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According to IP experts, outside of technical limitations of the technology itself, the steepest hurdle to blockchain technology becoming mainstream is a lack of trust (no pun intended) preventing companies from adopting the technology. When a business depends on the network for their day-to-day operations, they need rock solid trust. In some other industries, such as MedTech, a startup company’s patent portfolio can be a critical indicator to others of value, strength, and stability, as Christian Wentz references in the video below. (1)
In an interview at Money 20/20 Europe Conference, Senior Technical Staff Member of Blockchain at IBM, Arnaud Le Hors, talked about IBM’s decision to support the open source blockchain project Hyperledger with funding, staffing, and by donating 44,000 lines of code to the project. He explained that IBM’s support of open source blockchain is not just an ideological allegiance on behalf of himself and the other developers, it’s a business strategy. Around the same time, IBM started to offer their BaaS product (Blockchain As A Service), building propietary products “on top” of the Hyperledger foundation. Hyperledger is one of the “open source consortiums” Christian Wentz is referring to in his interview below.
The accessibility and transparency requirements of software code held under open source licensing are shows of good faith which could create the necessary trust for a company considering adopting blockchain. Even if no one at the company is planning on combing the source code, or would even know how to read it, knowing that it can be examined at any time, and that someone, somewhere is probably already doing just that, is reassuring, and for good reason. (2)
(Video Transcript Below)
Christian, you brought up a good- well, an interesting point.
May not be a good point.
I’m agnostic in that sense. So, you do have this MedTech background, where, even to get out of the gate, you need to have some sort of protection on whatever it is that you’re working on, just to secure some funding, or to really get going, at least have a solid plan, right, for protecting it, if you don’t have some [IP protection]. Kind of entering into a bit of a new realm, somewhat, still in the same- working with developing chips, but for a new application, working with this new shift, with the new technology that we’re working with, that we’re seeing everywhere, and then you brought up this point about kind of the divide of thought processes about how people think about this, so, as you’ve made that shift from being in the MedTech community to shifting towards the crypto community what are some of the sort of considerations that you’re thinking about?
Because I know quite a bit about what it is that you’re doing, but, you know, I know that you rely, you know… open source is a really important part of all this too. So, what has that been like?
I think another interesting shift that’s happening right now is… so, one of the core components in what Gradient does is, we build, it’s essentially a secure rooted trust, built into silicon. We can build it into other things, and things like the recent foreshadow attack on Intel’s secure software card extensions, specter meltdown, all of the attacks on the processors that we all use every day, there was a big movement, within academia at least, to say why don’t… arguably one of the reasons why those attacks were successful is that Intel was very opaque about how they architected their processors, and, I’ll… this is relevant, in a second… and if you look at the groups, actually there’s a group here at [ MIT ] CSAIL that led some of the work on understanding the likely vulnerabilities of those core processors. The way that they did that is the lead graduate student read all of Intel’s patents, and he formulated a hypotheses about how this process is working, and they’d send their idea to, they would solicit information, as to whether or not this was accurate and iterate through and they got to a point where it seemed like their theory was close to how this thing worked – (inaudible) – this this is probably a bad idea. We should probably improve this architecture and all this led to this idea that they, if this stuff had just been open source in the beginning, or at least published cleanly, so it was auditable, then these kinds of attacks wouldn’t happen. And, sort of similar to the point of with open source, one of the benefits is that you get a lot of people checking for vulnerabilities and looking and helping to improve a core codebase so, I think that there’s, both in the hardware side and the software side, there is an interest. In the hardware side, there’s becoming an interest, a desire to see open source hardware, which traditionally was not a thing, practically speaking. There are really big challenges in making true open source hardware, but I think that the middle ground that we’ve taken, seeing the benefits of both sides, it’s frankly beneficial to not expose exactly how we architect something, both from protection perspectives, in terms of being copied by competitors who are much larger than us, also, in terms of security by obscurity, although that’s controversial, is that, we will, at the very least, publish our architectures so that they’re fully auditable. And so, I think there’s a very interesting middle ground here where, and this gets back to the point I meant earlier, in terms of when people push for open source within the blockchain community, I think what they really mean is auditable and traceable and if you have something where it’s, we created a new architectural standard for something, and there’s a reasonable and non-discriminatory licensing model around it, that supports an industry existing, that may be an interesting middle ground, versus just we’re gonna be the next Intel or AMD.
To that point, I think it’s worth noting that openness and transparency, and publishing, at least, making your “code”, if you will, whether it’s hardware or software, publicly available, is not mutually exclusive with a patent strategy, because the fundamental thing that patents are supposed to do, the deal that they’re supposed to make, is that you’re telling everybody how you implement things, at least to some extent, and in exchange, you get a monopoly on the idea. You release your ideas to the world, it was kind of the open source of its day,
That’s an interesting way of looking at it.
…you release your ideas to the world, you receive a form of protection in return, and as a result: innovation can go forward. The problem is that, no matter what system you come up with, to protect people’s property and to release information, people are going to find ways to exploit it to their benefit. That has happened with patents many times. It’s happened with open source. It’s a common phenomenon for companies to take open source concepts that are developed in a little garden, that they curate, and then mine it for applications and innovations, sort of budding off of that, and then basically try to corner the market on the valuable aspects, the fruit of the garden, if you will. “Property” you could think of as: (information) plus (coercion). And coercion can come in many forms even in the form of viral network dominance.
So, the blockchain space, I think is, it’s sort of like this vulnerable child right now, I think because people are coming in saying:
“I have no idea how patents work I just, I hear they’re bad, and we don’t patent things. And so, we’re gonna open source everything,”and,
“Oh look, the big scary guys who used to, you know, come in with their patent litigation groups, are now creating these open-source consortiums, and everything is good.”
What’s probably actually going to happen there is exactly what Micah just articulated. Which is, if you create a consortium and make everything open and free and mine that for the best possible stuff and patent it, I just think that there’s this, maybe there’s a naivete that may face a bit of a reckoning.
The big and scary guys are always going to be big and scary.
We’re not worried, but…
Oh, well, you’re scary too.
(2)Interview with Arnaud Le Hors – Senior Technical Staff Member of Web & Blockchain Open Technologies at IBM at Money20/20 Europe 2017 (youtube video)
Caldwell Intellectual Property Law