Is Intellectual Property ready for Blockchain?
With its relatively low cost of maintenance, increased transparency, reduced administrative burden and resilience to fraud, blockchain is a versatile technology that can be deployed in a whole host of different sectors and businesses. So what is blockchain, and could this disruptive technology have any application for management of intellectual property rights?
Blockchain technology is a way of creating a shared database, which can record and track transactions and assets. In theory, any database or ledger could be created and maintained using blockchain.
Blockchain is not governed by one single user, so no centralised version of a ledger exists. Instead, it can be widely accessible to the public or to large groups (depending on permissions granted). The chain is updated with each transaction, so users can see the chronological activity for that particular blockchain. Once something is on the database, it cannot be removed.
Blockchain proponents have praised the technology for its resilience to fraud, its transparency and relatively low cost of maintenance. As a result, many businesses are asking whether they might be able to use this technology to update existing systems, including in relation to intellectual property.
“Blockchaining” Intellectual Property
While it is difficult to predict all potential IP-related applications of blockchain, I see 3 distinctive fields of application that are pertinent for technology transfer and IP professionals.
Blockchain can help with IP rights management and technology transfer/commercialization practice
Blockchain could be used by inventors wishing to find potential investors, while at the same time safeguarding the novelty of their inventions. A ledger might consist of a short description of the character and goal of the invention, while those wishing to gain access to more information on how the invention works would then have to accept the provisions of an agreement (“smart contract”). Or blockchain could be used by patent holders wishing to find potential licensees for related know-how and trade-secrets in addition to the patented invention.
Inventors might be interested in publishing their technological developments in order to preserve the novelty of the inventions and guarantee their freedom to operate.
Thus, blockchain technology will be able to facilitate the management of IPRs. Publications under a blockchain environment might be used as evidence in IP-related law proceedings.
Blockchain as an IP registry
Blockchain can also serve as a technology-based IP registry where IP owners can keep hashed digital certificates of their IP and use the platform to get royalties from those who make use of their creations and inventions using smart contracts.
Often, the approval wait times of patent agencies and other regulatory bodies are long. This can endanger the first-mover advantage in many industries where incumbents need to act fast in order to protect their inventions and stay at the top of the game. By replacing centralized registration systems with decentralized ones, it will be easier to not only register new IP but also update filings and transfer ownership at any time. With blockchain, regulatory agencies will be able to achieve more with fewer resources.
Determining creatorship, proof of ownership and origin
Blockchain can be used to catalogue and store original works. Copyrights need not be registered and come into existence automatically on creation of original qualifying work. Often, there are no adequate means for authors to catalogue their works. Copyright ownership can be hard to prove. It can also be difficult for authors to see who is using their work, and equally difficult for third parties using a work to know who to seek a license from. Authors are often unable to stop infringements or to monetize their works successfully.
Another major problem with IP rights management is tracing a complete chain of ownership. Due to the lengthy approval process and the multitude of national IP regulations, there isn’t a clear way of defining who owns IP. By registering their works to a blockchain, authors can obtain tamper-proof evidence of copyright ownership. A blockchain transaction is immutable, so once a work has been registered to a blockchain, that information cannot be lost or changed. Third parties could use the blockchain to see the complete chain of ownership of a work, including any licenses, sub-licenses and assignments.
Many times it is very difficult to draw a line between getting inspired by another musician’s work and stealing it. These nine most notorious copyright cases in music history show that determining creatorship and copyright ownership is often “mission impossible”. Blockchain can solve these system imperfections.
Blockchain-based platforms such as Binded allow authors to make a record of copyright ownership, which can then be used to see where and how the work is being used on the internet and to seek licenses from third parties. Binded blends integrations with the US Copyright Office, Instagram and Twitter to monitor how copyrighted images are being used. Registering a work via Binded provides a digital certificate of authenticity. This can help third parties identify the author of a work, and IP owners to tackle infringements. Currently, IP owners have difficulties in protecting the IP works online, i.e. once the IP work is uploaded on the internet, it becomes difficult to maintain control of that work and to monitor who is using it for what purpose.
When the IP work is registered and verified using blockchain-based platforms, authors can search across a whole host of different sources simultaneously to ascertain who is using their work. This enables IP owners to identify and stop infringements and makes it easier to license their IP works.
Blockchain as an enforcement tool
With a blockchain-based registration system, it will be much simpler to verify whether a new song is or isn’t infringing upon the existing IP of a previously-registered song. This type of blockchain-based detection system can be applied to text, art and music with the help of artificial intelligence.
Using Blockchain for micropayments and licensing via smart contracts
Blockchain and smart contracts can be used for licensing IP works by reducing the cost of transactions and creating a direct link between authors/inventors and users.
A smart contract is a computer program code that can facilitate, execute and enforce a contract by itself. The contractual terms are pre-programmed. This reduces the administrative burden and cost. Using smart contracts, IP licenses can be self-executing upon the use of a work.
Smart contracts can also be used for micropayments for use of content. The author could assign a Bitcoin address to an IP work, which then allows the user to make a micropayment to the author in return for using the work. This system can eliminate the need for financial intermediaries and thus enable the author to remunerated without having to pay the high transactions costs. The system also introduces simplicity and transparency in IP related transactions.
The Mycelia project is a research and development hub for music makers. Its Creative Passport is the digital container for verified profile information, IDs, acknowledgements, works, business partners and payment mechanisms for all music makers. Its aim is to become a digital identity standard for music makers, collectively forming the Creative Passport Database and evolving into the essential connective hub for all music-related services. Using blockchain, featuring template ‘smart contracts’, its ‘Creative Passport’ will enable quick and easy direct payments, to simplify and democratize collaboration from meaningful commercial partnerships to creativity.
Creative Passports will be free for music makers. Access to the Creative Passport Database is to be a subscription service for businesses who wish to link in and take advantage of its rich data, or market their service to the Creative Passport holders. Profits will go to the upkeep of the Creative Passport service and to the Creative Passport holders. Project Mycelia is currently alpha-testing the Creative Passport App. Still, in its infancy, the project’s goal is to use blockchain as a platform for hosting immutable metadata about songs, the artists who recorded them, and who is listening to them. This will lead to enabling peer to peer payments and restore more equity in songs to the artists, engineers, and producers who made them.
Other artists have also used blockchain as a platform for the management of their IP rights. Bjork partnered with the blockchain startup Blockpool, which collaborates with the label One Little Indian on a ‘crypto-checkout plugin’ for the online store. The platform has enabled processing of Bjork’s album ‘Utopia’ pre-orders using Bitcoin, AudioCoin, Litecoin and Dashcoin cryptocurrencies. Each fan received 100 AudioCoins as a reward for pre-ordering the album, deposited into an e-wallet.
The way forward
These examples demonstrate how IP owners can use blockchain platforms to better control and exploit their IP works, improve collaboration and achieve fair and efficient remuneration. This could have a massive impact on IP rights management in the digital environment by making the process more transparent and efficient, and cutting out financial intermediaries.
Even though the idea of creating a more efficient blockchain-based system for the management and monetization of IP rights is still in its infancy, novel blockchain-based applications for management of IP rights continue to appear with remarkable frequency. However, many issues remain unresolved, such as the required processing power of blockchains, compatibility and interoperability of different blockchain platforms, and legal issues such as data ownership, privacy, liability, jurisdiction etc.
