Using blockchain to co-create the future EU
anti-counterfeiting infrastructure
Nowadays, people live within worldwide virtual communities, just a click away from producing, sharing, buying and enjoying an ever-increasing diversity of products. The online world relies on trust that:
- you’ll get what you bought;
- your personal data won’t be misused and diverted;
- you know who’s behind what you purchase; and
- you’ll receive the original product you ordered and paid for.
Consumers are more and more confused about whether a product is authentic or not. In 2017, 10 % of EU consumers (approximately 43 million citizens) were tricked into buying a fake product instead of a genuine one. This figure represents the size of the combined populations of Belgium, Bulgaria, Greece, Ireland and Portugal. Over three times more people, 35 % (approximately 150 million in total!), wondered whether the product they had purchased online was real or fake .
It is apparent that free riders, criminal organisations and others involved in illegal activities use the potential of the virtual world for their personal gain, with no consideration for environmental, health and social standards, not to mention the safety and health of consumers. This illegal EUR 338 billion worldwide business is growing.
We all face the risks of fakes and this is a concern for everybody, so we all have a stake in the game.
At a global level, the European Union is involved in diplomatic and economic efforts to fight against fake goods. The protection of intellectual property rights (IPR) is a cornerstone in this effort that helps to sustain creativity, innovation and entrepreneurship. Once an IPR has been registered, the product and its related brand are protected by the system, and the owner is then considered an ‘IP rights holder’. This legal protection is then used by businesses, customs authorities, law enforcement, judiciary, courts of law and various other enforcement authorities that are active, within the legal and procedural constraints, in the fight against counterfeiting. Within this coalition, the European Union Intellectual Property Office (EUIPO) is a key player; as a European Union agency with a global focus, it is connected with its counterparts across the globe in the fight.
However, even with this strong coalition, it is simply impossible to track every package and every shipment entering into EU territory at the current time. There are huge challenges, such as the massive amount of goods transported in small parcels, the bureaucracy involved and all the protocols and processes to be followed in different countries.
Furthermore, there are many tools, solutions and ways to fight counterfeiting but they work separately, are centralised, with little synchronisation and there is no way to connect all the relevant players: the EU, intellectual property offices, governments, customs and other enforcement authorities, manufacturers, retailers, shipping companies, ports and airports and, above all, us — the citizens.
In a nutshell, we need more synchronisation and decentralisation.
Could blockchain live up to the challenge?
We need greater interconnectivity and the trust of all the actors involved in this process. Could blockchain live up to the challenge and help to build the next generation of an anti-counterfeiting infrastructure? Could blockchain be the basis of a common platform for everyone involved to interact and work together?
We need ways to be able to communicate what is true (authentic) and what has actually occurred throughout the entire supply chain: from the manufacturer through to the consumer. A secure, collectively shared truth. By doing so, everyone involved can help fight counterfeiting in a smarter and more effective way.
This is what the EUIPO, in collaboration with many other partners and organisations from both the public and the private sectors, is daring to explore. The aim is to link existing tracking solutions available in the market, as well as public databases of intellectual property, through a blockchain solution. The idea is to develop an infrastructure where anybody interested (producers, consumers, transport services, etc.) would be able to check the authenticity of any product openly and easily, as well as the possibility to alert rights holders to fakes. Perhaps one day you will be able to do all of this by just swiping your smartphone … dreaming is allowed.
Blockathon Team blockathon@euipo.europa.eu