The digital age has transformed how information is accessed and shared, offering creators the unprecedented opportunity to reach their audience instantly. Organizations whose core competency is intellectual property (IP), such as publishing firms, have embraced the Internet's capability to reach a global audience from the comfort of their offices.
However, this advancement has also introduced new challenges. Publishers are struggling to protect their most valuable assets more than ever. Additionally, registering a copyright can be costly, making the creation even more vulnerable while waiting for the lengthy process to be completed. If IP holders considered to sell off IP ownership, they are often at a disadvantage, as the traditional methods of IP valuation often fall short, focusing mainly on initial sales rather than potential future earnings (Bonnet & Teuteberg, 2023). This leaves IP often undervalued, and it's difficult for publishing firms to attract top authors concerned about IP safety, fair compensation, and control over their works.
The Promise of Blockchain Technology
However, amidst these challenges, blockchain technology (BCT) has emerged as a promising solution. Imagine a world where every creative idea and invention is securely stored in an immutable digital vault, protected from unauthorized use yet accessible to the global community. The World Intellectual Property Organization (WIPO) stated in 2020 that blockchain, known for its decentralized structure and cryptographic security, offers a revolutionary approach to safeguarding and managing IP.
BCT functions as a decentralized ledger where transactions are recorded across a network of computers, ensuring data immutability and transparency (Nakamoto, 2008) since data, once recorded, gets encrypted with the “hash” (a 64-digit code) and cannot be changed. Originally designed for cryptocurrency, blockchain has evolved to include features like smart contracts and non-fungible tokens (NFTs) for IP protection. Smart contracts are automated agreements written into code, facilitating the automatic execution of terms such as royalty payments and copyright management, thus reducing reliance on intermediaries and minimizing disputes (Patrickson, 2021; Tapscott & Tapscott, 2016). NFTs are digital assets like art, music, and books, offering proof of ownership and authenticity on the blockchain, empowering creators to monetize their work directly and gain greater control over their revenue streams (Lee, 2023)
How can publishing firms leverage blockchain?
Blockchain enhances IP security by making IP records tamper-proof and transparent, thereby minimizing the risk of unauthorized use or piracy (Bonnet & Teuteberg, 2023). Transactions are publicly visible, providing transparency and real-time traceability of ownership history and usage rights to stakeholders (Modic et al., 2019). BCT empowers creators by facilitating direct consumer engagement via smart contracts and non-fungible tokens (NFTs). This enables them to negotiate fairer agreements and receive appropriate compensation for their creations (Sekerin et al., 2021). Another notable benefit of BTC is NFTs, which introduce new revenue streams, allowing creators to explore innovative models like fractional ownership and royalties from secondary sales, thus expanding their income opportunities (Ryan et al., 2023). In other words, once a creation, like an eBook, is created in the blockchain network, the record of ownership is created and cannot be altered. The eBook could be sold as an NFT to readers via smart contracts where the usage of the eBook is clearly defined. Should the eBook be resold, a royalty distribution to the publisher and creator could be enforced even if the sale is from one reader to another. This tracking of sales in all forms creates a bigger picture of the IP’s value and could be leveraged when selling off rights.
Future Outlook
As blockchain continues to evolve, its integration into IP management promises to revolutionize industries like publishing and music, offering creators unprecedented security and financial empowerment (Bonnet & Teuteberg, 2023). Although blockchain technology is not yet fully understood and is gradually gaining legal recognition, it remains primarily confined to the digital world. IP holders continue to depend on traditional copyright firms offline, underscoring the ongoing need for additional research to clarify its adoption techniques in conventional business models. One thing is certain, though: blockchain is here to stay!
References
Bonnet, S., & Teuteberg, F. (2023). Impact of blockchain and distributed ledger technology for the management of the intellectual property life cycle: A multiple case study analysis. Computers in Industry, 144, 103789. https://doi.org/10.1016/J.COMPIND.2022.103789
Lee, E. (2023). NFTs as decentralized intellectual property. Univerity of Illinois Law Review , 2023(4), 1049–1122. https://eds-p-ebscohost-com.ezproxy.umgc.edu/eds/detail/detail?vid=21&sid=1dee5238-ac4a-4ae9-99b3-4fb440f97fb8%40redis&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d#db=edo&AN=171908739
Modic, D., Hafner, A., Damij, N., & Cehovin Zajc, L. (2019). Innovations in intellectual property rights management: Their potential benefits and limitations. European Journal of Management and Business Economics, 28(2), 189–203. https://doi.org/10.1108/EJMBE-12-2018-0139
Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Bitcoin.Org. https://bitcoin.org/bitcoin.pdf
Patrickson, B. (2021). What do blockchain technologies imply for digital creative industries? Creativity and Innovation Management, 30(3), 585–595. https://doi.org/10.1111/CAIM.12456
Ryan, M. D., Macrossan, P., Wright, S., & Adams, M. (2023). Blockchain and publishing: towards a publisher-centred distributed ledger for the book publishing industry. Creative Industries Journal, 16(1), 2–21. https://doi.org/10.1080/17510694.2021.1939541
Sekerin, V., Slepov, A., Gayduk, I. S., Bank, V., & Kravets, V. (2021). Blockchain technology development as tool for enhancing security in management and protection of intellectual property rights in additive manufacturing. Geintec, 11(2), 2237–0722.
Tapscott, D., & Tapscott, A. (2016). Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin. https://dontapscott.com/books/blockchain-revolution/
Great post of a very timely topic, Alesja! Well done, Dr. Bob