Cracking the Code of Blockchain + Intellectual Property
The intersection between blockchain and IP rights was both a seismic opportunity and one that was in danger of becoming overly fragmented by the rash of new entrants that often accompanies the genesis of any trillion dollar market. Just as we had expected even when we started the enterprise, this intersection has already become a crowded space. Any given day, we learn of a new entity that is raising tokens to address some mechanism of managing rights through blockchain technology. There are players who are driving the registration of patents or blockchaining artworks or royalty streams from music or gaming or looking to aggregate and vault off IP rights in particular niches and so on.
Although many of these applications are helpful for stimulating demand for this new category they are not addressing two fundamental market failures that we noted. First, we are at a fundamental inflection point with innovation in which the speed of innovation cycles keeps increasing faster than the abilities of enterprises to deliver fresh and robust innovation value. In fact, today is the slowest it’s ever going to be! The world needs new innovation at a faster rate than ever before. Second, we have for the first time in economic history come to a point where the life of rights (for example — about 17 years with patents) now exceeds the median lifetime of the entities that originated those rights. Certainly within fast-moving tech areas — whether that’s cellular mesh networks or self-driving cars or genomics 2.0 — companies that originate innovation don’t live as long as the IP that they generate.
These two facts signal that we are at a tipping point — where the world must find new capacity for innovation as well as new ways to absorb innovation. These intent to allow us to reduce the friction that these two market failures are inducing to the detriment of innovators everywhere.
To make our point, here are some use-cases that will help illustrate:
- One of the first clients we worked with through InvenTrust was a group of ophthalmologists working in a small clinic in Colombia, South America. This is not a part of the world typically considered as an innovation hot-spot. Yet, over years they have developed great capabilities around certain eye diseases. They approached us as they had patented and licensed high value technologies to a large Swiss pharmaceutical company in the past. However, their current innovation was believed to represent an even larger value. They wanted to get discovered through the InvenTrust platform’s proprietary search technologies and quickly triangulate to licensees that may be interested in leveraging their technology. Allowing such innovators, to use a blockchain powered mechanism to securely and rapidly promote, value, and license their innovation rights would be game-changer for millions of such innovators. And, this is why the platform already has users from such corners of the globe as Bhutan or Belgrade or Brisbane — which are all teeming with innovation potential that has yet to be tapped. Notice the deliberate choice of places that begin with B…because we believe that such B areas of the planet are in fact a way to generate massive social impact through unbanked innovation. The A-list is in effect passé now.
- Let’s consider another use-case. Imagine that a journalist in Nakuru, Kenya has been reporting on a new NGO that is building a marketplace from indigenous crafts made by disabled people from the region. There is tremendous know-how in these crafts and the journalist’s articles and images convey a sense of that know-how and how its packaging is helping initiate a new set of business enterprises. Some “mainstream” media become interested in his articles. Through another dApp, a protocol (such as RiteCoin) generates a token-curated registry of such articles and associated tags that allow them to be syndicated in a much more efficient mechanism. This could substantially accelerate the window for this journalist to get discovered and have his work generate meaningful income without becoming beholden to the strictures of large publishers. In effect, he may be open to new ways of valuing and distributing his initial creative output since he knows that these registries would enhance his reputation and earning power as the networks built around them proliferate.
- The third example may seem a bit far out but, frankly, underpins our plans to build RiteCoin protocol into the IP transaction layer for Web 3.0. A teenager has come up with a prototype for a new genetic marker through her high-school bio lab. Through a dApp specializing in academic tech transfer (and, for example, based on the RiteCoin protocol), she now has access to a decentralized group of scouts who know the needs of AgTech companies for finding unregistered rights. They help her through the on-chain mechanisms that are codified in RiteCoin protocol to package and wrap her innovation through the RiteCoin Rapper and associated data streams on a side chain. A combination of bots assists crowdsourced expert review of the valuation of her rights and the sourcing of likely targets who may be interested in licensing these rights. As a result, the scouts quickly place her genomics for review for appropriate economic incentives by large AgTech companies that would otherwise never have discovered her innovation talent.
Powering “innovation on demand” through scalable mechanisms offers the potential to generate liquidity for a whole class of unbanked innovation and intangible assets — whether these are contemporary artworks or early stage clinical research molecules. And as we tokenize these ecosystems, we would also help solve some pressing problems that will require urgent resolution if distributed ledger technologies are to become truly mainstream. As an example, we need to solve the challenge of how corporate R&D organizations would trade fiat for tokens that are used within for example, the RiteCoin ecosystems; how they would manage custody of such tokens; and how they would account for the purchase and settlement of IP rights through their internal processes. These are non-trivial proccedures that need to be solved for the GEs of the world to become large users of cryptocurrency.
Subsequently, it comes down to the following essential remarks.It is a truism that ‘killer apps’ of any technology come in areas that are not simply linear extensions of current practice. The examples shared here animates our passion for the atomization of innovation. Through RiteCoin, we are building infrastructure which is useful to a generation of creatives — and will help generate scale and liquidity that centralized patent marketplaces or vaults or art markets or clearing houses could not achieve. This is because creativity requires not just decentralizing software but it also needs innovations in leveraging distributed intelligence to allow it to generate a quantum jump of intellectual capital. The question is not how RiteCoin enables everyone to innovate — the question is just when.
Authored by Raj Malhotra, CEO RiteCoin
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