Intellectual Property Issues
Traditionally, inventions, literary works, artistic works, designs and trademarks formed the subject matter of intellectual property law protection. However, with the advent of new technologies coupled with the advancements in the digital space, various forms of intellectual property rights are evolving. The challenge for a business would be in identifying best methods for protection of its intellectual assets. With the development of virtual currencies (including Bitcoins) and other modes of online payment systems, we examine some of the key intellectual property rights available.
I. Trademark
To trace the history of the origin of the term, the word ‘Bitcoin’ first appeared in Satoshi Nakamoto’s white paper explaining the details of the Bitcoin software.145 As of date, MtGox, the world’s most prominent Bitcoin exchange based in Tokyo, currently holds the trademark for ‘Bitcoin’.146 As per Indian trademark law, a trademark protection can be accorded to a mark 147 which is capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others.148 Thus, the word ‘Bitcoin’ and any logos 149 connected with Bitcoins could acquire trademark protection in India under this law. However, a question that arises is whether the term “Bitcoin” should be accorded trademark protection in the first place. Since the term “Bitcoin” is widely used by the public in a generic manner, without association or reference to a particular entity providing an online Bitcoin payment system or other Bitcoin related financial services, it may be difficult for anyone to prove distinctiveness and uniqueness of the Bitcoin mark at the time of seeking registration of the mark. In India, there are trademark applications filed by Bitcoin traders for registration of various word marks that include the term “Bitcoin” within them. These applications are currently pending registration before the Indian Trade Marks Registry (“TMR”). Specifically, there is also an application pending before the TMR for registration of the word mark “Bitcoin” made by URS Wafler.150Trademark protection for the word marks that include the term “Bitcoin”, and various Bitcoin logos is essential for financial institutions dealing in Bitcoin transactions and online payment systems. However, if several entities use similar word or logo marks, it is likely to confuse the members of public regarding the various Bitcoin platforms / Bitcoin exchanges represented with various visually or phonetically similar Bitcoin marks.
II. Patent
In India, a patent may be registered for an invention that is novel, non-obvious and has utility. While Bitcoins are “mined” by individuals using software and specialized hardware and result in creation of complex algorithms, the process of mining Bitcoins may not qualify for patent protection in India, especially if the techniques and processes are available in the public domain. Further, under Indian patent law, a mathematical or business method or a computer program per se or algorithms are not inventions151 and are hence not patentable in India. In addition, it may be also difficult to establish novelty for Bitcoin related algorithms and computer programs for the purpose of terming them as ‘inventions’.
III.Copyright
As described above, Bitcoin is a software-based system which was introduced as open-source software in 2009152 Under the Indian Copyright Act, 1957, a computer program is protected as literary work. Section 2 (ffc) of the Copyright Act, 1957 defines a ‘computer program’ as a “set of instructions expressed in words, codes, schemes or in any other 145. Bitcoin: A Peer-to-Peer Electronic Cash System Available at: https://bitcoin.org/bitcoin.pdf Last accessed: January 30, 2015. 146. Mt. Gox to Sell Bitcoin Trademark, But Could a Buyer Enforce It? Available at: http://www.coindesk.com/mt-gox-sell-bitcoin-trademark-buyerenforce/ Last accessed: January 30, 2015. 147. Section 2 (m) of the Trade Marks Act, 1999 defines mark to include a “device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof.” 148. Section 2(zb) of the Trade Marks Act, 1999 149. One of the most popularly used Bitcoin logos / symbols may be viewed at: http://bitcoinsymbol.org/. Last accessed: February 2, 2015. 150. Trademark Application Number 2638963 151. Section 3(k) of the Patents Act, 1970. 152. Supra note 23. © Nishith Desai Associates 2015 23 Indian Legal and Tax Considerations Bitcoins-A Global Perspective form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result.”
The program in the underlying platform used in the generation and trading of Bitcoins or the programs which run in the back end of the Bitcoin exchange and facilitate trading, would constitute a ‘computer program’. However, the Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software.153 No exclusivity is generally claimed in open source software. Since developers can review the code and make their own modified version of the Bitcoin software154, each revision may give rise to a new copyright and thus it will be difficult to ascertain who holds the copyright in the codes. In the mining process, new Bitcoins are generated and introduced into the system, thus possibly leading to the creation of new codes, schemes or other components of the computer program, which may be entitled to copyrighted protection. Such an issue may arise with respect to who may be the author of such new works created. However, there does not appear to be any commercial value in the codes. Hence, the issue appears to be more of academic nature.
Traditionally, inventions, literary works, artistic works, designs and trademarks formed the subject matter of intellectual property law protection. However, with the advent of new technologies coupled with the advancements in the digital space, various forms of intellectual property rights are evolving. The challenge for a business would be in identifying best methods for protection of its intellectual assets. With the development of virtual currencies (including Bitcoins) and other modes of online payment systems, we examine some of the key intellectual property rights available.
I. Trademark
To trace the history of the origin of the term, the word ‘Bitcoin’ first appeared in Satoshi Nakamoto’s white paper explaining the details of the Bitcoin software.145 As of date, MtGox, the world’s most prominent Bitcoin exchange based in Tokyo, currently holds the trademark for ‘Bitcoin’.146 As per Indian trademark law, a trademark protection can be accorded to a mark 147 which is capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others.148 Thus, the word ‘Bitcoin’ and any logos 149 connected with Bitcoins could acquire trademark protection in India under this law. However, a question that arises is whether the term “Bitcoin” should be accorded trademark protection in the first place. Since the term “Bitcoin” is widely used by the public in a generic manner, without association or reference to a particular entity providing an online Bitcoin payment system or other Bitcoin related financial services, it may be difficult for anyone to prove distinctiveness and uniqueness of the Bitcoin mark at the time of seeking registration of the mark. In India, there are trademark applications filed by Bitcoin traders for registration of various word marks that include the term “Bitcoin” within them. These applications are currently pending registration before the Indian Trade Marks Registry (“TMR”). Specifically, there is also an application pending before the TMR for registration of the word mark “Bitcoin” made by URS Wafler.150Trademark protection for the word marks that include the term “Bitcoin”, and various Bitcoin logos is essential for financial institutions dealing in Bitcoin transactions and online payment systems. However, if several entities use similar word or logo marks, it is likely to confuse the members of public regarding the various Bitcoin platforms / Bitcoin exchanges represented with various visually or phonetically similar Bitcoin marks.
II. Patent
In India, a patent may be registered for an invention that is novel, non-obvious and has utility. While Bitcoins are “mined” by individuals using software and specialized hardware and result in creation of complex algorithms, the process of mining Bitcoins may not qualify for patent protection in India, especially if the techniques and processes are available in the public domain. Further, under Indian patent law, a mathematical or business method or a computer program per se or algorithms are not inventions151 and are hence not patentable in India. In addition, it may be also difficult to establish novelty for Bitcoin related algorithms and computer programs for the purpose of terming them as ‘inventions’.
III.Copyright
As described above, Bitcoin is a software-based system which was introduced as open-source software in 2009152 Under the Indian Copyright Act, 1957, a computer program is protected as literary work. Section 2 (ffc) of the Copyright Act, 1957 defines a ‘computer program’ as a “set of instructions expressed in words, codes, schemes or in any other 145. Bitcoin: A Peer-to-Peer Electronic Cash System Available at: https://bitcoin.org/bitcoin.pdf Last accessed: January 30, 2015. 146. Mt. Gox to Sell Bitcoin Trademark, But Could a Buyer Enforce It? Available at: http://www.coindesk.com/mt-gox-sell-bitcoin-trademark-buyerenforce/ Last accessed: January 30, 2015. 147. Section 2 (m) of the Trade Marks Act, 1999 defines mark to include a “device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof.” 148. Section 2(zb) of the Trade Marks Act, 1999 149. One of the most popularly used Bitcoin logos / symbols may be viewed at: http://bitcoinsymbol.org/. Last accessed: February 2, 2015. 150. Trademark Application Number 2638963 151. Section 3(k) of the Patents Act, 1970. 152. Supra note 23. © Nishith Desai Associates 2015 23 Indian Legal and Tax Considerations Bitcoins-A Global Perspective form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result.”
The program in the underlying platform used in the generation and trading of Bitcoins or the programs which run in the back end of the Bitcoin exchange and facilitate trading, would constitute a ‘computer program’. However, the Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software.153 No exclusivity is generally claimed in open source software. Since developers can review the code and make their own modified version of the Bitcoin software154, each revision may give rise to a new copyright and thus it will be difficult to ascertain who holds the copyright in the codes. In the mining process, new Bitcoins are generated and introduced into the system, thus possibly leading to the creation of new codes, schemes or other components of the computer program, which may be entitled to copyrighted protection. Such an issue may arise with respect to who may be the author of such new works created. However, there does not appear to be any commercial value in the codes. Hence, the issue appears to be more of academic nature.
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