You’ve definitely heard of Bitcoin, and you may have heard of Ethereum, but will blockchain technology now help to better secure legal transactions, including one’s valuable intellectual property assets?
Blockchain technology offers an alternative means to engage in secure transactions. For example, the execution of a contract, or the transfer of money, are both situations where a requisite degree of trust must exist between the parties. And while the convenience of a digital transaction is undeniable there are risks involved if one of the parties has malicious intentions. The most glaring vulnerability of a digital asset is its ability to be replicated and sold more than once, such as concert tickets.
So, What is Blockchain Technology and Why Should I Care?
Traditional digital transactions rely upon a centralized database or ledger. For example, in an Interac e-Transfer both your bank and Interac would be responsible for executing this transaction. Blockchain technology, on the other hand, distributes this responsibility across everyone on the network. Every person on the network has access to the relevant transaction databases and ledgers. When a transaction is conducted, it is blocked together with other transactions that occurred within a pre-determined time period and is then validated by members of the network. The member that validates the transaction first is rewarded. In the case of the Bitcoin network validations are awarded with Bitcoins. And although members of a network work to verify a transaction, the actual contents of the transaction remain confidential. This confidentiality has important implications, as we shall see below.
Because of its decentralized nature and oversight by network members, Blockchain technology makes hacking extremely difficult and adds a level of trust to digital transactions that has previously never existed.
And Blockchain technology is not going away. Despite the Canadian government concluding that the technology was not ready for adoption, this has not stopped private industry from significantly advancing its usage. The Enterprise Ethereum Alliance consists of Fortune 500 companies like Accenture, Intel, and Microsoft who understand the incoming disruption of Blockchain technology and the need to adapt to its existence.
Blockchain and the Practice of Law
As a result, lawyers will eventually, and inevitably, intersect with blockchain technology in the execution of routine contracts, title transfers, deed transfers, corporate resolutions, shareholder votes and of course, the transfer of financial assets.
Even more specifically, Blockchain technology could become an essential part of intellectual property law. For example, creators of digital content could adopt the technology to prove copyright ownership of content on the Internet. A distributed public ledger would also be beneficial for proving the date of first use of a trade-mark. Taking this a step further, because the content of transactions on the ledger are kept confidential, Blockchain technology may become an indispensable tool for establish a chronological record of innovation. This would have an immediate impact on global patent systems.
The exploitation of IP rights would also be impacted by Blockchain technology. For example, rather than a licensing agreement being a set of written obligations and restrictions to be followed in good-faith, a licensing agreement implemented with Blockchain technology could be continuously monitored for performance, licensing fees could be automatically and securely transferred, and certain contractual obligations could be automatically executed; all while maintaining a permanent public record. Of course, all of these potential uses are in addition to using the technology to maintain accurate and secure global intellectual property registries.
The implications of Blockchain technology are robust and diverse. Whether you are a technology company, or a professional service provider, it is time to do your homework and understand how Blockchain technology might secure your business.
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