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How can Blockchain protect Intellectual Property rights ?
18 août 2017

Blockchain has expanded since its beginning with Bitcoins. Indeed, the technology is now used for contracts, music and commerce. A question has arisen regarding the use of Blockchain technology to protect Intellectual Property rights.

Some companies have already started using the technology. For example, the website Binded, created by a company based in San Francisco, allows artists to protect the original images they have created. The artist must simply sign up and download his or her work. The work is then saved on the Blockchain. The artist also receives a certificate proving the authenticity of the image. However, downloading the image on the website and getting the certificate does not register the artist’s work with the United-States Copyright Office. The artist will still have to comply with certain formalities to win statutory damages in a lawsuit in the United-States.

Mathias Avocats gives an overview of the diverse ways in which the Blockchain could protect Intellectual Property rights.

The rights attached to the work

The European Parliamentary Research Service (EPRS) published an analysis entitled “How Blockchain could change our lives” in February 2017. It identifies several areas in which blockchain technology could be used namely patents. The EPRS identified two major advantages the Blockchain offers : “hashing” and “proof of existence”.

Hashing is the equivalent to a unique digital fingerprint. It is the process by which a document is transformed into a fixed length of code. Proof of existence is the recording of the hashes on the blockchain. These procedures apply to all transactions on the Blockchain and could be used for patents, trademarks or authorship.

If a work is recorded on the Blockchain, the creator can prove the content of the work through the hash and the time of its creation by proof of existence. Each transaction on the Blockchain is immutable.   Therefore, blockchain technology offers a trustworthy proof of record. This record could be used in an infringement action to prove the copying of constituent elements of the original work and ownership.

However, the creator may have to comply with the formalities of the appropriate authority to hold his or her full bundle of rights despite the registration of the creation on the Blockchain. For example, a patent can only be delivered by the competent authority and the inventor can only claim patent rights if he or she has a patent. Nonetheless, the registration of the invention on the Blockchain will allow the inventor to protect his or her invention if another person claims to have invented the same work. The inventor will be able to prove that the other’s invention is not new (a requirement for patentability).

It must also be underlined that blockchain technology could be used for unregistered Intellectual Property rights. This would namely be convenient for the fashion industry. The fashion designs are seasonable and it may not be profitable for the designers to register their rights which makes it complicated to prove ownership in an infringement action. Blockchain technology would be a fast and appropriate means to protect the designs.

Blockchain and rights management

The Blockchain could also be used by third-parties or the creator to see the complete chain of ownership of a work including licenses, sublicenses and assignments. It gives more control over the work and the content of the transactions would be easily available. The Blockchain would reference all the contracts on a particular work and would allow third-parties check that the rights acquired are legitimate.

Furthermore, the original creators of the work could use the blockchain technology for royalty payments. By digitally encoding the rights, royalty payments would become more reliable and efficient. The complex network of actors would be easily identifiable. If a suit were to arise, the blockchain could be used as proof of the contracts and the payments made.

In conclusion, the blockchain technology offers many advantages for the creation and protection of Intellectual Property rights. It is swift, inexpensive and practical. Nonetheless, in practice, such uses of the Blockchain may require reviewing the applicable legislation.