How Blockchain Helps Secure Product Ownership

Developing a new technology is both complicated and expensive. In most cases, innovators spend decades working on a single concept that might not even be commercially viable. Big companies have the financial muscle to pay inventors, fund their R&D, and own their technologies. Sometimes such companies steal or copy from the original developers who often are smaller companies without the same resources. However, blockchain can help prevent intellectual property theft or abuse.


Bigger companies have huge financial resources allowing them to recruit highly skilled experts. Imagine working with an engineer to develop a technology from scratch. Without a proper understanding between the CEO and the engineer, your company’s technology is at risk. Well-established companies can offer several times as much as your company is paying your engineer. When he or she leaves the company, the idea that worked for your company will almost certainly be duplicated and even enhanced at another company. Sometimes big companies also try to buy off small manufacturers who seem to be successful.


It is also vital to protect the systems that store the original source code or blueprints of the technology that made a business successful. Sometimes employees steal business technology and give it to the competitors. When signing an agreement with internal technical teams and technology partners, it is vital to include equity in the contract as well as non-disclosure clauses. This will prevent any member of the team with legal access to the company’s vital resources from misusing them.


What Blockchain Is and How It Works

The blockchain protocol groups transactions into blocks. Whenever new transactions happen, new blocks are added to the network by decentralized nodes. Each new block in the network replicates the chain of blocks before it. All the blocks in the network function together to verify the validity of the other blocks, and broadcast the completed block to other nodes in the network.


Some blockchains use proof-of-work consensus. When a block is mined, all the nodes in the network must prove that they are confirming the same valid information in the ledger. The principal is that a majority nodes would confirm the right information at the expense of the few malicious nodes that would want to confirm the wrong information. In this way, the blockchain is kept secure and accurate.


Leveraging Blockchain to Protect Small Scale Manufacturers

Blockchain can help small manufacturers mitigate the risk of  intellectual property theft. A startup in the manufacturing industry can create an asset on the blockchain, secure it into a block, and broadcast it to the whole network. All the nodes in the network will then have an updated version on the blockchain showing the immutable addition of the new asset. This asset on the blockchain can be securely transferred to anyone. Each time intellectual property changes hands, the transaction is written onto the blockchain to show the change in ownership. This enables new owners to trace previous owners of the intellectual asset back to the original creator of the asset. No transaction on the blockchain can be edited, modified, or tampered with.


Blockchain can help small-scale manufacturers secure new processes and track their assets. It is easy to verify the provenance of intellectual property by mapping physical or digital asset ownership and aiding recovery of stolen goods. When a firm registers intellectual property on the blockchain, no other company can use the patented technology without prior agreement from the original owner. Also, with blockchain, the settling of intellectual property claims is quickened since the origin of the intellectual property can be traced on the blockchain. Additionally, blockchain provides better supply chain transparency, and clarifies the value of products by providing a clear history of where they come from.

Become part of the ARXUM Community

Subscribe to our newsletter

Or join us on: