Intellectual property (IP) theft is a huge problem within the manufacturing industry. IP theft costs businesses up to $600 billion per year in the U.S. alone. The motives for IP theft are usually financial. Competitors steal ideas from others so they would not have to spend money on research and development, and thus can afford to undercut companies who spend money on R&D on the open market. Individuals also use stolen intellectual property to extort manufacturers into paying them money to keep it private. In some cases they might sell it on the darknet.
The problem with IP theft is that companies stealing ideas from small businesses can out-manufacture and out-sell everyone else to corner the target market before small businesses realize what has happened.To add another dimension to the IP theft problem, entities that steal intellectual property could also produce almost identical replicas of the original product. Such counterfeit products usually get sold on the black market, but these can also find their way into mainstream supply chains. If companies get found out, they could get hit with a bad reputation at best, or a lawsuit at worst.
Ideas Are Easily Stolen By Deep Pocketed Competitors
Large companies with more resources can bring ideas to market faster and more cheaply than small business entrepreneurs. Small businesses, on the other hand, have to concern themselves with keeping their intellectual property from getting stolen by bigger companies with more money. That’s why, for a long time, they have desired a solution that allows them to manufacture and sell products without worrying about having their ideas stolen and subsequently get elbowed out of the market. While some countries like the U.S. and many members of the European Economic Association take IP theft very seriously, other countries do not. The trouble is that many manufacturing facilities operate in the very same countries that don’t take IP theft seriously. The danger, for a small business entrepreneur, lies in working with suppliers in such countries. After enjoying some initial success, profit margins begin to vanish once competitors in that country copy the entrepreneur’s product and undercut the entrepreneur’s prices.
Revolutionary Blockchain-Based Solution to IP Theft
Blockchain technology brings a myriad of benefits, including decentralization, immutability, and transparency. But the most important benefit to small business entrepreneurs in eCommerce is the ability to prove ownership over an idea. Securing intellectual property is a much needed use case for blockchain technology because it is immutable, meaning data stored on each block or smart contract cannot be forged or tampered with.
Thanks to this technology, entrepreneurs now have a way to secure IP and rights to their patent. They can upload their original idea along with proof of ownership to the blockchain, and no one can lay any claims to that idea. Any individual can use the blockchain to secure patents and ownership of digital assets. Because the blockchain is immutable, they can now manufacture new products and not worry about getting their ideas hijacked by bigger companies.