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Blockchain will change the IP landscape
12 April 2018

Several blockchain applications are being developed within the Intellectual Property (IP) field. These developments could entail significant changes in the protection and organisation of IP rights.

There’s no escaping: blockchain technology and its applications made a huge advance in the last few years. It all started in 2009 with the introduction of Bitcoin, which was soon followed by other cryptocurrencies such as Ethereum. The trade in these currencies is enormously popular; almost half a million households own cryptocurrencies in the Netherlands alone. In the meantime, more and more companies and organisations see other (non-financial) possibilities for the use of blockchain technology. Blockchain acts as a sort of digital log, making the possibilities seem endless in various sectors. Examples include applications for verifying the origin of coffee beans, the sale of solar energy or applications in healthcare.

Blockchain: more than a hype?

Considering the large amount of media attention given to blockchain, the question might arise whether this technology is indeed revolutionary or just a hype.

The innovative feature of blockchain technology is that data and transactions can be processed and verified in a system through various points instead of one central point. Every participant within a blockchain network gains insight into all data and gets a copy of every change. All new transactions (or changes in data) are linked to the previous transaction (or change in data) and automatically verified by the participants of the network. This creates a transparent and chronologic overview of all transactions and data, which is processed decentrally and is, in principle, impossible to manipulate.

Although blockchain technology itself can be regarded as revolutionary, the real changes and impact will have to flow from the applications of this technology. We focus on a few applications which are being developed and could shed another light on the protection and management of IP rights.

IP Efficiency

Blockchain technology could make a major contribution to the uniformity and efficiency of IP rights. Different data concerning an IP right can be recorded in a blockchain based database, such as the date of registration, ownership, publications and first use. This way, a type of digital authentication certificate can be generated for any IP right.

In addition, certain events such as transfer of the IP right, can be added later (by smart contracting).

Of course, IP registers already exist, for example for European trademarks, designs and patents. However,  such registers are not always interconnected or coordinated. There are various trademark registration authorities spread across the world, each maintaining its own register which have to be consulted for verifying whether a certain trademark has been registered.

With the cooperation of the competent authorities, a blockchain based database could be perfect for making (the registration of IP rights) more transparent, reliable and efficient.

Even more ground-breaking is that non-registerable IP rights, such as copyrights, could be recorded in a blockchain database system. Various companies are already exploring these possibilities. For example, Kodak is currently developing a blockchain based picture registration system. 

IP Verification

Besides enabling a more efficient and transparent registration system of IP rights,  blockchain technology could be used as an instrument for verifying the authenticity of physical products. The company Vechain is currently collaborating with different parties to achieve this goal. The general idea is that products are marked with a code, which can be scanned by any smartphone. The blockchain application will then verify the origin and authenticity of the product.

There are also applications which specifically focus on tracing infringing goods. An example is StoptheFakes. The idea behind this application is that users (participants in the blockchain network) can report infringing goods and even get rewarded for it.

IP Management

Another blockchain based opportunity relates to the management and distribution of IP rights. Concrete examples of such developments can be found in the music industry. Within the music industry, two matters relating to musical works are important: i) who created the music, and ii) who owns the (distribution) rights. A blockchain application is perfect to clearly reveal the answers to these questions.

Spotify is currently developing such an application via the acquired enterprise Mediachain. The idea behind this application is that blockchain does not only record and answer the ‘who owns what’-question, but also effectuates the distribution of e.g. royalty’s using smart contracts. It is quite possible that in the future, blockchain will take care of automatic distribution of revenues between the rights owners, whenever someone streams a song. Other ‘blockchain enterprises’, like Revelator and Voise, are developing similar applications in the music industry as well.

Positive change

Although little notice can be taken of the effects of blockchain concerning IP rights at the moment, interesting things are certainly under development. New applications will make IP rights groundbreakingly more transparent and reliable. There’s especially much to gain in the field of copyrights, as these rights are in principle not registrable. Blockchain technology can also make an important contribution to the verification of the authenticity of products and the detection of ingringing goods. Last but not least, blockchain technology can significantly innovate the music industry through transparent registration of rights to music and a reliable distribution of royalties. In conclusion: blockchain can be a game changer in the IP landscape, giving us every reason to keep a close eye on this trendy.  

With special thanks to Jordi Vreeling, Legal Assistant at Van Doorne