Blockchain and IP

BLOCKCHAIN AND IP

The phrases “Blockchain” and “Intellectual Property (IP)” don’t initially appear to be synonymous because the former refers to a relatively new technology and the latter to a collection of legal protection mechanisms for such technologies.

Blockchain was developed in the early 1990s, primarily for the purpose of cryptographically preserving digital documents with time stamps to avoid tampering in a decentralized manner and keeping data that could not be modified over time. Similar to artificial intelligence (AI), a subsequent revolutionary innovation, it lay dormant for over two decades. Cryptographic tokenization was first accomplished in 2004 by “proof of work,” or high-energy computing.

Subsequently, the United States had a recession and mortgage crisis in 2008. This led to the adoption of blockchain technology and cryptographic tokenization by an unnamed person going by the name Satoshi Nakamoto to establish the Bitcoin blockchain and its proprietary token, BTC.

At first, not many people were aware of Bitcoin’s potential, and like other new technology, it was utilized for a variety of illicit purposes, including as money laundering and the black market. But as the technology developed, the money and the Bitcoin blockchain were split off in 2014 with the release of Bitcoin 2.0.

Subsequently, in 2015, the concept of a smart contract was introduced for the first time with Ethereum, which was founded by Vitalik Buterin, a Bitcoin enthusiast at the time. With this concept, all of the terms and conditions of the contract are written in computer languages like Solidity, Rust, and others that are mostly derivatives of Java, and they are executed through the use of cryptographic signatures.

As a result of the proof of work consensus mechanism’s inferior energy efficiency, several other methods, such as Proof of Stake, Proof of History, Proof of Storage, etc., were created to replace it. As a result, blockchain technology began to be used to a number of problems more than only serving as an open ledger for financial transactions.

As was indicated from the outset, there is a striking resemblance between Blockchain-led cryptocurrency and the intangible Intellectual Property (IP) domains. Because blockchain-generated currencies are entirely intangible, encrypted software programmes, they are referred to as cryptocurrencies, much like intellectual property. These two areas will work together in the future because of their intangibility.

Block Chain Technology — [Image Sources: Shutterstock]

After discussing the innate resemblance, there is a basic difference in how they work. Blockchains are inherently decentralized, unless the PROOF OF WORK process involves a centralized entity owning the majority of the nodes, or the locations where various users come together to meet. This forced centralization could also be applied to another consensus mechanism, albeit more simply: by simply acquiring sufficient tokens and using them for staking—that is, by buying a blockchain’s internal asset and staking it against a validating control—this forced centralization could also be applied to other consensus mechanisms.

On the other hand, the IP system has historically been mostly centralized. An IP is recognized by a central government that is either elected or chosen, as opposed to a decentralized system.

Blockchain transcends geographical boundaries, yet intellectual property is customarily territorial. Therefore, the IP- system may be equivalent to Blockchain till cross-border governance is homogenized.

Thus, at most, blockchain technologies may be used to enhance the current IP infrastructure running system. But in the previous three decades, a number of universal procedures have been used in various IP domains.

International copyright protection instruments include the Berne Convention and the Universal Copyright Convention (UCC). The Madrid Protocol, which has the widely recognized NICE Classification, is in effect for trademarks. The Hague system, which allows for the registration of up to 100 designs in 77 contracting parties throughout 94 countries, is still in use for the protection of industrial designs. Unions of nations have devised efficient procedures to handle many difficulties related to patents, such as accepting office activities, examining the nature of applications, satisfying local acceptance requests, translating applications into specific languages, etc. Mechanisms to facilitate the submission and prosecution of a patent application have previously been developed by organizations such as EUIPO from Europe, OAPI from Africa, and ARIPO from America. As a result, it appears extremely possible to deploy blockchain technology with a universal concept even in the intellectual property arena by giving stakeholder nations that have a specific number of blockchain nodes validator status. This would undoubtedly significantly decentralize the operations; yet, since a smaller, more powerful group would decide how to govern these nodes, the centralization would really occur at the base—that is, when determining each stakeholder’s share of the blockchain. With the knowledge that the governments of the participating countries would be the stakeholders in such a scenario, with those governments carrying socio-political agendas in a scenario where government selection is not uniform, many challenges need to be addressed through technological advancement. Here are a few scenarios—all without any bias—where blockchain technology and intellectual property might work well together.

AUTHENTICITY

A brand-valued product may or may not be genuine. The genuine product and/or any authentic representation of an actual product, as opposed to a counterfeit, may be easily identified by the decentralized consensus processes of Blockchain (Proof of Work is genuinely Decentralized, whereas there is still room for manipulation in other consensus systems).

OWNERSHIP/BELIEF

The most reliable method of establishing ownership or even authenticity may be a trustless method, in which transferring ownership or establishing ownership DOES NOT NEED TRUSTING ANY THIRD PARTY.

Probability concepts are applied in a TRUSTLESS transaction. Therefore, in a trustless process, the removal of third parties makes ownership information freely accessible.

The NFT (Non-Fungible Token) marketspace is the finest example of this. In this marketspace, assets such as digital or real paintings, valuable paper representations, or other assets can be placed on a blockchain and used as tokens. These tokens are not exchangeable for other tokens of the same kind.

FRAUDULENT ACTIVITIES

Blockchain ledgers are often open. Blockchains typically expose every piece of information on the chain, including the whole transaction history, with the exception of PRIVATE Blockchains, in which the identities of the participants are cryptographically sealed.

This would make it easier to track down such offences all at once, as counterfeiting is one of the major problems IP practitioners deal with.

TRANSACTION

Any asset might conceivably be tokenized, much as bitcoin currencies. Once tokenized, utilizing the blockchain’s consensus process for a free transaction gets safer and easier. IP-related assets can therefore be included in deals.

The implementation of Smart Contracts, which write the contract and all of its terms and conditions in computer language codes, has significantly increased the efficiency of these kinds of transactions.

INTELLECTUAL PROPERTY ADMINISTRATION

As was already noted, since the governments of the various nations grant the IPs, it is now not feasible to have an IP management system that is fully controlled by blockchain. But when it comes to managing intellectual property, for instance, Blockchain technology may be used for the full storage process, including the docketing of IP assets.

As was already said, an asset’s intellectual property rights may be ascertained via blockchain; moreover, an asset can be stored on a blockchain rather than in a centralized location. It appears that using AI in this situation may affect the game.

In the future, a nation’s government may possess a blockchain, but the other operations might be fully decentralized regardless of the centralized ownership. For instance, using smart contacts on a blockchain with a consensus mechanism, tasks like filing applications, reviewing them first, examining them, issuing office actions, and so forth, may be completed quickly and efficiently.

The most effective application of the blockchain might be in licensing. This technique allows for the licensing of any assets—including representative digital assets—with no potential danger of counterfeiting.

MONETARY BENEFITS

Blockchain-mediated transactions offer an extremely effective means of financial compensation for artists or technologists as they cannot be changed, manipulated, or duplicated. Furthermore, since the activities are all on chain and hence accessible to everyone, there is no way out without paying a set cost.

CONCLUSION

However, blockchain-driven systems typically need payment for even basic functions like browsing or searching, therefore they might not be appropriate for intellectual property (IP) because all data is publicly accessible. It remains to be seen if the blockchain technology is developed enough to support such a process, however further work might make it better.

As a result, Blockchain could function with limitations set by a particular nation. Blockchain technology has the potential to simplify future IP transactions and IP office processes, at the very least.

Author: SHIVANSH SAHU, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD.