BLOCKCHAIN and Intellectual Property

In today’s world, there are countless advantages to the protection of Intellectual Property Rights (IPRs), and they are more valued than ever in this global, highly connected digital landscape. It is undisputed that IPRs are seen as assets and there is fierce competition for their creation.

Their importance in the modern world has been increasing during the last decades, as is shown in the registration numbers from different IP Offices around the world which do not seem to stop growing.

Nevertheless, with the growth of their importance comes their management, which has become more and more difficult with the rise of the internet and the sharing of information and ideas.

How can this increasing difficulty be simplified or even resolved? A possible answer could be blockchain technology.

What is Blockchain?

Blockchain is a technology composed of bundles (blocks) of information or connected (chained) transactions using cryptography. When each new block is created and subsequently encrypted, it includes the encryption (hash) of the previous block of information, meaning that with every new transaction or new data introduced, it is added to the chain, creating a chain of blocks: i.e., a blockchain.

It has also been referred to as a chain of digital signatures where each owner transfers the data to the next by digitally signing a hash of the previous transaction.

Once data has been added to the transaction history, that information cannot be changed, meaning that what is stored in the blockchain is much more reliable than any data stored in decentralized databases.

This database is available via a network to an infinite number of computers at the same time, instead of having a centralized authority controlling the data transactions and verifying its veracity.

A transaction (or other information) stored in blockchain (a “ledger”), which has been accepted as “correct” may not be altered.

It, therefore, creates a time-stamped, and immutable chain of information. It offers a secure (and indisputable as to its traceability) chain of events which entails not only the nature of the data transaction but the exact order in which this transaction has occurred.

The concept of blockchain was firstly associated with cryptocurrency or bitcoins which is based on an entirely open database, where anyone may add at any time. However, in the same blockchain, there may be some confidential parts to which not everyone has access or even has the obligation to sign a confidential agreement beforehand, creating rather complex structures of storage and access.

As a result of all its characteristics, blockchain is appealing to many different industries because of its potential uses. With its increased transparency, reduced administrative burden, and resilience to fraud, blockchain is a versatile technology.

Different types of data can be added to a blockchain, from cryptocurrency, transaction, and contractual information to data files, photos, videos, and design documents. And the technology is continuing to develop.

How can Blockchain be applied to Intellectual Property?

One of the first applications of blockchain that may come to mind as regards IP may be concerning evidence either at the registry stage or in courts such as proof of authorship, provenance, or authentication.

However, this is just the tip of the iceberg. It can revolutionize the unregistered Intellectual Property Rights, as this technology can attest for the creation and use that would be simplified and verified with the blockchain effectively providing a time stamp record.

There has also been a debate regarding the use of this technology in the so-called “Smart Contracts” or “Smart IP rights”.

In the case of the SMART CONTRACTS, they could be used to enforce IP agreements signed by private parties. Each contract is allocated with a computer code that implements transactions of a contract recording them in blockchains. However, the uniqueness of it is that it ensures that all terms of the contract are complied with before the transaction is recorded on the blockchain.

A simple example could be a sales contract where a party, the owner of an IP right, sells its right to a buyer for a determined price in a specific currency. In this case, the smart contract (computer code) ensures that the terms of the signed contract are complied with i.e., that the seller is the current owner of the asset; and that the buyer has sufficient funds of the chosen currency. If one of the terms is not met, neither transaction is recorded (transfer of ownership and transfer of funds).

With this solution, tracing a complete chain of ownership, which has been a major problem with IP rights management could be simplified and even resolved.

These ideas are already being put in place by IBM, which recently launched a blockchain-based Contracts and Rights Management System that tracks the usage of content helping to manage payment of royalties, control distribution of content, and prevent piracy.

As regards SMART IP RIGHTS, it is the ability to register all the information regarding any IP right in an immutable record giving every participant the ability to access and verify the information.

Time-consuming activities such as IP audits and due diligence could be simplified and indeed all aspects of collecting information on IP rights and transactions would be speeded up.

Another aspect to consider is the anti-counterfeiting and enforcement of IP rights. With blockchain technology, IP owners can search across a whole host of different sources simultaneously to ascertain who is using their work. This enables them to identify and stop infringements and makes it easier to license their IP works. The secure character of blockchain might also constitute a reliable source of prior art for patent offices worldwide.

It could be a kind of detection system that could be applied not only to patents but to copyright, designs, utility models, trademarks, plant variety, etc.

Currently, various IP offices are gazing into the future and actively trying to study the capabilities of blockchain i.e., the World Intellectual Property Organization (WIPO) established the Blockchain Task Force.

Other IP Offices are already applying this new technology. The European Intellectual Property Office (EUIPO) introduced blockchain to search services TMview and DesignView and is also currently developing a blockchain anti-counterfeiting platform, and the European Commission has plans for a blockchain observatory.


Problems with Blockchain?

Unfortunately, as the old saying goes, all that glitters is not gold, and although it can help solve and economize many processes, there are still certain aspects to be resolved.

Many applications of blockchain technology are still in the early stages of development. It is a complex technology and regulations by governments and legal recognition is not yet worldwide spread.

The main issues that have arisen are the large amounts of computer resources required to effectively store transactions; the large amounts of power required to maintain the integrity of the blockchains; the compatibility, and interoperability of different blockchain platforms; and legal issues such as data ownership, privacy, liability, and jurisdiction.



It appears that the impact of blockchain technology in the management of IP rights will become increasingly important. Although many issues remain unresolved, there are countless motivations to anticipate the execution of blockchain technology which can be seen as a one-stop solution to many problems.

Creativity and innovation in IP rights protection are increasingly important in our ever-changing global economy and technology can assist us in adapting to this new age.

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