Cryptocurrency has been in the news quite a bit. Many consumers are still unfamiliar with it, but governments, banks and lawyers are taking notice. Additionally, a related technology known as blockchain is becoming more prevalent.
In fact, it’s this second technology that’s capturing the imagination of intellectual property lawyers across the globe. The possibility to harness this technology to protect IP rights is intriguing, and this is why more IP attorneys and their clients need to be knowledgeable about these technologies.
What is Cryptocurrency?
Cryptocurrencies are essentially digital money, which was developed in a white paper called “A Peer-to-Peer Electronic Cash System.”
Central to the invention was the concept of decentralization. Traditional financial transactions involve a central server, perhaps at a financial institution. The server tracks transactions to eliminate errors. Parties to a transaction check with the central server to ensure accuracy. If any party or the central authority disagrees about any part of the transaction, then everything is out of balance.
Cryptocurrencies eliminate this need for a centralized authority. Instead, this system uses a distributed ledger, which is called blockchain.
What Is a Blockchain?
Cryptocurrencies like Bitcoin use this technology as a digital ledger. Principally, it’s used to create records of transactions. Each transaction is shared and verified via a peer-to-peer network. Accordingly, these distributed ledgers forge a transparent record that multiple parties access for verification. No single party has the power to change any entries in the ledger after the transaction is complete.
In the terminology, each transaction is called a “block.” Once each participant in the node has verified their piece of the puzzle, the block is complete, which makes it a part of the ledger, which also may be referred to as a “chain.”
What Do These Technologies Mean to IP?
People who spend the majority of their careers pursuing and protecting IP will soon see how this distributed ledger technology may be applied to rights like patents, trademarks and copyrights. These technologies generate a time-stamped, transparent record of transactions, making it incredibly easy to determine things like first use dates for trademarks and licensing agreements for patents.
In fact, distributed ledger technology may help manufacturers to prevent gray market and counterfeit goods from being distributed. Agencies like U.S. Customs can use the database to determine whether or not a certain shipment of goods is legitimate. The transparency of the database may make it easier to track down where those counterfeit goods are coming from too.
The Future of Intellectual Property
It is not too much of a stretch of the imagination to picture a day in the not-too-distant future when brands and inventors will insist on having “smart” IP rights. Such a ledger could quickly clarify misunderstandings and disputes as well as provide a helpful reference point for owners who need to understand their rights at a glance.
It may be that patent and trademark offices around the world also will adopt distributed ledger technology. This would make it far easier to track the scope and status of IP rights within a jurisdiction. With an unchangeable record of events, it will be easier to determine licensing rights, expiration dates and more.
One platform, known as Loci, is already revolutionizing the world for inventors. This service provides a place where inventors can use a search tool to learn more about IP as well as find inspiration. Perhaps of most interest to inventors, this platform offers an alternative to the traditional route of obtaining a patent. It relies on crowdsourcing and democratization to stimulate innovation without getting tangled up in international laws.
The world is still years away from doing away with patents and other proprietary IP, if it ever happens. This means that working with an experienced IP attorney is still a necessity. Establishing a relationship now is the best way to ensure that brands are able to take advantage of emerging technology like distributed ledgers.
Author: Jeff Williams
Jeff Williams is an experienced mechanical engineer and lawyer that consults closely with clients in a straightforward and clear manner. He brings a particular set of strengths and unique perspectives to the firm Texas Patent Attorney.
Jeff received a B.S. in Mechanical Engineering from Arizona State University in 2005. He was an engineer for a number of years at a number of large corporations before pursuing his law degree. He graduated from Texas A&M University School of Law (formerly Texas Wesleyan University School of Law) with a J.D. in 2010. By combining his education and prior work experience into the field of intellectual property law, Jeff has developed key skills to fully assist clients.
