EU initiative uses blockchain and NFTs to combat IP infringement * TorrentFreak

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The EU is preparing to launch its own blockchain solution to authenticate physical products through NFTs. The technology can be used to combat counterfeit products, but also has many other uses. The tokens are compatible with common NFT platforms and will be linked to the EU’s own blockchain service infrastructure.

To the general public, blockchains and NFTs are often associated with volatile coins and expensive JPG files.

Beyond the big headlines, however, many projects under development have adopted this technology in new ways.

The European Union recognized this potential several years ago. In 2017, the European Commission began exploring options for using blockchain technology to combat online piracy and counterfeiting. Today, more than half a decade later, this vision is becoming a reality.

In 2018, the European Commission and the European Union Intellectual Property Office (EUIPO) launched their first 48-hour “blockathon”, which aimed to develop concrete projects. With the help of skilled developers, this resulted in a project that will help combat counterfeit products.

Fast forward four years and the EU’s blockchain-based anti-counterfeiting solution is about to see the light of day. In a recent update, EUIPO’s Claire Castel informed the World Intellectual Property Organization that a live version of the project should be up and running soon.

EU Anti-Counterfeit NFTs

In basic terms, the anti-counterfeit blockchain allows manufacturers to create unique tokens for all their products as proof of authenticity. This record is held on the blockchain and can be transferred to others if the underlying product is sold.

These tokens are “non-fungible”, better known as NFTs, and can be held in a regular blockchain wallet. The EU sees them as unique “digital twins” of a physical product that mean proof of legitimacy and ownership.

“The record on the blockchain is a unique and immutable token. When goods go from one party to another, the token is exchanged between digital wallets. The combination of a unique product identity and continuous transfer of the digital identity between wallets creates proof that the goods are genuine.”

“During the journey of a product, customs and other enforcement authorities can access information, such as authentic shipping records, that can support risk assessment,” adds Castel.

The EU sees many advantages with a blockchain-based solution. The unique NFTs make it easier for consumers and enforcement agencies to authenticate products. However, the NFTs will also help with product recalls, and allow manufacturers to communicate directly with consumers over the blockchain.

“Since the licensee defines the type of data included in the digital twin, it can also lead to a targeted loyalty program based on product specifications,” notes Castel.

Open and compatible

The EU initiative aims to be open and compatible with the wider NFT market. For example, brand owners can choose their own NFT platform. However, the EU infrastructure for blockchain services, which is currently under development, will have a central role.

“The solution will introduce a common language for track-and-trace providers, NFT platforms and logistics enterprise resource planning (ERP) to collect and share the right data for anti-counterfeiting.

“EUIPO will additionally create an identity management system, which will also act as the knowledge storage system to store interested stakeholders’ identities and product location, thus placing EUIPO at the center of the ecosystem.”

This may sound quite futuristic to some, but the project is already in its final stages. EUIPO is actively engaging with brand owners and will continue to test the system later this year. In addition, EU customs authorities, logistics operators and retailers are also on board.

Based on current planning, a live version of the EU’s blockchain anti-counterfeiting technology will go live by the end of 2023.

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The quotes above are from a document EUIPO’s Claire Castel prepared for WIPO, which was shared with the Advisory Committee on Enforcement last week.