Can Blockchain fix Intellectual Property rights in the Professions?
As a member of that vast assortment of workers known as “professionals”, I have for much of my career been subject to the terms of Non-Disclosure Agreements (NDAs). I wonder how much longer these artifacts of paranoia will supplement employee onboarding paperwork for consultancies, law firms, banks, product developers, accountancies, agencies, and the like. Surely in the 21st century white collar workers and their employers can devise a better way to mutually benefit from Intellectual Property (IP) assets.
In the professions, the problem with IP is that it is simultaneously a precious corporate asset and its inventor’s personal value proposition. It is a highly protected product of the firm, but also a professional’s proof of skill and future employability on new projects and in new organizations. It is difficult for knowledge workers to carry their IP with them, especially if they leave their employer. Yes, we vaguely recount successes on CVs, with varying trustworthiness and impact. Most professionals spend a lot of time on the job re-justifying their past credentials. What if, instead, we could demonstrate accurately and benefit fully from the broad scope of our aptitudes?
Another problem with IP is that we gather, create, and re-purpose it from multiple sources all the time. Our online reality, accelerating the rate of information transfer, renders absurd the notion that ideas can be pinned down in one spot. Questions of ownership become hard to answer. Employers get the juiciest bits of employees’ brains only when and if incentives of remuneration, bonuses, and fear-of-job-loss make it more profitable for workers to funnel IP through the firm than strike out on their own.
With the growing application of blockchain, I predict some interesting layers of IP management will arise to protect valuable corporate knowledge, whilst according workers stronger rights to the contents and quality of their own minds.
Spoiler alert: the balance of this article contains very loose and philosophical use of technology jargon.
NDAs only work because professionals do not take them overly seriously. The contracts serve as guidelines about what sort of behavior might incur a lawsuit, should a firm discover it is losing money due to IP theft.
NDAs usually include a clause stating that Intellectual Property generated during the course of employment at a firm is owned by that firm, not by the individual.
This is vexing because:
1) it is very hard to distinguish the fine line between IP generated on behalf of a firm and IP generated in the context of working for a particular employer; and
2) if employees really believed employers owned their every clever thought, who with any cleverness would ever enter into an NDA contract?
Clearly a fair bit of IP leakage seeps through the corporate cracks. The Commission on the Theft of American Intellectual Property found in 2013 that the United States lost about $300 billion annually to international IP theft. In 2017, the Commission found that the theft of trade secrets alone costs the United States somewhere between $180 billion and $540 billion. That is a lot of broken NDA promises.
Legal history has no shortage of intellectual property suits, from last year’s trivial case of Taylor Swift’s “Shake It Off” lyrics to last week’s eye-popping settlement in which Waymo exacted $245 million in penalties from Uber for former Google engineer Andrew Levandowski’s theft of LIDAR design elements.
Celebrity cases always feel far from home, but they’re high profile allegories for the stuff unfolding in real-world courtrooms every day. As a young professional, I was bemused by NDA contracts. As if I possessed anything in my head worth protecting for 24 months after I left the company payroll! Then I witnessed the ugly spectacle of a former colleague defending herself in court against our employer for “stealing IP.” This woman had spent the bulk of her professional career working for one organization — of course she parroted some of the firm’s methodology when she opened her own practice. Sure, she’d started a competing business; yes, she was guilty as charged. But insofar as she was applying what she’d learned through years of professional development and corporate training, she might have been any one of us.
What human potential might be unlocked if every person could capitalize more directly from the richness of his own mind?
This is not a defense of stealing trade secrets — it is a call for a better system of shared value. The existence of NDAs manifestly indicates businesses benefit from the Intellectual Property of employees. As well they should. Established firms put roofs over employees’ heads, keep the cookie tin stocked, provide client leads, meeting rooms, laptops, structure, etc. Companies have a right to profit from assets generated using their resources, whether those assets are physical products or lucrative ideas. But employees too must reap lasting compensation for what they create, otherwise the incentive for quality production is diminished. A paycheck is a one-dimensional reflection of IP’s value.
The NDA is an antiquated mechanism for value capture. Using your brain is (arguably) imperative for a professional. Certainly being able to demonstrate an active mind is crucial to a successful career in professional services. Yet the NDA pretends professionals undergo partial lobotomy when moving from one business to another. Forget the commercials here — what happens to the life of the mind when professionals cannot take their own productive histories with them? What loyalty and value could firms accrue if they implemented better systems to record and honor the creators of valuable IP?
Here’s the challenge to some fiery and tech-savvy entrepreneur: How might we apply blockchain’s world-changing precepts of ownership, decentralization, security, and incentives to IP in the professions?
Some starter thoughts: Imagine each professional as a living blockchain, a human compendium of information, each with the ability to demonstrate — or at least get credit for — original ideas. This is a bit like the principal underpinning academic citations; references strengthen the importance of the progenitor article. Like universities, professional services firms are aggregators of the human capital. Blockchains would provide a more accurate reflection of employees’ actual value.
Let’s next think of employment contracts and their concomitant NDAs as a sort of soft fork in a blockchain protocol, in which a professional agrees that for a time, their IP is earmarked with firm-level ownership. A record of the work is enshrined both in the firm’s records and in the professional’s personal anthology. Revenue can stay with the firm (money is not really the point here anyway). The firm continues to profit from assets created during the period of employment.
When employment terminates, the event restores pre-eminence of the original chain, now enhanced by a tendril whose specific detail — the protected IP — cannot be queried, but whose existence proves the quality of the professional’s mind. The firm continues to profit from assets created during a term of employment, and the worker walks away with a certifiable proof-of-his-own-work.
Blockchain allows information flow to be tracked, verified, and audited from source to destination. Is that not the dream state for both professionals and their employer firms? As protocols evolve, human capital value capture technology could be a way for knowledge workers to pass through the full lifecycle of their careers — as developing talents, loyal employees, sole traders, entrepreneurs, consultants, partners — amassing an accurate personal history of their intellectual output and carrying that record with them, even as firms protect IP.
We know Intellectual Property has shared value. How can technology improve the realization of this value by all parties responsible?
