The rise of blockchain technology and how Intellectual Property Law could benefit from it

09 Jul 2019

The word ‘blockchain’ has garnered a lot of attention over the last few years, with some labelling it as an elaborate scam, while other opportunists made millions during the initial Bitcoin “storm”. Initially, the distrust of this emerging technology mostly stemmed from a lack of regulation, which in turn opened the door for scams or market manipulation. The world stance has changed since then, for the better some would say. Many banks, entrepreneurs and technology experts have identified that ‘blockchain’ technology has the potential to revolutionize and transform business processes. Furthermore, blockchain has been identified as an emerging technology that plays a pivotal role in the Fourth Industrial Revolution, which has been characterized as an era where technology is becoming increasingly more incorporated into our daily lives. So, what exactly is blockchain technology?

Blockchain technology has been described as a clever way to get various individuals to create a single common digital ledger distributed across different systems that can be programmed to record transactions of any form. Prior to this technology, one had to rely on a trustee (e.g. a bank) to maintain a ledger that documents all of these transactions. This service could incur various costs and there is no real guarantee that the trustee will not manipulate these transactions. The benefit of a distributed ledger system can be easily explained and contrasted with a trustee-based system by using banking as an example. Traditionally, the transfer of money by a first party to a second party would first have had to be confirmed and finalized by a third party ( the bank) before it would reflect in the second party’s account. An alternative to such a payment system would be to use a public blockchain, which no longer requires a third party.  Instead a peer-to-peer electronic cash system is used. A common fear is that such a system will allow for hackers to steal or transfer funds from your account to theirs. This problem is avoided by distributing the ledger of each individual throughout the blockchain, which creates a decentralized ledger. Therefore, if one individual were to claim that a payment was not made, his or her ledger would have to agree with each and every copy of the ledger and the majority opinion of these ledgers will show whether the payment was or was not made. Initially, the purpose of blockchain was for simple peer-to-peer transactions, but the ingenious design of this technology has resulted in it finding further applications in supply chain management, medical recordkeeping, government public records, digital voting, real estate and many more.

This then leads to the question: What are the possible applications of blockchain in the world of Intellectual Property (IP)? The decentralized ledger technology offers various possibilities for both IP registration and protection. A simpler example would be in the world of copyright and royalty protection. With the ease of internet access, copyright and ownership laws on music and other multimedia content has become increasingly obscure, with streaming platforms and online service providers often finding themselves in hot water for distributing IP without obtaining the necessary permission from the holder of the copyright. Blockchain offers the technology to protect creators and improve copyright laws. Every digital content download will be noted as a digital transaction in a decentralized ledger, which will ensure that each artist or content creator will obtain their royalty distribution. Another simple example would be one decentralized ledger that contains the records of business transactions in a law practice or any other business. This would simplify the process of collecting information faster and accurately in respect of each individual client.

It is clear from these examples that blockchain has the potential to greatly benefit the field of IP and business. The flexibility and application of this technology in various fields makes it obvious that there are various slices available of the blockchain pie.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Bernard Dippenaar

Dr Bernard Dippenaar is a Candidate Attorney in KISCH IP's Patent Department. QUALIFICATIONS: -BSc Chemical Biology -BSc (Hons) Chemistry -MSc Pharmaceutical Chemistry (cum laude) -PhD Supramolecular Chemistry EXPERIENCE Postdoctoral Fellowship... Read more about Bernard Dippenaar


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