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Bitcoin Patents

JPMorgan Files Patent Application On 'Bitcoin Killer' 292

Posted by Soulskill
from the all-about-the-digital-benjamins dept.
Velcroman1 writes "Banking giant JPMorgan Chase has filed a patent application for an electronic commerce system that sounds remarkably like Bitcoin — but never mentions the controversial, Internet-only currency. The patent application was filed in early August but made publicly available only at the end of November; it describes a 'method and system for processing Internet payments using the electronic funds transfer network.' The system would allow people to pay bills anonymously over the Internet through an electronic transfer of funds — just like Bitcoin. It would allow for micropayments without processing fees — just like bitcoin. And it could kill off wire transfers through companies like Western Union — just like Bitcoin. There are 18,126 words in the patent application. 'Bitcoin' is not one of them."
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JPMorgan Files Patent Application On 'Bitcoin Killer'

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  • by eclectus (209883) on Tuesday December 10, 2013 @05:34PM (#45654979) Homepage

    Maybe the patent office will notice a bit of prior art? One can hope, right?

    • Re: (Score:2, Informative)

      by tgetzoya (827201)
      The US moved to a first to file system recently: https://en.wikipedia.org/wiki/First_to_file_and_first_to_invent#The_USA.27s_change_to_first-inventor-to-file_.28FITF.29 [wikipedia.org] So this might get approved regardless.
      • by the eric conspiracy (20178) on Tuesday December 10, 2013 @05:43PM (#45655115)

        No, first to file doesn't affect the issue of publicly disclosed prior art.

        First to file only sets the priority of the application.

      • by greensoap (566467)
        Bitcoin is not going to be deemed prior art regardless. This thing is claiming priority through a series of applications back to 1999.
        • by mysidia (191772)

          Bitcoin is not going to be deemed prior art regardless. This thing is claiming priority through a series of applications back to 1999.

          We need a law, that any patent application not approved within 3 years of the original application date, can no longer be amended; add, or drop claims, and if not issued within 4 years, will be deemed abandoned.

    • Maybe the patent office will notice a bit of prior art? One can hope, right?

      I suspect that JP Morgan's patent attorneys aren't idiots, so they've probably done some clever rules-lawyering; but 'bitcoin' is one of those things with such substantial public recognition that it won't be trivial to hide unless the examiner is really sleeping on the job.

      With a lot of painfully-obvious tech patents, the prior art (while it definitely exists) is mostly working knowledge among techies, and (because it's considered obvious) often doesn't get a writeup anywhere, although source implementat

    • Re: (Score:2, Informative)

      by nurb432 (527695)

      JP has the money to avoid that little inconvenience. This will go thru, and the will sue bitcoin.

      • JP has the money to avoid that little inconvenience. This will go thru, and the will sue bitcoin.

        How does one sue a currency?

    • by icebike (68054)

      Maybe the patent office will notice a bit of prior art? One can hope, right?

      But its not bitcoin, and you can actually spend the money anywhere you want, because in the end it is
      delivering real money to real accounts from other real accounts.

      Negotiating a bitcoin sale or purchase is still like a scavenger hunt. Even if a willing buyer finds a willing seller the product is usually not exactly what they were looking for, close by, or convenient. There are maybe 5 restaurants in the world that will take bitcoin. And who wants to eat in a crowd of nerds.

      • by roc97007 (608802)

        > And who wants to eat in a crowd of nerds.

        Not even other nerds.

      • by beelsebob (529313)

        But its not bitcoin, and you can actually spend the money anywhere you want, because in the end it is delivering real money to real accounts from other real accounts.

        But this will then become invalidated based on the fact that europe has had the concept of free bank transfers for decades.

    • by Albanach (527650)

      Maybe the patent office will notice a bit of prior art? One can hope, right?

      Or we could hope that you can't patent ideas, only implementations, and the summary is big on telling us why the ideas are similar, but scant on whether they share an implementation.

      If someone invents a steam engine, it shouldn't mean someone else can't create a different steam engine that does the same thing in a different way. Similarly, just because bitcoin allows micro payments and electronic funds transfers doesn't mean no-one

    • by Eunuchswear (210685) on Tuesday December 10, 2013 @06:34PM (#45655637) Journal

      The whole article is shit.

      Patents don't protect what you want to do, they protect how you do it.

      The article claims that JP Morgan have invented a system that does some of the same things that Bitcoin does, it gives no evidence that it does those things in the same way.

    • by ackthpt (218170)

      Maybe the patent office will notice a bit of prior art? One can hope, right?

      How are you going to show them a Bitcoin?

  • by Anonymous Coward on Tuesday December 10, 2013 @05:36PM (#45655009)

    Just because this proposed currency is capable of doing many of the things that Bitcoin does, doesn't mean it copies Bitcoin.

    Point out the technical components that copy Bitcoin, not the capabilities.

    • I'm trying to figure out when Fox News became a reliable news source. I was under the impression you only went to Fox News when you wanted to hear/see Right Wingers babbling like idiots, just the same for MSNBC for the Left.
    • by gmuslera (3436)
      The problem is when what it does is the thing patented, and that patent is used to forbid/request royalties/etc for something with prior art or of common sense. You know, like doing rectangular phones.
    • by Agent ME (1411269) <agentme49&gmail,com> on Tuesday December 10, 2013 @06:07PM (#45655401)

      Yeah, I'm skimming the patent, and I don't see how this is like Bitcoin. It's not a decentralized currency. It's just a different interface for using existing bank accounts they control. It's only anonymous to the users. The whole system runs on trusted servers they control and can see what's happening on.

      The stuff that made Bitcoin revolutionary isn't that it works over the internet, or has receive-only addresses. The revolutionary part was that it was decentralized. It didn't rely on any trusted or privileged groups or servers. All nodes that people run are equal. There is no central minting group who can secretly mint more or change the minting rules. The currency itself is limited. This proposal does not involve any of that.

      • by freeze128 (544774)
        A few years ago, I was able to transfer funds from my savings account into a friend's account because we used the same bank. I liked this because it was simple and straightforward. Of course the bank will transfer the funds... It's just moving numbers, and no real money even needs to leave the bank.

        I now take you to late 2013, and I wanted to do the same thing again, but this time found that I had to "Sign up" for some service that would allow me to "Send money to anyone with an email account". I didn't w
        • by rduke15 (721841)

          That sounds so weird that it is hard to believe.

          If you cannot transfer money to your friend's account, how can you transfer any money to any account? And if you cannot transfer money to another account, then why do you have a bank account at all? That doesn't make sense.

          Maybe what you mean is that you could do it free of charge, and that now there is a small transaction fee, even if both accounts are in the same bank?

          Or maybe the redesigned their web pages and you didn't find the correc page page for transf

        • by cusco (717999)

          It's JP Morgan. The only way that will come back is if they can charge 10-15% fee, the same as they do their money laundering, er, 'private banking' services. You'd be better off going to the cash machine, taking the cash out, handing it to him, and letting him deposit it into the same machine. They're not charging a fee for that again, are they? I left them when they started charging for our "permanently free" checking account.

          You could probably do it at a credit union. They're owned by their customer

  • by Anonymous Coward on Tuesday December 10, 2013 @05:36PM (#45655017)

    The patent is a near-exact description of how paypal works.

    • You're missing the point. Businesses who do transactions with Bitcoin might be sued for infringing claims in the patent, even if the patent itself has nothing to do with Bitcoin. I read the patent and couldn't find anything I recognized as new. Just a very detailed description of a simple electronic financial transaction. The detail given seems to try to obscure instead of clarify, in my opinion, because there is so much of it that is not necessary. An excerpt from claim 155 of the patent:

      ...storing,
    • by Jayfar (630313)

      The patent is a near-exact description of how paypal works.

      Minus the ridiculous fees no doubt.

  • Like bitcoin? (Score:2, Informative)

    by Anonymous Coward

    BitCoin is not anonymous, and it does have fees. How is it just like BitCoin?

  • by Ultra64 (318705) on Tuesday December 10, 2013 @05:37PM (#45655029)

    >The system would allow people to pay bills anonymously over the Internet through an electronic transfer of funds â" just like Bitcoin.

    Bitcoin is not anonymous. There is a very clear, public trail linking your wallet to your purchases.

    • >The system would allow people to pay bills anonymously over the Internet through an electronic transfer of funds â" just like Bitcoin.

      Bitcoin is not anonymous. There is a very clear, public trail linking your wallet to your purchases.

      Yes; but (unlike, say, credit cards) anybody can magic a wallet into existence with a dash of math, at any time, so connections between people and wallets are established only by inferences made possible by various forms of sloppiness in handling. Odds are that many wallets are robustly identified with users; but only on the basis of techniques unrelated to bitcoin proper.

    • The "anonymous" in the patent claim is not anonymous either. It refers to using an "address" which is anonymous in the sense that it is not obviously tied to any personal information. It is less anonymous than Bitcoin even, if my reading of the patent is correct.
  • by ZombieBraintrust (1685608) on Tuesday December 10, 2013 @05:39PM (#45655045)
    BitCoin is not the first electronic payment system. No reason for patent to metion BitCoin unless it JPMorgan is going to have people mining for Morgon bucks.
  • by Overzeetop (214511) on Tuesday December 10, 2013 @05:40PM (#45655065) Journal

    Something is wrong with the entire system when a financial company is awarded a patent.

    • I'm sorry, the fixed rate loan has been patented by a competitor, so we can only offer you APRs that go up by 30% a day.

    • The US allows patents not just on software, but on business methods too. JPMorgan probably has a great many business patents.

    • by Sarten-X (1102295)

      Why? Why does one's industry determine whether they can contribute an innovation to the world?

      The patent is for a mechanism to make payments from an account by both sides exchanging possibly-anonymized information. What other industry would you expect this idea to come from? Agriculture?

  • Trolling (Score:5, Informative)

    by Sarten-X (1102295) on Tuesday December 10, 2013 @05:41PM (#45655079) Homepage

    Troll summary for a troll article.

    The patent has nothing to do with Bitcoin. It's a payment processing system that's set up so it can use anonymized IDs rather than actual account numbers.

    • by Apothem (1921856)
      Sounds like they're trying to patent a way to make it easier to launder their money.
      • by Sarten-X (1102295)

        Hardly. The system itself would still be able to track where money came from well enough for law enforcement. It'd just be a bit safer to give out direct payment information online.

    • "so it can use anonymized IDs"

      kind of like, say, bitcoin addresses:

      "A Bitcoin address, or simply address, is an identifier of 27-34 alphanumeric characters, beginning with the number 1 or 3, that represents a possible destination for a Bitcoin payment. Addresses can be generated at no cost by any user of Bitcoin. For example, using Bitcoin-Qt, one can click "New Address" and be assigned an address. It is also possible to get a Bitcoin address using an account at an exchange or online wallet service."

      • by Sarten-X (1102295)

        Yes, kind of like Bitcoin addresses, but without the rest of the Bitcoin architecture. Instead, the concept is adapted to fit a more traditional banking system, which is usually rather biased against working with temporary or disposable anything.

        Anecdotally, while working in finance I helped set up a corporation for the sole purpose of selling a single house. The account had to stick around in our systems for 90 days, to accommodate a nonzero balance for about an hour.

    • I should patent "A Method for Ensuring Submission Acceptance on Slashdot", with the claims being "Create false association between news article and Bitcoin" and "Ensure Bitcoin is featured prominently in submission title".
    • by Lehk228 (705449)
      which is exactly the same as the throwaway credit card numbers offered by many institution. the patent system is really just a circular human centipede eating it's own shit.
  • Just like BitCoin? (Score:5, Informative)

    by Bogtha (906264) on Tuesday December 10, 2013 @05:42PM (#45655099)

    The system would allow people to pay bills anonymously over the Internet through an electronic transfer of funds â" just like Bitcoin.

    Bitcoin isn't anonymous. [bitcoin.org]

    It would allow for micropayments without processing fees â" just like bit coin.

    Processing fees are common with Bitcoin. [bitcoin.org]

    And it could kill off wire transfers through companies like Western Union â" just like Bitcoin.

    Wire transfers are largely an oddity of the USA. Most of the rest of the world doesn't use wire transfers anyway.

    • Wire transfers are largely an oddity of the USA. Most of the rest of the world doesn't use wire transfers anyway.

      Don't forget about Nigerian Princes...

    • by javajawa (126489)

      Wire transfers are largely an oddity of the USA. Most of the rest of the world doesn't use wire transfers anyway.

      Say what? I process wire transfers to Europe and Asia on a daily basis... they actually have better infrastructure for it in the rest of the world. IBAN/SWIFT

  • The patent does mention "digital cash," and BTC is that. However the patent is not about creating new coins from thin air. The patent is simply about software that allows you to pay using your existing accounts with banks (they mention c/c.) The payment, however, is anonymous, and very cheap. That's all.

    • by mlts (1038732) *

      Wonder if it might overlap with some of Chaum's anonymous currency patents. His venture didn't last long, but the underlying concepts of the currency were sound and it provided true anonymous transfer of money without relying on blockchains or "majority rules".

    • Banks are not about creating coins from thin air? What do you think the bank bailouts were?

  • by gandhi_2 (1108023) on Tuesday December 10, 2013 @05:43PM (#45655105) Homepage

    It's got 18 thousand word, but a 'bit' ain't one.

  • "Now we sue Bitcoin and shut them down. (whispers) They don't have lawyers? Excellent! (whispers) What do you mean they don't exist as an entity?(whispers) Distributed what?! (whispers) Damn those techies. They can't do that. Don't they understand real business?"
  • Don't banks love to fee stuff up a lot.

    • by rickb928 (945187)

      Their purposes are to: (repeat after me)

      - Provide services
      - For a profit

      Any questions?

  • by earlzdotnet (2788729) on Tuesday December 10, 2013 @05:48PM (#45655167)
    Yea, the reason they don't mention bitcoin is because this is nothing like bitcoin. This isn't a cryptocurrency. This assumes that behind the scenes a bank is tied to your account to push/pull funds from. This incorporates some of the things bitcoin is good at, but it does it all in a completely different manner. If you'd take a look at the patent application, you'd know this is in no way close to bitcoin
    • I agree - this sounds much more like, say, mPesa which allows cash transfers using mobile phones. Wildly popular and growing like mad in Africa.
  • by deego (587575) on Tuesday December 10, 2013 @05:48PM (#45655177)

    In 2013, the brilliant scientists and upstanding MBAs and executives at JP Morgan Chase invented an awesome cryptocurrency and transfer mechanism, and duly filed a patent on it.

    FOSS advocates copied the system near-verbatim, went back 4 years in time, and launched it is one open sourced "bitcoin." The nerve!

    • Except they didn't because the two systems are completely different. Someone read the title of a patent without reading any content and jumped to conclusions. Welcome to the Internet.

  • by harvestsun (2948641) on Tuesday December 10, 2013 @05:53PM (#45655221)
    The point of Bitcoin is that it's decentralized. There's no single entity that keeps track of what money is where. Every person who uses Bitcoin has a record of every transaction (in the form of the blockchain), and is involved in the process of verifying transactions (in the form of bitcoin mining). Although the security is still being debated, in theory, you would need to control half the computing power of the Bitcoin network in order to break the security.

    In contrast, this patent seems to be talking about a system that uses your same old credit card account. Which is not surprising; how would a BANK use a DECENTRALIZED currency system with its customers?

    So basically, this is a meaningless article written by some idiot at Fox News who wanted to make a headline that would stand out. Which I suppose worked, since it made it past the impeccable Slashdot editing process.
  • Anyone check the IDS?

    Applicant has a duty to disclose (See MPEP 2001) any and all prior art that they are aware of at the time of filing.

    Per MPEP 2001.01

    (c) Individuals associated with the filing or prosecution of a patent application within the meaning of this section are:
    (1) Each inventor named in the application;
    (2) Each attorney or agent who prepares or prosecutes the application; and
    (3) Every other person who is substantively involved in the preparation or prosecution of the application and who is asso

  • by Animats (122034) on Tuesday December 10, 2013 @06:06PM (#45655389) Homepage

    The original application on which this is based is dated May 3, 1999. So this predates Bitcoin. Only prior art earlier than the priority date is relevant.

    The life of the patent counts from the priority date, so this patent, if issued, will run out in 2019. The USPTO doesn't consider this patent to contain patentable subject matter; they've issued a 101 Non Final Rejection. (You have to look up the patent application in USPTO Public PAIR [uspto.gov] to see this. Public PAIR has the status info for all patents as they go through examination, and images of all the actual documents. All the letters and forms back and forth between the applicant and the USPTO are in there. PAIR is kind of slow, and there's a CAPTCHA to prevent it from being scraped in bulk, so the data in PAIR isn't indexed by search engines.)

  • I'm not sure that giving JPMorgan a patent on money is a good idea. Just sayin'...

  • by Jawnn (445279)

    There are 18,126 words in the patent application. 'Bitcoin' is not one of them."

    So /. could take a lesson from JPMorgan's patent lawyers, then, and STFU about bitcoin already.

  • From the USPTO PAIR database, "By this preliminary Amendment, claims 1-154 have been canceled..."

    154 claims canceled?!? Typical patents have around 21 claims. USPTO charges per-claim over 21 total claims. JP Morgan's application had 170 claims — way beyond even a 3-sigma deviation for all patent applications. That is, it's amateurish. But, somehow they managed to avoid paying the $80/each for the excess claims. Most rejections were nominally due to the claims being "too abstract."

    So, anyways, f

    • From the USPTO PAIR database, "By this preliminary Amendment, claims 1-154 have been canceled..."

      154 claims canceled?!? Typical patents have around 21 claims. USPTO charges per-claim over 21 total claims. JP Morgan's application had 170 claims — way beyond even a 3-sigma deviation for all patent applications. That is, it's amateurish. But, somehow they managed to avoid paying the $80/each for the excess claims.

      It's actually pretty standard in many instances - i.e. there's nothing amateurish about it. Specifically, if someone comes up with a half dozen related-but-different inventions, it may be more efficient to write one giant application than a half dozen applications that repeat parts of each other. That one giant application may then have [drumroll] 170 claims. And when you file it, you actually file one and cancel claims 21-170 in a preliminary amendment on the filing date, "somehow managing to avoid paying the excess claims fees". And then later (or at the same time), you file a divisional application and cancel claims 1-20 and claims 41-170. And another canceling claims 1-40 and 61-170. Etc.

      Let me guess... in spite of your description of this standard practice as "amateurish", you're not a professional in the field?

      So, anyways, from the USPTO PAIR database — JP Morgan are claiming that their filing is under pre-AIA conditions. That is, that they are first to invent, and are not subject to the current first to file rules. Big difference. The inventor filed an "oath" regarding the invention date. Uh huh.

      Well, yeah. This was first filed in 1999, long before the first to file rules. Of course it's subject to the first to invent rules. 1999 vs. 2013? Big difference. Uh huh.

      USPTO also says, "Claims 155-175 are allowed over the prior art of record based on the earliest priority of the parent applications." I couldn't find the priority date that they are claiming, or whether it is before their filing date, but one might guess they are trying to get a pre-BitCoin patent priority date. Jerks.

      You apparently couldn't find paragraph 1 of the application:

      [0001] This application is a continuation of U.S. Ser. No. 09/497,307 filed Feb. 3, 2000 and is based on and claims priority to U.S. Provisional Patent Applications Nos. 60/132,305, filed May 3, 1999; 60/150,725, filed Aug. 25, 1999; 60/161,300, filed Oct. 26, 1999; 60/163,828, filed Nov. 5, 1999; and 60/173,044, filed Dec. 23, 1999, the entire disclosures of which are hereby incorporated by reference.

      Gosh, being really clear about the priority dates? What a bunch of jerks.

      If only someone knew of some actual prior art, and that this person also knew the name and contact information for the patent examiner. Hmmn...

      Ah, here we are: From their non-final rejection, "Any inquiry concerning this communication or earlier communications from the examiner should be directed to JAGDISH PATEL whose telephone number is (571) 272-6748." I'm sure he has an email address as well.

      Yeah, go ahead and call the Examiner, in spite of the fact that it's explicitly illegal without a letter of authorization from the patent applicant:

      [T]he Office prohibits third parties from submitting any protests under 37 CFR 1.291 or initiating any public use proceedings under 37 CFR 1.292 (without the express written consent of the applicant) after publication of an application... Office personnel (including the Patent Examining Corps) are instructed to: (1) not reply to any third-party inquiry or other submission in a published pending application; (2) not act upon any third-party inquiry or other submission in a published application, except for written submissions that are provided for in 37 CFR 1.99 and written submissions in applications in which the applicant has provided an expres

    • A preliminary amendment filed on the filing date along with the application can avoid excess claims fees. In other words, they filed a continuation that included claims 1-154 (because a continuation is supposed to have all the same stuff that the parent has, and this ensures that there is written description support for the parent's original claims in the child case), but then they amended the claims on the same day to cancel those claims and only present claims 155-175 (21 claims). So they owed us $80 fo

  • And it could kill off wire transfers through companies like Western Union — just like Bitcoin.

    There are all manner of things Bitcoin could do, but I don't think it's succeeded at this one yet.

  • 1) Bitcoin is prior art invalidating JPMotherfkr's patent.

    2) The Supreme Court is seriously considering killing these types of patents and hopefully will.

  • Perhaps the reason they didn't mention bitcoin is that the patent is not an attempt to kill bitcoin or an attempt to compete with bitcoin and does not have the words "bitcoin killer" attached to it in any way other than by the article submitter, who is probably hoping to drive down bitcoin prices so he can buy low.

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