Blockchain for Patenting Intellectual Property: How Will it Work?

How does one create a blockchain which can protect intellectual property? What’s the point? What are the consequences of changing the system so that new inventions aren’t registered on paper but digitally? The hope is that innovation production, and new high-tech products will be produced faster. In order to create such a system, ITMO University, together with their partners, have established the “National Coordinating Center for Transaction of Intellectual Property and Rights”.

Patenting Problems

What does it mean to have intellectual property rights? It means that only the owner has the right to use his unique R&D. Others also can but only if they pay royalties. Having such a law is an integral part of introducing a new product into the market, otherwise the inventor won’t get any revenue from the sale of his product. If he doesn’t get any money for his product then there is no purpose of putting it on the market. And in this case, the market won’t get any new R&D, the development of technology will stop, and the standard of living will fall.

Currently, self-patenting can be challenging. In order to self-patent, you must send a request to Rospatent. For this, the invention has to prove its novelty, uniqueness and the fact that it is a new invention. These documents are then reviewed by experts at the patent office. This entire procedure delays the process for a year, or two, or three: since specialists need to check if there is any similar invention in other patent databases, evaluate the novelty of the invention, and its applicability to industry.

Since the patent takes quite a long time, and the market can’t wait, contracts between buyers and inventors often don’t have the correct legal work, contracts aren’t declared anywhere, people don’t find out about new technologies easily or never find out at all. In fact many companies, instead of patenting, work with innovative technologies that require “know-how” or “commercial secrets .” Just because it’s easier that way. Thus the development of innovation slows down, and the number of documents about intellectual property rights doesn’t grow.

One of the disadvantages of this system is that there are many patent databases in the world, and, if a company, for example, wants a particular technology, they need to look through all of these different databases. In the same way, an inventor also has to navigate through this mass of information.

Advanced smart contracts and Blockchain

In the finance sector, Blockchain is becoming a more and more popular system. This is an online platform where different participants make transactions between each other. All participants of the Blockchain are aware of all transactions. Thus you can’t cheat people, and thus there is no need for notaries, lawyers and other specialists who ensure the authenticity of transactions. This concept can be applied also to intellectual property.

An online platform, or service, can be created where users, in this case inventors of new technology, or authors of works of art and other objects of intellectual property, will upload models of their inventions. The upload will be registered in the system and will mean that the right to intellectual property belongs to the person who uploaded the model. And all participants of the system who have access to invention inventories, can request information and also sign “smart” contracts in the same system. External users can do the same but the interface will be slightly modified. 

“More and more transactions are taking place digitally. This is clear in terms of copyright law. For example, before if you wanted to listen to a song, you had to buy a CD or make a contract with the rightholder. Now we have iTunes, and you can connect your bank card to your itunes account, and this automatically means that the user has signed a contract with all rightholders who upload their music to the service”, explain Nina Yanykina, head of the Project Management and Innovation Department.

Nina Yanykina

She also added that by “digitizing” patenting will have an effect on other factors. For example, more and more inventions are made in collaboration. So how do you observe the interests of all authors using paper documents? An online system like blockchain solves this problem, since you can enter the data of all authors, and all of those individuals will automatically receive a fair compensation when their technology is sold.

Also, digital patenting will eliminate bureaucratic and human factors when testing innovative inventions or the uniqueness of an artwork. Data from all patent databases could be uploaded in the system and then be automatically analysed in seconds. This will speed up the innovation market by a hundred times and allow new products to find investors and buyers much faster.

Universities can increase the amount of their R&D, which industry representatives will have access to. This will contribute to the growth of R&D work. ITMO's involvement in this block-chain system for patenting has a special significance in that it is an opportunity for the university to use its potential in the IT sphere, machine learning, and neurotechnology.

The problems of implementing such a system

The most important objective right now is to understand the technical aspects of implementing such a system. In order to analyse information from patent databases, it requires neuronetworks, and these neuronetworks need to be taught. To recognize search queries, you need to implement web semantic technologies that will recognize not only specific words, but those that are semantically related to them. Also, we would need to have an intelligent interface for uploading models and descriptions of inventions, which will be able to recognize them by their characteristics and classify them into specific categories. This will also require in-depth training of neural networks.

Another important issue regards who will carry out a formal evaluation of the intellectual property, that is, checking its uniqueness and innovation. Probably, this will also be done by artificial intelligence.

And how will the issues of insurance against violation of property rights be resolved? After all, for different uses of intellectual property you need to pay in different ways. Who will check and evaluate whether the purchased technology is used only to the extent that it was paid for? Potentially, such a system is feasible in the future economy of robot economics, where literally every transaction and any action at the enterprise will be registered in a huge network. And in this network it will be possible to trace absolutely everything that happened with the technology: where it was used, for how long, and what was created with its help. But this is a very distant future, which requires the rebuilding of the entire society.

Also it’s not clear who will monitor this complete patent system. Ideally, at the initial stage an association should be created, and in the future the system must be self-regulating. Of course, the system will require technical personnel who will monitor the performance of the system. But where will the staff work? Who would pay them?

“We want to create a global intellectual property platform, which will significantly develop the institute of intellectual property in the world. While working on the platform it’ll be easy to find technical solutions, artwork, music, literary works, check the novelty of a new solution or works, where the authors are, including future users of intellectual solutions, who can work together on improving technologies, digital models, understanding that the system guarantees the rights of authors itself, to the degree that it pays them royalties through collection of smart contracts. We understand that there are many unanswered questions, which is why we created this association so that together with our partners we can find answers to all of our questions. We also understand that this is the future, and it’s important right now to set up basic rules and protocols of working with such a platform because soon it’ll be too late.” added Nina Yanykina.

The association was officially established at the beginning of summer 2017. During the Project 5-100 conference on 21 and 22 September, and also in mid-October in Skolkovo, the future development of this particular blockchain system for patents will be discussed further.

Besides ITMO University, the association is also made up of Skolkovo Institute of Science and Technology, Institute of Economic Strategies, Skolkovo Fund, Non-Profit Organization for the Protection and Management of Rights of Artwork, Russian Organization of Intellectual Property, Russian Union of Right-holders, Russian Authors’ Society, Novyy Vek Bank, Higher School of Economics, Support Fund for Scientific Projects of Students and Young Scientists called "National Intellectual Development".

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