Blockchain in the Supply Chain: Stake Your IP Claims Now!

April 15, 2019

Author(s)

Many companies are exploring the use of blockchain in their supply chain to make sure they are well positioned from a business perspective when blockchain use becomes ubiquitous. But another important consideration in exploring blockchain now is to be well positioned to protect current and future intellectual property rights. This was a key takeaway from a panel at the Blockchain Supply Chain Summit that included Joshua Krumholz, who is the former Leader of Holland & Knight's Intellectual Property Group, along with Patrick Manasse, Co-Founder and Chief Compliance Officer at MonetaGo, and Peter Nadimi, Senior Counsel, Commercial, Privacy, and Technology Team, McDonald's Corporation.

The panel serves as a reminder that the foundational structure for blockchain is being laid now, and the adopted structure will create IP winners and losers. It's not just the blockchain platform developers that stand to win or lose. There are many available licensing structures, and the licensing structure of the platform affects what intellectual property rights and protections users will have. Those who participate now will help determine what rights all users may have in the future.

Additionally, the patents issued today will shape patent disputes of the future. There may be offensive or defensive value in obtaining patents, but failure to participate can have expensive consequences in the future. Again, it's not just those who are creating blockchain platforms that need to consider patents. Software that interfaces with the blockchain may also rely on the patented technology.

While there are several benefits to early exploration of blockchain, it is important to be mindful of protecting data privacy and security. While one of the primary benefits of a blockchain is security, placing such data on the blockchain may implicate regulatory compliance considerations. Those considerations are only likely to become more prominent as data privacy and security regulations become more prominent globally. There is often no need to place all data associated with a transaction on the blockchain itself. That data can be stored off-chain, with a link connecting that data to the blockchain.

Mr. Rice is Leader of the Transportation Sector of Holland & Knight's Blockchain Initiative and Motor Carrier and Logistics Editor for Holland & Knight's Transportation Blog.