D

DECENTRALISED

distributed ledger

I

IMMUTABLE

tamper-proof

C

CONSENSUS

cryptographic

✅ Blockchain patentability — the threshold framework

Blockchain inventions face Section 3(k) scrutiny: · Pure blockchain concept (distributed ledger) — likely excluded as algorithm/method. · Specific technical implementation — MAY be patentable. · Industrial application — strengthens case. · Technical effect demonstration — required. The CRI Guidelines 2025 specifically address blockchain patentability: · Theoretical distributed ledger concepts — EXCLUDED. · Practical implementations integrating blockchain with physical systems — MAY be patentable. Key requirements: · Specify consensus mechanism and parameters. · Document smart contract logic. · Detail data structures including block linkages. · IoT or oracle integration where applicable. · Identify specific technical effect (latency reduction, tamper-proof provenance, automated enforcement).

📖 Priya Randolph & Anr. v. Deputy Controller of Patents and Designs (2023)

Facts — Patent application for blockchain-based system rejected on Section 3(k) grounds.

Holding — Court ruled that blockchain technology can be eligible for a patent when it provides a solution to a technical problem.

Significance — Foundational Indian case establishing blockchain patent eligibility. Confirmed: (i) Blockchain not categorically excluded from patents. (ii) Technical effect/contribution required. (iii) Specific application matters.

📖 Ab Initio Technology LLC v. Controller of Patents & Designs, 2024:DHC:5708 (Del HC)

Facts — Blockchain patent application rejected on Section 3(k) grounds.

Holding — Delhi HC clarified the technical effect standard for blockchain: "If an innovative input in the form of a process, system, or method enhances the computational ability of the processor, the effect is technical."

Specific Standards: (i) Theoretical concept of distributed ledger — NOT patentable. (ii) Practical implementation with concrete technical outcome — MAY be patentable. (iii) Technical effect must be specific (latency reduction, tamper-proof provenance, automated enforcement without centralised server dependency).

Significance — Watershed Indian blockchain patent case. Established: (i) Blockchain not per se excluded. (ii) Technical effect must be specific and concrete. (iii) Implementation details crucial. (iv) Adopted in CRI Guidelines 2025.

Theoretical distributed ledger concept

NOT PATENTABLE.

Tamper-proof provenance system for supply chain

MAY be patentable.

IoT integration with blockchain authentication

MAY be patentable.

Smart contract execution with specific technical effect

MAY be patentable.

Reduced transaction latency through specific implementation

MAY be patentable.

Generic cryptocurrency platform

NOT PATENTABLE (business method).

Decentralised identity management with technical features

MAY be patentable.

✅ NFT IP confusion — what is actually owned?

NFT ownership is widely misunderstood. The fundamental confusion: · Buying an NFT = owning the TOKEN (the cryptographic record). · Buying an NFT ≠ owning the underlying COPYRIGHT. · Buying an NFT ≠ exclusive use rights (unless specifically transferred). What NFT typically gives: · Cryptographic record of token ownership. · Often a license to display the underlying work. · Right to transfer the token. What NFT typically does NOT give: · Copyright in underlying work. · Right to reproduce. · Right to make derivative works. · Trademark rights. Unless the underlying terms specifically transfer copyright, the artist retains it. This has caused massive confusion and litigation.

Copyright

Whose work is being tokenised? Original artist vs. minter.

Trademark

NFT collections using brand names without authorization.

Right of publicity

Celebrity image NFTs without consent.

Smart contract validity

Can smart contracts be enforced under Indian Contract Act 1872?

Consumer protection

Misleading representations about what NFT confers.

Royalty automation

Smart contracts can auto-pay royalties to creators.

Provenance

Chain-of-title verification.

Unauthorized minting

Third party minting NFTs of other's works.

📖 Hermès International v. Mason Rothschild ("MetaBirkins"), 2023 (USA)

Facts — Mason Rothschild created and sold "MetaBirkins" — NFT collection of digital images of fur-covered Birkin handbags. Hermès sued for trademark infringement.

Holding — US jury found Rothschild liable for: (i) Trademark infringement. (ii) Trademark dilution. (iii) Cybersquatting.

Damages — Awarded $133,000.

Significance — Foundational NFT trademark case. Established: (i) Real-world trademark law applies to NFT context. (ii) "Artistic relevance" test (Rogers v. Grimaldi) examined but rejected here. (iii) NFTs not free zone for trademark use.

📖 Nike Inc. v. StockX, 2022 (USA)

Facts — StockX sold "Vault NFTs" linked to Nike sneakers. Nike sued for trademark infringement and counterfeiting.

Status — Litigation ongoing; settlement potential.

Significance — NFT-physical product linkage; complex authenticity questions.

📖 Bored Ape Yacht Club (BAYC) v. Ryder Ripps, 2023 (USA)

Facts — Yuga Labs (BAYC creator) sued Ryder Ripps for creating "RR/BAYC" copying NFT collection.

Holding — US court ruled in Yuga Labs favour; trademark infringement.

Damages — $1.6+ million.

Significance — Confirms NFT trademark protection; satirical use defence rejected.

✅ Applying existing IP law to NFTs in India

· Copyright Act 1957 — protects underlying work; NFT minting may infringe. · Trade Marks Act 1999 — applies to NFT use of registered marks. · Indian Contract Act 1872 — smart contract validity questions. · Information Technology Act 2000 — digital signatures, electronic records. · Consumer Protection Act 2019 — misleading NFT representations. · Specific Relief Act 1963 — remedies. Key questions: · Is minting NFT of someone else's work infringement? — YES. · Is selling NFT of branded product trademark infringement? — Likely YES. · Are smart contracts enforceable? — Generally YES under Section 10 ICA. · Are NFT licenses copyright transfers? — Depends on specific terms. Indian framework currently relies on judicial application of existing statutes. Specific NFT legislation pending.

Section 10 — valid contract requirements

Smart contract must satisfy: free consent + competent parties + lawful consideration + lawful object.

Section 11 — competence

Parties must be of age and sound mind; smart contracts cannot make minors competent.

Section 14 — free consent

Smart contracts cannot ensure free consent — subject to challenge.

Section 25 — consideration

Smart contract terms must include consideration.

Section 23 — lawful object

Smart contract must not violate Indian law.

Section 73-74 — damages for breach

Indian court may award damages.

✅ For blockchain inventors — eight points

Demonstrate concrete technical effect (Ab Initio standard).

Avoid claims of "distributed ledger concept" alone.

Specify consensus mechanism and parameters.

Document smart contract logic.

Detail data structures and block linkages.

For supply chain blockchain, emphasize provenance technical features.

For IoT blockchain, document integration specifics.

For DeFi, recognize business method exclusion implications.

✅ For NFT participants — eight points

For NFT creators, secure copyright in underlying work first.

For NFT minters, obtain authorization for third-party works.

For NFT buyers, understand what license/copyright transfers.

For brands, monitor unauthorized NFT use of trademarks (Hermès lessons).

For platforms, implement DMCA-equivalent takedown procedures.

For sales, comply with Income Tax 30% virtual digital asset framework.

For smart contracts, ensure ICA 1872 compliance.

For disputes, recognize Indian court jurisdiction.

✅ For IP management — eight points

Use blockchain for timestamping and provenance.

Implement smart contract royalty automation.

For licensing, use blockchain marketplaces.

For patents, use blockchain disclosure timestamps.

For copyright, recognize Indian formal registration's value.

For trademarks, use blockchain authentication.

For trade secrets, blockchain not suitable (transparency conflict).

For cross-border IP, leverage blockchain for transparent licensing.

🎯 EXAM POINTERS — TOPIC 91

• Section 3(k) Patents Act — algorithms NOT patentable; blockchain implementations may be.
• CRI Guidelines 2025 — dedicated blockchain examination framework.
• Priya Randolph v. Deputy Controller (2023) — blockchain patent eligibility recognized.
• Ab Initio Technology v. Controller (2024:DHC:5708) — blockchain technical effect required; theoretical concept excluded; concrete implementation may be patentable.
• Theoretical distributed ledger NOT patentable; practical implementation MAY be.
• Specific technical effect required (latency reduction, tamper-proof provenance).
• Hermès v. Rothschild (US 2023) — "MetaBirkins" $133,000 trademark infringement.
• Nike v. StockX (US 2022) — NFT-physical product linkage.
• Bored Ape Yacht Club v. Ryder Ripps (US 2023) — $1.6M+ NFT trademark infringement.
• No NFT-specific Indian legislation; existing IP/contract laws apply.
• Income Tax 2022 — 30% tax on virtual digital assets; 1% TDS on crypto transactions.
• NFT ownership = TOKEN ownership; NOT copyright transfer (unless specified).
• Smart contracts must comply with Section 10 ICA 1872 (free consent + competent parties + lawful consideration + lawful object).
• Blockchain IP applications: timestamping, provenance, royalty automation, marketplaces.