Patenting Fintech: ArentFox Schiff Received Patent for Secure Crypto Wallet and Cryptocurrency Payment Protocol | ArentFox Schiff

by James · August 5, 2022

The use of cryptocurrencies for online purchases has become increasingly popular. However, using crypto to pay for goods in stores has been slow due to the lack of infrastructure that can support crypto transactions. Tangem AG has received a patent for technology that enables crypto transactions over conventional POS terminals without modification of existing infrastructure.

Conventional electronic payment systems, such as MasterCard, Visa and Europay, do not support cryptocurrency transactions in their default state. In other words, a customer cannot simply pay for groceries using a cryptocurrency at the local supermarket’s Point-of-Sale (POS) terminal. To address this shortcoming, Tangem, a Swiss fintech pioneer, has developed and patented a secure cryptocurrency hardware wallet and associated authorization protocol for cryptocurrency transactions that is compatible with conventional electronic payment systems. Thus, a vendor does not need to purchase a separate POS terminal configured specifically for cryptocurrency transactions.

Tangem’s US Patent No. 11,315,113 describes a secure crypto wallet, which can be implemented as a smart card or smartphone app, that stores customers’ private cryptographic keys to crypto funds. The wallet is configured to interact with a conventional POS terminal using a standard single tap contactless approach or an insert-the-card contact approach made with a chip and PIN bank card. The patent also describes a new authorization method for blockchain transactions where a POS terminal can obtain a blockchain transaction signature (authorization) from the customer’s hardware crypto-wallet and transfer this authorization over a conventional electronic payment network by embedding the necessary data in standard electronic messages.

One of the main challenges in prosecuting fintech patents is overcoming the qualification claim rejections under 35 USC 101 in light of the Supreme Court decision Alice Corp v. CLS Bank, which limits the patentability of certain business methods. This challenge can be even greater if your patent application is assigned to USPTO Art Units 3620 or 3680, which examine business method patents and are notorious for their prosecution difficulties, with patent grant rates as low as 25% and 30%, respectively. Despite being placed in the 3680 art unit, ArentFox Schiff patent attorneys were able to obtain the patent for Tangem, within six months from the filing date, with minimal prosecution using well-developed patent drafting strategies such as emphasizing the invention’s technical aspects and improvements over conventional technical standards.