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February 3, 2020
The progressive spread of blockchain technology in France greatly contributes to digital transformation of business. In this second article, Verne Legal continues to shed light on the question of what are its real implications on business law services.
After having discussed in the first article the creation of dematerialized company registers, we evoke below the second application of blockchain technology in business law: the protection of intellectual property (II). Please follow us for consequent articles concerning the dematerialized data room (III) and blockchain as a mean of judicial evidence (IV).
Blockchain in two words: security and immediacy
As we saw in the first article, blockchain is a technology of storage and transmission of information aggreged in “blocks”; that is transparent, secure, and operating without any intermediaries. It enables tracing and time stamping the history of the transactions concerned.
It is in fact an asset database of recorded transactions grouped by “blocks”, with new “blocks” being added subsequently to the chain. It is secure and accurate; its history can be easily retraced. The ledger is composed of blocks registered in a chronological order, that is shared across a network of multiple sites but of which each participant has his own copy.
However, why is blockchain so interesting in terms of security?
The system of sharing allows everyone to verify and authenticate each operation. Thus, the modification is impossible and the chain, and therefore the database, becomes immutable.
Undoubtedly, blockchain’s inalterability is very interesting for the legal sector and in particular for the protection of intellectual and industrial property.
Blockchain and intellectual property (IP) protection
The use of blockchain to protect IP rights such as patents, copyright and trademarks in a simple and efficient way has been gaining in popularity.
Indeed, the race for technology transformation gives rise to a very large number of innovation projects that are subject to the requirement of almost instantaneous recording of their development progress.
However, to obtain the copyright, the inventor must be able to demonstrate, firstly, their quality of real creator of the claimed invention, and secondly, their precedence compared to other inventions.
Registration at National Institute of Industrial Property (INPI) of an innovative solution is not possible for all inventions and can turn out to be expensive, especially that usually at this stage the concept has not yet proven its value. Intermediate means used such as the “Soleau” envelope, filing with a bailiff or a notary are either ineffective or equally costly, or both at the same time.
Therefore, as for the IP, the use of blockchain could revolutionize the means of proof of the authorship of the invention and the date of its creation.
Indeed, the blockchain makes it possible to instantly obtain the date and the time of registration of a creation by anchoring it in the database. Thus, if we attach a “hash” to the text describing the invention or creation, we will then have a certain date that can be opposed to the title of prior personal possession.
It can contribute to automathizing the process of invention’s registration, obtaining secure traceability, and auditing the evolution of an invention since every operation concerning it (stages of creation, transfer, license) have been recorded.
Anchoring in blockchain allows obtaining a proof of valid invention design (such as the originality or the name of the country where the object produced from the design was firstly marketed), its status and its evolution. For example, with blockchain, it becomes possible to reproduce the traces of the exploitation of digital works, which is impossible today, and, if necessary, to oppose to certain content usages.
A different use of blockchain technology has found its application in the field of patents. Indeed, each copy produced is recorded in a transaction ledger by means of a unique identification allowing the control of product circulation. This procedure offers among others a possibility of distinguishing authentic products from counterfeit products or even establishing the number of authentic copies in circulation. It will also contribute to fighting the counterfeiting or combatting any other IP rights infringements.
This secure, simplified and inexpensive protection process would also strengthen the position of authors and inventors who today are often helpless in front of the “pillage” of ideas and techniques. Thanks to a platforms offering the anchoring in the blockchain of various elements, a creation born from an idea becomes truly protectable.
This progress in the blockchain application in the IP, which some people do not hesitate to describe as revolutionary, would also upset the current balance of economic forces. As a matter of fact, intangible assets, that are the only real value of new technology companies, and therefore the only guarantee that start-ups can offer to investors.
The way that the elements are stored on blockchain reinforces even more the importance of the intangible assets, as the proof thus established will be valid both in the country of origin and everywhere in the world, as will be explained more in detail in the fourth article of Blockchain serie dedicated to blockchain as a mean of judicial evidence (IV).
In our next article, we will present the third blockchain application in the field of business law: the dematerialization of data rooms (III).
Ewa Kaluzinska Nicolas Renault Iga Kurowska
Verne Legal, Partner Verne Legal, Lawyer Verne Legal, Partner
Verne Legal provides a customized legal and tax advisory service to both French and foreign companies. It advises clients in running their business in France, offering strategic assistance enriched by multicultural sensitivity. For more information on the tax law in France, we invite you to download “Doing business in France” e-book and to contact our team at info@vernelegal.com.