In the week of 9/21, the Bitcoin community discussed recent patent filings by Coinbase for ideas including Bitcoin wallet software, an instant exchange, and a tipping function. While the community emotionally reacted to Coinbase filing these patents, CEO Brian Armstrong issued a blog post outlining the company's reasons for filing these patents and what they intend to do with them.

In short, Armstrong noted that most major tech companies file for software patents defensively against patent trolls. The acquiring of these patents is not to enforce them against companies to stifle innovation, but to preemptively prevent trolls from maliciously acquiring the patents for their own monetary gain.

Armstrong stated that filing for patents and getting rejected leads to a helpful precedent for the intellectual rights of the technology. Filing for patents and getting them accepted acts a deterrent to anti-Bitcoin actors and trolls.

Armstrong also clearly stated that Coinbase would not be using these patents to come after Bitcoin companies for IP infringement. While what the company actually does if it gets the patents accepted will remain to be seen, Coinbase has a positive reputation as a trustable company in the Bitcoin space. Also, Coinbase is in the strongest position as a Bitcoin company to acquire such patents.

Software patents tend to be a touchy subject in the tech world, especially within open source communities like Bitcoin. The open source model generally relies upon innovators to use and build upon existing technology that others created. It is also true that companies must file such patents in order to prevent competitors from using certain technologies. Holding the rights to intellectual property is important in many cases in order for an organization to remain competitive.

However, it is also true that malicious patent trolls force companies to take action on acquiring software patents in order to allow innovation to flourish. These companies uphold positive social and public reputation when they allow innovative companies to use these technologies freely and without legal recourse.

Last year electric car and battery manufacturer Tesla open sourced many of their patents so that other companies could freely use them. There is a competitive upside for companies to do this: by allowing others to use their patents, it increases the chances that these companies will build products and services that utilize Tesla's existing infrastructure (electric charging stations, etc). This is a win-win for Tesla.