IP infringement costs the average company almost $102 million in revenue per year, and that number is only increasing with time. Luckily, blockchain technology might be able to provide some much-needed relief. Here are my thoughts on the potential applications of blockchain when applied to the IP space, and how the technology could enhance IP protections in the digital age.
The age of the internet has presented many challenges for intellectual property law. Most notable is the fact that digital products and content can be copied with extreme ease, and can instantly be shared across the entire world. This lack of obstacles to replication means intellectual property owners can lose control of their creations virtually overnight. Software piracy is a perfect example of the loss of revenue that can result from unauthorized copying.
In 2015 alone, it’s estimated that $9 billion in unlicensed software was installed on computers in the United States.
IP owners also suffer from the fact that the systems for enforcing their rights online are badly outdated. The main law governing online intellectual property is the Digital Millennium Copyright Act, or DMCA for short. This act, which was written in 1998, gives IP owners a simple method for calling on sites to take down individual files that infringe on their rights.
The first hurdle that blockchain technology can help with is proving ownership rights.
This makes them an ideal solution for proving when a given piece of work was first created and used. Such a system could eliminate doubts about who created a piece of IP, making it easier for creators to enforce their rights when instances of infringement occur.
This aspect of blockchain in the intellectual property space is of critical importance, since it could solve the problem of easy and cheap replication of content mentioned above.
Blockchain technology could also streamline the process of registering for formal IP rights, as in the case of patents. A decentralized registration system, if implemented properly, could allow for fast and accurate verification of a person or company’s right to a given piece of intellectual property. As a result, excessive wait times for patents and trademarks could be reduced, and businesses would find themselves more able to innovate quickly.
Finally, I think it’s important to consider how smart contracts could play a role in IP enforcement. While basic blockchain ledgers can be used to establish IP rights and monitor for instances of infringement, smart contracts can play a much more active role in enforcing licensing agreements. Smart contracts allow creators to set their own licensing terms and ensure that they are being carried out. Another benefit of smart contracts is that they can be used to license content directly to end users, thus cutting out middlemen and creating fewer opportunities for infringement.
Although blockchain isn’t a ‘be-all and end-all’ for the world’s IP problems, it is a technology with a great deal of potential to disrupt the IP space.