How Blockchain Technology is Changing the Trademark Space
What are blockchain technologies?
For starters, the aim of the technology is to act as an alternative to any mainstream way of doing most things. Blockchain technologies are shared databases that record and store information about transactions on ledger type de-centralized computer platforms. The database entries are time stamped and authenticated. What this means is that a record of the date, time and other relevant transactional information of each activity is created whenever a data entry is made on the block. Each chain is formed by verification and ‘clearing’ of the previous block – to produce a ‘blockchain’. This also means that no other block can be formed along the chain without the information being verified by the previous block. The cryptocurrency bitcoin is the most common form of technology associated with blockchain. Created by use of the underlying blockchain technology, it is reported that 25 million persons worldwide used bitcoins for online transactions in 2018. The other major form of blockchain related program is Ethereum. This allows a range of different transactions to be done on the platform by using smart contract technologies. Intermediaries such as banks, tax offices, or money remittance services are usually used to complete transactions such as paying bills, real estate fees, or to collect money transfers. Smart contracts are designed to get rid of intermediaries and to execute the entire transaction via the technology. These are self-executing programs on the blockchain that carry out specific tasks, such as the transfer of property (such as land, money or a trademark interest) if certain conditions are met. Of course, for the smart contract to work, each party must agree to the conditions of the agreement.
Global uses of Blockchain distributed ledger technologies in trademark law
Trademark Registration and Record Keeping
There are now blockchain businesses that can register and protect trademarks on their platforms. This is a ground-breaking venture in the IP space and is available for as little as $15. These services include the actual registration of trademarks and providing evidence of proof of use by keeping records of transactions. If this alternative platform becomes mainstream, it is set to compete with traditional trademark services offered by IP Offices, lawyers and trademark agents.
Proof of Provenance
Blockchains are used by various industries to verify supply chain transactions. From blockchains set up to prove that diamonds are real, to those created to verify that foods are sourced from fair trade suppliers, the number of blockchains that deal with provenance is growing. The idea is to create an immutable record of a product’s life cycle, from its creation to distribution. What’s the link with trademarks? The technology proves to consumers that the product is authentic and provides some comfort to trademark owners against counterfeit brands.
Blockchains Registered as Trademarks
There is an increasing number of trademark registrations for blockchain technologies. Since August of this year, more than 400 blockchain technologies are either registered or pending trademark registration in Canada, the European Union (EU) trademark registry indicates that over 1000 blockchains are registered as trademarks, and in the U.S the number is over 200. Since breakthroughs in these technologies is happening at a fast pace, it is likely that trademark registrations in this area will increase.
Relationship with Domestic and International IP bodies
Since most blockchain enterprises are private, or semi-private, some form of regulatory system will be needed to ensure that the working of the system is aligned with the public’s interest. The technology offers cost saving solutions to trademark owners – a plus that may appeal to start ups wanting to protect their trademarks, but who are watching how their bottom dollar is spent. However, rules to specify how well blockchains work with domestic and international IP systems should be encouraged in the space. If blockchains that offer trademark services are marketed as alternatives to IP law firms, there is a risk that rightsholders using these platforms will become siloed from IP developments taking place in mainstream settings (such as CIPO, WIPO or the WTO).
Can trademark registrations on blockchain be altered? The technology is often described as immutable, meaning that the information stored on the blockchain cannot be tampered with. However, because most blockchain technologies are still in a developing stage, it is not totally immune from hacks or unwanted interferences. For example, Singapore’s International Commercial Court found a cryptocurrency operator in breach of contract for making changes to a transaction done on a blockchain platform. The incident has potentially significant implications for commerce and law, including IP. If trademark records can be altered on blockchains, the effect on brand values and revenues may be significant.
Smart contracts use in trademark-oriented settings is likely to increase. Because the technology works off pre-set conditions that are programmed as part of specific blocks on the chain, un-expected issues may compromise the security and validity of transactions. What may help? To promote best practices in trademark law’s relationship with blockchain, public-private partnerships may offer a sound solution. There are crucial roles for the WIPO, WTO and CIPO to play in promoting fair principles and standards in trademark-oriented smart contracts.
As blockchain become more popular in the global economy, Canada and other jurisdictions will need to address how trademark law and policy deals with the technology.