Revolutionizing Ownership: Blockchain Technology and Intellectual Property

Blockchain Technology is transforming nearly all industries and Intellectual Property (IP) can no longer shy away from its pervasive influence. 

IP protection, including trademarks, copyrights, and patents, is critical for all the major industries. Businesses can leverage blockchain technology to create an ecosystem for enhancing IP protection. 

While the blockchain’s decentralized ledger technology protects your IP assets, the business owners and inventors can focus more on research & development or marketing. However, you need to consider its benefits and challenges before embracing blockchain technology for IP. 

In this post, we delve deep into how blockchain technology is revolutionizing intellectual property. 

Key Highlights

• Blockchain can confirm ownership and authenticity by providing a timestamp that can’t be modified. It can be used to verify the origin and ownership at a specific moment. 
• Blockchain technology enables inventors and businesses to convert their trademarks or patents into digital assets such as non-fungible tokens (NFTs). The unique identification number associated with each NFT makes it easier for you to track unauthorized usage, secure storage, and enhance asset protection.
• High-value items can be authenticated using blockchain applications such as Everledger, Ascribe, and Verisart. 
• Blockchain-powered smart contracts may become an alternative to IP contracts and licensing agreements.

Blockchain and Intellectual Property: A Match Made in Heaven

Blockchain has long been perceived as the underlying technology of cryptocurrencies. However, the use of blockchain has recently extended to the realm of IP due to its decentralized and tamper-proof nature. 

Integration of blockchain into IP will make the enforcement of IP rights more efficient by simplifying the management and licensing of IP assets. You can leverage blockchain’s immutable record-keeping system for IP rights management and real-time status/usage tracking. 

We have listed here some of the key contributions made by blockchain in IP:

Unalterable Proof of Creation

Claims of infringement and ownership rights violation are common in IP. IP rights holders need valid ownership proof to defend them during such conflicts. Blockchin’s unalterable timestamp can be used to verify the origin of a logo, invention, design or any other form of IP at a designated moment. 

Transparent Ownership Tracking

The transfer of IP can be challenging during franchising or Mergers and Acquisitions deals. Conflicts related to ownership changes often end up in IP litigation. Blockchain technology offers a transparent option for tracking the ownership changes or transfers of patents, trademarks, copyrights, and other forms of IP. Such a transparent tracking system also simplifies the process of due diligence during M&A deals or licensing agreements. 

Decentralised Control 

The standard IP model has one big drawback: “centralization of control over validation and registration”. Blockchain facilitates distributed control in IP management. Blockchain technology eliminates the need for intermediaries by giving direct control to creators. 

Streamlining IP Licensing Processes

Blockchain simplifies the IP licensing process through automation of royalty distribution. The transformative power of blockchain is reflected in various stages of the IP licensing process including negotiation, compliance checks, and renewal, introducing efficiencies in IP management.

Blockchain technology creates an unalterable digital timestamp of content that can be easily tracked and verified. By setting up an IP marketplace on the blockchain, you can enjoy the benefits of detailed IP registries, exchanges, and payments. 

Improved trust and collaboration

Blockchain allows more secure and transparent exchanges on its unified platform. The distributed ledger system makes all transactions visible to authorized participants. This improves trust among the stakeholders and ensures a transparent record of licensing activities.

Smart Contracts

Smart contracts are computer codes that automatically implement transactions subject to certain predefined conditions. Smart contracts can be used in IP as an alternative to traditional licensing and contract agreements. Its self-executing and monitoring capabilities may come in handy for collecting royalty payments. Whenever the copyrights are used, the royalty amount will be added to the owner’s account. 

Application of Blockchain in IP Management

The transformative powers of blockchain are reflected in its real-life applications. We will now examine some specific instances of how blockchain is being effectively utilized in IP rights management.

Blockai

Blockai is a blockchain company that helps writers, artists and creators to meet their diverse needs. Blockai leverages timestamps to document the creation of new works and protect them from copyright infringement. 

Verisart

Verisart leverages blockchain technology to provide you with a secure and tamper-proof digital certificate. The company allows artists and brands to convert their works and products into NFTs for sale. With Verisart, verifying the authenticity of an artwork has become easier.

Bernstein

Bernstein’s certified version history allows users to create a digital trail of records of their innovation & creation processes. Any digital asset of any size and format can be quickly registered online to prove existence, ownership, and development over time, in real-time.

Blockchain Adoption in IP: Key Challenges 

Blockchain is a game-changer for the IP ecosystem but we can't ignore the challenges. Integrating blockchain into IP warrants huge investment, expertise and careful planning. 

Despite blockchain’s game-changing potential in IP rights management, there are hurdles and aspects to consider for its successful integration. Integrating blockchain technology within existing IP management systems demands significant investment and expertise and requires careful planning for a successful migration.

The challenges include: 

Legal uncertainty

The legal status of blockchain in IP is questionable because it is a relatively new technology. Many features of the blockchain are new to the legal system, creating uncertainty. For example, the absence of a central authority is a key blockchain hurdle that creates legal uncertainty in its adoption in IP. 

Industry-Wide Adoption

Industry-wide adoption of blockchain in IP is hindered by the lack of standardization in blockchain platforms. The stakeholders may shy away from blockchain due to its lack of a clear market leader or standard.

Absence of Interoperability

Numerous blockchains are in circulation, operating with various standards and protocols. This absence of interoperability within different blockchain networks adversely impacts communication and data-sharing capabilities.

Complex Implementation Process

Integrating blockchain into existing IP databases is not that easy. Companies may find it challenging as they need to have specific resources and technical expertise for the integration of blockchain technology into IP. 

IP enforcement challenges

While the security and restriction of unauthorized access to IP rights under the blockchain will never be a question, enforcing rights in the real world could be challenging.

Jurisdictional Challenges

Since blockchain technology is borderless, it might complicate jurisdictional oversight. A dispute involving blockchain records may cover different jurisdictions, which might cause legal uncertainty. 

Global Efforts in Blockchain and IP: WIPO's Role

The World Intellectual Property Organization (WIPO) has partnered with IP offices and other stakeholders for the smooth integration of blockchain into the realm of IP. Some of the initiatives are:

Blockchain Task Force

The WIPO launched the Blockchain Task Force under the Committee on WIPO Standards (CWS) to draft a new WIPO standard for the application of blockchain technologies in IP ecosystems.

Events & collaborative projects

WIPO has conducted many events based on the IP-blockchain integration. Such events focus on aspects such as blockchain technology and its impact on IP, the practical application of blockchain on IP etc. The organization is focusing on collaborative pilot projects, capacity-building initiatives, and public-private partnerships.

Harmonisation of IP & Blockchain

WIPO is working to develop a harmonized approach towards the integration of blockchain into IP worldwide. The organization is focusing on aspects like regulation, governance, and standardization of blockchain technologies in IP ecosystems.

Blockchain for IP: Best Practices and Recommendations

Since using blockchain in IP is challenging, IP owners need some guidance. Use the following recommendations while using blockchain for IP rights management:

• Choose the right platform
• Be vigilant while designing smart contracts
• Protect the privacy and security of IP data using encryption, hashing, zero-knowledge proofs, and access control.
• Collaborate with other stakeholders

Conclusion

Blockchain technology is rapidly evolving along with transforming the realm of IP. With the advent of blockchain, we can see a drastic change in the way IP rights are managed, licensed, and enforced. Blockchain’s transformative power rests in the benefits it offers such as an immutable record-keeping system to streamline IP licensing processes and boost enhanced collaboration and trust among stakeholders.

Real-life applications of the blockchain such as Blockai, Bernstein and Verisart have shown us how far the technology has elevated IP rights management. 

However, we need to be mindful of the technology’s limitations such as legal uncertainty, industry-wide adoption, jurisdictional challenges etc. The contributions made by organizations such as WIPO also underscores the bright future of blockchain adoption in IP.