When we think of blockchain we automatically think of the technology that underpins Bitcoin – but it can do much more than that. Blockchain technology is now being developed across multiple sectors, where it is expected to have a transformational effect; from healthcare to pharma through supply chain logistics to food safety. Technologists are also exploring how it can be used to better protect intellectual property, with clear benefits for creators of intellectual property.
What is Intellectual Property?
Intellectual Property (IP) refers to all material created by mental power – including art, images, written materials, inventions, design work, symbols and names.
When properly protected and utilised, IP can be very valuable, able to generate income from the sale or licensing of products and services.
Two of the challenges for those commercialising IP are (i) proving that you are the owner/author of the IP and (ii) being able to identify who is using your IP.
Can Blockchain help overcome these challenges?
What is Blockchain?
Blockchain is technology that records electronic transactions on a public database that all participants in the chain can access known as a ‘decentralised ledger’. Each new piece of information added to the chain (a block) is verified by all users in the chain creating a trustworthy and transparent record. With blockchain, databases are not maintained by one person nor stored centrally on one computer. The entire system is secured by high level cryptography.
It is heralded as being low cost, transparent and resilient to fraud. Just about any database or ledger can be created and managed using blockchain.
Still not sure what blockchain is?
Imagine blockchain as taking a document, copying it one hundred times and storing a copy on one hundred computers at once. That initial document forms the first block in what is now a shared database, visible to all users holding a copy. Each time the document is added to or changed, all users must approve or verify the change and the change gets recorded (and timestamped) on all one hundred copies. The change becomes a new block in the chain. Each block is encrypted in a special way so all users in the chain can view the database and all chronological activity for the chain. (Old versions do not get deleted, they stay as part of the chain and new blocks cannot be deleted.) Only users with special encryption keys can add to the chain – so changes cannot be made by just anyone.
How can Blockchain protect IP?
Many forms of IP are already regulated by national/international patent and trademark offices – so how can blockchain technology help?
Firstly, blockchain can help because not all IP is registerable – that is, there is no national or international registry to record ownership of certain categories of IP. Copyright, for example, is an automatic right that is not registered anywhere.
Secondly, businesses today increasingly operate on a global basis from inception and are less likely to establish a reputation locally before expanding internationally. Consequently, business owners need to protect, register and manage their brand and reputation internationally in numerous countries from the outset which is neither cost nor time effective.
Potential applications for blockchain technology include:
· Innovation ledgers – businesses can create and maintain a blockchain database of ideas generated within a business. This will help avoid complex and costly legal challenges about when an idea or concept was generated, particularly where the innovation has not yet been (or cannot be) formally protected or registered.
· Collaboration/development ledgers - where businesses operate on a global basis from more than one office, employees in different offices can collaborate to develop IP and that real-time collaboration can be clearly recorded.
· Licensing ledgers – recent high-profile patent disputes have been exacerbated by difficulty in verifying ownership of patents as often businesses have not maintained clear records of licenses granted or acquired. A blockchain ledger will allow a business to keep a record of each new license, and also make searching to see who is using their IP much easier and helps stop third party infringement.
· IP Registration ledgers (in-house) – whilst businesses will be trading globally, most IP registrations can only be done on a country by country basis. Keeping track of and managing these valuable registrations is fraught with difficulty. Using blockchain will help simplify management of IP.
· Registration ledgers (National IP Offices) – the process of registration of ownership of IP can be simplified and codified using blockchain technology. Blockchain databases can include copyright which currently is not recorded on any form of register. This can also help businesses who want to licence existing IP source the relevant owner and obtain a licence to use their IP rather than use the work illegally.
· Smart Contracts – blockchain can be applied to allow automation of contracts granting IP rights and can also allow royalty or other payments associated with the contract to be paid automatically. This will make the process of selling or licensing IP much easier and quicker and ensure that IP creators are properly recognised and rewarded.
Can we use blockchain now?
The potential for blockchain in relation to IP is clear, and some very early adopters like the musician Imogen Heap and her blockchain project for artists and music rights ‘Mycelia’ are already demonstrating the power of the technology to benefit creators of music.
Legal hurdles to blockchain becoming mainstream such as governing law and jurisdiction, data security and privacy need to be overcome before blockchain can be applied as described in this article. Government agencies and IP registries are actively exploring the uses of Blockchain and global standards for self-executing contracts are being discussed.
It’s ultimately only a matter of time until the legal hurdles are addressed and blockchain is being utilised to protect and manage intellectual property!