The Blockchain Task Force of the Emerging Issues—New Emerging Issues Subcommittee was recently charged with examining the potential relevance of blockchain technology in trademark practice. One member of the Task Force, Bennett Collen (Cognate, USA), had already begun exploring this question in depth through his company, which seeks to leverage blockchain technology to provide trademark owners with a secure means of documenting proof of first and continuous use. From there, the Task Force sought other potential avenues of utilizing the technology, and through research regarding the development of microcomputers, recognized the potential of utilizing blockchain technology in anticounterfeiting efforts. This article provides a brief introduction to blockchain technologyand summarizes the Task Force’s conclusions regarding these two potential avenues for use of that technology by trademark owners and practitioners.
What Is Blockchain?
A blockchain is a decentralized digital ledger of transactions that combines powerful cryptography algorithms with a system of decentralized computing power. In other words, instead of having a single party keep a record of all of the transactions that happen within a given system, a blockchain shares the task of recording those transactions among the people making them, and the underlying technology verifies that all users are keeping matching records.
This causes a blockchain ledger, and all transactions recorded within it, to be public, timestamped, and tamper proof. A hacker would have to control more than half the network’s computing capacity to change any record in a given block, and because blockchain records are comprehensive (i.e., they contain a record of every transaction that has happened in the history of that particular blockchain), the more records added to a blockchain ledger, the more secure it becomes.
The technology came to prominence as the backbone to cryptocurrencies such as Bitcoin and Ether, but has expanded beyond cryptocurrencies into other more tangible applications.
How Will Blockchain Affect Trademarks?
The Blockchain Task Force has found that there seem to be at least two immediately applicable uses for the technology (as well as many more potential future uses). The two immediately applicable use cases are:
Benefits of Blockchain-Based Records
- Creating blockchain-based records as a more secure and trustworthy recordkeeping system to prove trademark use; and
- Proving the provenance and legitimacy of goods in anticounterfeiting efforts.
Benefits for Anticounterfeiting Efforts
- There is unequivocal evidence of use in case of infringement.
- Immutable timestamps—timestamps cannot be altered by any party—associated with proof of first use, filing date, registration date, etc., remove any question as to source/veracity/time of specimen creation and lock in a highly credible date on which that information was captured.
- Use of registered and unregistered trademarks can be recorded on the same distributed ledger, creating a comprehensive picture of all trademarks in use and the extent of use in a particular jurisdiction.
- Records can be made for trademark use in any jurisdiction.
- Blockchain can be used to build comprehensive, unequivocal timelines of trademark use and rights.
- Records are quick to obtain and always accessible (they cannot be destroyed).
- They save time and money in discovery.
- Blockchain may lessen the number of issues an infringer or other party will be able to challenge regarding use documentation because blockchain is secure and immune to alteration.
- A blockchain protocol can ensure that all relevant data has been recorded, eliminating the incomplete recordkeeping that plagues many informal, or even formal, recordkeeping systems.
- Assignments, chain of ownership, and sales of trademark rights are more secure.
- “Smart contracts” (which are not contracts per se, but self-enforcing computer code that exists on a blockchain ledger) can be used to transact with blockchain.
- Evidence of rights in Uniform Domain-Name Dispute-Resolution (UDRP) Policy and other domain name‒related disputes (possibility to redesign the WHOIS system to be compliant with the European Union’s General Data Protection Regulation (GDPR)) are more readily available.
- If used in conjunction with other technologies, such as radio-frequency identification (RFID) chips, near-field communication (NFC) chips, QR codes (Quick Response Codes), or microcomputers, legitimacy and provenance of goods can be tracked via blockchain by consumers or customs agents.
- Blockchain facilitates supply chain coordination between manufacturers, shippers, middlemen, and delivery, ensuring only legitimate goods enter the supply chain and are delivered to consumers.
- Customs authorities can reference supply chain blockchain to validate legitimate goods or identify counterfeit goods.
Significant efforts are already underway to use blockchain for both of the use cases stated above. For example, the European Union Intellectual Property Office (EUIPO) recently hosted a “Blockathon” (blockchain + hackathon) “to explore how blockchain technology can actually make a difference and lead to a better society,” specifically with an eye towards creating “the next level of anti-counterfeiting infrastructure, by working directly with manufacturers, logistics companies, customs, retailers and consumers.” The EUIPO handed out over EUR 100,000 in prizes to the winning teams, with the goal of having working prototypes within 100 days.
Although other potential uses cannot be discarded, the Task Force identified two immediately applicable uses of blockchain in the trademark field: (1) as a secure recordkeeping system to prove trademark use; and (2) to prove the provenance and legitimacy of goods in anticounterfeiting efforts).
Because blockchain is, by nature, a timestamped, tamperproof, and self-enforcing technology, it can help to solve many trademark issues, such as bringing legitimacy to the filing of specimens for goods with patent and trademark offices around the world. The Task Force plans to join forces with the subcommittee studying specimen legitimacy across jurisdictions to explore whether applicability of blockchain can also be of aid in this matter. Other uses might also involve registration of certifications marks or collective marks. The endless advantages of blockchain may indeed trigger exploration of its applicability in other IP areas, such as copyright, patents, and design rights.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.
© 2018 International Trademark Association