Square forms crypto patent alliance to promote open-source spirit

Square, the US-based payment company owned by Twitter founder Jack Dorsey, is urging crypto companies to join its newly-formed patent alliance in a bid to maintain an open-source community within the industry and mitigate the malicious use of patents.

Sqaure has launched the Cryptocurrency Open Patent Alliance (Copa) as a non-profit which it hopes will stop firms abusing the patent process to either lock up useful technologies or hinder competitors’ research efforts.

“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.

“We believe that cryptocurrency’s success depends on the community coming together to build and develop upon existing technologies to innovate, which is not possible when parties tie up foundational technology in patents and litigation,” it added.

A particular problem is the growing use of so-called ‘pre-emptive patents’ relating to ideas that applicants have no real plans to develop but want to stop other companies doing so. 

This has led to the existence of so-called patent trolls who speculatively launch a raft of patent applications each year. More than 5,800 applications were made last year but only 3% were successful. 

To become a member of Copa, applicants must be willing to make their patents freely available and pledge not to use their patents offensively. The hope is that as the shared patent library grows, more companies will join in order to access the innovative technology.

Square has committted to placing its own patents within the new library, although it will make any exception for any filings related to existing patent applications. 

Square has also stated that Copa will be an entirely separate body with its own board of directors. 

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