Blockchain has the potential to protect intellectual property

October 12, 2017

The blockchain is the perfect solution for providing proof of creation. It is a permanent immutable record. Meaning, once the record is there, it is there forever and will never change. One result of this is that orphaned works could become a thing of the past, as there will always be an unalterable record of copyright authorship.One of the most obvious applications of blockchain technology is as a registry of IP rights, to catalogue and store original works. This means that, unlike registered trade marks which can be recorded and viewed on various registries around the world, there is often no adequate means for authors to catalogue their works. As such, ownership can be hard to prove. It can also be difficult for authors to see who is using their work, and equally difficult for third parties using a work to know who to seek a licence from. The result of this is that authors are often unable to stop infringements or to make the most of monetising their works.

Blockchain is Unhackable

Using blockchain as an IP registry may help give clarity to copyright authors, owners and users. By registering their works to a blockchain, authors could end up with tamper-proof evidence of ownership. This is because a blockchain transaction is immutable, so once a work has been registered to a blockchain, that information cannot ever be lost or changed. In theory, third parties could use the blockchain to see the complete chain of ownership of a work, including any licences, sub-licences and assignments.

Platforms such as Blockai and ascribe are taking advantage of blockchain technology in this way, allowing authors to make a record of copyright ownership, which can then be used to see where and how the work is being used on the internet, and to seek licences from third parties. Registering a work in this way gives the author a digital certificate of authenticity which can help third parties identify the author of a work, and authors or owners to tackle infringements.

IP protection using blockchain

Blockchain also offers a large number of obvious possibilities for IP protection, registration and as evidence, either at the registry stage or at court.

Blockchain-based IP registries

Blockchain technology could be used by the existing IP offices in connection with registering and granting IP rights, for example to replace the traditional databases holding registration information for trade marks, patents, designs and –in some jurisdictions – copyright. The advantages are apparent. By registering IP rights on a distributed ledger, they could effectively become smart intellectual property rights, providing a robust and trustworthy proof of record. The information could also be linked to and connected to actual use of products, so that (first) use in rade/commerce requirements could be updated immediately.

Evidence of use in trade/commerce

If all transactions relating to a product bearing a particular trade mark are entered on the blockchain, then that use of the trade mark on the blockchain could – at least arguably – be evidence of use of the trade mark in trade. If we assume that this was accepted by the law, then blockchain technology and related smart contract technology (which we will discuss in more detail below) could also be used to simplify the process of proving evidence of use of a trade mark in trade and/or or first use in commerce, depending on the jurisdiction, as well as providing other evidence at an IP office or court, for example evidence of acquired distinctiveness or secondary meaning. Further, whenever use of a trade mark in trade/commerce can be reconciled with information on a blockchain ledger then this could enable evidence of such use to be notified to the relevant IP office or authority virtually immediately on the occurrence of a verified event of such use. This would substantially lower the burden of collecting relevant evidence for rights holders and at the same would simplify the process at respective IP Office. Indeed, the registration process of a trade mark could be simplified and freed of a significant burden of evidence and administration, which would equally apply for maintaining IP rights once registered, especially in those jurisdictions where the renewal or incontestability of an IP right requires further evidence of use in commerce.

Blockchain and certification/collective marks

Certification and collective trade marks are another field for the potential application of blockchain technology, particularly with regard to the fashion, luxury and textiles and related industries.

While there are national differences, certification marks may be used by anyone who can certify that products meet certain established criteria or standards, for example the Woolmark which certifies that the goods on which it is used are made of 100% wool. In many jurisdictions, the main difference between collective marks and certification marks is that the former may only be used by a specific group of enterprises, such as the members of an association, whereas certification marks are not confined to any membership but may be used by anybody who complies with the standards defined by the owner of the certification mark. An important requirement for certification marks is however that the entity that applies for registration is considered “competent to certify” the products concerned. This could mean that certification marks issued by way of blockchain would potentially have to be issued within the scope of a private blockchain rather than by traditional open blockchains which, as explained above, operate without a single issuing authority. The concept of private blockchains, originally almost an anathema to blockchain users, has become increasingly popular. Instead of providing fully public and uncontrolled network access permissions on traditional open blockchains, private blockchains are more tightly controlled, with rights to modify and/or read the blockchain restricted to a small number of users. As such, they are ideally suited to be used for certification and/or collective trade marks, which the added bonus that fake certificates could almost immediately be identified as such.

Evidence of creatorship

Blockchain technology may be equally important within the context of unregistered IP rights, which are particularly important in the fashion industry. The seasonal nature of fashion designs, with fast changing designs or “see now, buy now” models which will only be marketed for a short time, means that it is often not cost-effective for designers to apply for registered rights and designers therefore frequently rely on unregistered design rights and copyright to prevent copies of their designs. Enforcement of unregistered rights gives rise to difficulties of proving matters, such as ownership of the design, whether it is still in the period of protection and whether qualification requirements have been met. This is where blockchain technology could bridge the gap: if an original design document and details of the designer are uploaded to a blockchain, this creates a time-stamped record and good evidence to prove these matters. Locking evidence of their use and conception on a blockchain could make their enforcement much easier and at the same time also act as a deterrent to potential infringers.

Provenance authentication

Blockchain also allows you to record objectively verifiable details about when and where products are made and about the people that made them. It is obvious that this could be used for much broader brand protection and information, including trade mark registration details, legal information, assignment and chain of title information and/or evidence of (first) use in trade or commerce.

Weaved in intelligence

In the fashion industry this is already being used in real life: utilising one of blockchain’s so far most imaginative applications is exemplified by the collaboration between New York/Shanghai-based fashion brand, Babyghost, and VeChain, a blockchain start up that focusses on the protection of brands, trade marks and products. For its spring 2017 collection, inspired by the 1970s concept of Indigo children – often defined with reference to their enhanced intellect and insight – Babyghost quite literally weaved intelligence into its clothing. Each look or outfit was embedded with a VeChain chip, hosting a public key which was also stored on a blockchain. Using a mobile app to verify the public key, the wearer of the garment can thereby access information about the piece. In this case, each outfit was able to tell the wearer about the designer’s inspiration for the design. Blockchain may also be useful for high-value or collectible items such as jewellery, works of art, rare musical instrument or books where purchasers (and insurers) will be keen to confirm provenance and purchase history of goods, not least when it comes to reselling, finding insurance or when it comes to the recovery of stolen goods.

Tracking progress through the supply chain

The ability to add blocks of data to the chain also creates opportunities for brand owners to record details about a product’s progress through stages in the manufacturing and supply chain. Brand owners could use this function to record where goods are placed on the market – allowing them to distinguish grey goods in cases of parallel imports and identify where they left the supply chain. In the same way, blockchain could be used to monitor and control leaks from selective distribution networks and so assist in enforcing such agreements. This capability will render the technology of interest to other industries, such as the pharmaceutical industry. Again, this type of technology already exists: a London-based start up called Everledger is using blockchain technology to record details of the provenance of diamonds. Everledger engraves a serial number on the diamond’s girdle which allows access to information about where the diamond comes from and a chain of information about its owners. This information can be used by potential purchasers, diamond certifiers and insurers. The information could also be extremely useful in identifying and recovering jewels and any other valuable items, such as designer handbags, in cases of theft. Opportunities of further application in other industries seem almost limitless.

Anti-counterfeiting and enforcement

The above examples also show blockchain’s potential for revolutionising anti-counterfeiting and enforcement efforts. In fact, the VeChain chip was conceived as a brand protection method and the usual information stored on the chip is data confirming the origin of the product. Adding scannable tags or chips to garments could also enhance the effectiveness of Customs programs to prevent global trade in counterfeits. If a brand owner is able to tell Customs that its genuine products are embedded with a tag which proves its origin, then the absence of such a tag or a tag bearing incorrect data is an easy way for Customs to check whether a product is counterfeit. We already mentioned the concept of having an interactive tag (similar to QR codes and NFC tags), which allows users to objectively verify the origin of products is not new. However, unlike blockchain, these more traditional and established technologies link to one single source of information, such as a website. Therefore, although they make life more difficult for counterfeiters, they are still prone to corruption and copying. Blockchain technology does not suffer from this drawback since counterfeiters should be unable to alter the information on the blockc

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