Anti-counterfeiting Blockathon Infrastructure

The Anti-counterfeiting Blockathon Infrastructure

There are a number of blockchain-based solutions that have been initiated by the private sector. Some of these solutions have the same purpose, are used in the same sector and sometimes even interact with each other. However, most of them are tailored to the needs of a specific business and work independently of others.

There are many private initiatives developing, notably to authenticate and track products, but they tend to work in silos, with no possible way to interconnect these different solutions throughout the supply chain. Counterfeiters use this to their advantage. In an attempt to overcome this issue, the EUIPO has been working on a pilot for a blockchain-based system that would interconnect all the interested parties and their systems to ensure product authenticity throughout the whole supply chain, and eventually beyond.

As part of this pilot project, the infrastructure itself will be developed through cooperation with several stakeholders, united under the Blockathon Forum. The EUIPO solution would provide them with the means to transfer a product alongside its virtual equivalent, with the latter being stamped with an immutable digital signature from the brand owner. It will not compete with existing solutions such as Non-Fungible Token (NFT) platforms, private or public blockchain track and trace solutions or existing and digitally enabled product ID serialisation. Instead, it will leverage them to guarantee that the product is genuine and its current holder is identified.

Specifically, during the whole product journey, organisations and product holders will be identified through a trust register created and maintained by the EUIPO, which will also leverage pre-existing databases and enforcement tools (TMview, DesignView, IPEP and IP Register in Blockchain). For the first block of this global chain specifically, the EUIPO register would guarantee rights holders’ identification and validate their capacity to sign the NFT, which will then be linked to the physical products. Using a standardised data structure and a uniformed protocol language, the solution would then allow logistic operators, freight forwarders and other carriers to interact in the logistics nodes via scan events, until the product reaches the retailer or the end consumer. Additionally, the solution aims to interconnect with the risk analysis systems of interested enforcement authorities, possibly to improve current alert mechanisms as well as product green lanes at the borders.

The EUIPO expects to release a first version of the solution by the end of 2023, and, in the long term, ideally scale up and evolve in order to connect to the European Blockchain Service Infrastructure and the European Self-Sovereign Identity Framework.

Let’s continue fighting fakes and shaping the future together!

What’s in it for…

Brand owner / Rights holder Challenge

As an IP rights holder, the threat of counterfeiting is very real. When my products are counterfeited, my brand, in which I invest because it is part of the trust relationship with my client, is damaged

Since a fake and a genuine product can look almost identical nowadays, I need to ensure the authenticity of my products to the rest of the supply chain, customs authorities, and ultimately, the consumers. To guarantee product authenticity, I am using different types of ID serialisation techniques, but I know they can be tampered with. When that happens, I need means to alert of a potential infringement to the rest of the supply chain.

Furthermore, I might need to pay attention to my products after their production, and I need a mean to communicate with the rest of the supply chain. This is the case when my products have a second life in the aftermarket or resale process, when they might be recalled if they have been tampered with or are simply no longer consumable.

What EUIPO Solution could provide for me …

Product authenticity

All my products have been signed digitally by me. Anyone involved in the supply chain can scan the product and confirm its authenticity, including law enforcement authorities, at any time. I also sign the shipment request that triggers the logistic and transport journey of the product, so that a source of trust in the chain is established from the beginning.

Information sharing

By providing the right level of information to the right actor in the chain, we create a trusted network to share data and a common protocol for alerts and fast decision-making and actions against the counterfeiters or tampered products.

Enhanced communication

Further building upon the solution in the long run, we provide communication means and services to the end product holder in terms of product recalls or expiration alerts, as well as after sales or loyalty programme opportunities.

Transport & Logistics Operator Challenge

As a logistics operator, I am a key link in the supply chain. My clients are rights holders of all shapes and sizes. I want the best service for my clients; I don’t support free riders or organised crime.

My business is dependent on my reputation to deliver reliably, quickly and cost-effectively. I need the products I deliver to be legit and do not want to be a part of criminal activity. I want to be protected from handling dangerous fake products, which jeopardise my business and the people I deliver to.

Furthermore, Trucks or storage facilities that are held for inspection cause delays, and any seizures damage my reputation. I need to be able to reassure consumers and authorities that my business can be trusted.

Given the number of companies that can be involved in this global logistical network, I need great communication with those located upstream and downstream. When I receive goods to store or move, I want to be sure they are safe and authentic.

As an ethical employer, I safeguard my employees from any concerns about their safety or held under any suspicion. They can be proud to play their part in a trusted distribution system.

What EUIPO Solution could provide for me …

Collaborative system

All movements of products are now tracked from location to location with an authenticity signature from the brand owner. The change of operator will be notified to the rest of the parties in the chain.

Certainty

At every step of the journey, goods remain authentic. There is no chance of handling fake goods.

Enhanced processing based on trust

Customs agents can trust that the products I transport are authentic and that transport has been issued by the real brand owner. In the long run with such a solution, there would be no reason to inspect our facilities or trucks for authenticity.

Customs Authority Challenge

As a custom agent, I am working to intercept counterfeit products. I look for a smarter way of doing our important job, which stops criminality by keeping fake products out of the European Union. Right now, I can only check a small percentage of all goods coming in. I work hard to use our data, experience and knowledge to effectively target the shipments and packages to check and intercept them.

When a shipment arrives, I have to assess its risk; the better the assessment, the better we can target our checks. There are many documents to handle such as customs declarations, cargo manifests, bills of lading and commercial invoices. I need great data and systems to increase efficiency. The quicker I can scan and verify shipments, containers and parcels, the better.

Providing I can match the data, I can use databases such as the EUIPO’s Enforcement Database to identify potential infringements, and if there are doubts, I can flag it as a suspicious case to notify the rights holder. If I receive an application for action (AFA) from the rights holder with all the relevant product and logistics information, I can be authorised to take the appropriate steps, such as seizing goods.

What EUIPO Solution could provide for me …

Additional data feeds

Parcel authenticity, and in the long run entire shipments could be proven to be authentic. The documentation accompanying a shipment can be used at the pre-arrival stage automatically to feed the Risk Assessment Systems.

Increased efficiency

With this system in place, entire shipments could be fast-tracked through customs’ authenticity checks.

Interconnection

Building upon the solution, a trusted network where customs authorities, rights holders and logistics operators could share data and a common protocol for alerts, fast decision-making and actions against the counterfeiters or tampered products.

Consumer & Retailer Challenge

As a consumer, I do not want to buy fake products. As a retailer, I want to make sure that the products I offer my clients are authentic. Beyond brand and retailer reputation, we both know that behind fake products is a world of all kinds of misery, like child labour and unsafe working environments. We both need the assurance and the tools to check whether a product is fake or authentic.

As a consumer, I also often wonder if the retail site from which I have purchased the product is legitimate, and once I pay, I worry that they will not arrive or will turn out to be fakes. As a retailer, I need better product authenticity and provenance tools, as this damages my reputation.

Every time consumers buy a product, there should be trust among all the parties involved, with the certainty that the end products received are legit.

What EUIPO Solution could provide for me …

Reliability

The authenticity of the products available for sale can be guaranteed and their shipment can be ensured.

Authenticity

In the future, when receiving the product, the authenticity validation will be made using our trusted application, avoiding purchasing a fake product. Never again should I be deceived by and retailers blamed for a fake product.

Interconnection

In the long run, this solution could allow applications to easily detect and report fake products to the rights holder and customs authorities, engaging end owners in the tracing and fight against counterfeits.

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