© 2018 Baker & McKenzie LLP Blockchain Revolution? How might this technology affect IP-intensive industries Ruth Burstall and Birgit Clark 12 December 2018
© 2018 Baker & McKenzie LLP
Blockchain Revolution? How might this technology affect IP-intensive industries
Ruth Burstall and Birgit Clark 12 December 2018
Agenda
1 What is blockchain?
2 How can blockchain be applied in IP intensive industries? Some examples
3 Possible applications in the world of IP
4 Who owns blockchain? Implications for contracting
5 Outlook
1 What is blockchain?
Confused by jargon?
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Situation: Amy needs to send money to Bob
Replacing the intermediary
Amy’s BankAmy Bob’s Bank BobTR
AD
ITIO
NA
L
AP
PR
OA
CH
BLO
CK
CH
AIN
AP
PR
OA
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Amy Bob
BLOCKCHAIN
© 2018 Baker & McKenzie LLP
user and recipient wish to conduct
a transaction (i.e. send data,
cryptocurrency, contract, etc.)
cryptographic keys
assigned to User and Recipient
transaction is “broadcast” to
and “verified” by a
decentralised P2P network
(“nodes”); using algorithms
▪ “miners” in the network “validate”
the transaction
▪ creation of a new date stamped
block (“proof of work”)
▪ network balances updated
▪ new block added to the
blockchain
▪ immutable and transparent
record of transaction
▪ cryptographic signature assigned
Transaction complete
U R
How a blockchain transaction works
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Models
A centralised system
Model 1
Current system
An open network that anybody can
access. The digital ledger of
transactions is shared, transparent
and run by all participants
Model 2
Public blockchain
(permissionless)
Model 3
Private blockchain
(permissioned)
The preferred option of most
regulated entities. It is a private
system which controls access to
certain invited participants.
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Use cases
▪ Payments
▪ Reconciliation
▪ Securities
FinancialServices
PharmaCreative services
Public sector
Retail EMI Real Estate
Applications across industries
Nature
▪ Supply chain
▪ Record keeping
▪ Asset management
▪ Digital identity
▪ Compliance
▪ Smart contracts
2 Applications in IP intensive industries
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▪ RFID tags in clothing interact with blockchain
▪ Allowed clothes to ‘tell their own story’ –those scanning tag could access details about the design
▪ Possible application in sustainability messaging, promotions, authenticity checks
▪ RFID / QR Code technology also developing fast
▪ Verify origins and ownership of diamonds
▪ Number on diamond / features of diamond and ownership on a blockchain
10
Industry use cases: examples
Provenance: “Everledger”: Marketing / consumer
engagement: “Babyghost”:
https://www.youtube.com/watch?v=GAdjL-nultI
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▪ Interaction with NFC tags in physical world
▪ If NFC tag is absent, this indicates product is counterfeit.
▪ As NFC interacts with blockchain more difficult for counterfeiters to fake.
▪ Potentially help identification by customs
▪ Benefit of a global solution
▪ Identify where diversions out of legitimate supply chain occur
▪ Trace origin of products for easier enforcement
▪ Discourage tampering
▪ Consumer trust / ensuring repackaging is legitimate
Industry use cases: examples
Anti-counterfeiting: “Qadre” Parallel trade:
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• EU wide system to prevent counterfeit medicines (Rx and some OTC products) entering the legitimate supply chain
• Secure supply chain between manufacturer and end user
• MA holders required to give packs a unique serial number and anti-tamper packaging
• Implementation by February 2019
• Requirement to add unique electronically readable product identifier
• Trace the product through the supply chain and verify authenticity
• Implementation by 2020
Impetus from legislation
Falsified Medicines Directive Drug Supply Chain Security Act
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Blockchain holds the potential to speed up, reduce costs and improve authenticity:
Industry use cases: examples from the healthcare industry
Healthcare
Secure supply chain
Manage patient data
Accelerate R&D
Proactive, personalised healthcare
Improve service delivery
3 Possible applications in IP
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IP Enforcement
Possible applications in IP
Anti-counterfeiting
Supply Chain Tracking
Provenance Authentication
Smart Contracts
Digital Rights Management
Patents
Trade Secrets
Smart IP Rights and Registries
Evidence of Use
Certification Trademarks
Evidence of Creatorship
Traceability
4 Who owns blockchain?
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Who owns blockchain?
Patents
▪ Selecting and managing relationships with providers
▪ Contractual considerations
Open
source
approach
Hybrid
approaches Trade
secrets
5 Outlook
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Hurdles to large scale application
1. High cost per transaction
2. Time delay
3. High energy usage
4. Compatibility and standards
5. Public's confidence in technology and participants
6. Anti-trust / privacy concerns
But solutions are being developed
▪ Addressing bandwidth issues by reducing computing power required by each user computer / node
▪ Addressing storage issues by using hybrid models, in which not all data is stored on the blockchain (storing less significant data "off chain")
Will blockchain live up to the hype?
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