Blockchain and Intellectual Property Rights – Use Cases and the Legal Implications

The use cases of blockchain technology in the context of IP spun wide and this article will delve into a couple. 

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The intersection between blockchain technology and intellectual property rights cannot go unnoticed.

A blockchain system is an open ledger which records verified transactions by various nodes, hence it is considered to be transparent and immutable. On the other hand, Intellectual Property (IP) encompasses all mind creations made by people, including artistic works, inventions, designs and images which are recognized and protected by the law.

The use cases of blockchain technology in the context of IP spun wide and this article will delve into a couple. 

In April, 2021 the European Union IP Office launched  Europe’s first blockchain platform for the secure documentation of IP rights, both trademark and design registrations, in real time. They also informed stakeholders that they were in the process of launching a blockchain authentication platform to tackle counterfeiting claims.

Notably, the US Chamber of Commerce has set up a Blockchain Intellectual Property Council to deal with IP-related issues in the blockchain sector. This move was driven by the numerous complaints on patent trolling where companies register patents, not to use them in running their businesses, but to demand payment in the form of royalties which results in stifling innovation in the blockchain space.  

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In the Logistics sector, some companies have integrated scannable blockchain tags and seals which detect their authentic products hence distinguishing them from the fake ones. This, in turn, secures their clients interests and streamlines their supply chain management systems.

The entertainment industry has also adopted the use of blockchain technology by setting up Digital Rights Management Systems. For instance, IBM partnered with Tech Mahindra to create a blockchain solution known as Blockchain-based Contracts and Rights Management System that tracks the usage of content helping media houses to manage payment of royalties, control distribution of content, and prevent piracy.

Similarly, Kodak launched a Blockchain-Based Document Management Platform with the aim of automating workflow and keeping documents secure. As a result, they reduced their operational costs and streamlined their revenue streams since they can access all documents in real time, manage distribution channels, and prevent the infringement of their IP rights.  

More importantly, the legal sector has not been left behind in the adoption of this technology. Through smart contracts, created and stored on the Ethereum blockchain, parties can write and enforce IP agreements. In this context, it would include agreements revolving around assignment or transfer of IP rights, creation of licenses, and issuance of consent for exclusive distribution to networks. Blockchain technology enables IP owners to receive real-time payments when the conditions stipulated in smart contracts are met.

Therefore, the non-involvement of third parties saves time and ensures efficiency. 

In Kenya, the Kenya Industrial Property Institute (KIPI) is tasked with the role of administering industrial property rights, such as trademarks and patents, which distinguish businesses from each other, while the Kenya Copyright Board (KECOBO) administers and enforces copyright and related rights such as audio visuals and artistic works.

These two institutions could use blockchain technology to register and manage IP rights and function as IP offices with “smart” IP registries.

KIPI can rely on the technology when registering property rights, and this would come in handy to parties conducting due diligence on a company’s IP when there are proposed Mergers and Acquisitions.

Alternatively, KECOBO can use the technology to track the lifecycle of an IP right from the initial application for registration, to registration and first use, showing evidence of its creation and a means to prove its authentication. This would, in turn, aid interested parties in identifying counterfeit works.

Companies and individuals could incorporate the use of blockchain technology to enjoy some of the benefits listed above and contribute to the discussions regarding this rapidly growing space.  

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RECOMMENDED READINGCRYPTO LEGAL GUIDE: The Cryptocurrency Regulatory Framework in Kenya by Global Legal Insights

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