With the emergence of blockchain technology, an opportunity has been created to leverage this new era’s capacities to implement further the rules and regulations of intellectual property (IP) rights.
The advent of blockchain technology has revolutionized intellectual property (IP) infrastructures, enabling a transformation in how intellectual property rights are enforced. This article begins by defining intellectual property rights and then explores how blockchain technology can support and safeguard intellectual assets.
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In today’s world, where science and technology are advancing rapidly, measures must be taken to encourage and protect innovators and thinkers. For many years, countries worldwide have sought to create mechanisms to implement these incentives and protections properly. Intellectual property rights consist of rules and regulations to establish mechanisms and frameworks to support inventors and creators legally. The importance of intellectual property rights is undeniable. Their significance has reached a point where IP rights now form one of the foundational pillars of the World Trade Organization.
Definition of Intellectual Property Rights
Intellectual Property Rights (IPR) refer to human intellectual achievements and innovations. These include inventions (patents), literary and artistic works, trademarks, industrial designs, trade names, geographical indications, and all intangible assets from human thought. Based on the classification by the World Intellectual Property Organization (WIPO) (wipo.int), intellectual property is divided into two main categories:
- Industrial Property: Includes patents, trademarks, industrial designs, and geographical indications.
- Copyright: Covers literary works (such as novels, poems, and plays), films, music, artworks (like maps, paintings, photographs, and sculptures), and architectural designs. “Related Rights,” such as performers’ rights for their artistic performances and rights to radio and television broadcasts, are also included under copyright.
Additionally, trade secrets are considered a type of intellectual property. However, they differ from other forms of IP as they do not benefit from formal registration or legal protection.
Like other types of ownership, it is evident that intellectual property is legally valuable and financially worth it.
The question arises: With the various interpretations of intellectual property rights (IPR) and their immense importance, how can individuals benefit from the advantages and profits of intellectual property rights or transfer them? Countless other questions come to mind. This is where the intellectual property rights (IPR) concept becomes even more significant.
Like any other form of ownership, intellectual property rights belong to individuals, whether natural or legal, such as the inventor or patent holder, the owner of a trademark, the writer or poet of a literary work, or the owner of a unique industrial design. These rights help them benefit from the results and profits of their work and the investments made in its creation and development while preventing others from exploiting it without permission. Thus, this right ensures that third parties cannot buy, sell, or exploit these works without the owner’s consent, and lawmakers have put strict enforcement measures in place to uphold this.
Intellectual property is a key aspect of economic development. -Craig Venter, American businessman
It is worth noting that Article 27 of the Universal Declaration of Human Rights recognizes the right to use and protect the material and moral interests of scientific, literary, and artistic creations. Numerous international treaties and conventions have been established to create specific frameworks for further adherence to these laws and regulations.
In our current world, where scientific progress is rapidly increasing, intellectual property is widely used across various fields.
The advantages and benefits derived from the applications of the intellectual property system are so evident that one cannot even imagine a world without it. For example, consider the multibillion-dollar music industry of Taylor Swift, which millions of people use worldwide. Without copyright, one form of intellectual property, none of these revenues would exist. Or think of the popularity of well-known brands like Apple, Microsoft, or Coca-Cola, where no price could be placed on these trademarks. Without intellectual property, inventors and innovators would have no incentive to produce better and more efficient products, and the next generation of products, such as smartphones and flexible clothing, would not be available to humanity.
On the other hand, it should be noted that without trademarks and their recognition by legal systems, there would be no way to purchase authentic products, and counterfeiting would occur rapidly. As a result, the market for these products would be flooded with counterfeit items indistinguishable from the originals. All of these examples demonstrate the special role of intellectual property rights in humanity’s current life.
The Importance of Expanding Awareness About Intellectual Property Rights
Intellectual property is as essential for modern businesses as oxygen is for humans. It can be said that the survival of businesses depends on protecting intellectual assets. Consequently, human well-being, comfort, and progress are closely linked to intellectual property rights. Legal experts and intellectual property specialists examine several key reasons for the importance of spreading awareness about intellectual property rights. These experts argue:
First, the advancement of societies, public welfare, and comfort are directly tied to the ability to create and develop technological innovations and cultural works directly related to intellectual property.
Second, legal protections for the works created by their authors and new innovations lead to increased investments to foster further innovations in every field.
Third, increasing the level of protection for intellectual property drives economic growth, job creation, the formation of new industries, and improved quality of life in societies.
As a result, a precise, efficient, and fair system for protecting intellectual property helps countries leverage the capacity and potential of intellectual assets as a facilitator for economic development, social welfare, and cultural enhancement. An intellectual property rights system can help balance the interests of innovators with the public good, creating an environment where creativity and innovation become a public value in society.
“The most important thing about intellectual property is that copyright law was created not to stifle creativity, but to encourage it.” -Shepard Fairey, American artist and founder of OBEY Clothing.
Types of Intellectual Property Rights
According to intellectual property sources and references such as the World Intellectual Property Organization, the United States Patent and Trademark Office, and international treaties and conventions, intellectual property rights can be categorized into several distinct types. Each category refers to a specific type of intellectual asset with unique characteristics.
A) Patent:
A patent is an exclusive right to exploit an invention, including a new product, process, or technical solution that addresses a problem. This exclusive right is granted to the inventor or patent holder for a limited period (usually 20 years), preventing others from manufacturing, exploiting, or selling the invention. In exchange for this exclusive right, the inventor or patent holder must fully disclose the invention so that a skilled person in the relevant field can replicate it. To be eligible for registration in the patent system, inventions must meet certain requirements known as the “patentability criteria.”
B) Trademarks:
A trademark is a distinctive sign used to identify the products and services of a particular individual or company. Trademarks help consumers distinguish the products they wish to purchase from similar ones available in the market. A trademark may consist of a shape, symbol, combination of letters, or even a particular color or scent.
C) Industrial Designs:
Industrial designs refer to the aesthetic aspects of an object, encompassing both three-dimensional features (such as shape) and two-dimensional features (such as patterns, lines, or colors). Industrial design is often a key factor in attracting consumers’ attention, encouraging them to prefer one product over another and use it more frequently. As a result, industrial design is widely used in various industries and products, including medical equipment, watches and jewelry, electronics, and agricultural tools.
D) Copyright:
Copyright was developed to protect literary and artistic works, including books, films, music, and paintings. This type of intellectual property does not require registration to be protected and enjoyed by its creator.
E) Geographical Indications:
A geographical indication is used for goods and products produced in a specific geographical area and possessing certain qualities tied to that region. Typically, a geographical indication includes the name of the place or origin of the product. For example, agricultural products like Tuscan olive oil (from Tuscany, Italy) and Rafsanjan pistachios are unique due to the local climate or soil, which imbue specific quality characteristics in those products.
F) Trade Secrets:
A trade secret is a formula, process, design, tool, or even a method of gathering informational data that provides a competitive advantage over rivals. A company or business protects this trade secret and prevents customers and competitors from accessing it. One of the advantages of trade secrets over other types of intellectual property, such as patents, is the absence of time limitations. However, it is important to note that there is no official legal protection for trade secrets, and the risk of disclosure rests with the business itself. One of the best examples of a trade secret is the formula for Coca-Cola, which has been protected as a highly valuable trade secret for many years.
“Forget land, buildings, and machines; the true source of wealth today is intelligence and applied intellect. We’re talking about ‘intellectual property’; it’s not just about patents and trademarks; it’s the brain behind the story.” –Charles Handy, Irish author and philosopher.
Intellectual Property and International Treaties
In recent decades, intellectual property has become a key issue in the economy and other areas of human life. With the increase in communication between different societies and the globalization of businesses, international treaties and conventions have been established to protect intellectual assets. Some of the most important ones include the Paris Convention (Paris Convention for the Protection of Industrial Property, 1883) for the protection of industrial property, the Berne Convention (Berne Convention for the Protection of Literary and Artistic Works, 1886) for the protection of literary and artistic works, the Madrid Agreement (Madrid Agreement Concerning the International Registration of Marks, 1891) for the protection of trademarks, the Hague Agreement (Hague Agreement Concerning the International Deposit of Industrial Designs, 1925) for the protection of industrial designs, and the TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) for the protection of intellectual property rights in commercial aspects.
Blockchain Application in Protecting Intellectual Property Rights
Blockchain, a relatively new term, has recently gained attention for the many opportunities it creates in finance and cryptocurrency. Today, blockchain technology is considered revolutionary, with the potential to change many aspects of human life. It could be said that blockchain is a revolution akin to the emergence of the internet in the 20th century.
Blockchain technology has the capacity to change financial systems, industries, financial institutions, banks, and service companies worldwide without compromising personal privacy. It ensures the security of digital assets and stakeholders involved.
At present, in-depth studies regarding the use of this technology are a priority for many national policymaking organizations worldwide. Companies and governments that can quickly ride the wave of new technologies are the first to implement blockchain.
In the domain of intellectual property protection, Francis Gurry, Director General of the World Intellectual Property Organization (WIPO), in a 2017 interview regarding the future of technologies, challenges, and opportunities, specifically mentioned blockchain technology as an opportunity for protecting intellectual property rights and predicted that, if fully utilized, this technology could solve many of the issues related to intellectual property protection.
Suppose you have experience writing, designing, or creating content, such as writing, images, music, or other forms. In that case, you have likely struggled with protecting your artistic and literary works, especially if your content is published online. What causes concern is that as easy as it is to copy your created work, proving ownership in legal and judicial processes is arduous. While copyright laws are in place to protect artistic and digital works, there is currently no defined system for registering and proving ownership, which means one cannot rely solely on copyright laws—especially in countries lacking the necessary legal infrastructure to defend against such violations. In such cases, the situation is clearer: the issue itself needs more comprehensive consideration.
Blockchain is the financial challenge of our time; this technology is set to change how the financial world operates. —Blythe Masters, former executive at J.P. Morgan
Despite significant barriers and limited awareness regarding the implementation of blockchain technology for legal applications on a large scale (for example, regulatory ambiguities, security, and confidentiality concerns), the potential of blockchain in protecting intellectual property rights—both at the registration stage and during enforcement and litigation—appears more practical and precise. Additionally, given the structure of this new technology, it is believed that using blockchain for intellectual property protection could be more cost-effective.
The most important applications of blockchain in the field of intellectual property law include:
- Proving the creation of an artistic work
- Registering or clarifying intellectual property rights
- Controlling or marking the distribution of unregistered intellectual assets
- Proving the authenticity of a work or tracking its first use in markets and advertising networks
- Managing digital rights, such as those for online music platforms
- Controlling and tracking the distribution of unregistered intellectual property (e.g., copyright, designs, trademarks)
- Enforcing and executing intellectual property contracts, exploitation licenses, or exclusive distribution networks via smart contracts
- Ensuring payments to intellectual property owners at the correct times and according to contracts
In addition to the mentioned uses, blockchain can also be employed for verifying authenticity in processes of identifying or recovering counterfeit goods and theft, or when parallel imports occur in a country.
Blockchain Application in Smart and Efficient Protection of Intellectual Property Rights
The potential uses of blockchain technology in managing intellectual property rights cover a wide range. Registering intellectual property rights in databases that use this technology, which features the unique attribute of a distributed ledger, makes the intellectual property protection system smarter than traditional databases. This type of smart intellectual property system, in the form of a centralized solution, has good capacity for implementation in intellectual property offices because it can immutably record all events throughout the lifespan of a registered intellectual property. This intellectual property could be a trademark or patent for which the exploitation rights have been temporarily granted to an individual or company, or its ownership has been fully transferred to another individual or company.
The ability to track intellectual property throughout its lifecycle can offer many benefits. One of these benefits is clearer legal audits. Furthermore, this system can efficiently guide due diligence operations that are essential in the valuation and transactions of intellectual property and simplify them when companies merge, for example. Offering an optional privacy feature can also alleviate concerns about maintaining the confidentiality of intellectual property owners’ information.
Blockchain was invented in the early 1990s, primarily to store content that could not be altered over time; it cryptographically stores digital documents to prevent their manipulation in a decentralized manner. —Mohan Dewan, Lawyer and Patent Attorney
Blockchain Application in Trademark and Patent Registration
One of the interesting and unique features of blockchain data banks is that the data is shared in a decentralized and immutable manner, and this feature allows us to observe the details of ownership when using this technology. For example, it can show who the actual owner is of something that a seller or brand owner is offering or how much of a product with a specific brand is available in the market. This feature can be highly beneficial for trademarks, where authenticity and the scope of usage are key and challenging factors in their recognition and evaluation. Additionally, blockchain technology would be highly effective in legal disputes or situations where identifying a well-known brand in the market is needed or when defending an unused trademark.
Similarly, collecting information from the market or advertising networks officially registered in the blockchain system can be done with greater accuracy and ease, helping intellectual property offices, which need complete information for trademark registration. As a result, the trademark search and examination process would be significantly shorter.
In the case of patents, when a technology is registered in shared databases, it serves as evidence of the existence and publication of that technology. As prior knowledge, it not only prevents others from filing for a patent on the technology but also facilitates and accelerates the process of confirming the novelty and inventive step of the patented technology for patent offices.
Blockchain Application in the Protection of Literary and Artistic Works
The use of blockchain in the field of copyright is one of the most interesting and widely applicable uses of this technology for protecting intellectual and moral property rights. Blockchain enables the creation of a decentralized and secure database for storing and preserving artistic works (especially their digital forms), where the data for each of these works can be recorded in the corresponding blocks.
In blockchain technology and the databases designed based on it, registering and verifying the identity of artistic works is done with greater ease, speed, and accuracy. As a result, even if the ownership rights of a work are lost or expire, an original version of the work will remain in the blockchain-based database, attributed to the creator and the original rights holder.
Moreover, blockchain’s significant capability, which can benefit artists, creators, and makers of artistic works, is the ability to track the distribution and dissemination of each work. Based on this, the creator can receive payment each time their work is used. This database can facilitate special usage permissions; more importantly, all these activities are recordable and measurable. Currently, several startups using a payment method called “Pay Per Use” have created opportunities for artists to sell their works directly, without intermediaries like music publishers, while overseeing the marketing, commercialization, and distribution process. One such startup is “Ujo Music,” where the music creator sets a price for downloads, commercial remixes, or other uses, and payments are made through cryptocurrency, with all transactions being traceable. Other startups that have begun operations in this area include Blokur, Mediachain, and Mycelia.
The ability to patent and the decision to patent an innovation play a crucial role in the growth of any technology or new field. The blockchain ecosystem has undoubtedly begun to face this role. —Marc Kaufman, Co-founder of Blockchain IP Council
Blockchain Application in Smart Contracts for Licensing and Managing Ownership Rights
Smart contracts are computer codes stored on the blockchain platform. These contracts include all the information related to the terms of the agreement, and in a smart system, the execution of all contract clauses is automatically carried out. Since blockchain operates as a shared data repository or, in other words, a distributed ledger, it serves as a witness, enabling the protection of intellectual property rights both during the registration stage and in transactions, sales, and court proceedings. A smart contract can be used to create and enforce intellectual property agreements, such as licensing agreements, ensuring that the transfer of payment to the intellectual property owner occurs at the right time, as specified in the contract. Smart information about intellectual property can be digitally encoded, for example, within the protected content of a song or image. Examples of such contracts are already in use in some startups mentioned earlier in the section on blockchain in the preservation of artistic works. Furthermore, for example, the company “Kodak” has recently used blockchain technology, cryptocurrencies, and smart contracts to manage images.
Preventing Scientific Theft and Inventions
Blockchain technology can show who owns what and who is authorized and qualified to grant the right to use it. This capability enables customers or consumers to distinguish an authentic and specific product from a counterfeit one. Since blockchain technology can include details such as the materials and technologies used and the stages and processes of production from raw materials in the blocks as part of the information in those blocks, the consumer can verify the product’s authenticity through a search.
Adding blockchain-scannable tags to products and anti-tamper seals (visible or hidden) is one of the unique uses of this technology, and it can play a crucial role in preventing counterfeiting and unauthorized copying of products. Suppose a brand owner shares information with customs about their genuine product’s features. In that case, the absence of these features in similar products provides an easy way for border authorities to detect and confirm the counterfeit nature of the product. Customers can also learn this method to differentiate between counterfeit and authentic products.
It is expected that blockchain technology will have a major impact on the intellectual property ecosystem. –Julia Hugendubel, Intellectual Property Lawyer
Preventing Parallel Imports and Unfair Competition (Antitrust Laws)
Blockchain technology’s ability to track counterfeit products allows brand owners to enforce their contractual obligations, especially considering leaks in the distribution and supply systems, preventing parallel imports, or creating black markets. Tracking product distribution can also be used in pharmaceutical industries to meet legal requirements and substantiate warranties.
Conclusion
Intellectual property rights are of great importance, being one of the key elements in forming the World Trade Organization, especially today when science and technology are advancing at an unprecedented rate. If we were to name a key factor for encouraging and creating an appropriate environment for creators and innovators, it would certainly be the regulations of intellectual property law. Given that the scope and benefits of blockchain technology can serve as a useful tool for expanding and closely monitoring intellectual property laws, it is essential to use this technology to implement and oversee intellectual property rights without bias or fear of the unknown aspects of blockchain.
It is important to note that unwarranted fears stemming from ignorance of new technologies could prevent us from benefiting from the unique opportunities that lie ahead.
We must be open to discovering new and unknown areas to advance and improve effective legal systems in today’s societies.
The study of law never ends…
Sources:
- Website of the Iranian Patent Center
- Website of the Intellectual Property Center of Iran
- Website of the World Intellectual Property Organization (WIPO)
- Website of the World Trade Organization (WTO)
- Book: Introduction to Intellectual Property Law; by Seyed Hassan Mirhosseini
- Article: The Application of Blockchain in Protecting Intellectual Property Rights and Its Practical Aspects; Authors: Mohsen Sadeghi, Sara Molapana, Maedeh Safari
- https://www.wipo.int/wipo_magazine/en/2017/05/article_0001.html
