Patents and technology have coexisted for a long time, and this relationship has thus far continued into the digital age. Imagination is no longer the limit: virtual events now take place anywhere and at any time, in the Metaverse, without physical, cultural or governmental boundaries. The phenomena of non-fungible tokens (NFTs) has emerged from this digital environment and is being welcomed across cultural and economic spheres.
What are NFTs?
NFTs are a unique unit of data that can be stored and tracked on a blockchain and bought and sold, or even used as digital certificates of authenticity for many kinds of transaction. In the past few months they have made a splash in the sports, music and arts industries. NFTs are digital assets and can be representations of real-world objects, like a sports highlight video, and often come with substantive rights in the underlying object.
Simply put, an NFT can serve as a certificate of authenticity representing either ownership or a licence. Many digital experts say that, like cryptocurrency, NFTs are all about supply and demand. Iin other words, an NFT’s value is determined by the desirability of its linked asset, thus taking into account market demand and resale potential.
Around the world, this kind of technology, based on blockchain and cryptography, has been protected by patents, as an example of the value of the related inventions, and the future of the growing crypto-universe.
Legal framework in Mexico
NFT patents include technical elements related to blockchain, cryptography, codes, computer programs and computer instructions. It is worth noting that Article 47 of the New Mexican IP Law states:
The following shall not be considered as inventions:
- Discoveries, scientific theories, or their principles;
- Mathematical methods;
- Literary, artistic works or any other aesthetic creation;
- The schemes, plans, rules, and methods for the exercise of intellectual activities, for games or for economic-commercial activities or to conduct business;
- Computer programs;
- The ways of presenting information;
- The biological and genetic material, as it is found in nature, and
- The juxtaposition of known inventions or a combination of known products, except in the case of their combination or fusion that cannot function separately or that the qualities or characteristic functions of the same are modified to obtain an industrial result or a use that is not obvious for an expert in the field.
The matter provided for in sections I to VIII above shall not be considered an invention, when in the application it is claimed exclusively as such by itself.
In light of this, and in a strict sense, computer programs are not considered inventions according to the New Mexican IP Law, however, the criterion for these kinds of inventions at the Institute of Industrial Property (IMPI) has been evolving in the last few years. According to Mexican practice, patents related to NFTs can be protected in Mexico if they solve a technical problem and if the respective claims are drafted as a computer-implemented method.
Tips for protecting NFT patents in Mexico
In connection with filing and prosecuting patents related to NFTs, it is important during the prosecution to recognise and distinguish a software patent from a computer-implemented method. This is because, although the corresponding specification could include all the terms related to blockchain and the associated cryptography, the claims must not include the following terms: code, algorithm, instruction or computer program. It must also take into account that the claims related to a computer-implemented method must solve a technical problem. In this regard, it can be said that the Mexican resolutions on this topic will probably depend on the criteria adopted in the European Patent Office in the near future.
The IMPI has not developed any written guidelines that may lead the examiners to carry out a special type of analysis of computer-related inventions, particularly those pertaining to NFT patents. However, a uniform criterion for the examination of these types of inventions will be generated through dealings with the examiners during the prosecution of applications for computer-related inventions in the next few years.
According to Mexican practice, the respective claims must include all the technical features that allow the invention to achieve the corresponding technical solution. Specifically, and with regard to NFT technology, an approach for the claims should include, as an example, “A method for generating cryptographic digital assets associated with articles of…”.
At this point in the specification the claim could include all the products or commercial elements that will be related to the NFT. However, it should not specify the commercial aspects of the products, the technical features that allow one to solve the corresponding technical problem. These in turn could be related to the steps of transmitting, receiving or linking all the essential features of the cryptographic digital asset, owner identification information, distributed blockchain ledger and transaction blocks.
At this moment, according to Mexican practice, it is possible to protect NFT patents, however said protection will heavily depend on a properly drafted specification that clearly shows an examiner that the invention in question should be considered as containing statutory subject matter. That is, it will be necessary to disclose an invention having technical, novel and useful practical applications in the arts, regardless of the fact that said novelty and usefulness fully relies on the software aspects of the invention, as well as including a detailed description of what the invention achieves. This is the case, not only in the theoretical or mathematical sense, but also in terms of marketplace value, demonstrated by stating how the invention solves a practical and technical problem.
Patents related to NFTs can protect the corresponding assets if the claims are carefully drafted as computer-implemented methods. Additionally, bear in mind that in the near future, Mexican legislation could adopt similar criteria to that of Europe.