As we are all aware, blockchain technologies are not only relevant to cryptocurrencies: they can also be used for other applications, including in the IP field. The reason for this lies mainly in the fact that, due to its design and structure, a blockchain is immutable.
To put it simply, a blockchain is a database “shared” between many devices (“nodes”) belonging to a network, which means that each device has its own constantly updated copy of the database. Depending on the purpose of the blockchain, it may contain different sets of information: This may apply to transactions, digital assets, the status of physical goods, smart contracts. All nodes simultaneously and automatically register new information added to the database.
The information is stored in the database in so-called “blocks”, each of which has a certain storage capacity and can therefore contain a given amount of information. When a block is filled with all the information it can contain, it is time-stamped and it is given a so-called “hash”, ie a number that acts as a unique identifier. The hash is generated based on the information included in the block, which means that even if the smallest information in a block was changed, the relevant hash would also change.
Each block includes the information recorded therein, a timestamp and a hash. In addition, it includes the hash of the previous block, which “links” the blocks between them in chronological order.
Given this structure, it is virtually impossible to tamper with the information included in a block. In fact, if this were changed retroactively in a node in the network, the hash of this manipulated block would no longer correspond to the hash registered by the majority of the other nodes; therefore, the latter would refuse to register the change in the blockchain. The only way to tamper with the information in one block would be to change both that block and all the following blocks, because they all include the original hash of the tampered; and this must be done in all copies of the blockchain held by at least 51% of the nodes so that their tampered version of the blockchain will prevail. However, this will require huge resources and money, which will make tampering impossible. This is why the information included in the blockchain is immutable.
Here are some ways in which the above can be used to protect or exploit IP rights.
Evidence of authorship
Original works enjoy copyright protection under Italian law as soon as they are created, without the need to register them. Nevertheless, in case of disputes, the author may need to prove that the work was made by himself / herself on a specific date, which is much easier if the work was somehow registered and time-stamped. Blockchain technologies can provide this in a much faster and cheaper way than using traditional methods such as depositing the work with a copyright company or a notary. In fact, placing a work on a blockchain – digitally signed by the author – generates immutable evidence that the author was in possession of that work at the date and time of the time stamp.
The same goes for trade secrets: they can be placed in a blockchain to gain ownership at a specific time. Their confidentiality will not be compromised, since blockchains offering this service also provide encryption of relevant data.
Proof of use
Similar to the above, a blockchain can be used to record time-stamped evidence of the use of a certain IP right. This can be useful in a variety of IP rights, for example to demonstrate first-time use or genuine use of a trademark or its acquired characteristics, or to demonstrate past rights over an invention.
Anti-counterfeiting
Blockchain technologies can help detect counterfeits because they provide the means to identify the origin of given physical goods. The company will record the information about the original items and their supply chain on a blockchain, and will include a smart tag attached to the specific items, such as a QR code. By scanning the smart chip, supply chain partners, customers and authorities will be able to check the authenticity of the goods and their supply chain.
Even if the specific label was counterfeit, ie it was duplicated from the original product, counterfeiting will still be detected. In fact, a scan of the duplicate label will reveal that the retailer does not belong to the supply chain for that product, which means that both the product and the label are counterfeit.
Transfer and licenses
Transfer and licensing of IP rights can be made easier by using a blockchain thanks to the smart contracts that lie there. This is basically self-performing software that causes automated execution of certain actions when certain conditions are met. IP rights holders can, among other things, use them to:
– sell their IP rights upon receipt of a specific payment: “if user X pays Y, property over IP right Z shall be transferred to user X”;
– authorize the use of certain copyrighted works upon receipt of a specific payment: “if user X pays Y, user X can download a digital copy of the work Z”;
– collect royalties: “if work Z generates income on user X’s account, Y% of this income shall be transferred from user X’s account to the licensee’s account”.
Of course, these are just a few examples. Needless to say, IP licensing agreements are more complex than this, and so far smart contracts seem unsuitable to include all relevant terms. Nevertheless, as shown by the examples above, they can make the implementation of the agreement extremely efficient and predictable.
