05 Feb 2020

Blockchain and intellectual property – the de-centralised alliance

Blockchain is an anonymous online ledger that simplifies the way in which transactions are carried out. It comprises a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous one, a timestamp and transaction data. The technology was invented in 2008 in the form of bitcoin, a peer-to-peer electronic cash system, by a creator known by the pseudonym Satoshi Nakamoto.

Blockchain technology can serve as an indestructible digital ledger, which can be programmed to record data that can be securely sent across networks.

Blockchain in IP industry

Costly and time-consuming disputes can arise over who created a particular invention. This could be easily resolved if inventors registered their innovations to a blockchain – any debate over who first one came up with the idea could then be solved through the timestamp.

Blockchain technology provides records of IP assets owned by businesses across the world. Licensing agreements can be created and recorded via smart contracts, paving the way for a real-time ledger. Similarly, if used as a means to register works, it could provide authors with irrefutable evidence of ownership.

Blockchain can also be used to identify counterfeit goods by attaching blockchain tags to them. The ability to track the entire lifecycle of goods has multiple benefits (ie, smoother audits of IP rights) particularly in jurisdictions where proof of first/genuine use is crucial.

Research suggests that Estonian company Agrello is working to create an application for legally binding smart contracts, while Bernstein already offers blockchain-based solutions for IP management. Further, Blockai registers works of art with a timestamp, which serves as proof of copyright.

Blockchain and intellectual property – the drawbacks

Although the idea of a centralised, non-corruptible management system has the potential to revolutionise the IP industry, there are several hindrances to a solely blockchain-based IP ecosystem.

First, although some jurisdictional courts allow blockchain as evidence, its full adoption into law is still far off. Further, this technology can be slow, so the presence of IP experts is still necessary for legal matters and examinations.

Second, energising all nodes and providing appropriate cooling is an extremely energy-consuming process. These two constraints make blockchain one of the most expensive databases imaginable.

Further, with regard to a method to connect registries across the world through a single distributed ledger, this reality is far from simple. Successful management of IP rights using blockchain requires a mutually agreed, internationally supported platform. The problem with this is (and always will be) the issue of aligning multiple national and regional judicial frameworks and traditions. Any universal IP register would have to pass the desks of several bureaucrats who might see it as a threat to their jobs.

Comment

Blockchain has the potential to be an enormous boon to the IP industry and is ripe for a world that demands greater transparency and accountability. However, it has not had the kind of impact on the IP industry that many previously expected. Like any emerging technology, there are several challenges that must be tackled to ensure the smooth integration of the technology within the IP framework.

Just as the increasing use of bitcoin will not replace traditional financial institutions, the same is true for blockchain use in the IP world – rather, the two systems can co-exist and complement each other.

For further information contact:

Sanchit Kalra
Effectual Knowledge Services Pvt Ltd
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Ritu Tyagi
Effectual Knowledge Services Pvt Ltd
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