Streamlining Intellectual Property in the EU
Intellectual property rights (IPR) are a cornerstone of the European Union’s economic future. According to the European Commission, “IPR-intensive industries currently account for almost 45% of Europe’s GDP and directly contribute to the creation of almost 30% of all jobs”.
On November 25th 2020, the European Commission published a report entitled “Making the most of the EU’s innovative potential: An intellectual property action plan to support the EU’s recovery and resilience”. The report identified five challenges that face the European Union in regards to intellectual property rights management.
The IP system is too fragmented, with procedures that are complex and costly
Many companies, in particular SMEs (small to medium sized enterprises), do not make full use of the opportunities offered by IP protection
Tools to facilitate access to IP for both licensors and licensees are insufficiently developed
In spite of continued efforts to turn the tide, counterfeiting and piracy of both goods and trade secrets is still prevalent
There is a lack of ‘fair play’ on the global level due to a lack of global norms and standards regarding IP protection
These above challenges are the basis for the solution ChromaWay is developing for Phase 2A and 2B of the European Blockchain Pre-Commercial Procurement. Let’s take a closer look at the RBN Decentralised IP Marketplace and explore how it addresses these key concerns.
What is the RBN Decentralised IP Marketplace?
The IP marketplace powered by Relational Blockchain Nebula is envisaged as a simple and transparent marketplace for storing, selling and purchasing IP licenses in the EU. By combining the strengths of blockchain with a tiered governance model, our solution can standardize and automate the means by which IP is exchanged.
What is the structure and role of the administrators?
The application is designed with a two-tiered architecture that includes administrators (managers of the system) and end users (buyers and sellers of IP). A system designed to handle IP transactions for the EU will naturally have many stakeholders. Some examples would be government agencies, law firms, and consumer protection groups. Decentralisation is introduced into our solution by granting administrative duties to multiple stakeholders who reach consensus in order to perform administrative functions. These functions include:
KYC checks on users who wish to access to application
Verifying the content of licensing agreements and ensuring they are handled correctly by all involved parties
Reviewing and resolving disputes between users
Can expire license agreements between legal entities
Can grant license agreements between legal entities
By distributing these key functions across various entities as opposed to granting central authority to one party, we ensure that the system remains transparent and fair for all participants.
What is the role of users?
Users fall under two broad categories: licensors and licensees. Licensors represent inventors or companies that hold an IP and wish to sell licenses for the use of that IP by third parties.
Licensors will have access to following features:
Entering requests to register their IPs in the system
Creating sale offers for their IPs in the marketplace
Raising disputes pertaining to license agreements
Licensees will have access to following features:
Creating purchase offers for IPs listed in the marketplace
Raising disputes pertaining to license agreements
The smart contract advantage
Representing licensing agreements in the form of smart contracts solves several pain points in the IP exchange process. In our solution, each contract will contain full terms and conditions — making the process more accessible and unambiguous for both parties. It also boosts efficiency by turning the marketplace itself into a secure repository for the EU’s IP data.
Smart contracts also offer the advantage of automatic execution: on the licensor’s side, the performance is a grant of rights, while on the licensee’s side the smart contract enters into force after the transfer of financial compensation and possible royalties. All information regarding completed transactions will be automatically written to the blockchain, creating a permanent record of the legal agreement and financial exchange between the parties.
How does our solution address the five challenges?
1. The IP system is too fragmented, with procedures that are complex and costly
RBN Marketplace has the potential to replace the current patchwork of systems with a single interface that automates and streamlines the procedure by which IP is bought and sold.
2. Many companies, in particular SMEs (small to medium sized enterprises), do not make full use of the opportunities offered by IP protection
Making a fully digitized system allows SMEs to more easily participate on a level playing field. Once the entity has been onboarded to the system, they can participate in the same way as large businesses and corporations. Agreements are recorded and enforced automatically, removing the need for expensive and time consuming legal and administrative costs for small businesses.
3. Tools to facilitate access to IP for both licensors and licensees are insufficiently developed
The creation and development of the marketplace directly addresses this problem by delivering a single interface that facilitates access for both licensors and licensees.
4. In spite of continued efforts to turn the tide, counterfeiting and piracy of both goods and trade secrets is still prevalent
By using a diverse but trusted set of administrative level nodes, the system can be guarded against malicious actors attempting to gain access to valuable IP. Since the data underlying the contracts is stored on a blockchain, it remains secure against threats posed by hacking.
5. There is a lack of ‘fair play’ on the global level due to a lack of global norms and standards regarding IP protection
The first step to establishing global norms is demonstrating a solution that is superior to currently available options. By delivering a functional and streamlined platform, the EU can set an example for others to follow.
