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Blockchain And Its Application In Intellectual Property
Blockchain is amongst the latest technological trends with the potential to transform businesses and industries. At present, blockchain technology is in its nascent stages with limited application, but this is likely to change in the future. There are many industries like banking, healthcare, finance, automotive, etc., where it is likely to emerge as a major disrupter and bring about impactful changes. In this article, we explore the advancements and opportunities that blockchain technology holds for the Intellectual Property industry.
Table of Contents
What is Blockchain?
Blockchain is defined as a shared, immutable ledger that acts as a digital repository of information. The stored data is shared among the nodes of a computer network. Blockchains play a vital role in cryptocurrency systems such as Bitcoin, where they are used for maintaining a secure and decentralized record of transactions. In a blockchain, unlike regular databases which hold information in tabular form, information is collected in groups or blocks which have a predefined storage capacity. Once a block is filled to capacity, it is closed and linked to the next vacant box, thus forming a blockchain. The data entered in a blockchain is sealed with a timestamp and is irreversible.
Blockchain Use–Cases In IP
As mentioned, blockchain technology is still in embryonic stages but holds immense future capability. Based on its secure, accountable, transparent, and immutable nature, there are five probable use cases in IP for this revolutionary technology:
Smart contracts are blockchain-based programs that run when predetermined conditions are met. They are most commonly used for the automation of agreements once the defined conditions have been verified. Smart contracts can help in automating and expediting workflow in IP. Processes such as buying a patent, checking validity, negotiating the sales agreement, etc., can be simplified using smart contracts. Integrating it with the various processes in IP can be helpful in doing away with manual work of documentation, and thereby enhance the speed, accuracy, and efficiency. It will also lead to trust and transparency since no third party is involved and blockchain records are encrypted.
One of the central pivots in IP is checking the authenticity of the owner or inventor. While the issue isn’t prevalent with patents, since the inventor can secure a patent with the patent office, copyrights are at risk because the owner has to prove their ownership over the piece. In this internet age, it is easy for anyone to plagiarize or download any content and use it at will.
Blockchain can help here in three ways:
- By creating digital certificates of creative works and time-stamping them. Once data is on the blockchain, it is nearly impossible for anyone to hack or access it without permission. This certificate thus becomes an irrefutable proof of ownership
- Piracy can be prevented by accessing the original data on the ledgers of the blockchain.
By acting as an authenticating tool, which establishes and proves the rightful ownership. Since duplicate information cannot be stored on blockchains, they can help validate the integrity of an intellectual asset.
Hence, the blockchain time-stamping and validation features can be an excellent means to safeguard one’s IP assets.
Creating an IP Marketplace
Blockchains can be sued to design and create an efficient online marketplace for IP assets. The power of blockchain can be harnessed to enable a bidding platform where businesses can participate. Upon a successful deal negotiation, the ownership of the patent, along with the agreed transfer amount and legal fees will instantaneously be transferred to the respective participants using cryptocurrency. By creating a global online registry of patents, copyright, trademarks, etc., blockchains can speed up audits and maintain due diligence in IP transactions. The Distributed Ledger Technology of blockchain can thus offer a solid and secure foundation for the transfer and exchange of IP assets in the near future. IBM and IPwe have already created the Global Patent Registry, which is the world’s first blockchain-based registry for collecting active and historical records.
A Unified Global IP System
The present fragmented IP system across countries creates problems that can easily be resolved using the decentralized ledger technology of blockchains. It can be useful in unifying the patent system across nations and improving IP management. As more countries move towards the acceptance of blockchain as “admissible evidence”, the IP landscape can hope for better management, speeding up of the innovation process, and quicker dissemination of information. In recent years courts across the world have considered blockchains as proof under electronic evidence:
- The Vermont Rules of Evidence admits blockchain receipts as admissible.
- The Delaware General Corporation Law now allows businesses to maintain records using “distributed electronic networks or databases.”
- The Supreme Court of China has also formally recognized Blockchain evidence as admissible digital evidence in the ByteDance’s Douyin v/s tech giant Baidu case.
Given the increasing acceptability of blockchain as proof of evidence, the future might also see governments using it as an underlying technology, thereby unifying the global IP system.
Control and Maintenance of Digital Asset Versions
Various versions of patents, copyrights, etc., are made over the years, therefore, there is a need to assimilate and link them. Using blockchain ledger technology, all these versions can be easily linked together and maintained over their lifetime. This version control can also be helpful in creating prior art publications. Establishing prior art is a defensive move to protect innovations from being copied during the patenting process. Using blockchain, each file can be given a unique fingerprint, made indexable and searchable, and serve as prior art.
The management of IP in a global setting can be a challenging affair. Businesses need to focus not just on innovation but also safeguarding it across countries. For companies with more than one innovation, this entire process can prove cumbersome and time-consuming. With the use of blockchain technology, this process can be greatly simplified while affording the same or better level of protection to IP assets. The entry of blockchain into the IP domain is inevitable, it only remains to be seen how soon the industry adopts this ingenious tech.
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