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The Use of Blockchain in Intellectual Property Management

Josh Conley \ March 22, 2018

Blockchain technology is having a bit of a moment right now. With the ups and downs of the volatile Bitcoin market frequently making the news, people are more aware of cryptocurrency than ever before. However, Bitcoin and other cryptocurrencies are just one application among many potential uses of Blockchain technology.

So what is blockchain technology? Essentially, a blockchain is a public record of transactions that are added chronologically. Each block contains the transaction data, as well as bits of data from the previous block and a timestamp. In order to create a record of a transaction, the transaction must be verified by other computers on the network. Once the network reaches a consensus as to the validity of the transaction, numerous transactions are aggregated into a block which is then added to the chain. Thus, each block provides a tamper-proof, publicly available record of each transaction and exactly when it occurred.

For cryptocurrency such as Bitcoin, blockchain is essential. Without the ability to track the exchange of digital currency, there would be no way to prevent people from infinitely copying the coins and destroying their value. By creating a decentralized and immutable record of each transaction, however, blockchain verifies that every transaction using digital currency is authentic. These fraud-eliminating benefits can also extend to intellectual property management.

Proof of Ownership

One problem existing with copyrights is that many countries, including the United States, do not require registration; instead, rights attach automatically upon creation of the work. However, it can be difficult for the copyright owner to prove that they are the owner of their work and when exactly that work was created. Blockchain technology solves this problem by creating immutable, time-stamped evidence of ownership. Additionally, it can be difficult for trademark owners to prove when they first began using the mark in commerce. Blockchain technology could provide a time-stamped database that would be capable of providing proof of origin of the mark, when the mark was first used, and who owns the mark.

Another problem with existing registries is the lack of certainty regarding the current owner of the intellectual property. While proper registration is required for enforcement against third parties, transfers of intellectual property don’t require government registration to be effective. For example, an author who registered their work with the Copyright Office could assign that work to a first party without recording the assignment. That author could later execute an agreement to assign the work to a second party, and the second party would believe that the author was the owner of the copyright because the Copyright Office wouldn’t show the first assignment. This is a problem because at the time of the second transaction, the author had no ownership rights in the work, and the second party would have no rights in the work they believed they were purchasing.

The use of a blockchain database would eliminate this problem by creating an unalterable record of each transaction involving intellectual property. This record would show the original owner as well as the complete chain of ownership of the work, ideally showing any licenses as well as assignments. This type of database would provide a digital certificate of authenticity, which would allow third parties to access proof of the legitimacy and ownership of any particular piece of intellectual property.

Monitoring Intellectual Property

Blockchain technology can also be used to help intellectual property owners discover potential infringers. Because of the size of the Internet, it can be extremely difficult for an author or inventor to discover unauthorized uses of their intellectual property. For example, a photographer who uploads their works online faces the impossible task of maintaining control of those works.

Blockchain registries such as Binded provide a solution to this problem. Binded provides photographers with a platform to upload their images to a private copyright vault. Once uploaded, the service creates a unique fingerprint for each image that is saved to the blockchain in order to verify ownership of that image. The service then screens for similar images and alerts the owner.

It is important to remember, however, that blockchain cannot actually enforce intellectual property rights. While discovery of infringing works and proof of ownership are two major components of proving copyright infringement, the actual enforcement of copyright will still rely on legal processes.

Smart Contracts and Licensing

One of the most useful applications of blockchain technology comes in the form of smart contracts. A smart contract is essentially a program that has the ability to execute and enforce a contract by itself. The parties agree on the terms of the contract, and then the blockchain network either automatically performs the contract or verifies that performance has occurred. Among many other uses, these smart contracts can be used in the licensing of intellectual property.

For example, smart contracts could be used in copyright licenses to automatically enforce payment and termination dates, as well as geographic exclusivity provisions and sublicensing prohibitions. Because the smart contract is enforced by the blockchain network, the parties don’t have to waste their time monitoring each other for compliance. The efficiency and reduced transaction costs of smart contracts would decrease the costs of licensing, which would prompt more parties to use licensing rather than efficient infringement, in turn increasing the amount that the licensor would actually receive.


While the use of blockchain is growing exponentially, widespread use of the technology for intellectual property rights is still in its infancy. It is uncertain whether the United States, and other international legal systems, would adopt blockchain as a method of proving ownership and validity. It is also unclear whether courts would accept blockchain as a form of indisputable evidence in an action to enforce intellectual property rights. There are drawbacks to using Blockchain, as verification uses a massive amount of processing power, which also means that transactions cannot be immediately added to the chain. It is clear that blockchain technology is poised to replace outdated and inefficient processes, and the growth of blockchain will continue to intensify in the future.

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