How the Blockchain Will Transform IP Management and Patent Commercialization
Most consumers mainly associate blockchain technologies with cryptocurrencies, but digital currencies are just one use case for distributed ledger platforms. Within the world of intellectual property, there are several exciting possibilities for IP owners seeking new forms of patent monetization or trying to get a better grip on their own IP management activities. SHIP Global IP is no stranger solving IP issues with new technological solutions, which is why we’re excited about the wide range of blockchain’s potential applications to intellectual property ownership.
Smart Contracts: Automating Patent Filing Activities Based on Changing Business Conditions
One of the most discussed use cases for blockchain technologies that have yet to be fully realized are smart contracts. These self-executing agreements programmed into computer code and stored on a distributed ledger can automate a wide range of business activities including transactions, content distribution and even government filings.
Here at SHIP Global IP, we’re familiar with many aspects of patent prosecution and management that could benefit from the use of smart contracts. Automating updates to IP recordals alone can save IP management professionals significant amounts of time when handling patent transactions, even for small portfolios. Years from now, the programming of smart contracts could advance to the point that companies might automate the filing of patent applications into additional countries based on changing business conditions, such as increased sales in certain regions or the appearance of counterfeits.
For content creators, smart contracts deployed via the blockchain also enable access controls that are difficult to circumvent. Once stored on the blockchain, smart contracts may not be revoked by either party and can ensure that access to a song or video file isn’t made available until funds have been processed. These automated business compacts can also improve innovative capacity within corporations, conditioning the distribution of annual bonuses on the number or quality of invention disclosures.
IP Registers: Harnessing Agency Resources to Rid Counterfeits From the Market
The distributed nature of the blockchain provides value in the form of immutability. It is nearly impossible to manipulate the blockchain’s ledger of transactions once timestamped data has been entered into the ledger. Many government agencies have explored the use of blockchain, although most of these efforts have focused on the establishment of digital fiat currencies.
Using blockchain to create an easily traceable and timestamped record of IP ownership could resolve IP ownership disputes at the agency instead of a courtroom. This was recently suggested by a Texas A&M University law professor’s research article discussing the potential use of blockchain technologies by copyright offices. Along with policy issues, however, such systems must overcome several hurdles including the high amount of computing power required to create new blocks on the chain each time an IP application is filed.
The European Union Intellectual Property Office (EUIPO) has been a leader among IP agencies trying to incorporate blockchain technologies into their registries. Supported by the European Blockchain Services Infrastructure, the EUIPO is looking to release an early version of a blockchain-based trust register by the end of 2023. This register would enable branded products to be stamped with an immutable digital signature, improving enforcement against counterfeits. The distributed nature of the register will both allow it to be implemented across the supply chain and make it less vulnerable to criminal cyberattacks.
Tokenization: Finding New Avenues for Monetizing Patent Assets
The value of a patent right makes its expense worthwhile, but the high costs of both obtaining and maintaining patent rights often spur companies toward new methods of capital formation. Blockchain-based platforms for digital transactions allow property owners to tokenize their assets, whether real or intangible, providing investment opportunities with more liquidity than a typical brokerage market. Global patent market IPwe, backed by information technology giant IBM, is one company building a digital infrastructure for commercializing patents as non-fungible tokens (NFTs) on a blockchain, for example.
Patent owners thinking of tokenizing their IP assets should be aware that any change in ownership interest via blockchain transaction must still be recorded with the IP filing office. SHIP Global IP knows that improper or outdated ownership assignments is a pain point that many of our clients face before trusting our IP management services. Very few countries have a legal framework that recognizes the transfer of legal rights via blockchain transaction. While the European Union continues to develop its crypto-asset regime, the small Central European country of Liechtenstein passed legislation in October 2019 that recognizes ownership interest transactions that occur via the blockchain.
SHIP Global IP sees many encouraging signs indicating that further blockchain development will be a boon for IP owners and rights holders. Contact us today to learn how our technological solution for highly accurate patent translations and filings can streamline your corporation’s IP management activities.