Intellectual capital is the intangible value of a business, covering its people (human capital), the value relating to its relationships (relational capital), and everything that is left when the employees go home (structural capital), of which intellectual property (IP) is but one component. ( Wikipedia). Intellectual property right is a right held by a person or company to have exclusive rights to use its own plans, ideas, or other intangible assets without worrying about competition, at least for a specific period of time.
Intellectual property rights include copyrights, patents, trademarks, and trade secrets. These rights are protected by a court through a lawsuit. Intellectual property rights are protected so as to encourage innovation without fearing unfair competitions. The current mechanism for safeguarding and protecting intellectual rights is not very efficient.
Counterfeits products still find their ways into even the most protected markets such as the United States, the United Kingdom, Germany, and France. Developing countries suffer most from the effects of Counterfeits. Middle-class countries are the origins of most counterfeit products and intellectual property right violations.
These countries in most cases do not have well-established regulations for protecting intellectual property rights. Sometimes their government even encourage counterfeiting to improve export revenues. However, counterfeiting is a vice that should be completely uprooted from an economy for it to take off.
From innovators who spend millions of dollars in research to investors who fund these research projects, counterfeiting causes billions of dollars in losses every year. There is a need to deploy a more robust approach towards protecting Intellectual Properties. Our best bet is on blockchain technology and smart contracts.
Smart contracts are comparable to legal contracts only that smart contracts are a computer code running on top of a Blockchain. Smart contracts contain a set of rules under which the parties of that smart contract agree to interact with one another. When these predefined rules are fulfilled, the agreement is automatically enforced through the code that facilitates, verifies and enforces the terms of the smart contract.
Smart Contracts are applicable to almost all forms of Intellectual capitals. The list includes digital media, trademarks, methodologies and trade secrets. Intellectual capital owners can register their products in a distributed network. This network would help in verifying the actual property owners.
By utilizing distributed ledger technologies, the blockchain can help significantly reduce infringement as well as provide an electronic chain of custody for each Intellectual property recorded on its database. This makes the users be the judges and thus strengthen the value of a particular work.
This alone is beyond the capacity of the existing authorities concerned with the protection of intellectual property rights. Consumers aim to use original products, however, we lack a platform where products can be verified. The existing platform is easily manipulated by the manufacturers of these counterfeit goods.
With a blockchain based public trusted network that allows creators to register their products, consumers would use the platform to verify the authenticity of products before purchasing. Through this, the negative impacts of consuming counterfeit products will be alleviated. Besides, creators will be well compensated for their innovations.
The system can reduce government spending on fighting counterfeits on the market since consumers would already know what they want. Innovation and research will be encouraged due to the assurance of high earnings from successful products.