Posternak Blankstein & Lund LLP is now Arent Fox. Read the press release

Arent Fox Secures Patent for Crypto-Asset Recovery Using Blockchain Technology

Arent Fox has procured for Bloomio, a fintech pioneer and provider of a blockchain-based investment platform, a U.S. patent covering a new technology for crypto-asset recovery.

There has been a tremendous increase in blockchain technology innovation and corresponding patent filings in the U.S. and worldwide. Bloomio, a Swiss fintech pioneer, has developed a blockchain-based investment platform that connects investors and startups and raises capital using an equity tokenization process, by which investors get crypto-assets (such as crypto-coins/tokens) derived from the equity in startups. Individual crypto-asset owners typically keep their crypto-assets and conduct crypto-transactions via cryptocurrency wallets, which can be accessed using the owner’s private encryption key. If that key is lost or stolen by a cybercriminal, the wallet and all crypto-assets within may no longer be accessible to the owner.

Bloomio’s U.S. Patent No. 10,790,976 addresses this security problem by providing a multi-signature crypto-wallet and a key recovery mechanism. When an owner requests recovery of his private encryption key, Bloomio’s system generates a blockchain transaction data structure that includes a script for replacing the owner’s personal private encryption key with a replacement key. The system then generates digital signatures based on the data structure using other private encryption keys associated with the multi-signature wallet, namely, a key of the crypto-service provider and a key of a key escrow organization. The blockchain transaction data structure, along with the generated digital signatures, are sent to the blockchain network for validation, subsequently enabling the owner to access their crypto-wallet using the replacement key.

The main challenge of prosecuting fintech patents is overcoming the subject matter eligibility rejections under 35 USC 101 in view of the Supreme Court decision Alice Corp v. CLS Bank, which restricts patentability of certain business methods. This challenge can be even greater if your patent application is assigned to the USPTO art units 3620 or 3680, which examine business method patents and are notorious for their prosecution difficulty. Patent grant rates for these art units are three times lower than the USPTO’s overall grant rate of 70%. Knowing these challenges in advance, Arent Fox patent attorneys carefully drafted Bloomio’s patent specification and claims to emphasize the invention’s technical aspects and improvements. As a result, Bloomio’s patent application was assigned to art unit 2436, which examines cryptography and cybersecurity technologies and has a grant rate of 76%.

Arent Fox is a market leader in helping clients to navigate the business and legal issues surrounding blockchain technology, particularly in the software and fintech industries.

Contacts

Continue Reading