In May 2018, the Ministry of Industry and Information Technology released the “2018 China Blockchain Industry White Paper” (hereinafter referred to as the “White Paper”), which covers the overall development status of China’s blockchain industry, the development of sub-fields, and finance. The Company has conducted in-depth analysis on the development of practical applications, industrial movement, legal policies and standards of the blockchain industry in China. Below is the legal interpretation from Chen Wenfeng, Senior Partner of Zhong Lun Wende Law Firm.

The legal protection of blockchain technology

The definition of blockchain technology in the White Paper is to regard blockchain technology as computer technology. It can be seen that currently the legal protection of blockchain technology is generally limited to patent protection, business secret protection and criminal law protection. This article further clarifies and improves the legal protection content of this section, and analyzes the legal protection of blockchain technology from the following aspects: (1) copyrights; (2) patent rights; (3) business secrets; (4) criminal law.

(1) Protection of Copyright

According to the ” Regulations of Computer Software Protection”, the author of software copyrights enjoy copyright in their computer programs and related documents from the date of completion of software development and the copyrights are protected by law. Compared to applying for patent protection, copyrights have lower standards for the review of computer technology, and the review period is short. Blockchain technology developers can generally obtain corresponding certificates within two months. In addition, the term of copyright protection is also longer. For the copyright owned by corporate or other organizations, the protection expires on December 31 of the 50th year after the software was first published.

However, the drawbacks of copyrights are also very obvious. Because copyrights have low requirements for novelty, other blockchain companies may apply a new copyright certificate by slightly modifying the software.

(2) Protection of Patent Rights

According to the latest edition of the Patent Examination Guidelines of the Intellectual Property Office of the People’s Republic of China, the computer’s language and rules of computation will not be granted patent under the “PRC Patent Law”.

The software that will be granted patent refers to the program that is designed to solve certain problem and executed by the computer to control external objects or internal objects of the computer.

For example, a software is developed to implement process control over an industrial process, measurement, or test purpose. The software performs a series of controls on each stage of the industrial process in accordance with natural laws so as to obtain desired result. Then such solution is a technical solution and falls into the category protected by patent rights.
Generally speaking, blockchain technology are in line with the definition of the above technical solution. However, the actual application results need to be analyzed case by case. Therefore, not all Blockchain technology can meet the conditions of the above patent applications.

The advantages of patent protection are the high degree of protection with relatively more extensive coverage for patent-owners. They can have a certain degree of monopoly within a certain period of time. But at the same time, the disadvantages are also obvious. On the one hand, the audit standard is relatively high and the term of protection is also relatively limited. Taking the invention patent as an example, the protection period is only 20 years; on the other hand, the patent protection scope is based on the claims of the right holder. If the company cannot clearly specify the scope of its technical application, it is likely that the protection content will be omitted.

(3) Protection of business secrets

The protection of business secrets in China has not yet formed a relatively complete protection system. The relevant provisions are scattered among the laws of the People’s Republic of China Contract Law, the Anti-Unfair Competition Law, the Labor Law of the People’s Republic of China, and the Criminal Law of the People’s Republic of China. Therefore, in terms of current legal development in our country, it’s difficult to apply business protection in blockchain technology and it needs to be analyzed based on specific cases.

(4) Protection of Criminal Law

In addition to the above-mentioned protection measures for civil means, the protection of the Criminal Law of the People’s Republic of China (hereinafter referred to as the “Criminal Law”) is the last legal protection granted by the Chinese law to blockchain technology owners, and its corresponding disciplinary measures are also the most severe. If the right holder fails to obtain legal protection through copyright, patent right, business secret approach, the owner may resort to “Criminal Law” .