Over the past few years, the number of patent applications filed for blockchain technology in healthcare has doubled across the United States, Europe, and Canada. The first blockchain application released was Bitcoin which was not immediately patented. Since then, patentability of blockchain technology has been on the rise while the exponential growth of development in blockchain has been nothing short of breathtaking. An important factor in the progress of this technology is that the source code is open source, meaning that anyone can access the code for free and improve upon it. Because of this, a deliberate decision was made not to use copyright laws to protect the source code, leading companies to explore patentability, especially in healthcare.
Recently, Walmart won their patent for a system that would store medical records on a blockchain from a wearable device which generated quite an interest in securing blockchain innovations. This system, according to Walmart, allows medical professionals to retrieve medical data from a patient. The patient’s medical records will be stored on the blockchain, accessible by a device worn by patients and accessed with an RFID scanner. Additionally, the medical information may be shared with hospitals and other healthcare entities, making patient data available to medical professionals ahead of time. According to Fortune, Walmart may also consider purchasing the health insurance company, Humana, to provide an indispensable data depository. Walmart also filed patents for other blockchain-based systems, including a marketplace for reselling products, a system to track packages, and an electrical grid powered by Bitcoin or other digital currencies.
Healthcare stakeholders are considering using blockchain technology to advance existing business models alongside emerging regulatory agendas. Currently, there are several patents filed for the use of blockchain technology in healthcare, including healthcare data sharing, provider credential management, and patient health data. The potential effect that blockchain patents may have on innovation, collaboration, and interoperability in healthcare is quite impactful. As more organizations obtain blockchain patents, it becomes even more difficult to implement ideas that use blockchain to revolutionize conventional industry practices. The use of blockchain technology for healthcare data sharing is subject to the United States Patent Laws for the protection of healthcare innovation.
When granted, blockchain patents may harm innovation, collaboration, and interoperability by bringing an open source technology into the world of patents. History has multiple examples of patents harming rather than aiding innovation. With that being said, the objective of Article I, Section 8, Clause 8 of the United States Constitution is to promote the progress of science and arts. As emphasized in previous cases, obtaining patents should be more than drafting a design to monopolize an abstract idea. Referencing 35 U.S.C. § 101, the Court explained that it has “long held that this provision contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable” because they are “the basic tools of scientific and technological work,” and “monopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of the patent laws.” Nonetheless, depending on the specific claims that the patent application makes, the patent may still qualify as a patentable subject matter. This means that even if a specific blockchain technology can be patented based on 35 U.S.C. § 101 as a “process,” it still needs to show that the claims in the patent application are novel and non-obvious. All of these requirements may be challenging to prove given the proliferation of blockchain technology and the fact that it has recently been applied to so many uses other than digital currency.
Owning to the technological characteristics of blockchain, many companies are choosing to protect their algorithms as business secrets. However, as recent trends have developed, the number of patent applications being filed for blockchain technology is on the rise, especially in healthcare. Getting a patent on blockchain technology that uses a peer-to-peer network using proof-of-work to record a public history of transactions is like getting a patent on an algorithm that is an abstract idea, which is not likely to be approved. Nonetheless, if an invention uses an algorithm in a process designed to solve a specific technical problem in “conventional industry practice,” like healthcare, then a patent may very well be granted.