Blockchain technology through the prism of Intellectual Property

Charlie Taylor


Specialists in the area of ​​Baptista Luz Advogados, raise possibilities for the use of this technology in digital business models and point out the challenges

In a scenario with increasingly digital business models, the promotion of innovation and creativity ends up gaining a prominent role and, with this, the area of ​​intellectual property begins to act as one of the main elements. This is because the sector seeks to regulate new technologies in order to facilitate and simplify their protection. Coupled with this, when looking at the newest digital trends, it can be seen that the adoption of blockchain technology can be crucial in the registration of creations, inventions and brands. Alexandre Chwartzmann and Isabelle Rito, from the Intellectual Property and Technology Transactions area at Baptista Luz Advogados, discuss possibilities for using this technology and its challenges. Blockchain technology is nothing more than an online data storage method, functioning as a kind of digital record book (Ledger or ledger). “When someone sends a value or information to another person on the Blockchain, a new transaction is created. Transaction data is permanently stored in blocks that are linked to the previous block, forming an interconnected network”, says Alexandre. He points out that a simple modification of a transaction’s data is capable of completely changing the block’s hash. This gives Blockchain the property of tamper resistance, as it becomes very easy to identify when the data in a block has changed, even intrinsically by the network itself. In the private sector, blockchain is being widely used by fintech and big tech companies, mainly in the financial, telecommunications, consumer goods and health sectors. In the public environment, however, governments are still in embryonic steps. In Brazil, the technology is being tested by the Federal Revenue, which uses the permissioned network of bConnect – a tool developed by Serpro – to share and exchange data between Mercosur countries, which are nodes in this network. Furthermore, the CVM (Brazilian Securities and Exchange Commission) took the initiative to launch the regulatory Sandbox, an environment in which companies that run a business model based on blockchain technology are authorized by the Central Bank of Brazil to test their innovative projects in the financial or payment. “But in relation to the registration of Intellectual Property, the INPI has not yet taken a strong initiative to adopt blockchain technology in its operations”, recalls Alexandre. According to the intellectual property specialist, in the case of copyright and there is no legal obligation to register for the effective protection of this right, proof of authorship and the date of creation of the work is extremely important, in case of questioning of prior art. by third parties. This also applies to software, which by Brazilian law is treated as copyright works. In these cases, blockchain technology can enable the identification and tracking of creations, permanently and practically immutably, helping to identify authorship and precedence. At the international level, the European Union created the Anti-Counterfeiting Blockathon Forum, a virtual networking environment between people and organizations working together to shape and provide the future anti-fraud/counterfeiting infrastructure in blockchain networks. But it’s not just. There is a whole new hype surrounding NFTs (Non Fungible Tokens). This category of tokens makes it possible to provide a digital certificate of authenticity, signaling the precedence and ownership of creations based on blockchain technology, by generating a certification code that makes the asset a unique asset. NFT technology has made it possible to create a digital scarcity, making encrypted items collectible and unique. “The cryptographic record of tokens made using blockchain technology allows their maintenance and commercialization with security, being a safe and effective means of recording both physical and digital works, since the token generated is associated with the work, in a kind of ‘signature’. ‘ by the author”, explains Isabelle. But the NFT does not automatically grant ownership of a digital work. Other applications of the technology can be verified both in the protection against copyright infringement and in cases of counterfeiting and plagiarism, since, as already mentioned, the authorship, date, time and text would be immutably recorded on the blockchain. Thus, the author could register licenses for the works, even, in a way, track them, avoiding copyright violations, as well as the decentralization of the system for managing payments. “In this sense, technology can help artists and creators to more assertively monetize their work. The payment of royalties for the licensing of works using blockchain network currencies not only makes the whole process faster, but also transparent and secure for all parties”, defends the lawyer. In cases where specific laws require registration for the constitution of the property right, as in the cases of trademarks, patents and industrial designs, the blockchain could not work as a substitute for registration, since they are constitutive rights, which arise from the registration. granted by the designated federal agency, the INPI. Thus, the right of exclusive use does not arise from prior use, or from creation (as in the case of copyright), but from prior registration, conferring the character of a constitutive administrative act to industrial registration. . Even so, the technology can be useful in situations where evidence of use, precedence or other evidence is needed. According to the CPC, in its article 369, in Brazil, “all legal means, as well as morally legitimate ones, even if not specified in this Code, are admitted to prove the truth of the facts on which the request or defense is based and effectively influence the judge’s conviction. “Still, specifically in relation to patents, the legislation considers patentable the invention that meets the requirements of novelty, inventive step and industrial application. Thus, blockchain registration could favor an inventor before putting the product on the market, by noting and memorizing the moment of invention, in order to guarantee proof of the novelty”, points out Alexandre. In registration processes (patents, industrial designs and trademarks) it is possible to apply blockchain technology, in addition to the feasibility of proving the use of the trademark. The World Intellectual Property Organization (“WIPO” or “WIPO”) has been fostering dialogue to gain a better understanding of its potential use in the context of IP. “UEIPO”, the European intellectual property office, was also open to a dialogue on the use. Currently, the EUIPO TMView platform automatically stores data related to registered IP rights, bringing together more than 100 million brands (from within or outside the European Union), fully connected on blockchain and updated in real time. This system facilitates the search for precedence between trademarks, in addition to facilitating the work of the examiner to verify the trademarks already registered. Smart contracts – self-executing smart contracts in a programming language formed by sets of rules associated with certain transactions, used and applied in different branches of law – can be used in intellectual property contexts to establish or enforce agreements and licenses. They are also a possibility of a tool applied through the blockchain, since they are built and executed through software, enabling more accessible, transparent, faster, safer and less expensive agreements. In Brazil, both in public and private spheres, they have already been used. In 2021, for example, the first public power of attorney was signed, granted in a notary public, via blockchain. The application possibilities of this tool are numerous, as in the registration of copyright or IP contracts. But in cases of Copyright, the transmission of rights must comply with the provisions of Law 9.610/98, using smart contracts as formalization tools. Trade and industrial secret contracts can also make great use of blockchain technology, as they guarantee integrity, anonymity and reliability in the recording of information. “The existence of mechanisms for efficient confidential records is essential and with the new technology, the ownership and chronological chaining of information, already officially recognized, is guaranteed”, says Isabelle. It is possible to observe the existence of several challenges on the technology. One of them is related to the size of data created and the need for storage capacity. In addition, the complexity of the technology and its explanation and understanding can be another difficulty factor. However, on the positive side, there is an indication of other government bodies, such as the Federal Revenue, which already uses blockchain tools. The regulation of technology for Intellectual Property is also an obstacle, as possible legal limitations to its use have not yet been established. Thus, in addition to the technological and social challenge, there is also the legal issue, which may become an obstacle to the adoption and development of technology. But, according to Alexandre, the path of using technology is inevitable and new technologies should be looked at as a way of transposing the law and formulating new regulations that accompany these new market needs. NovaDAX is full of news! One of the largest cryptocurrency exchanges in Brazil has now ZERO withdrawal fees in real! NovaDAX also has zero fee for Bitcoin transactions and more than 110 listed currencies, with cash withdrawal available and high liquidity. Cryptocurrencies with the best rates on the market! Simply activate the free Novawards program and enjoy reduced rates of up to 75%. Discover the NovaDAX Card and order yours now.

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