The transition to a more digitized society based on an information economy has created intense pressure for companies to reconsider their management of intellectual property (IP). Intangible assets can represent more than 80% of a company’s balance sheet value, and intellectual property in the United States is now to worth more than $ 6 trillion in gross domestic product, according to the US Department of Commerce.
Well-managed and leveraged intellectual property can provide a company with a strategic advantage over the competition, not only in terms of acquiring customers, but also potential investors and employees. However, these valuable assets present a unique set of challenges for organizations that want to capture the full value of their intellectual property as it grows and matures.
A complicated website
Securing intellectual property is a multifaceted task that requires expertise in law, cybersecurity, and often the nature of intellectual property itself. Companies need complex and expensive layers of security designed to protect confidential research and development and trade secrets from industrial espionage. Intellectual property that is already in the public domain may be protected by patents, trademarks, and copyright registrations.
Patents and trademarks are key to protecting companies’ intellectual property assets, but managing and managing them is an overwhelming proposition. The patent process, itself, may require filing in multiple jurisdictions, but there must be agreements with employees, ensuring that they are legally bound to protect company secrets and stipulating the company’s copyright to the work produced. by those in charge.
To further complicate matters, intellectual property can be licensed under particular agreements between companies, which can work in two ways. Thus, a company may have intellectual property that licenses one partner, but may also have licenses for another company’s intellectual property, creating an additional paper trail.
Furthermore, many companies do not even have a comprehensive system or platform to manage their intellectual property. Documents can be stored in various places or owned by different people. Next, consider the sheer volume of sensitive and lucrative information that can be stored on a company’s systems or in software run by external third parties.
Related: A cure for copyright problems? NFTs promise to empower creative economies
If all of this is not managed effectively, companies can suffer non-quantifiable losses. From an incident perspective, copyright, trademark, and patent infringements result in lengthy and costly lawsuits, along with intangible or indirect losses, such as reputational damage or higher insurance premiums.
However, the lost opportunity costs can be even more significant. The success of investments, including corporate mergers and acquisitions, may depend on the effectiveness of the work done in the due diligence stage, when an investor or acquirer will expect to see all assets, including the entire IP portfolio, of the company. target company. you can make a fair appraisal. The inability to demonstrate an accurate and fair value of the intellectual property could significantly affect a valuation. Additionally, ongoing intellectual property disputes or pending lawsuits could also adversely affect the investment.
Proof of ownership through tokenization
Businesses can leverage blockchain to prove their ownership of intellectual property-related assets. Assets are created on the blockchain as tokens, and each token transaction is recorded transparently, chronologically, and with its own timestamp. All assets are protected by key cryptography, which means that only the owner of an asset can authorize a transaction and their key serves as proof of ownership.
Related: Going back to blockchain’s originally intended purpose: time stamping
Indeed, any intellectual property asset could be tokenized and assigned to a user or group that is authorized to perform transactions such as licensing. In recent years, blockchain technology has also progressed to the point where it is possible to handle complexities such as different levels of permissions for documents of different sensitivity.
Transactions on a blockchain are immutable and assets cannot be duplicated or destroyed. Therefore, blockchain is a perfectly designed technology for the intellectual property management process.
Blockchain in practice
Large luxury companies are already using this technology to help protect intellectual property in their supply chains. French multinational luxury goods conglomerate LMVH and Italian luxury fashion house Prada are among the firms spearheading the Aura Blockchain Consortium, a collaboration that aims to use blockchain to recover part of the $ 30 billion that the industry loses every year to counterfeiters.
The platform uses non-fungible tokens (NFTs), a unique digital asset, that accompanies a product, such as a designer handbag, throughout its life cycle from factory to final purchaser. The buyer can view the product journey as a series of transactions on the platform, and their NFT serves to authenticate their bag as the genuine item.
Related: Non-expendable Tokens: A New Paradigm for Intellectual Property Assets?
In an even more ambitious move, blockchain and NFT are also transforming the way intellectual property is licensed and sold. For example, IPwe has developed a platform to support the global patent market, allowing patents to be licensed and transacted as tokens on a blockchain. Businesses can manage and track IP-related assets and transactions in one place, and license or sell IP almost instantly, securely, and with anyone in the world. The platform aims to unite the world’s patent data into its Global Patent Registry, overcoming the many challenges of the current patent landscape, including geographic silos, burdensome documentation requirements, and slow processing times.
Another example is SharpShark, a startup that leverages Symbol’s blockchain platform to offer timestamp solutions for content creators to protect their intellectual properties. Blockchain content protection company Custos Media Technologies uses similar technologies.
These are just a few scenarios, but there are many more. Summarizing the challenges of IP could perhaps best be described as using 20th century tools and processes to manage 21st century assets. They are no longer fit for purpose and do not allow companies to get the maximum value from their intellectual property. For years to come, companies will depend on technologies to overcome their legacy challenges with managing intellectual property, protect their assets, and unlock lost value.
This article does not contain investment advice or recommendations. Every trade and investment move involves risk, and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Mrinal Manohar is the CEO and co-founder of CasperLabs. He has a career as a computer programmer and finance professional. Prior to founding Casper, Mrinal was a director and head of the technology, media and telecommunications sector in a long-term hedge fund of approximately $ 1 billion (Sagard Capital), a private equity associate at Bain Capital in Boston, and an associate consultant at Bain & Company. . Mrinal has been investing in the blockchain industry since 2012 as a seed investor in Ethereum, Blockstack, Basis, Maker, Filecoin, and more.