Blockchain: a “disruptive” overview on various commercial sectors

Alessio Balbo di Vinadio – Trainee at Clarke, Modet & Co. Spain
Gilberto Macías – Senior Advisor and Lawyer at Clarke, Modet & Co. Spain

In 10 years 10 percent of the global GDP will be stored in blockchains” this data insight comes from the World Economic Forum, but what implications does it have (pragmatically) on nowadays society? This article will approach some advantages and disadvantages of the blockchain and how its possible applications may be disruptive in relation to many sectors but, first and foremost, let’s start with some brief background.

Created in 2008, the blockchain is an encrypted program that acts as an online ledger of transactions, and it provides an “irreversible, secure and time-stamped record”. Each block of transactions is linked on a chain, giving its participants an overall picture of what is taking place in the system. The program is designed to be decentralized, allowing transactions to take place between users without the need for third parties such as banks, or a central clearing system like SWIFT. In essence, in the context of finance, each user acts as their own independent bank —  free from administrative and associated costs, normally found in “traditional” financial centers. Each transaction is viewed as a single block where subsequent transactions or blocks are added. When a new transaction is recorded, a copy of the blockchain is sent to each node as they join the network (a node is each computer that is connected to the blockchain network). Blockchains can be public, private or hybrid (permissioned). The main principle behind it is trust, and the blockchain is safe, incorruptible and encrypted. By assigning to every single one of its users a public key, it allows them to identify their transaction publicly. Such key will not be disclosed by the blockchain, so every user can be totally anonymous, unless it is voluntarily disclosed.

Furthermore, records are not deleted on the blockchain, so nobody would be able to change the data stored on it, as it would have to change the whole “chain” of transactions.

As every new invention, one of the most important innovations is that the Blockchain is extremely cost effective. This is because it excludes intermediaries from the picture, but it does not only cut costs by doing so, it also increases efficiency.

Let’s analyze the impact on a sector-by-sector analysis

In respect to banking the blockchain could be effectively revolutionary. In fact, the implementation of the blockchain into the banking system would allow banks to save around 20B$ a year by 2022.

Looking at the latest news on the matter, it can be indisputably said that almost daily a new enterprise, a tech giant, or a new company comes out with an application of the blockchain. As an example, on the 15th of May, Amazon announced his partnership with Kaleido (CNBC article available here) in relation to the Bezos’ cloud computing service, to simplify the creation of a company based on the blockchain.

Particularly, one of the most interesting application of the blockchain relates to healthcare. In fact, a distributed ledger in relation to health records would allow any hospital to access medical data belonging to any individual, with no need of additional paperwork. This could be particularly useful in relation to emergencies concerning patients rushed into surgery. The threat here would be addressed in the context of data protection and privacy.

Another further implication in the same industry (i.e. healthcare) could be the distribution and tracking of pharmaceuticals. To this regard, the well-known multinational company Merck has filed a patent claiming that the blockchain technology enables a reliable, secure storage of the reading results with very high data integrity, such that it is essentially impossible to manipulate or erase or otherwise taper [sic] with or lose such data, e.g., due to unintended or deliberate deletion or due to data corruption.”[1]. Blockchain adoption would result in increased transparency, safer and more secured delivery of pharmaceuticals and decrease in the counterfeiting of healthcare products.

In the legal sector, the blockchain’s impact on Intellectual Property (IP) can be noteworthy. The constitution of blockchain networks in relation to IP offices, the traceability of trademarked products, the implementation of royalty distribution mechanism all have a sweet sound to the ears of the professionals working in this sector. To this regard, many international institutions are starting to use such technology to foster innovation. In fact, the European Union has set up the Bloomen project, where “blockchains will be used as a distributed database for media copyright information, for fast micropayments of media content, and for transparency in copyright management and monetization”. The expansion of such project would improve dramatically the efficiency of the sector.

Other figures within Intellectual Property, will may also take advantage of the use of the Blockchain, for example, regarding trademarks, it is expected that it will be possible to register or renew a mark using Blockchain technology. We know that the EUIPO is looking very seriously and actively at using blockchain to records and enforce IP Rights. However, in the USA, there is already an online platform using Blockchain technology to file trademarks (Cognate). The use of blockchain in the protection of trademarks or patents would represent a real revolution in the registration of these assets.

Similarly, another giant in the field of consultancy, Deloitte, is partnering up with the next participant to blockhaton, Seal Network, to develop an anti-counterfeiting platform and technology to stop such illegal practices.

In a different sector, another giant, Alibaba, has announced the pilot program to track international shipments to China, in order to safely be aware of the origin, shipment and destination of the effective product ordered.

In relation to fashion, blockchain may be disruptive too, as QR codes or tracking numbers on labels may be able to tell the customers the origin of the specific item, the full history of the supply chain behind each garment and possibly even more (i.e. the history of the company, the materials used, the instructions on how to wash, etc.). Since the statistics only for 2016 amounted to 1 billion dollars of counterfeited articles sold, blockchain would be a blessing for the sector, allowing to fight more effectively against the growing scourge of counterfeits and piracy.

A similar approach has been applied to food, for instance, in emerging markets. A traceability of the product “from farm to fork” would simply facilitate the business of guaranteeing an origin and avoid corruption and quality control. The matter concerning food safety has historically increased up to the point of creating Agencies in charge of such control. A giant in the industry of supermarkets, Walmart, has already successfully carried out several blockchain project, proving that such technology is a real game changer. Blockchain could also have an important role in the protection of foods identified and commercialized with a Protected Geographical Indication or a Designation of Origin, the control of raw materials (as to their origin, use, transformation, etc.), all of the aforesaid could be followed with greater ease and transparency.

The jewelry business may also be reformed and secured. Chemical fingerprints could radically change the industry and blockchain may be the key to track the diamonds, in order to guarantee the effective origin and a safe shipment too.

The industry of photography and works protected by copyright exposed to the dangers of internet may be helped by blockchain too. Since copyright does not need any registration to be valid, it does not depend to registries (unless the holder of such rights decides to submit them for registration to an Office). In this field, the real issue has always been the distribution of royalties to the legitimate owners and to the management entities of competence. As everyone can imagine, internet has certainly opened a new way of making business in this sector, but it has also exposed works to more infringements and violations. For instance, by allowing a file to be downloaded, the author spreads his/her work online and reaches bigger audiences indeed, but such audiences may not always be having pure and honest intentions and may misappropriate the copyrighted work.

Particularly, the afore-mentioned applies to the music industry. In fact, the advent of new technologies transformed the music industry into an important source of income with high levels of exploitation, notwithstanding the existence of blatant disadvantages (i.e. the increase in piracy and the lack of payment in relation to the reproductions).

The effects of technology in the music industry are twofold, on the one side there is the acceleration in the diffusion of musical works, which allows us to visualize a very positive scenario for authors and intermediaries, just as consumers are greatly benefited from this fact. On the other, there is the uncontrolled circulation in the network, the speed at which music circulates on the internet is unstoppable and untraceable by the holders of rights, since it facilitates the unauthorized use of digital works and recordings. Uncontrolled circulation reveals very negative consequences for the basic and intellectual property industry.

Another consequence derived from the implantation of new technologies in the basic industry is the change in the relations between the authors of music, services, intermediaries and consumers. The digital environment allows a direct connection between the creator of the musical work and the audience, and that is precisely why the blockchain could be a real game-changer in the music industry. Media Chain, for instance, a company recently acquired by Spotify, takes care of the royalty distribution matter, offering music platforms to protect the authors and their works in the online world. Mediachain allows artists to create a digital record for songs on the Bitcoin blockchain and InterPlanetary File System . Spotify, in fact, aims to use such tool to create fairer conditions and more transparency in respect to the payment to artist for their musical works.

The blockchain does not uniquely help the music sector in relation to copyright. In fact, it applies also to photographers, whose works are constantly at risk of being copied, used or transformed without being remunerated. The need to broadcast and divulge the work is often the most significant mistake that leads to piracy. To this regard, Kodak, earlier on in January 2018, firmly declared to be willing to develop a blockchain based platform to remunerate photographers through the use of Ethereum. Photographers will register their photos on the KodakOne  platform and buyers will purchase rights using the KodakCoin cryptocurrency. The platform will provide cryptographic proof of ownership and monitor the web for infringement, offering an easy payment system for infringers to legitimize their use of photographs. A pioneer to this regard is Fernando Alonso, the Formula 1 player who recently announced that he will be protecting his image and copyrights with KodakOne[2]. Mr Alonso is the first public figure to release such a statement.

Another sector where the blockchain has arrived into is the timestamped proving of paternity of literary works. An example of this is Po.et, a shared, open, universal ledger designed to record metadata and ownership information for digital creative assets. Po.et is a continuation of Proof of Existence, the first non-financial application of the blockchain.

An interesting article of February 2018 explained how the blockchain may be a solution which could definitely solve the adult industry of pornography. Already various projects are underway with ICOs in relation to this industry, as stated by the author of the article on El País (cryptocurrencies like Sexcoin, Titcoin will be used as purchasable tokens and reusable on the various adult blockchains by keeping complete anonymity).

Conclusions

The blockchain technology has created a whole new playing field, and the game could yet be very hard-fought. With the prize at stake of higher transparency, efficiency and cost-effectiveness, it remains to be seen whether this becomes a winner-takes-it-all race and how the issue of standards for the technology will be managed.

Blockchain enables a completely new level of information exchange between different kind of industries, some of them unknown until now and others just emerging.

This new technology has a huge potential to help everybody improve their creativity, their relationship with technology and the realization of new business and, consequently, increase the value of such new creations. Obviously, the protection of these new assets will be closely linked to the protection of intellectual property, a field in which, as we have seen previously, Blockchain is already playing a leading role, providing different solutions to securing IP assets and innovation processes.

In our opinion, although blockchain is still growing day after day, it is getting closer to its breakout moment and it is just a matter of time before it will be necessary to adapt all related regulation, inter alia, IP laws.

[1] https://cryptodisrupt.com/blockchain-in-pharmaceuticals-fighting-counterfeit-drugs/

[2] http://www.expansion.com/directivos/deporte-negocio/2018/07/03/5b3a8605e5fdea8f2f8b45ba.html

Relevant amendments to the Industral Property law of Mexico

Citlali Carlos
Associate attorney at VILA Attorneys at Law

There have been two transcendental amendments to the industrial property law of Mexico, which are important to keep in mind for those EU SMEs who are planning to invest in our country.

The first amendment was published on March 13 2018, mainly in the field of Industrial Designs and Geographical Indications.

Industrial Designs:

Industrial designs refer to the appearance of a product, namely any element or combination of flat elements, with aesthetic or ornamental nature such as shape, colour, design, texture, with or without relief, that incorporated into an industrial or craft product (two-dimensional object), may serve as a pattern for industrial or handicraft production.

Most countries demand novelty as a minimum requirement for design protection.

  • Main changes: The concept of “new” is clarified for the effects of the registration of industrial designs, since previously it was stipulated that only designs created independently and that were different in a significant degree would be considered new, with no definitions given for “independent creation” and “significant degree”, now a creation is considered independent when no other identical industrial design has been made public before the filing date of the application or before the priority date, and an industrial design will be considered identical to another one, if it differs only in irrelevant details; the term “significant degree” is now stipulated as the general impression that and expert in the subject has on the industrial design, which should be different from the general impression caused from any other industrial design.
  • The validity of industrial designs has been modified, which was previously of 15 non-extendable years and that has changed now to 5 renewable years for equal periods of time up to a maximum of 25 years.

It is important to mention that, industrial designs registered before the entry of the mentioned decree will maintain their validity until the 15 years come to an end, and they will be able to be renewed for 2 successive 5 year periods, without exceeding the maximum of 25 years.

However, industrial designs’ applications submitted but not granted yet, could benefit from the new extension provided that the applicant opts in no later than 30 days after the entry into force of the reform.

Appellations of Origin and Geographical Indications:

Geographical Indications (GI) refer to signs that identify products by the name of their particular provenance, and stand out because of their quality, reputation or other characteristics which are essentially attributable to that geographical origin.

Appellations of Origin (AO) are similar to GI as long as both identify the geographic origin where a product is produced, and stand out by their quality, reputation or other characteristics, which are essentially attributable to that geographical origin as well. However, the main difference is that AO also take in consideration, the human and/or natural factors of the significant environment.

These two forms of protection are not mutually exclusive, thus they could coexist.

Main changes:

  • Unlike the Appellations of Origin, the figure called Geographical Indication is now included, which had been left out from the Mexican legislation.
  • The figure of expiration based on the lack of use for a period of 3 years is included regarding Appellations of Origin and Geographical Indication.
  • The Mexican Institute of Industrial Property (IMPI), will now recognize Appellations of Origin and Geographical Indications protected abroad, through a registry created by the Trademark Office.
  • Opposition is now introduced for Appellations of Origin and Geographical Indication, as long as the party justifies its interest to file the opposition according to the law.

The aforementioned reforms are now in force.

The second relevant amendment was published on May 18th, 2018 changing several things mainly in the fields of trademarks and opposition system.

Trademarks

Trademark is any sign, word, symbol, or a combination thereof  that are capable of distinguishing the source of  a product or a service on the market.

Main changes:

  • Non-traditional trademarks are recognized; before this amendment, only visible signs were susceptible for registration and now sensorial signs can be registered such as sounds and scents.
  • The recognition of “certification marks” is now included, which it is defined as a sign that distinguishes goods and services with qualities or other characteristics that have been certified by the owner of the mark, such as components of the product; the conditions under the products have been elaborated or the services have been rendered; the quality; process of the goods or service and the geographical origin of the goods.
  • The option of protecting geographical indications as certification marks is allowed.
  • The provision that required the registration of the trademark in order to obtain the statement of notoriously known or famous is abolished.
  • The statement of use is now mandatory, after the third year of registration of the trademark.
  • Trademark applications filed in bad faith will be now an impediment for registration and a cause of nullity if a registered trademark falls under this statement.
  • Generic and descriptive trademarks that through their use in the market have acquired distinctiveness will be susceptible for registration, known as “secondary meaning”.
  • Trade dress” figure is now included, meaning that image elements of the trademark such as size, design, color, label, packaging, decoration or any other that combined distinguish goods or services in the market, will be susceptible for registration.
  • Coexistence agreements are now allowed, meaning that the registration of trademarks or commercial names similar to others already registered or in the process of registration will be allowed, as long as the consent is given by the owner or applicant with prior rights.
  • The period to file a cancellation action based on the prior use of a trademark, that has been used whether in Mexico or abroad has been extended from 3 to 5 years.

Opposition

  • The kind of proof that can be filed on opposition proceedings is now determined.
  • The possibility of filing closing arguments (allegations) after the response to the opposition has been filed is also included.
  • The PTO will now dictate resolutions regarding the oppositions, which was not mandatory before the reform.

In general, the opposition system recently introduced in Mexico is strengthen and improved.

The aforementioned reform will come into force on August 10th, 2018.

We hope that these measures will encourage EU SMEs to protect their intellectual property rights in Mexico.

Buenas noticias para la PYME europea en Perú: cooperación en materia de Propiedad Intelectual

Sara I. Tortosa

América Latina se está configurando como una de las regiones más atractivas para la PYME europea. Cada vez más empresas se proponen internacionalizar su negocio y adentrarse en esta región del continente americano. Las PYMEs representan el 99% de las empresas en la UE, por lo que su impacto en las economías emergentes ha aumentado notablemente la competitividad y nadie quiere dejar escapar las oportunidades que ofrece Latinoamérica.

Perú es uno de los territorios con mayor atracción de inversión, gracias a los acuerdos comerciales alcanzados con instituciones y organismos de la Unión Europea, con el fin de reforzar la cooperación y concienciación en materia de protección de derechos de propiedad intelectual de las empresas, tanto locales como extranjeras.

Diversificar la inversión en territorio extranjero es una estrategia clave para los operadores que compiten en el mercado globalizado.  Sin embargo, antes de adentrarse en territorio extranjero, debemos conocer ciertos aspectos que nos ayudarán a utilizar con acierto los recursos humanos y económicos para obtener una protección adecuada de nuestros derechos de propiedad intelectual: nuestras marcas, nuestros diseños, nuestras patentes, nuestro know-how, etc… en definitiva, todo el valor que nos diferencia del resto de competidores, y cuya regulación varía de un territorio a otro.

Debido al carácter eminentemente territorial de los Derechos de PI, gozar de una protección adecuada en nuestro mercado local no garantiza protección en el mercado al que nos dirigimos, de allí la necesidad de contar con una estrategia adecuada. Desde Latin America IPR SME Helpdesk, te ayudamos con algunos consejos para reducir los riesgos de conflicto entre tus derechos de Propiedad Intelectual y los de terceras empresas que ya se encuentran operando en el territorio de destino, sin perjuicio de que sea aconsejable contar con la orientación de un profesional en la materia para la región de que se trate.

Tmview y Designview: también en Perú

Desde octubre de 2.017, INDECOPI (Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual en Perú), gracias a un acuerdo con la EUIPO  (Oficina de Propiedad Intelectual de la Unión Europea), forma parte de los sistemas internacionales TM View (desde el 10 de Octubre de 2017) y Design View (desde el 18 de Septiembre de 2017).

TM View y Design View son dos herramientas esenciales en materia de Marcas y Diseños. Se trata de dos de las bases de datos más extensas y completas del mundo, con información relevante sobre Diseños y Marcas, registradas o en trámite, (más de 44 millones de marcas y signos distintivos, y alrededor de 12,4 millones de dibujos y modelos) procedentes de 59 bases de datos de diferentes Oficinas de Propiedad Intelectual del mundo.

Estos sistemas permiten, tanto a particulares como profesionales, realizar consultas en línea, de manera gratuita, centralizada y fácil, en cualquiera de los países que integran la red.

Contienen información sobre los Diseños y las Marcas, los productos o servicios que designan, su tipología (denominativa, figurativa, mixta, entre otras) y su fecha de publicación. De este modo, podrás conocer la situación jurídica en que se encuentran y si están en vigor, así como los plazos para presentar oposiciones de terceros a las solicitudes de marca que estén en tramitación.

TM View y Design View están disponibles las 24 horas al día, 365 días al año, siendo actualizadas diariamente por cada oficina de Propiedad Intelectual.

Este convenio PERÚ-UE beneficia tanto a empresarios, emprendedores y ciudadanos peruanos como a las PYMEs europeas que pretendan abrir mercado en el país andino, ya que aumenta la seguridad jurídica tan importante para el empresario que cruza fronteras.

5 tips básicos

Te dejamos algunos TIPS a tener en cuenta antes de (i) introducir tus productos en mercados extranjeros, o (ii) de usar y/o registrar tu Marca, Diseño, o cualquier otro derecho de propiedad intelectual en dicho territorio:

  • MARCAS: Comprueba si la Marca elegida para identificar los productos y servicios de tu empresa es idéntica o similar, tanto a nivel denominativo como gráfico, a otras Marcas ya conocidas, utilizadas o previamente registradas por terceros.
  • NOMBRES DE DOMINIO: Comprueba la disponibilidad de los nombres de dominio que incluyan tu Marca o puedan asociarse con ella, o si están siendo utilizados en el país de destino y para qué tipo de productos o servicios. Esto es importante para mantener la imagen, el prestigio y los valores de la Marca.
  • DISEÑOS: Los Diseños, al igual que otros derechos de propiedad intelectual, sólo tienen efecto en el país en el que han sido registrados y concedidos. Puede solicitarse protección en otros países. Algunas legislaciones permiten la protección del Diseño no registrado, pero NO es el caso de Latinoamérica, por lo que es importante tener en cuenta este aspecto.
  • PATENTES/MODELOS DE UTILIDAD: Verifica si tu idea o invención es realmente nueva (requisito imprescindible para su registro como Patente o Modelo de Utilidad) o si ya ha sido registrada por otra persona/empresa. Recuerda que, aunque no esté registrada, es posible que ya la hayas publicado a través de otros medios (internet, o cualquier otro medio de difusión accesible al público), lo cual también impediría registrarla por carecer de “novedad”.
  • EXPLOTACIÓN DE LOS DERECHOS: Tu plan de internacionalización y expansión, debe contar con una estrategia clara de protección del patrimonio intelectual de tu empresa, para asegurar el respeto a la imagen corporativa y a los valores que deseas transmitir. Por ejemplo, es conveniente definir una política de explotación que prevea posibles acuerdos de transferencia (licencia, cesión, franquicia, outsourcing, asistencia técnica, formación, ingeniería, etc…).

Internacionalización: sí

En resumen: apuesta por la internacionalización de una forma segura y eficiente, gracias a la multitud de recursos y herramientas que existen a disposición de la pequeña y mediana empresa. No dejes de consultar nuestro blog, encontrarás contenido de interés que te ayudará a despejar tus dudas a la hora de adentrarte en el mercado latinoamericano.

Te invitamos  suscribirte a nuestra newsletter si quieres estar al día de las últimas novedades en propiedad Intelectual en Latinoamérica.

Beware of fraudulent invoices regarding your patent application or your trademark registration

INPI Portugal
Instituto Nacional da Propriedade Industrial

In the last years, we have noticed in Europe an increase in the number of fraudulent invoices being sent to users relating to trademarks or patents applications. If you receive an invoice that is unexpected or from an unfamiliar entity, please contact your Industrial Property (IP) Office or attorney before paying the invoice.

While many of the fraudulent invoices are sent via regular mail, some are sent by email. In Brazil, for instance, users are also receiving phone calls from people pretending that they belong to the legal department of the IP Office and that the applicant is at risk of losing his trademark. Typically, the invoices seek payment for various services related to applications: registration fees, filing fees or monitoring fees.

Such invoices —which are intentionally designed to look like real invoices from an official source— have nothing to do with the processing of your patent application or trademark registration, and the services they purport to provide have no value beyond the services already provided by your national, regional office or an international organization, such as WIPO, EPO or EUIPO.

National Patent and Trademark offices, as well as relevant international organisations and user associations, are working to inform users about this trend and to help them avoid falling for such scams. For example, warnings have been posted on several websites that include names of known perpetrating “companies” and examples of misleading letters. The Trademark International Index and Trademark Info Corp. became very popular in Mexico a few years ago.

As regards criminal proceedings, the EUIPO closely cooperated with the Swedish public prosecutor’s office who brought to Court an extensive scam scheme principally targeting EUTM owners. The Court passed four custodial sentences ranging between two months and one year for four of the defendants for attempted aggravated fraud.

The more this practice spreads over the Latin American countries, (in Brazil has some significance), the more important it is for applicants of international trademarks or patents from these countries to be aware of this situation.

If you are a PCT or an International Trademark applicant and you receive one of these invoices, first check WIPO’S warning page and see if it matches any of the examples. If not listed there, send an e-mail to WIPO with a copy so it can be added to the collection.

If you registered by yourself, you are also recommended to contact the National Intellectual Property Office involved to be sure that there is no scam and make a complaint, if afirmative. Most of them provide assistance on this issue (i.e. Brazil), but if you want to know more about what to do in case you receive one of those invoices, do not hesitate to contact our free of charge, confidential, fast Helpline. Our experts will be happy to support you.

And most importantly: Do not pay!

Madrid System governed only by the Madrid Protocol

INPI
Instituto Nacional da Propriedade Industrial

The Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks — the Madrid Protocol — is one of two treaties comprising the Madrid System for international registration of trademarks.

The protocol is a filing treaty and it provides a cost-effective and efficient way to ensure protection for marks in multiple countries through the filing of one application with a single office, in one language, with one set of fees, in one currency.

The Madrid Protocol also simplifies the management of the mark, since a simple, single procedural step serves to record subsequent changes in ownership or in the name or address of the holder with World Intellectual Property Organization’s International Bureau.

With the recent access of Algeria to the Madrid Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, the filing and management of international registrations will be simplified. Signatory to the Madrid Agreement since 1972, the country was the last of the 95 members of the Madrid System which was not party of the Protocol.

This represents a milestone for the Madrid System. From now on all the international registrations of marks will be exclusively governed by the Madrid Protocol.

As explained by WIPO, “An international registration produces the same effects as an application for registration of the mark made in each of the countries designated by the applicant. If protection is not refused by the trademark Office of a designated country within a specified period (12 or 18 months), the protection of the mark is the same as if it had been registered by that Office. The Madrid system simplifies greatly also the subsequent management of the mark, since it is possible to record subsequent changes (such as a change in ownership or a change in the name or address of the holder) or to renew the registration through a simple single procedural step with the International Bureau of WIPO. Further countries may be designated subsequently.”