Blockchain and IP: Smart Contracts, Protecting Innovations, Enforcing Licenses, and More

Description

Blockchains are decentralized, peer-to-peer networked databases that can store and authenticate a ledger of assets and asset transactions. One significant benefit of blockchain technology is that transactions can occur without a third-party intermediary; instead, transactions are validated by consensus. The best-known use to date has been Bitcoin cryptocurrency transactions, but major companies are employing DLT in many other environments.

Blockchain technology provides the underlying platform for the issuance and redemption of crypto-tokens as well as an environment for the operation of smart contracts. Crypto-tokens can take myriad forms to represent units of value, rights, privileges, and/or access and for trade among interested parties. Smart contracts are computer programs designed to implement aspects of a transaction. Beyond just transferring value from one place to another, smart contracts can access and transfer a variety of information depending upon predetermined conditions. Counsel advising clients developing or participating in a blockchain need to grasp both the technology and the legal ramifications involved.

Blockchain and DLTs, including smart contracts, are undergoing a rapid rate of technological innovation. In particular, innovations are being made in respect of specific technical innovations that attempt address technical problems relating to scalability (e.g., transaction throughput), human error (e.g., lost keys), protocol hardening/security (e.g., improved cryptography), and token minting (e.g., modified proof-of-stake), among others. Further innovations are being made in respect of uses of private DLTs operated on semi-trusted or trusted nodes within an organization or a set of organizations. These innovations are protectable using various intellectual property protections, including, for example, patents, copyrights, and trade secrets, but care needs to be taken in how the innovations are described and characterized to obtain protection.

Listen as our authoritative panel explains the technology behind blockchain and DLT and its growing list of applications across a spectrum of industries. The panel will also discuss some of the legal issues involved with blockchain-based offerings, including government regulations, privacy laws, intellectual property, and smart contract enforcement.