Blockchain With IoT: How To Protect Intellectual Property

Blockchain, best known for the crypto-currency Bitcoin and Ethereum or fintech, is being used today to track the progress of goods in a supply chain, a domain of increasing interest to many Intellectual Property (IP) sectors. These include the pharmaceutical, automotive, luxury and consumer goods industries, art in all its forms, where the traceability of goods is important and counterfeit and grey goods need to be marked out. Blockchain is attractive because of its potential uses, ranging from crypto-currency, transaction and contractual information to data files, photos, videos and design documents and newer systems keep getting devised every day. 

Simply put, blockchain is a form of distributed ledger technology which creates a secure, transparent record of every transaction, and reports the transaction to everyone on the blockchain platform. For example, if there is somebody who has authored a book, the blockchain will not store the actual book, but would record it as an encrypted unique set of letters and numbers, technically referred to as ‘hash’, to give a unique identity to the book. This provides verification of the authorship and the evidence that the creative work existed at a given time and was created by a particular author, without revealing its actual contents. This ‘hash’ is then linked with other hashes made at the same time, to make a block. Each new block is turned into a hash and these are cryptographically connected as a chain of blocks. Any modification to any of the blocks will disrupt the chain as the subsequent blocks will not have valid referencing. The data, once mined, is transparent and immutable and could provide IP offices an opportunity to transform the registration of the IP rights process into a more cost effective, faster, accurate and more secure one.

The ideas registered in blockchain, the date and time of registration are not just recorded temporarily, but stay there forever. So the information can be verified by anybody, at anytime – making it easy to scrutinise in court, should there be a dispute. Blockchain enables creation of automated agreements for distribution of profit from IP assets proportional to the fractional ownership on the distributed ledger, referred to as ‘smart contracts’. The assets are available round the clock, but only few relevant fragments of the design are available to any individual of the chain as per authorisation  –  allowing greater liquidity of data and frictionless transfer of ownership with trusted provenance. Innovators are ensured progressive protection as every iterative step of any new scientific or artistic development is continuously captured, time-stamped and certified or technically ‘mined’. There is establishment of secure channels and evidence records of the IP assets for safe collaboration with partners, investors and employees while exchanging confidential information, data, and documents. This extensive IP safety is provided by protecting the asset digitally before sharing, regulating the access rights, linking non-disclosure agreements and policies and avoiding data leaks or misuse of information. Hence, all the roadblocks can be cleared seamlessly through the evidence of creatorship and provenance authentication, registering and clearing IP rights, controlling and tracking the distribution of unregistered IP, providing evidence of genuine first use, digital rights management, establishing and enforcing IP agreements, licenses or exclusive distribution networks through smart contracts, transmitting payments in real-time, and more.

Blockchain technology has the potential to shake up the world of Intellectual Property with its relatively low cost of maintenance, increased transparency, lessened administrative burden and resilience to fraud. Open networks collaborating with the Internet of Things (IoT) will allow extraction of the maximum value: monetizing IP, establishing partnerships and collaborators using automated contracts, finding subject matter experts to support the project, as also making unbiased screening and evaluation of innovation for agile decision making and funding. Cyberattacks are becoming increasingly common and data security is at risk. The use of blockchain technology with IoT will add a layer of security against any untoward cyber incident as decoding or altering each module of the link chain is nearly impossible.

For blockchain technology to take off in the management of IP design rights and copyrights, there would be a need to an agreed and internationally supported set of standards monitored by an authoritative and trusted third party, such as IP office or Collective Management Organisation. To better understand the potential use of the technology, if we need to register a design in the European Union or the United Kingdom, we need to decide where we need to protect it. Then consider the registerability – whether it is ‘new’, or does it have a unique ‘character’, the services for which it should be registered and so on. A very extensive search has to be undertaken to ensure to clear any potentially conflicting earlier rights to obtain ‘No Objection’ from the Registery or objections from any third party. Next hurdle is setting up a system for collecting separate application fees in every country, the IP needs to be registered in. To circumvent all these processes and archived paper records, existence of a digitally-linked file would reduce the time, cross-country effort and cost. 

Alternatively, a system can be evolved wherein the right holders may also be account holders, meaning the Registery would not only record but simultaneously transfer rights by append-only digital ledgers, evolving into a gigantic blockchain-based copyright management system which would be valuable, scalable and safe. Issues pertaining to legal, technical and socioeconomic perspectives will however, still need to be addressed for market adoption and to have an ‘indelible’ impression on the copyright in the digital environment. Issues of rights management and anti-counterfeiting will have to be comprehensively addressed. Lengthy legal battles to reclaim family possessions, including a famous portrait by Gustav Klimt, ‘Portrait of Adele Bloch-Bauer-I’, seized by the Nazis but considered national treasures by Austria as portrayed in the movie, ‘Woman in Gold’ would perhaps then not be so dramatic anymore!

The transparency would be welcome, but the enigma and controversies around great works of literature from the pseudonym of Charles Dodgson to Lewis Carroll when writing ‘Alice in Wonderland’, or the purported ghost-writing of adventure classics such as ‘The Count of Monte Cristo’ and ‘The Three Musketeers’ by the historian Auguste Maquet for Alexandre Dumas would be lost. Cut and dry, or safe? You choose!