchain database. And in it, he looked at the universities and university partners, and he said, Who are the leading universities, university partners, that's why you see Texas Instruments in there that are working in the blockchain space. And if you see green, it means they have a patent if you see the goal, that's a patent application. Otherwise, that may be a press release or or some other non patent literature that results in these things in terms of events. And you see California, there right at the top doing a lot of stuff. They have patents, they have applications, and they have other things that are occurring out there. UT comes up there. Next with Texas Instruments, where Texas Instruments is getting patents, Columbia, MIT, the Institute, Cornell, IBM, Michigan, and Wuhan come up there next. This is from the US perspective, if you do the world perspective, everything is Chinese, the Chinese are overwhelming the blockchain market and that stuff. But you can also see some of the cool categories that Barry's database that where you can see that people are using it in automation and automotive banking, or finance, Cloud Storage, credit cards, or ATMs, energy, gaming, sovereign coins, which is governance, you could also have healthcare. So you see who's playing and where. And certainly, if you want to get access to this, you should reach out to Barry Gregor, who I said, is a great friend of autumn and provides a lot of great activity on it. So anyhow, that's what this has been to do. A more points before we go on to the next section. Isabella.

Unknown Speaker  43:57  
I think you read you covered everything there. I mean, I noticed Northwestern is on this chart. So I'm a little little upset about that.

Speaker 2  44:04  
I understand I worked on trying to get you on there, but you didn't make it in the top seven. So you have to work on your footprint. I also pointed out that this is a little dated because it's as of q3 2019. So to the extent that Northwestern may have had things become published, after that, it would have made it and you know, that is one of the things you have to keep in mind. A lot of people when they're doing blockchain patents want to do them in the US unless and until they allow them to become published, you may not see it. And that also impacts a lot of what's going on. And you know, if you look at the third column, where it says publishing activity, you can see how those chains are growing over time. And, you know, there's a lot more things happening in recent time. But yes, I thought Northwestern should be in there and I was trying to get your data if I didn't get it in time and I apologize So now we're going to talk about obtaining patents that make it useful. And one of the things that you want to think about is taking into account how things are developing when you're doing your patent drafting. So, we're going to talk about how the original Bitcoin was a public blockchain, but how that has evolved into different kinds of public, private or hybrid chains. We're going to talk about how the original Bitcoin was a proof of work consensus and how that's evolved. We're going to talk about how sending messages as involved in public and transparent data, different blockchain technologies in terms of using a chain versus other types of work to hide organization, the differences between fungible and non fungible. So just starting off with one of the core features that we saw in Satoshi Nakamoto paper was that he didn't trust anyone, and he wanted to trust in math, and in a peer to peer public network. But over time, the public blockchain has also created either semi private or private blockchains. And such that only the authorized actors are allowed to be in the piers to see what's going on. Or that privacy could be different as to who can see what within a private blockchain. So if you're working on technology that changes in this space, and how you're changing that, that's a ripe area where you might seek patent protection. And for example, we got one of our clients a patent on key technology associated with making private blockchains work faster, more efficient, and yet shielded. Other types of developments that we've seen in the in the Bitcoin stack, was that the Bitcoin was a proof of work consensus mechanism, which has over time been substituted in other chains like Aetherium, using proof of stake and Libra using a Byzantine fault or burst using proof of capacity. As people develop new types of consensus mechanisms, those are technological challenges with technological solutions that could potentially lead to patent protection. We also saw how Bitcoin originally would send messages like Thanks, Grandma or something like that, or happy birthday when they send the Bitcoin. How those evolved into smart contracts, which evolved into tokens, which are now evolving into decentralized apps. And as those technologies evolved, how they evolve is something that could be protected. And we've gotten patents involving, you know, special smart contracts and how they're formulated and implemented and the technology associated with that. We also have the fundamental theory of public and transparent data underlying the original Bitcoin yet we had shielded wallets that were developed as new and different in Z cash in one euro. And new technologies on how that may be implemented is an example of an area which might have been ripe for patent protection. We also saw that when Facebook implemented their Libra solution, instead of using blocks where they just added the new transactions, they would have a new Merkle tree every step of the way. So they changed the whole logic of how they were doing the database. And in the chain. Also, you know, I love crypto kitties. Here's some real crypto kitties that are out there. And what you can see is one of the fundamental differences is that that first kitty, which is 2403616 Gen eight was owned by someone, and it was their crypto kitty. And it wasn't fungible with kitty 240611. And there was lots of technology developed in the smart token and the smart contracts that were used to generate crypto kitties, including having baby crypto Kitties and, and whether you allow copying or other things like that. And so those are technological problems with technological solutions that can come out of evolving technology. So when we're looking for making a patent, we have the same considerations that we do for any other computer implemented invention. We care about patent eligibility, we care about divided infringement, and we care about having a sufficient disclosure of what the computer software is that is doing this. And, you know, in the specification, we look to try and show technical problem in technical solution. We'd like to have samples of the pseudocode showing how the computer can be programmed in an exemplary embodiment. In the figures, we want to know the topo Do you have the network that components of the computers and the associated electronic devices, we obviously need the process flows. We care also about that the claims are meaningfully tied to the invention to the blockchain technology. We care about the claims interaction with the blockchain, are they sending the messages to the blockchain, which get executed. detail is very important in claims these days, thanks to Alice and 112. And we also want the claims ideally, to go beyond merely storing information, but actually doing something with that information. Sorry, so here's examples of how we throw in pseudocode into our issue blockchain patterns, and talk about technological problems that are being addressed. We also have examples of how we've done figures that show the components and and what's in the smart contract. We also have examples of figures showing the network or the graphical user interface, or what the database should look like in what we're doing. We also have examples of different ways we've done flowcharts to show how things are done. The second one saying continue from 19. A is showing how the different smart contracts that interacted and that invention, interact with each other and show what a blockchain is doing. What we also like to do is tell you, what we want you to gather. And this is the advice which all YouTube videos need to know. We need to know what you're trying to cover and make sure you're covering something that makes sense on the block on the stack or the off ramp. And you know that you're not just updating the Bitcoin protocol and therefore in the in the cloud, computing space, but you're actually developing something new and different or developing a Z cash type difference versus a like coin type difference, or, or a or a split in that. We also started we also want to know, does your invention change the blockchain or interact with it? And how does it interact with it, we want to make sure we can define what the computer problem and the computer solution is. So you sort of want to make sure you can phrase that because otherwise, we'll have challenges on patent eligibility down the road. We want to identify which blockchain invention was developed for and how it must be modified to work with other blockchain technologies. The way you implement something in Bitcoin is different than the way you would implement it with Aetherium is different than the way you may implement it with stellar. So we have to understand that now it would be modified, we have to understand the details of implementation and why the blockchain technologies needed to make the invention work. We don't want to just say and do it with a computer or and just do it with the blockchain. We also would like pseudocode, for key aspects of the invention, like the example we gave you earlier. And we also want you to think about who are the people that are going to use this technology, and focus on the roles that they're performing in the claim. So that way, you can draft claims to cover the people that matter. We always have to deal with divided infringement, particularly when it's a peer to peer network with 1000 people operating. And always, as with any invention, why are you different than the prior art? And why are you novel? not obvious? At this point, Isabella, do you want to share any thoughts before we open up to questions?

Unknown Speaker  53:57  
No, I really don't have any much to say thank you, you went through a good way to go to disclosure. I think a lot of times as a TTL, we're not you know, I'm a blockchain expert, I really don't know how to handle a blockchain invention in I guess it would just depend I mean, a lot of times we get a lot of software components. And as Northwestern we don't have a cop, we don't have the ownership of copyrights and software. So we have to really just see if it's something more patentable at that point. So that's a good point to bring up is if it's something that is related to the hardware, or is really just a software.

Speaker 2  54:32  
Right, and when you're going to be relying upon copyright law as a university, a lot of times you have to get into the exception area. And it may be that the exception is something the author of the copyright software may want to have the university to help market it, but then you have to deal with also the fact that they probably made the mistake of putting it on GitHub and making it private What's happened before yes open source, or that they took a lot of software from GitHub and didn't segregated otherwise, or attributions and things like that. That's an autumn lecture for another day, which I'm sure you guys deal with all the time. Holly, I don't see that there's any open questions right now have? Is that correct? Or is there anything that I'm missing? There are

Speaker 1  55:26  
not any open questions right now, if anybody listening has a question, you can put it in either the q&a box or the chat box. We don't want to wait around in silence too long. But we also want to make sure that there's an opportunity for those questions to be asked. So maybe we'll give it just kind of a minute here while we finish up. So well,

Speaker 2  55:48  
while we have you on we'll put some shameless plugs in. We are doing a webinar with Dan Dyani. from MIT, in a week on patenting, artificial intelligence and machine language, we're doing it through World Congress. If anyone wants to participate or watch it, just send me a private message. And we'll get you login information. We also are working on a really exciting project with LDS, which involves the impact of COVID on innovation. And it's talking about the disruption that occurred, the acceleration in technology adoption, as well as the innovation. If you look on our firm website, or in my LinkedIn profile, you will see that we published on Monday with the mid market report of law.com, a wonderful thought piece on this. And if you have anything to share about your experiences, please add it to the comments of my LinkedIn posting, or send it to me, we also would love to have a university perspective on any of those things. I say we just got a question. I'm sorry, at the end, we did put in some definitions that Isabella was kind enough to share. I see we have a question. And this one is from Justin Wagner. And thank you as well, Justin, thank you. If there's anything you need, please feel free to reach out to us. We'll be happy to talk to you. Um, so at this point, I think we've met our time limitations, Holly, or do we have another minute? We

Speaker 1  57:36  
have another minute if you need it, but I don't see any other questions coming in. So if you have any closing comments, feel free and then I'll just close this out.

Speaker 2  57:44  
I think that what people have to understand is there are places that are appropriate. And there are places that are not appropriate for seeking IP protection in blockchain technology. It's a hot area is some of this hotness comes and goes with fads like ICOs and other things like that. But it's it's still important and hot. And it's something that you want to make sure that as a CTO, you're aware of what the issues are. Sorry, I'm having trouble with my screens. And, and it's one of those things which we can certainly help you navigate of what to do with that stuff. And we'd love to assist any of you and we also want to thank autumn for letting us make this presentation and Isabella in particular for participating. Isabel, if you want to have any closing words, please feel free. And I'm sure Isabel is one of those resources in autumn, which if you reach out to her and say, How did Northwestern handle this? She can at least give you an answer. Like that's a tough question.

Unknown Speaker  58:54  
Thank you, Charlie. Yes, I would have to just say I know blockchains been around for 10 years. Universities are the last people to really get on board a blockchain. So I would say don't sleep on universities where they're doing stuff and it's gonna take a little longer because you know how research goes University takes a little bit longer. But I really see a difference in five years the TTS is really getting more patents or putting more applications in the blockchain and especially with the different areas healthcare is gonna be really big cybersecurity is gonna be really big. So just as a TTL really reach out to your, your electro engineering department, your hospitals and see what they're doing in blockchain or have they ever even thought about implementing blockchain under current process.

Speaker 2  59:36  
Also, Holly, I believe that this has been recorded. So if anyone would like to get access to the recording, let Holly know. And if there are people that didn't get to see it today, let them know that they can reach out to Holly to do so. Thank you once again to autumn and Isabella and Holly. And with that, I think we can end our conference.

Speaker 1  59:56  
I just want to say a quick thank you to both of you. Thanks, Charlie. Thanks, Isabella. We appreciate your sharing your time and your expertise with hope everybody found it informational. If you had a question you didn't get a chance to ask, please feel free to follow up either directly with Charlie or Isabella. Or if you don't have their contact information, you can follow up with me, you know, I'll pass it along. A recording will be available, you'll be able to find and to register it for today, you'll be able to find that in the my Autumn section of the website. If you're having any trouble with that reach out to me. I'll also put a PDF copy of the slides in that section. And that'll be available within just a couple of days. evaluation will pop up when you close out of this window today. Please fill it out. We really appreciate feedback. And I think that will conclude our program for today. Thanks for joining us. Have a great afternoon, everyone.

Transcribed by https://otter.ai