October 11, 2022 | Jon Hautamäki

Blockchain & Newsroom

Blockchain and Intellectual Property Rights

This year we have covered different crypto phenomena in our 8-part article series. This article focuses on one phenomenon which has huge potential in the current NFT- and crypto sphere: The utilization of blockchain and intellectual property rights (“IPR”).

In this article, we will the discuss of the use of blockchain in the field of IPR and introduce the possibilities it presents to the IP ecosystem, especially with regard to industrial rights as well as copyrights.

Blockchain as an IPR vs. IPRs “on-chain”

First, a distinction must be made between protecting blockchain itself as an IPR and using blockchain to protect intellectual property rights.

The latter means the utilization of blockchain technology in protecting IPRs, such as trademarks, patents and copyrights. Such use could mean a blockchain-based register of industrial rights, which could ease the processing and argumentation in trademark seniority claims.

The former, on the other hand, relates strongly to the blockchain’s inherent properties or the use case of the blockchain. For example, the United States Postal Service has applied for a patent for a secure voting system that utilizes blockchain – such a system could, in theory, enable a safe, secure and reliable election with no possibility of fraud or tampering with the results. Another example is a patent for a system and method for proof of view via blockchain, which aims to counter ad fraud, the use of bots to accrue false views to advertisements in order to gain more revenue from the ads.

Industrial rights and blockchain

Industrial rights encompass patents, utility models, trademarks and design rights. These rights protect the results of development work and the investments made to the rights, such as the branding of a trademark and all of its goodwill value accrued over time. Owners of industrial IPRs can deny others the use of their rights and choose whether to grant licenses that allow the use of these rights.

How does blockchain relate to industrial IPRs, then? The use of blockchain in the IP ecosystem has potential benefits and use cases that could enhance the process of generating, protecting and managing IPRs.

In the case of trademarks, seniority claims could be easily solved with time-stamping mechanisms that show evidence that the proprietor of an earlier trademark has registered the trademark or used it at a certain time, which in turn deters possible future actors in the market from trying to use a similar trademark in their business. Similarly, blockchain could help fight counterfeit goods by keeping record of every shipment and transaction involving the genuine goods. Blockchain could also aid in the transfer and licensing of trademark rights by making it easier to trace and manage evidence and ownership information. With patents, blockchain technology could be utilized to allow global IP offices to share information with regard to priority information.

In short, blockchain makes it possible to create a clear, dated and accurate proof of ownership of their intellectual property. Such a blockchain could issue a token as a certificate of ownership which would contain all the necessary information about the ownership and the IPR.

Copyrights and blockchain

Copyrights give the authors of creative work the exclusive right to determine how their works are used. Copyrights can be categorized into economic rights and moral rights. The former includes the right of reproduction of a work and making a work available to the public. The latter grants the author of a work the right to claim authorship of the work and integrity rights, meaning that the author’s work may not be modified in a way that could violate the integrity of the author or the work.

Unlike industrial rights, copyrights are IPRs that do not have a centralized register. Blockchain technology could offer a way of registering certain copyrights with a time stamp of their creation and and the author’s right to the creative works in question. Whether such a register should exist – or if it is even worth it – is another question up for debate.

What to expect?

New innovations constantly shape the business and legal environment. In the near future, we could see blockchain and metaverse as new megatrends in the market that shape the evolution of not just IPRs, but the whole legal system itself.

Blockchain technology could prove to be a powerful tool in creating, managing and protecting intellectual property. While we already have seen some steps in that direction, we are still in the early stages of fully harnessing blockchain in IPR.

Our Associate Trainee Patrik Anthoni took part in writing this article.

Nordic LawPioneer in Web3 and Fintech law