Cryptocurrency startups are gradually warming up to the new trend of tokenizing intellectual property rights. As a result, many firms are optimistic about it.
Cryptos that are based on blockchain enable patent holders to convert their rights into digital assets. This means that the blockchain technology holds the key to several opportunities in the manner that startups purchase or sell an intellectual property or even in the way that they license.
Those owning intellectual properties are faced with challenges when it comes to managing income channels. Safeguarding patents is also a tedious process that is labor intensive. More often than not one has to seek the services of lawyers. Unlike sports figures, big firms or even celebrities who do not seem to mind that at all, small software developers or even programmers find it difficult.
Difficulty in tracking usage
Even though it is easy to find out any time a patent has been in a commercial, it becomes a problem when one tries to trace how it was used. It is the responsibility of the patent holders to prove that they actually own the rights and to enforce them.
In a bid to avoid this process of enforcing which is expensive and takes time, tech companies are coming up with projects which are capable of tokenizing the sector. Distributed ledger technology which drives blockchain will accurately identify who owns what patent.
Last month, Ernst & Young (EY) and Microsoft unveiled a blockchain solution that will aid in managing royalties and patent rights. Its main aim is to tame the expensive and time-consuming procedures that patent holders take to get royalties.
Complex patent rights
Patent rights sometimes tend to become very complex. Software development, for example, is mostly faced with overlapping patents. Since it involves several programmers to develop, ascertaining who is entitled to what becomes a challenge. It is claimed that developing a smartphone may take up to 250,000 patents.
EY’s Paul Brody stated that the scale, complexity, and volume of digital rights and royalties payments make this a perfect application for blockchain. He stated that a blockchain can handle the unique nature of each contract between digital rights owners and licensors.
A firm based in Estonia, Lexit plans to develop a blockchain based registry for intellectual property rights. it will enable buyers and sellers to interact with each other via an online marketplace.