How Blockchain Technology Can Help in Protecting Property
Digital protection of property has been a major issue recently. Luckily, blockchain technology is here as a solution.
Why Blockchain Technology?
Blockchain technology’s rapid emergence and growth have led to a significant interest in this field. That has resulted in significant investment in businesses involved in this space and widespread engagement from financial institutions and other industrial sectors. Due to the increasing number of people working in this area, the development of proof-of-concept and live deployments of blockchain technologies has also been significantly escalated.
The immutable nature of blockchain allows people to maintain their ownership of assets and ensure that their creations can never be tampered with by anyone. That is very important for intellectual property owners as it prevents unauthorized persons from claiming ownership. Through smart contracts built on blockchain technology, users can also obtain licenses and royalties.
Protection Property Using Blockchain Technology
Blockchain technology comes in handy for property protection, especially in this internet era where most information is stored online. In addition, transactions, communications, and advertisements are also majorly done in the same way. Here are some of the ways blockchain technology can help in protecting property;
Proof of Creation
One of the most challenging issues in intellectual property protection is proving copyright ownership. According to law, the creator of intellectual property owns the copyright after its creation. However, in some instances, the parties cannot confirm that the original creator of an IP was the one who created it. Moreover, intellectual property transfers do not require government registration for effectiveness.
Blockchain technology allows intellectual property creators to store their works in a secure and cost-effective distributed ledger. That eliminates traditional services and allows them to focus on their core business.
The information stored on the blockchain is secure, and all the involved parties have access. That ensures that it is reliable and all the parties can use the information as they wish. Blockchain also allows the issuance of a digital authenticity certificate with timestamps available for any parties who want to track the property.
Creating IP Marketplaces
One of the biggest issues businesses face regarding intellectual property is selling this property. The process is often expensive, complicated, and has a high entry threshold. For example, even if a person has the right amount of money and their products’ quality is high enough for a brand, says Audi, they can’t use their logo without their permission.
It is also common practice to package intellectual property rights in one package. For instance, if a person wants to make hats with the Audi logo, they have to buy the right to use it on different clothing and hats. Usually, this license is costly and can be very challenging for many entrepreneurs to profit from.
Blockchain technology comes in handy in creating NFT licenses to solve this issue. The IP owner can divide these rights into hundreds of categories, such as caps, hats, and other accessories, with each separate NFT license for each type of product. It’s also possible for buyers of these licenses to have the right to sell them if they change their minds about using them.
Licenses for the right to use certain IP objects make the process incredibly cheap and fast. This approach also increases market liquidity by lowering the entry threshold and increasing the number of people buying it. For instance, if a company wants to use a specific logo on a product, it can easily purchase just that one NFT license.
Record Keeping and Tracking
Property is often faced with record keeping and there is usually a long tracking duration to find the ownership chain, down to the original one. This issue not only pertains to music, images, and photos but also includes products such as bags, shoes, and T-shirts.
For example, fraudsters often use designer solutions and logos from well-known brands to create counterfeit products. Customers often find it hard to distinguish between real and fake products; hence, they may make purchases from frauds.
Blockchain allows recording data about the product’s origin and the product’s creators. Since blockchain is secure and has a structured data system, customers can easily identify and track the origin and authenticity of IP. The various industries that come in handy are the real estate industry, the fashion industry, and the manufacturing industry.
Privacy Protection
There are many cases where an individual or company wants to hide certain details about themselves or their work. However, they do not want to violate anonymity to ensure that the information is authentic. In most cases, third parties can help resolve this issue by providing access to private information and grant to anyone interested that it is authentic.
Most companies still have no 100% protection against data leaks and hacks, even if they spend hundreds of millions of dollars annually on cybersecurity.
The use of blockchain technology can help solve this issue by protecting the identities of users and parties involved in transactions. It can also hide the IP of individuals who sign a non-disclosure agreement before completing test assignments and want to protect copyright before content disclosure.
Managing Copyright
Usually, other people can use uploaded content on the internet without the owner’s permission, sometimes even for commercial purposes. Copyright owners are typically reluctant to claim theirs due to how hard it is to prove their authenticity. Furthermore, you’ll find that only the wealthiest individuals can hire a third party to manage and protect their intellectual property.
The use of blockchain technology eliminates the need for third parties and allows users to manage their IP without having to deal with the complexity of managing it. It can also automate the tracking and fulfillment of predefined actions.
Cost-effective Licensing Fees
The complexity of license fees is a common issue in the IP market. These payments require a complex infrastructure that can track and collect license fees and distribute them to the owners. Since banks process almost all of the costs associated with a transaction, they charge fees. That is typically due to the larger commissions they receive from international transactions.
By implementing blockchain technology, licensing fees can go down by up to 70%. For this, smart contracts are implemented, which can automate the various processes involved in licensing and other fees.
A smart contract is a self-executing algorithm that can automatically perform various actions related to the assigned contract data. Hence, property owners can program smart contracts with predefined conditions and specifications, which makes it easy for anyone to verify the contract independently.
New IP Monetization Model
There are only a few ways people can earn money from intellectual property: subscription, royalty, and paid demonstration. However, the market has changed and now requires more sophisticated monetization models.
Through smart contracts, businesses can automate distributing payments and royalties to artists. For instance, artists can receive a royalty automatically generated and distributed through smart contracts by selling their art.
In addition, developers can use blockchain technology to monetize digital land in video games. Hence, users can earn money from playing games by selling their digital land, which they pay for with taxes. These games also allow players to lend their digital currency to other users.
IP Registration Optimization
When creating an IP product, copyright protects the main rights, such as patents and trademarks. However, other rights, such as industry samples and trademarks, are only protected after registration. This process can be costly and involve lawyers.
The registration process also only grants the copyright to the owner in the country where the IP was registered. That will restrict the market’s liquidity and prevent owners from meeting their needs due to the current economic situation.
Blockchain technology’s registration process for intellectual property (IP) is significantly faster and more reasonable, as it eliminates the need for intermediaries and provides a secure environment for all kinds of business transactions. Its smart contracts allow companies to automate various processes and improve their efficiency. Moreover, blockchain will enable them to collect data from databases several times faster.
The parties can also easily view the copyright chain, including all the licenses and sub-licenses. Hence, very fast and easy to implement.
Secure Transfers
The copyright law provides the copyright owner with many exclusive rights over a protected work. These rights include the right to reproduce, copy, distribute, and perform the work. Due to the nature of the rights, they are often referred to as “bundles of rights.” A right holder can transfer the copyright in its entirety and one or more of its exclusive rights if desired.
Meanwhile, multiple people can also own exclusive rights to a work, which they can acquire through different quotes. However, since multiple copyrights are involved, the transfer gets even more complicated.
With blockchain, these people can transfer rights through smart contracts between users. These right holders can set the terms and price of the rights before the user gets them, eliminating the need for negotiation. Doing so saves money and allows users to get the rights without negotiating. In addition, it is easy to track each right owner if need be.
Unifying Global Patent/IP System
A blockchain-based platform would allow companies to unify their intellectual property (IP) management and improve the efficiency of their operations by allowing them to distribute information across various jurisdictions. That could also help speed up the innovation process and improve the effectiveness of their marketing and sales efforts.
Technological advancements have been increasing in the past few years. As a result, many jurisdictions and legislations are now recognizing blockchain as a permissible proof of evidence. For example, in India, Section 65B of the Indian Evidence Act provides that the authorities have the power to prevent electronic records from being lost or stolen. That is very important in the context of transactions involving blockchain technology.
In another government, Arizona, House Bill 2417 provides that certain electronic transactions, such as those involving blockchain records, can be considered legal. The government also passed similar legislation in Ohio in 2018.
Applications of Blockchain in Protecting Property
A16z
A16z is Andreessen Horowitz’s crypto arm and is seeking to release a free licensing system that aims to help NFT owners to reach their economic potential. This platform seeks to increase the legal claim behind the ever-growing NFT sector by allowing users to have Lawyer vetted array of free licensing options for their assets.
Such a solution would work well with the property that has been encrypted in form of NFTs. That means it would officially be recognized as yours in a court of law as there is a legal claim attached to it through the license.
Bernstein
Bernstein, a startup in Munich, offers a blockchain solution that allows companies and individuals to deposit their intellectual property (IP) and obtain an authentication certificate. They can also make the data they collect private, such as the creator’s time and content. Through their unique cryptography protocols, Bernstein can protect the confidentiality of their confidential information.
Filecoin and NiceHash
NiceHash and Filecoin are blockchain platforms that help protect your IP address. Other blockchain platforms such as Dash, Zcash, and Mina can help keep your transactions private. If you need a secure and reliable way to manage your personal information, use Blockstack, BlockVerify, Bitnation, or BlockAuth.
Kodak
Through a blockchain solution designed to automate the management of documents and protect intellectual property, Kodak has created a platform that enables people to manage their content. It allows them to manage their distribution channels and prevent unauthorized access.
Mycelia Project
The Mycelia project provides a comprehensive digital identity platform for music makers. Its Creative Passport is a secure platform for music publishers, labels, and business partners to manage their various profiles and payment mechanisms. It aims to establish a standard for music makers and a central hub for all music-related.
Creative Passport also enables creative professionals to pay for their services easily and quickly. In addition, it allows them to connect with their customers and create new business opportunities.
What the Future Looks Like for Blockchain and Property Protection
Although blockchain technology can potentially support various ideas and businesses, it will take time to fully develop and implement it in other industries. For instance, it was relatively easy to adopt blockchain for cryptocurrencies. However, it is not easy to implement the same in the property industry that has already proven to be quite challenging with a slower technological adoption rate.
When the IP industry adopts blockchain technology in full swing, it could even be more successful than the finance industry. Currently, the main challenge in the industry is coming up with the right adoption path for the technology.
Final Note
The potential of blockchain technology to transform the property industry is immense. It enables various parties, such as content producers, distributors, and end-users, to benefit from its decentralized and safe intellectual property storage and exchange. Businesses can also reduce their transaction fees, improve the efficiency of their operations, and solve various financial problems related to the traditional market.
