In the recent past, terms such as bitcoin, crypto-currency and blockchain have become buzz words in financial and legal circles.
Blockchain is a public ledger, where every aspect of financial transactions is recorded and kept safe and secure in an encrypted format. The technology is revered as safe from tampering and manipulation by third parties, and involves storage of information in independent ‘records’ (or blocks), which are linked using encryption (cryptography). Hash pointers link one block to another to form a chain (blockchain). These blocks also contain independent timestamp and transaction data.
While the blockchain is in the public domain, the data in the blocks cannot be altered or manipulated.
The development of the Bitcoin in 2009 pushed the global economy into a whirlwind of change. Using blockchain as the basic concept, Bitcoin took the world by storm and is already expected to become the next technological revolution.
Bitcoin and other crypto-currencies using the blockchain format facilitate cashless payments between two transacting entities, leaving central agencies such as banks completely out of the equation.
So powerful and attractive is the idea of blockchain that its use and promotion has spread like wildfire. This is reflected in the technology being used not only by entities well-versed with the financial world, but even by indie-music festivals in remote corners of India.
IP protection for blockchain
With the world gearing up to the use of blockchain to harness unexplored potentials of various industries, intellectual property can play a key role in future.
Patent filing trends. There has been a steady growth in the number of entities hoping to secure patents over technology using blockchain as a base. One expert analysis into the emerging patenting trends of blockchain says that as of March 2017, about 879 patent applications in the US cited the terms “bitcoin, blockchain” etc, and that 150 patents have already been granted towards such technology.
Industries at play. While different sectors of the business world have filed patent applications using blockchain as a base, the security and financial sectors are frontrunners through companies such as MasterCard and Goldman Sachs. Most patent applications have focused on different encryption techniques to protect and safeguard data.
An IP-blockchain council. With the rise in patent filings and a serious threat of patent trolling, the US government saw the formation of the Blockchain Intellectual Property Council (BIPC) in 2016. The BIPC is focused on the development of a defensive strategy that ensures a balance between innovation and widespread adoption of blockchain-based technologies.
Blockchain’s impact on IP
Experts say there are innumerable ways in which blockchain can be used. A few examples of blockchain having a tremendous impact on IP law are mentioned below:
(1) Trademarks. Most trademark disputes are boiled down to the determination of whether a particular mark was put to use in commerce. With blockchain maintaining an unalterable record of commercial transactions for goods or services, and if the trademark is also recorded as one of the details in given blocks, then this data can be used to determine exact particulars regarding use of the mark.
(2) Copyright. With the above hypothetical, data can determine the exact date of the creation of a particular work, the details of the creator, etc. Since blockchain uses “time stamps” and encryption, such details can be used as cogent evidence in lawsuits concerning infringement of copyright, ownership, etc.
(3) IP commercialization: licensing, assignment through ‘smart contracts’. Smart contracts are being touted as the future of contractual transactions as they ensure that contracts can be implemented and executed without human intervention once the basic underlying contract has been executed by the parties.
The use of blockchain is expected to eliminate the need for monitoring by human beings, just as crypto-currency can reduce the need for central banking agencies.
Such smart blockchain contracts can be used for self-monitoring terms, execution of terms (automatic payments for instance), generating proof of execution of terms (through time-stamps), etc.
The financial world has already predicted that blockchain will be a daily feature of everyday life and will dramatically reduce the cost of financial transactions. The projected dominance of blockchain can be gauged through the increasing patent applications filed from different sectors of the financial world.
Similarly, the technology has the potential to revolutionize the way in which intellectual property law is regulated and enforced. The road to the assimilation of blockchain in everyday life shall be entertaining, educating and nothing short of transfixing.
Pravin Anand is managing partner and Siddhant Chamola is an associate at Anand and Anand
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New Delhi 110013, India
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Email: [email protected]