Piper Alderman Partner, Michael Bacina recently presented at the 10th Annual Trade Marks and Patents Conference in Sydney to explain blockchain technology and how it is affecting trade marks.
This article includes key takeaways on upcoming Blockchain projects which will impact trademarks and patents. For the uninitiated, an introduction to blockchain is available here.
Blockchain, and distributed ledger technologies generally, combine existing technologies into a new form of decentralised network which promises to cut down on inefficient business processes and automate transactions with built in rulesets. They are at heart a form of ledger system which is revolutionary in the way that no single party controls most Blockchain networks, enabling a trust in the system, as opposed to trust in counterparties, to unlock new economic efficiencies.
Blockchains usually have the following core features
- (Trustless) – The verification of transactions in a Blockchain is effectively crowdsourced and the need for a central authority is removed, removing large costs and delays associated with bureaucracy or traditional oversight of ledgers;
- (Immutable) - Security of the data (once verified and entered) is improved with an increasing number of users (or nodes) in a network. For an attack on the system to succeed, it must hit (almost) all or a majority of nodes simultaneously. This is increasingly difficult to do, particularly where there are a large number of nodes;
- (Verifiable) – Because each transaction contained in a block is time stamped, transactions and ownership of the assets on the network are verifiable. In the context of a first to file trade mark application, the blockchain’s ability to create an immutable date of creation is a highly attractive feature;
- (Traceable) - Providing a record of transactions. A Blockchain is updated with each ‘block’ of transactions, so users can see the chronological activity for that particular blockchain, effectively creating a chain of custody for IP ownership if recorded in a blockchain; and
- (Cost) - When a new user enters a public blockchain network, that user becomes both a client and an administrator. In contrast to establishing a central bank or national registry, which effectively introduces both bureaucracy and cost, blockchain gives each user the power to transact on equal footing, as each node is part of the ecosystem and benefits from the ecosystem operating efficiently.
These benefits are difficult to conceptualise in the absence of a clear use case. CSIRO's Data61 has identified IP management as an economic opportunity for Australia’s future, arguing that effective platforms capable of managing the provenance and integrity of IP may unlock significant economic activity and new business models.
There are several potential use cases in IP for which blockchain could provide a solution. This article describes some key proposed use cases.
