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How can blockchain can increase innovation?

Blockchain, Bitcoin, and DLT have implications that go far beyond cryptocurrencies and applications in the financial sector.

In this article, Victoria Thompson (Director and Founding Member of the London Blockchain Foundation, and Group Head of Innovation Legal at Barclays) shares her insights on how blockchain can increase innovation and manage intellectual property rights.

Victoria Thompson

Blockchain, Bitcoin, and DLT have implications that go far beyond cryptocurrencies and applications in the financial sector. One area where DLT can be used is in the innovation process to help bring huge benefits to how individuals and companies gain, protect and commercialise their intellectual capital. And more importantly, how governments and policymakers can leverage this technology to create a fairer and more innovative society.

When blockchain is put to work in the field of intellectual property management systems and processes, it can remove barriers to Intellectual Property Rights (IPR) protection and enforcement. IPRs are more widely known as trademarks, patents, copyright, design rights, database rights and trade secrets. They have become very important in the global digital economy. Despite their value, IPRs are still from a commercial and societal perspective undervalued, under-utilised and very misunderstood. This misunderstanding stems from the complex and outdated processes which we need to comply with in order to file, manage and protect IPRs once they are created.

How can DLT help?

So, how can DLT help remove this pain? Well, as an Intellectual Property (IP) and tech lawyer, I foresee a future world where individuals and CEOs will use simple automated Distributed Ledger Technology (DLT) based platforms to capture, track and protect their most valuable resources and IP assets. Content producers, owners of IP, distribution partners and end consumers will all benefit from these new systems as they will finally transparently account for their role in the innovation lifecycle. Likewise, governments and IP authorities will be connected to these platforms and databases with real-time data feeds that will equally enable them to identify bad actors and enforce rights in the civil and criminal legal systems.

Currently, IP management software systems are mainly the domain of large established corporates and are designed to allow communication and sharing of data between the legal department and their R&D teams. Despite the cost of these systems, they are largely centralised databases and heavily reliant on human data entry to inform them. Also, government policy and IP authorities are running on outdated systems which mean they cannot easily disseminate real-time data about filings, grants and oppositions. In IP litigation, due to a lack of data transparency, gathering evidence is time-consuming and often still very paper-intensive. So, IP enforcement actions (ie taking someone to court for infringing on one’s IP) are very much the domain of big corporations with deep pockets to fund such actions, leaving the average inventor outside of the justice system.

DLT-based systems have four killer features that, when applied to the IP lifecycle, can be highly effective in solving a few key problems: hashing, timestamping, tokenisation of assets, and smart contracts. These features enable systems to be formed that will quickly create a solid foundation for any IP value-based ecosystem.

In Estonia in 2015, the government introduced an Ethereum-based blockchain public notary system (a legal verification process), giving Estonian residents and companies the ability to notarise in a legally compliant way all kinds or certificates and documents, and paving the way for smart IP registries and digital IP certification [1].

Similarly, we’ve seen the emergence of new companies like Bernstein [2] and Valtitude [3], who offer web-based services that can be used by inventors to gain proof of authorship, securely share confidential information with third parties prior to IP filing, document the transfer of ownership, and gain freedom to operate through defensive publication.

I believe in the future blockchain-based systems will be expanded upon to enable the development of IP across all phases of the innovation lifecycle: tokens will be used to represent the IP asset; tracking services and contributions to IP development will be notarised and formalised via smart legal contracts; and platforms will be developed to manage the sale, licensing, distribution and exploitation of IP with plugins to smart digital registries acting as oracles in distributed networks.

The future of DLT

Furthermore, as technology standards and smart legal contract terms become standardised at each phase of the lifecycle, the cost of legal services will be reduced, removing long-standing barriers to IP enforcement actions.

At the heart of any DLT-based system is the ability to securely store and exchange value across a network of participants. Given that IP assets are increasingly valuable to companies, and that their success is measured on their ability to secure a return on investment on their innovation processes, I believe we will witness a massive transformation and automation of the IP Lifecycle.

What’s more, DLT and tokenised IP will have a foundational role in that transformation journey. As a result of DLT-based IP management systems, IP assets of the future will be attributable upon creation, securely distributed (reducing fraud and counterfeiting), and consumed safely on a network that promotes IP rights transparency and operational efficiency that benefits all in the chain.

References

1. Parker L. Bitnation starts offering blockchain public notary service to Estonian e-Residents. 30 November 2015. Brave New Coin. Available from: bravenewcoin.com.
2. Bernstein. Individuals. Available from: bernstein.io/individuals.
3. Valtitude. Available from: valuechainplanning.com.

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