“System And Method For Providing Patent Title Insurance With Centralized And Distributed Data Architectures” in Patent Application Approval Process (USPTO 20220084127): Patent Application

2022 MAR 01 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A patent application by the inventors Asselot, Pascal (Paris, FR); Bork, Daniel Lawrence (East Kingston, NH, US); Spangenberg, Erich Lawson (Paris, FR), filed on April 13, 2021, was made available online on March 17, 2022, according to news reporting originating from Washington, D.C., by NewsRx correspondents.

This patent application has not been assigned to a company or institution.

The following quote was obtained by the news editors from the background information supplied by the inventors: “Many people are familiar with the concept of color of title in real estate transactions. However, color of title also applies in intellectual property and patent law which governs the ownership of information or ideas. In this context, color of title is a phrase that means having the appearance of title to a patent, but in actuality, there is either no title or a vital defect in the title. Therefore, if one has color of title, then the other (actual) patent holder has a “cloud on title” since his title has a defect or “cloud” on it.

“Confidence in the ownership and the title of an asset is a prerequisite for a transaction to take place. Buyers do not want to purchase patents with title issues. Sellers would rather not lose a transaction over title issues and would like to avoid any claims against them for title defects. In some jurisdictions, failure to properly record title has other negative consequences for patent owners. Lenders and investors require assurance that the patent owner has title and that any prior liens are removed. Title representations by sellers that are conditioned by phrases like, “To seller’s knowledge, . . . ” are not necessary and depress prices. A simple example: If you were shopping online for a large screen television and as you were completing your order a message came on the screen and said: “We are pretty sure we own this TV and when you pay us we are pretty sure you will own it,” would you pay full price for the TV? We would not either.

“Unfortunately, chain-of-title issues plague the patent asset class. Ownership records at patent offices are rarely, if ever, updated and may include clerical and other errors. This issue is further complicated because there is no accurate, central, public repository of worldwide patent ownership. Correcting chain-of-title issues in a patent portfolio slows down patent transactions and, in certain cases, can deter transactions. Market participants need a trusted partner who can leverage its resources to identify and quickly and cost-effectively correct title issues early in the process.

“Inasmuch as intangibles are gaining increasing importance in both domestic and international transactions, as well as in litigation, it is becoming increasingly important to provide parties to such transactions or who may be affected by litigation with more reliable, accurate, and cost-effective information through the due diligence process. Such information may include, for example, verification of the chain of title of the asset, identification of the encumbrances on the asset, the validity and enforceability of the asset, as well as past and pending litigation which involves or otherwise impacts the asset. As the certainty among purchasers, inves-tors, insurers and financers in the transferability and market-ability of such assets increases, the market value of the asset should also increase, and should lead to more litigation being averted, transactions being completed, and investments being made.

“Traditionally, assessing and assuring the risks in the purchase of an asset often involves extensive and costly due diligence. This is because there is little to no way to know of any specific records related to an assignment or license. Such licenses and assignments can be recorded through several jurisdictions and through several countries. As a result, when patent related transactions occur, due diligence becomes extremely important.

“The due diligence related to determining color of title of a patent application is costly, since it may require manual and semi-automated searching of various and disparate records, data-bases and other sources. This problem is difficult enough to solve when the property is tangible, such as in the cases of real estate and personal property. However, the problem is further compounded when the asset is related to intangible property, such as patents, trademarks, and copyrights.

“The present invention discloses the first publicly available, worldwide, patent and patent publications ownership registry system answers the question of patent ownership. The Global Patent Registry is a blockchain-based system that applies distributed trust and artificial intelligence (AI) techniques to provide reliable title information available to anyone who needs this information. IPwe leverages its deep knowledge of chain-of-title issues, AI and the Global Patent Registry to provide title confirmation services to all market participants including patent owners, acquirers, licensees, counsel, brokers and investors.

“Intermediaries, like brokers and counsel, face the same issues as their clients when it comes to chain-of-title issues in patent transactions. The tedious task of reviewing a patent portfolio’s chains-of-title is not a valuable use of time for intermediaries who could instead be applying their resources toward delivering higher-value services to their clients. The present invention replaces the intermediary and thus saves money and frees up valuable resources for providing its specialized services.

“Instead of the seller making a representation that the seller owns the patents, the patent title insurance affiliate offers a very inexpensive per patent policy that pays out if it turns out the Seller did not have title to the patents. The Seller, Buyer, Licensor or Licensee could purchase this policy. It is inexpensive and easy to obtain, and it reduces risk and should increase the price of the patents being sold. The insurance covers the purchase price of the patents.

“An important development with respect to the present invention relates to the use of blockchain technology. Blockchain technology (sometimes simply referred to as a blockchain) was developed and has been used in certain digital currency implementations. An example implementation and corresponding blockchain techniques are described in a 2008 article by Satoshi Nakamoto, called “Bitcoin: A Peer-to-Peer Electronic Cash System,” the entire contents of which are hereby incorporated by reference. With that being said, in certain embodiments discussed herein, the blockchain may be privately hosted (e.g., where all member nodes are run and provided by the same entity or a controlled group of entities). In certain example embodiments, the blockchain may be a distributed blockchain, such as the one provided by the bitcoin network. Thus, the term blockchain as used herein is not confined to the so-called blockchain that is only used for the bitcoin cryptographic currency.

“The blockchain is a data structure that stores a list of transactions and can be thought of as a distributed electronic ledger that records transactions between source identifier(s) and destination identifier(s). Every transaction is “to” a destination identifier that is associated with a public/private key pair. In creating a new transaction, outputs from other, prior transactions that are to the “from” address (which may be multiple different addresses derived from the same private key) are used as inputs for this new transaction. The new transaction is then encumbered with the public key associated with the “to” destination identifier. In other words, outputs from prior blockchain transactions are used as inputs for new transactions that are then signed using the public key associated with the destination address. The new blockchain transaction is then submitted to the blockchain. Once on the blockchain multiple such transactions are bundled into a block and the block is linked to a prior block in the “blockchain.” Computer nodes of the distributed system then maintain the blockchain and validate each new block (along with the transactions contained in the corresponding block). The techniques described herein make use of blockchain technology to address one or more problems with the conventional database systems

“Blockchain technology holds great promise for a range of industries and business cases, including the patent asset class. That is because a Blockchain can be viewed as a type of shared database, the contents of which are verified and agreed upon by a network or independent actors. For a new piece of data (such as the owner of a newly issued patent) to be added to the Blockchain, the independent verifiers must come to consensus on its validity. Because each new set of transactions (a “block”) is cryptographically linked to the previous block, it is extraordinarily difficult to change data stored in a Blockchain and any such change would be readily detectable. Thus, blockchains are widely considered to be immutable and thus can serve as a record of proof of ownership.

“When transacting in a Blockchain platform, each user makes use of a public address (needed for other actors in the network to send a transaction to that user), and a cryptographically paired “private key.” Private keys are used to sign transactions digitally, a form authentication to ensure that a given user has genuinely generated a transaction.

“Blockchain is a relatively new technology. The first “real world” implementations of Blockchain, Bitcoin, envisioned by Satoshi Nakamoto launched in 2009. The Ethereum Blockchain was released in 2015. In addition to the distributed ledger capability of the Bitcoin Blockchain, the Ethereum Blockchain allows so-called “smart contracts,” which are programs stored in the Ethereum Blockchain that can act autonomously to execute sophisticated transactions.₁ ¹ “Ethereum Whitepaper,” http://github.com/ethereum/wiki/wiki/white-paper, 2016

“Blockchain data transfer is currently considered one the most secure technologies for digital asset transfer due to its distributed nature and use of sophisticated cryptography. Smart contracts, therefore, offer a potential solution for the management of patent transactions via the introduction of a universal, distributed ledger that does not require trust in a single third party.”

There is additional background information. Please visit full patent to read further.”

In addition to the background information obtained for this patent application, NewsRx journalists also obtained the inventors’ summary information for this patent application: “The present system relates to a method of reducing risk related to the color of title in patent intellectual property assets. Such assets may include, patents, trademarks, copyrights and other forms of intangible property. The system and method of the present invention provides assurance to those wanting to transact with these assets regarding the title of the asset.

“In another embodiment, the present system relates to a method of residual value insurance, whereby 100% of the principal amount is insured. The intellectual property can also be partially insured. For example, 25%, 50%, or 75% (or ant percentage less than 100%) of the principal amount can be insured. Another option is to insure a fixed monetary amount of the principal, such as $100,000, or any fixed fee amount. Additionally, 100% of the interest amount can be insured. The interest amount can also be partially insured based on percentage, or a fixed monetary amount of interest, such as $100,000 or any fixed fee amount, can be insured. If borrower pays on time or early, he can receive incentives, money back, non-monetary incentives, reduced future principal owed, reduced future interest owed, cash awards such as $10,000, or the loan being extended an additional time period such as 1 year. If certain milestones are hit, the loan can be extended from 3 years up to 2 additional 1 year periods.

“The system and method of the instant invention may comprise a network, the network consisting of a series of nodes, each node capable of communicating with at least one other node in the series of nodes. The network configured to recursively record all transactions that occur over the network on a secure digital ledger. The transactions encoded using a method such as a checksum.

“The network is capable of issuing a smart contract, or a series of computer executable code, with preprogrammed rules related to the title of at least one intellectual property asset, which when executed will record a transfer, license, or other transaction related to said asset on the secure ledger. This is considered a cryptographically secure network. The network will allow a user to claim title to an intellectual property asset, and another user to purchase insurance on the title of that intellectual property asset. The network will be accessible over the web, and may further employ real-time or reactive computing systems and methodologies to enable due diligence to be conducted Such that results generated by the system and method may be returned to the user during a single interactive computing session.”

The claims supplied by the inventors are:

“1. A method for providing IP Asset Title Insurance, the method comprising: evaluating a premium rate of an insurance policy related to title of an intellectual property asset transaction occurring on a secure ledger distributed network; offering at least one party to the transaction an insurance on title for the intellectual property asset; upon acceptance of the insurance by the at least one party to the transaction, recording a smart contract on the secure ledger distributed network, which when executed collects a policy premium from the at least one party to the transaction; determining the status of an insurance claim; and distributing a policy amount as included in the smart contract.

“2. A method according to claim 1 wherein said smart contract is an Ethereum contract.

“3. A method according to claim 1 wherein said premium rate takes into account validity of said intellectual property asset.

“4. A method according to claim 1 wherein said premium rate takes into account infringement of said intellectual property asset.

“5. A method according to claim 1 wherein said secure ledger distributed network is constructed with peer to peer communication processors.

“6. A method according to claim 1 wherein said offering is distributed to a plurality of potential investors.

“7. A system for providing IP Asset Title Insurance, the method comprising: a processor for evaluating a premium rate of an insurance policy related to title of an intellectual property asset transaction occurring on a secure ledger distributed network; said processor offering at least one party to the transaction an insurance on title for the intellectual property asset; upon acceptance of the insurance by the at least one party to the transaction, recording a smart contract on the secure ledger distributed network by way of said processor, which when executed collects a policy premium from the at least one party to the transaction; said processor determining the status of an insurance claim; and distributing a policy amount as included in the smart contract by way of said processor.

“8. A system according to claim 7 wherein said smart contract is an Ethereum contract.

“9. A system according to claim 7 wherein said premium rate takes into account validity of said intellectual property asset.

“10. A system according to claim 7 wherein said premium rate takes into account infringement of said intellectual property asset.

“11. A system according to claim 7 wherein said secure ledger distributed network is constructed with peer to peer communication processors.

“12. A system according to claim 7 wherein said offering is distributed to a plurality of potential investors.”

URL and more information on this patent application, see: Asselot, Pascal; Bork, Daniel Lawrence; Spangenberg, Erich Lawson. System And Method For Providing Patent Title Insurance With Centralized And Distributed Data Architectures. Filed April 13, 2021 and posted March 17, 2022. Patent URL: https://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.html&r=1&f=G&l=50&s1=%2220220084127%22.PGNR.&OS=DN/20220084127&RS=DN/20220084127

(Our reports deliver fact-based news of research and discoveries from around the world.)