Blockchain technology and Intellectual Property Law: a perfect match in the crypto space?

 Blockchain technology has become famous as the technology behind cryptocurrencies like bitcoin and ethereum. Essentially, it is an open registry of information that allows transactions to be recorded and tracked, which is exchanged and verified in a network between individuals. Blockchain and other distributed ledger technologies Blockchain development company create a trustworthy and transparent ledger by allowing multiple parties to participate in the transaction and verify the data to be recorded in a ledger in advance, with neither party having the ability to change later. registry entries. Each transaction or “block” is transmitted to all network participants and must be verified by each participating “node” by solving a complex mathematical problem.

From an information perspective, the real innovation of distributed ledger technology is that it ensures the integrity of the ledger by making its oversight public and eliminates the need for a central authority. In other words, the transactions are verified and validated by the multiple computers that host the blockchain. For this reason, it is considered a practically inviolable technology, since, in order to change the information it contains, a cyber attack would have to simultaneously affect (almost) all copies of the registry. While the traditional concept of the blockchain is an open and anonymous network, there are also “private” chains that pre-select the nodes that can manage the registry.

An appeal that goes beyond the world of fintech

Because distributed ledger technology creates a secure, immutable, and time-stamped chain of information, applications are already emerging in the areas of trademark rights protection and enforcement, marketing, and consumer engagement. Examples of new applications appear almost daily, it seems. The technology has quickly become attractive beyond the fintech world and is already being used to track product developments in supply chains, which is of interest to many IP-intensive industries such as the pharmaceutical, automotive, luxury and consumer goods industries, where product traceability is important and counterfeit and gray products are of concern.

Blockchains are of interest to a wide variety of sectors thanks to their possible uses. These strings can contain different types of data, from information related to cryptocurrencies, transactions and contracts to data documents, photos, videos and designs. In addition, the technology continues to develop and new types of distributed ledgers are emerging, such as hashgraph software, which are intended to address the problem of adaptability.

Possible applications in the field of IP

Large-scale legal enforcement can pose a number of obstacles (such as questions of applicable law and jurisdiction, data security, and privacy). Despite this, in the context of IP-intensive industries, blockchain and related distributed ledger technology offer clear potential for IP protection and registration, and as a means of evidence, either at the registration stage or in court. Blockchain Development services They also promise an inexpensive way to speed up those processes. Possible applications include: paternity testing and authentication of origin, registration and management of IP rights; control and monitoring of the distribution of IP rights, registered or not; proof of actual use or first commercial use; electronic rights management (eg online music sites); establishment and enforcement of IP agreements, licenses or exclusive distribution networks through smart contracts; and real-time transmission of payments to IP right holders. Blockchain can also be used for authentication and origin determination purposes in the process of detecting or recovering counterfeit, stolen and parallel import goods.

“Smart” IP rights

The use of blockchain technology for IP rights management offers great potential. Registering IP rights in a distributed registry and not in a traditional database could transform them into “smart IP rights”.

The pertinent idea would be to establish IP offices using distributed ledger technology to create “IP smart registries” in the form of a centralized solution managed by an IP office as the responsible authority that would create an immutable log of events in the life of a registered IP right. That record could include the time a trademark was first applied for, the time it was entered in the trademark registry, and the first time it was used commercially; when a patent, design or trademark license was granted, when the rights were transferred, etc. It would also resolve the practicalities related to the collection, storage and presentation of such evidence.

The ability to track the entire life cycle of a right would have many benefits, including ease of auditing IP rights. It could also simplify the due diligence process required in IP transactions, for example mergers and acquisitions. Confidentiality concerns raised by IP right holders could be addressed through an opt-in system.

Means of proof of use of IP rights

A registry that shows who owns a particular right provides trademark owners with a point of reference regarding their rights and their use in the marketplace. This mechanism could be particularly useful in jurisdictions where proof of first use or actual use is necessary or where the scope of use is decisive, such as litigation or other proceedings involving the recognition of well-known marks, or the time to defend a claim for revocation for non-use.

As an example, the collection of information on the commercial use of a trademark in an official blockchain-based trademark registry would allow the relevant IP office to be notified almost immediately. This would provide time-stamped reliable evidence of the actual use and frequency of use of a trademark in commerce, data that is relevant to proving first use, actual use, distinctiveness or secondary meaning. acquired or the goodwill of a brand. Similarly, distributed ledger technology could be used to disclose the prior art of some technologies for the purposes of preemptive publication to prevent others from obtaining a patent on the technologies in question.

means of paternity testing

Blockchain technology can also play an important role in the context of unregistered IP rights, such as copyright (which in many jurisdictions and under the Berne Convention for the Protection of Literary and Artistic Works , is not a registrable IP right) and unregistered design rights, since you can provide evidence of their conception, use, admissibility requirements (such as originality and the country in which the designs were first marketed). items made to design) and location. When incorporating a design or an original work and the data of the designer or creator into a block chain, a record will be created with date and time and a reliable proof that certifies that data.

Various blockchain startups are already developing repositories based on distributed ledger technology for unregistered IP rights, which could be an interesting and viable solution for copyright protection as well as electronic management of rights.

Smart contracts and electronic rights management

In the context of the blockchain, the concept of “smart contracts” is often cited. Since some blockchain-based solutions can host, execute and monitor contract codes, such “smart contract functions” could be of interest for electronic rights management and other IP transactions.

Smart contracts could be used to establish and enforce IP agreements, such as licenses, and facilitate the transfer of real-time payments to IP right holders; “intelligent information” about IP rights in protected content, such as a song or image, could be encoded in digital form (in a music or image file). That these ideas are rapidly becoming mainstream is evidenced by Kodak’s recent launch of a blockchain-based image rights management platform and its own cryptocurrency.

Anti-counterfeiting and enforcement of IP rights

A register that shows who owns a particular right, who is an authorized licensee, etc., will allow everyone in the supply chain, including consumers and customs authorities, to validate a genuine product and distinguish it from a genuine product. fake. Blockchain registries containing information on IP rights allow for authenticating origin, as they can store objectively verifiable data on when and where products are made, as well as details on their manufacturing process and the origin of materials. cousins. These types of solutions using blockchains are spreading rapidly as they allow users to verify the authenticity of the product and offer confidence and peace of mind to companies, authorities,

The incorporation of scannable elements connected to the blockchain, such as labels, tamper-evident seals or fingerprints (visible or hidden) into products is one of the most compelling applications of distributed ledger technology and could play an important role in the fight against counterfeits. If a brand owner informs customs authorities about the security features that authentic products must have, the absence of those features will allow border agents to easily check whether a product is counterfeit. The presence of these blockchain-linked features also offers a greater ability to communicate with customers and educate them about the risk of counterfeiting and the ability to check whether the products they purchase are authentic. This technology could also be used in connection with certification marks to certify that products meet certain standards or established criteria, such as the Woolmark mark, which certifies that the products in which it is used are 100% wool.

Supply chain management

The ability to track products on an unalterable blockchain could help brand owners enforce contractual provisions on distribution and detect leaks in the distribution system, as well as locate parallel imports or gray market activities. Product distribution tracking can also be used to meet regulatory requirements (for example, in the pharmaceutical industry) and validate warranties.

Who owns the blockchain?

In recent years, the promise of blockchain technology has led to the filing of numerous patent applications for inventions related to the technology. Many of the patent applications were initially filed by banks and financial institutions, but with the popularization of blockchain technology, applications are being filed from a wide range of sectors.

Most of the patent applications related to blockchain technology claim methods to improve or use the original chain, disclosed by its mysterious inventor, known only as Satoshi Nakamoto, in a white paper published in 2008.

. Some defenders of this technology also continue to advocate making it accessible with open access licenses to the source code or by creating patent pools. Furthermore, as with many promising new technologies, blockchain has also attracted patent hijackers, as noted by, among others, the Chamber of Digital Commerce, a US group that promotes the emerging industry underlying blockchain technology. of blocks. This entity has recently created the Council for the Intellectual Property of Blockchains (BIPC, for its acronym in English), whose objective is to create an industry-led preventive strategy to fight against the hijacking of patents related to blockchains. . With everything,

Future perspective: beyond the crystal ball

As blockchain technology becomes more widely used, industry players and blockchain developers will increasingly need to collaborate to develop interoperability standards and protocols. Various government agencies and IP registries such as the European Union Intellectual Property Office (EUIPO) are intensively studying the possibilities of blockchain; the European Commission is planning to create a blockchain observatory and the United States Congress has recently established an informal group on the technology. In addition, various organizations are examining the possibility of developing global standards for the automatic execution of contracts.

Therefore, it appears to be only a matter of time before the legislation takes into account the potential obstacles posed by the large-scale legal application of the technology, such as questions of applicable law and competent jurisdiction, enforcement of rights smart contracts, data privacy and security, and credible standards and definitions for smart contracts, and permeate IP law and practice.