IP Protection Through Blockchain: Use Cases in Manufacturing

The rapid advancements in digital technology have introduced many new challenges in data security. Especially in the manufacturing industry, since it is the field that actually makes things. As manufacturers get bound closer together, a single critical failure in the chain can disturb the whole system. If malicious actors manage to lay their hands even on a part of a design, the market will be flooded with counterfeit items. 

Today, blockchain is a technology trustworthy enough to address the challenge and secure the data. It is defined as a decentralized, distributed ledger network that records all changes happening to a digital asset. This system is virtually impossible to tamper with, hack or cheat. 
Blockchain has been a hot topic recently, with many industries exploring it, and new use cases are emerging every day.

Blockchain use cases and applications

Since distributed ledger technology behind blockchain creates a secure, time-stamped, and immutable chain of information, it is already finding applications in brand protection, marketing, and consumer engagement.

It is also used to track the progress of goods in a supply chain, which is important for such industries as pharmaceutical, automotive and luxury, where the traceability of goods is important and counterfeit is unacceptable.

The number of potential areas for large-scale blockchain applications include the government sector (smart contracts can increase the effectiveness of a bureaucracy), data security, law, and copyright infringement prevention. Let’s take a better look at them:

• Blockchain as evidence of IP rights. The technology functions as a ledger, showing who owns what and offers owners a potential reference point for their rights and their use within the market. This is particularly useful in those jurisdictions where proof of creatorship is required. This is what BORIS, our solution, does. 

• Smart contracts and DRM. Some blockchain solutions can hold, execute and monitor contractual agreements, functioning as simple “if…then…” codes. Smart contracts can be used to establish and enforce IP-related documents, such as licenses and allow the transmission of payments in real-time to IP owners. For example, information about IP rights on digital content such as songs, images, designs, or videos can be encoded in digital form as well. The fact that Kodak launches a blockchain-enabled image rights management platform proves that these ideas are becoming mainstream. 

• Anti-counterfeit. Blockchain technology can help with protecting goods as whenever anyone within the supply chain uploads data about a product, it gets stored in the network permanently. And unlike the traditional software-based tracking systems, nobody controls a blockchain-based network. So no crooked quartermaster can tamper with it, making it “lose” a few things from its memory. 

Each piece of information is encrypted individually, meaning that if anyone wants to change anything, they have to convince the rest of the nodes to agree, which is virtually impossible for fraudsters to achieve. 

Many product systems are already employing the technology.

• IP rights management. The technology provides IP offices with the ability to track the entire cycle of a trademark: when it was first applied for, registered, and first used in trade. Applying this method has many benefits, including smoother IP rights audits and faster reaction to all IP-related concerns. 

Manufacturing industries and blockchain developers carry on increasing collaboration to develop better quality service and operability protocols. Various state agencies, like the European Union Intellectual Property Office (EUIPO), are actively researching the possibilities of the technology to further include it in their operations. 

It is now only a matter of time before international law addresses the possibilities of the large-scale legal application of the technology. This will greatly benefit IP law and copyright protection all over the planet, making supply chains more traceable and enabling better quality control over products.