BLOCKCHAIN & IPR

A Breakthrough Collaboration

ADV. SAKSHI SHAIRWAL

Saransh Awasthi

Overview
Law and technology are complementary to each other in the sense that, when a new technology is
developed the law ensures the protection of it as an intellectual property (IP) asset similarly, at the time
the law needs to be adaptable to the technology in order to get supplementary leverage.

Intellectual Property Rights (IPR) have grown to a prominence where people are more aware of their
artistic rights. With emergence of new technologies and rising threat to the IP rights, the industry is
witnessing the need for technology to devise proper protection of IP rights. These concerns are not limited
only to the enforcement of the rights but also IP asset management is an equally challenging issue. Latest
technologies need to be utilized to strengthen the whole IP regime and a fresh look in the current digital
work is needed.

With the growing popularity of Blockchain technology with cryptocurrency, the world is intrigued about
the unexplored potential of the technology in various industries. Features like decentralized network,
Secure information and transparency makes it more advantageous over other technologies.

This article will help in understanding various unexplored possibilities of Blockchain technologies in the
field of IPR Laws.

Introduction

Blockchain technology is a decentralized, peer-to-peer (P2P) network based public digital ledger system.
This digital ledger system is a type of Distributed Ledger Technology (DLT) which is maintained by the
participants themselves and is immune of third-party intervention. The technology is immutable as the
technology involves storage of information in encrypted blocks made up of codes, which are
independently time-stamped and contained individual transactional data. These blocks are linked using
hash pointers to form a chain i.e. a blockchain.
The ledger is maintained by the network participants i.e. nodes in a decentralized manner. It makes it
tamperproof where any change or any subsequent transaction is not possible without the consensus of
these participants.
Functioning
Blockchain offers multi-dimensional utility as it can store any kind of data such as- transactional
information, multimedia data, design data and so forth. The data, being most vulnerable to cyber attack,
can be protected through the blockchain system which makes it virtually unalterable.
The transaction of an information between the user and the recipient is generally secured through a
principal algorithm:
1. User or the originator and the recipient is assigned a pair of cryptographic keys
2. User sends the encrypted information to the recipient
3. The transaction between the user and the recipient is broadcast to a decentralized P2P network i.e.
nodes.
4. Miners in the network i.e. who maintains and validate the record of the transaction through
blockchain, creates a new stamped block which will be a proof of work.
5. New blocks are added to the blockchain and a cryptographic signature is assigned to each block
so as to ensure that no alteration of records can be done.

The information can be accessed by any participant of the network. The Blockchain network is mainly of
two types – A Public Blockchain and A Private Blockchain.

In a Public Blockchain is an open network that can be accessed by anybody for public broadcasting and
transparency of the transaction whereas, on other hand in Private Blockchain, only those who has the
permission can access the information. The Private blockchain is preferred mostly by regulated entities
which controls the access to certain invited participants only.

Scope in IPR Laws

IP rights are generally administered by Governments or their subordinate IP repository offices. These
systems have their inherent physical limitations which oftentimes lacks the capacity to protect those
rights. The issues of piracy of copyrighted works are a serious concern amidst the advent of internet
sharing techniques and as the market gets more concentrated and globalized, the issue will certainly
become more vulnerable to treat and would require more feasible and reliable alternative. In the same
context, Blockchain technology offers some untouched possibilities:
1. IP Registration
Across the globe, IP registers are either maintained in papers or on computers. These records have
evidentiary value in court of law, it also contains subsequent transactions of these IP rights. The IP
records are being registered at different IP repositories remotely, there is a high chance of the
information not being in sync. In such a situation, constant revision of the information poses a big
challenge.
The DLT-based technology offers these repositories to develop an all-inclusive register for all IP
assets, right from the date of its registration. This will benefit especially the copyright authors to
corroborate their original authorship. In trademark laws, blockchain system will be extremely useful
in the revocation claims for non-use. This will not only help in identifying the rightful proprietor or
author but also in execution of royalties on assignments or on transfer of copyrights could be awarded
in real and this will certainly minimize the number of litigations.
 Even in auditing, assignments and licensing, mergers and acquisitions, this system could be very
useful.
2. Anti-Counterfeiting & Ledger Maintenance
In times of rapid technological advancement and the generation of E-Contracts or Smart Contracts,
the onus subsequently increases on the authorities to conform with the technology and ensure
improved and traceable transaction. Chain of Supply or chain of custody is a process through record
of every transaction is carried but unfortunately, this process creates opportunity for corruption.
Through blockchain, these transaction via e-contracts can be recorded at each stage of the chain
which would be useful for detecting counterfeit goods by custom authorities thereby preventing their
entry in domestic market.
3. Trade Secret
Increasing common business especially Small and Medium industry is a constant concern as to
protect their inventions as trade secrets. These trade secrets are stored as proof on a private
blockchain platform system where the information is encrypted which means the information will be
shared yet be secured from any third-party infringement.
4. World Intellectual Property Offices (WIPO)
WIPO was created to promote and protect intellectual property across the world by cooperating with
countries as well as international organizations and to connect IP Laws system through uniform
standards and infrastructure throughout the world.
Blockchain provides a framework to create a shared platform through an autonomous organization
creating a borderless online cooperation where various parties can report their compliance to the
appropriate authority in an automatic manner eventually creating a uniform structure across the
globe.
Currently with 193 signatories, WIPO administers 26(twenty-six) treaties which deals with various IP
issues under which certain protectionary provisions such as Patent Prosecution Highway (PPH)
scheme requires cooperation with other IP offices during the prosecution process. Though the
information of certain IP assets is in public domain yet the mining and compilation of such
information is oftentimes difficult. Nevertheless, the blockchain technology makes it a much easier
process by giving a singular platform for broadcasting especially the departments such as
International Searching Authority, International Preliminary Examining Authority or Receiving
Office would be more benefitted to track already registered patents, trademarks or copyright.

Legal Developments & Implications

Worldwide
The enforcement agencies like, police, custom and excise or societies through the unique feature of
virtually unalterable, the information can be used to settle several IP disputes.
France became the first country to regulate the recording and securities transaction on a blockchain
system. In April 2016, the French government ordered to legislate rules regarding “mini-bonds”. The
order, for the first time, defined blockchain as – “a shared electronic storage device” or “a shared
electronic recording system allowing for authentication.”
In 2018, a court in Hangzhou (China) recognized Blockchain based evidence for the first time and
immediately after this decision in 2019, The Apex court of China affirms the use of evidences stored and
verified on blockchain platforms.
India
In Indian, although there is no dedicated law or guideline that could governs the use and operation of
blockchain. Over the time, as the technology use is increasing the government has a positive approach
towards its implementation.
The Indian IT Act, 2000 provides legal recognition and protection for transactions through electronic
communication and contains provisions for the prevention of unauthorized and unlawful use of computer
system. And since the amendment of the Indian Evidence Act, through 65A the legal significance of e-
contracts or the smart contracts has attained more prominence making it admissible as an evidence in the
court of law.
Former Finance Minister Arun Jaitley in his Union Budget Speech of 2018 said that India will explore the
use of blockchain technology proactively to help promote the digital economy. In pursuance to this
objective, NITI Aayog, the Indian think tank has recently come up with some proactive suggestions and
innovations including an indigenous blockchain initiative- IndiaChain. A discussion paper was even
published by the NITI Aayog to strategize the implementation of a decentralized data marketplace which
will be based on the blockchain technology.
In addition, apart from all Governmental proactive steps towards the development of the Blockchain
technology, a few other organizations are also working for the advancement and growth of the
technology. NASSCOM, FICCI are some examples of such associations.

Potential Hurdles
The major hurdle, inter alia, is the high cost of whole system. The widespread use of blockchain requires
high energy consumption and with continuous operation the efficiency of the hardware tends to get low so
this requires regular upgradation of the network which becomes extensively costly.
Another significant challenge with the blockchain technology would be recognition in the books of law,
although there are constant developments are going on in the world for the adoption of blockchain in
different legislations.
Some other challenges are namely - compatibility and standards, privacy concerns and public confidence
in technology and participants and so forth.

Real Life Developments

 Non-Fungible Token
Non-fungible token or NFT, first used by CryptoKitties, is a digital instrument containing unique
characteristics. These tokens can be compared with an Aeroplan ticket, although superficially, all
tickets look the same but each ticket contains some unique information which helps to differentiate
one particular ticket from other. Similarly, each NFT has a unique digital identity which can be used
to represent unique property on a blockchain.

 Ethereum
Ethereum is decentralized blockchain platform which provides various blockchain services including
– smart contract functions. It even provides other application the blockchain system for storage on the
wide network.

 OpenRepository
Open Repository is a web-based repository system through which the users can upload files and
metadata, create author profile or browse through the searches that would help the owners to identify
already patented creations.
 OpenLaw.io
It is a digital contracting platform for lawyers, based on the blockchain technology, it helps in
creating and executing of legal agreements. Through OpenLaw, any agreement can be secured
digitally through digital signature and all transactional work will be recorded automatically
leveraging the scope of smart contracts in the legal scenario.

 E-Print Archive (by IIS)

E-print archive initiative is an online digital repository for research papers, technical reports,
unpublished findings etc. E-print@IIS is now part of the worldwide institutional e-print archive. It is
integrated with Greenstone Digital Library software, which enables full-text search of the e-prints.

 Discogs
Discogs is a website and a DRT-based database for information about music recordings. The creator
can upload key, tempo and other musical metadata on this platform. It provides a platform for the
users to buy and sell music in the Marketplace and ensure a DLT-based transaction of rights and
royalty.

Conclusion
A sound IP system requires strong, traceable, immutable and verifiable records of IP rights. In the present
world of globalization where the world is coming closure through internet the need to strengthen the IP
regime increases subsequently. Blockchain is one such revolutionizing technology which would be useful
in delivering better protection to the intellectual property. From the above study, it becomes evident that
blockchain has immense potential to cater the contemporary needs of IP offices across the globe.
Ensuring faster search results, tamperproof record management the technology would aid in proper
prosecution, enforcement of IP rights and minimizing IP disputes.
In spite of the enormous potential of Blockchain technology certain limitations demotivates the
implementation of the technology in regular working system. It has been debated that these shortcomings
can be rectified overtime with new technological development but that should not hinder the applicability
of such revolutionary technology. These challenges need to be addressed effectively in order to avail
unreckoned benefits of the blockchain technology.

For further information on this topic please contact Advocate Sakshi Shairwal by email at
[email protected]
The website of Sakshar Law Associates can be accessed at saksharlawassociates.com