Square Forms Group to Stop Patent Hoarding From Stifling Crypto Innovation

Square said the Cryptocurrency Open Patent Alliance (COPA) will allow companies to access and share tech innovations with one another.

Sep 10, 2020 at 4:05 p.m. UTC
Updated Sep 14, 2021 at 9:54 a.m. UTC

Jack Dorsey's payment company is inviting other cryptocurrency firms to join its "alliance" to pool patents and preserve the industry's open-source spirit.

  • Square said Thursday it has launched what it calls the Cryptocurrency Open Patent Alliance (COPA), a non-profit that wants to stop companies from locking up useful technologies in patents, a practice Square says hamstrings innovation.
  • "Locking up foundational cryptocurrency technologies in patents stifles innovation and adoption; and offensive use of patents by bad actors threatens the growth of cryptocurrency technologies," Square said in a statement.
  • In addition to companies jealously guarding their own work in crypto, some firms go further, filing what are called "pre-emptive patents" for ideas they have no plans of developing but which act to hinder the research of competitors.
  • To become part of COPA, members must pledge to make their patents freely available to all other members using a shared library.
  • This library will act as a "collective shield" protecting members from "patent aggressors," said Square – which ventured into crypto in 2018 and has already committed to putting its own crypto patents into the new library.
  • The only exception will be those filed to preserve existing patent applications.
  • The number of cryptocurrency and blockchain-related patents in the U.S. doubled between 2016 and 2017; in the past year, Microsoft filed a patent for a mining system powered by physical exertion and IBM for a token that is a "self-aware."
  • Assuming the patent library grows and gathers momentum, the idea is that more and more companies will look to join COPA to access tech innovations – creating a more equitable patent environment.
  • Any company that works in crypto, regardless of whether it has patents or not, will be eligible to join COPA.
  • COPA will be an entirely separate entity from Square, with its own independent board of directors, a spokesperson confirmed.

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