While we talk about using blockchain in the context of the protection of transactions, the term itself has acquired the distinctive status of being associated with cryptocurrencies, especially with Bitcoin. However, it is important to shift the focus from an area where the law of the land does not allow the use of blockchain to an area where the technology can be utilised effectively.

What is Blockchain?

The blockchain technology was invented in 2009 by Satoshi Nakamoto (an anonymous person) for use as a public transaction ledger for Bitcoin, allowing users to make and receive payments without the involvement of a central bank or other financial institution.[1] Blockchain can be defined as “a shared database or digital ledger that automatically updates information across an entire network, without the need for a central intermediary”.[2] However, the definition is not completely self-explanatory.

The blockchain technology comprises a cluster of blocks which are used for recording entries. When a person enters a transaction in the system, the computers spread across the globe, known as “nodes”, perform the task of verifying the transaction, and once the transaction is verified, it is entered into a block and the same is linked with the blocks before and after this particular transaction. The blocks form a publicly (depending on the members to be using the ledger) accessible ledger which will get synchronised via the Internet every 10 minutes (on a standard basis).

Use of Blockchain in Protecting Brands

The blockchain technology started off and has since been associated with the concept of Bitcoin. However, as time has passed, it has found its uses not only in the workings of the large companies, but also in the general election that took place in Sierra Leone last year. With such diverse uses, it is not a surprise that the technology will find its place in the protection of IP as well.

So, how is protection of IP through blockchain going to be effective? As we have already discussed, the blockchain technology is a synchronised ledger of transactions, which can record transaction entries from any field of the world. Moreover, each transaction entry is separately verified by nodes at different parts of the world. This feature ensures that the block entries are not only transparent, but also immutable, and almost unhackable. And this is the very characteristic of blockchain technology that every IP owner is looking to exploit.

Thus, there are two fields in which blockchain can provide protection for IP owners and users, i.e. supply chain and the monitoring of the intellectual property. And this makes the lives of brand owners a little easier.

1. Supply Chain

A supply chain refers to the chain of persons (natural and juridical) that a product passes through to reach the ultimate consumer. This chain is very important from the perspective that the genuine product that leaves the premises of the manufacturer also reaches the final consumer. Not only is this requirement important for the consumers who want to receive genuine products, but it is also important for the brand owners who do not want their brand to get diluted due to loss of reputation.

It is, thus, very important to bring about transparency in the supply chain, and blockchain can bring about more transparency to supply chains by providing information about the origin of the goods and by empowering governments to effectively request reliable data related to even the most distant supplier.[3] What makes the technology even better is that the data cannot be altered or destroyed once it is entered, and therefore, the genuineness of the supply chain will not be called into question.

The technology can also simplify the process of labeling, and one may soon be able to verify if the label on one’s new jacket, stating it was made in a particular country, is accurate,[4] merely by verifying the chain of transactions through which the jacket has passed.

2. Monitoring of Brands

Blockchain has the potential to enhance IP protection for the brand owners, since the branded goods can be easily tracked through the blockchain technology. Thus, their authenticity will be easily verifiable by the brand owners, the retailers and the consumers, reducing counterfeiting of branded products and fraud on consumers. Further, the brand owners, the sellers and the users of the products will be able to keep track of them even when the products are sold in a second-hand market or through discount-sellers.

Conclusion

Although blockchain is yet to be tested and verified in the field of IP, the use of this technology can revolutionise the measures of protection and enforcement in IP law by making it easier to monitor the genuineness of the branded products in any part of the world.

[1] Jeffrey H. Greene and Anne Marie Longobucco, What Can Blockchain Technology Do For The Fashion Industry?, Mondaq (July 11, 2018, 11 P.M.), http://www.mondaq.com/unitedstates/x/694170/Trademark/What+Can+Blockchain+Technology+Do+for+the+Fashion+Industry

[2] Id.

[3]  Losing to Win, The Economist (July 11, 2018, 11:30 P.M.), http://www.economist.com/blogs/schumpeter/2014/06/bitcoin.

[4] Anna Radke and Olivera Medenica, Blockchain and the Fashion Industry, Fashion Industry Law Blog (July 11, 2018, 10 P.M.) http://www.fashionindustrylawblog.com/blog/2016/12/15/blockchains-and-the-fashion-industry

ABOUT THE AUTHOR

Shreetama Ghosh

Shreetama Ghosh is a fourth-year law student at the Rajiv Gandhi National University of Law, Punjab. A typical Bengali at heart, she is a creative mind-hiker in the land of knowledge, and enjoys living in the world of alphabets and punctuations. She has been a part of several editorial boards since school, and being a Grammar Nazi has helped in the selection process. Other than writing, movies, travelling and cuisines fascinate her as much as the ever-changing fashion does. It is, thus, her passion to blog, whether about a breaking news, a movie she hopes everyone gets to watch, the quietest place on earth, or even the homely taste of authentic Bengali cuisine.