What is branding and brand protection?

A trademark is a unique name, symbol or image used to identify a business or brand, distinguishing it from competitors' products or services. Trademarks play an important role in building consumer trust and increasing brand awareness. The legal and strategic steps taken to protect a brand and its reputation are called brand protection. This includes measures to prevent unauthorized use, counterfeiting and infringement of a brand in order to protect the uniqueness and integrity of the brand.

Brand protection faces many challenges, with infringement and counterfeiting being two major issues. Counterfeiting not only undermines brand value but also impacts consumer trust and safety. Online brand infringement adds complexity as counterfeiters can operate anonymously and globally across digital platforms. In addition, managing global legal frameworks requires thoughtful strategies to prevent cross-border infringement.

Today’s brand protection strategies include technology, proactive enforcement, and legal action. Legal channels, including intellectual property law and trademark registration, provide the foundation for protection. Technologies, such as digital watermarking and blockchain, provide advanced authentication and traceability methods. Brands also regularly monitor, investigate, and cooperate with law enforcement to detect and respond to infringement cases quickly. However, as counterfeiting activities change, brand protection methods must continually evolve and adapt.

How blockchain improves brand and trademark protection

Source: Cointelegraph

Anti-counterfeiting software is one of the important applications of blockchain in protecting brands and trademarks. With blockchain technology, businesses can create immutable records of product legitimacy. Each product can be assigned a unique identifier, allowing retailers and customers to instantly verify the authenticity of the product. This not only protects customers from counterfeits, but also helps businesses maintain their reputation, ensure data integrity, and attract new customers.

In addition, supply chains benefit from the transparency and traceability that blockchain provides, allowing businesses to track the flow of goods from production to distribution. Blockchain helps businesses confirm the legitimacy of products and detect illegal or counterfeit items circulating in the market. This not only protects the reputation of businesses but also builds consumer trust by ensuring product authenticity.

The implementation of smart contracts also enhances brand protection by automating licensing and enforcement processes. These self-executing contracts are designed to perform specific tasks when conditions are triggered. Smart contracts help brands protect their trademark rights, such as automatically penalizing unauthorized use or triggering licensing agreements when a product is sold. This reduces the need for manual enforcement procedures, optimizes brand protection efforts, and ensures compliance across the supply chain.

Benefits of applying blockchain in trademark and brand protection

Immutability is a major advantage as blockchain creates an unchangeable record of transactions, making it extremely difficult to counterfeit or modify brand information. This reduces the risk of intellectual property theft or infringement, while ensuring the authenticity and integrity of brand assets.

Furthermore, public blockchains eliminate the need for intermediaries such as centralized authorities or registries, simplifying the trademark registration process and reducing administrative costs. Smart contracts can be programmed on the blockchain to automate processes such as royalty payments and licensing agreements. This ensures compliance and reduces the likelihood of disputes.

Blockchain also enhances transparency by providing stakeholders with real-time access to the history of trademark ownership and use, allowing them to verify the validity of a trademark and monitor its use across different markets.

Similarly, non-fungible tokens (NFTs) provide a unique digital representation of an asset, allowing businesses to tokenize their brand and securely verify ownership on the blockchain. By providing reliable proof of ownership and provenance, this technology enhances brand identity protection, reducing the risk of counterfeiting and unauthorized use.

Additionally, blockchain ensures seamless management and protection of digital assets in virtual environments as businesses enter the metaverse. Through the use of blockchain-based registries and smart contracts, brands can establish and enforce brand ownership in virtual spaces, fostering authenticity and trust in digital interactions. In this context, NFTs play a vital role, enabling the creation of branded virtual products and experiences with real value and exclusivity.

Challenges in applying blockchain in trademark and brand protection

First, stakeholders do not fully understand or lack knowledge about blockchain technology and how it can be applied to trademark protection. Businesses may hesitate to adopt blockchain because they think the technology is complicated or unfamiliar.

Additionally, integrating blockchain technology into existing systems and processes can be difficult and costly. Effectively implementing blockchain may require restructuring of infrastructure and significant investment in new technology and skilled human resources. This is a major obstacle, especially for small businesses with limited budgets.

The implementation of blockchain in brand protection is further complicated by issues related to scalability and interoperability. As blockchain networks expand, scalability issues may arise, leading to longer transaction processing times and higher costs. In addition, interoperability between different blockchain platforms and traditional systems must be addressed to ensure seamless integration and data sharing.

Furthermore, the use of blockchain in brand protection is also hampered by regulatory and compliance issues. Many businesses must comply with stringent regulations related to consumer protection, intellectual property rights, and data privacy. Navigating different legal frameworks and ensuring that blockchain systems comply with existing regulations and standards can be a complex and time-consuming process.

Practical application cases

Aura Blockchain – Luxury Product Transparency and Authentication

LVMH, Richemont, OTB, Prada, Mercedes-Benz have joined forces to develop the Aura Blockchain Consortium platform, a blockchain solution designed to support the entire luxury industry in tracking and tracing products.

Aura enables detailed information about each product to be stored on a shared ledger, covering the entire journey from raw materials, manufacturing, distribution to the second-hand market. The platform gives consumers the ability to access product history and verify authenticity through the brands’ official app, increasing transparency and protecting authenticity.

The Aura Blockchain platform is built on Ethereum blockchain technology, and uses Microsoft Azure to provide related services such as product care and warranty.

For example, at LVMH’s Hublot brand, Aura Blockchain is used to verify the provenance of goods. When a Hublot watch is sold to customer A on day X month Y, the transaction is recorded on the blockchain. In the future, if this customer gifts or resells the watch, the transaction information with Hublot is still stored in the security code of the Aura Blockchain system. This allows the new owner to easily have the watch serviced when needed.

De Beers – Preventing Counterfeiting in the Diamond Industry

De Beers Group, a leader in the diamond industry, has deployed the Tracr blockchain platform at scale to increase transparency and ensure the provenance of diamonds. It is the world’s first distributed blockchain platform designed to track the journey of diamonds from the source of mining, providing immutable assurance of provenance and helping to prevent counterfeiting. Tracr allows retailers and customers to access transparent information about the provenance of each diamond.

The platform uses blockchain technology combined with artificial intelligence (AI), the Internet of Things (IoT) and advanced security technologies to ensure that data is stored securely and cannot be tampered with. Tracr operates on a decentralized model, allowing supply chain partners to control access to their data and share information only with permission. This not only enhances data privacy but also ensures scalability and processing speed, with the ability to register up to 1 million diamonds per week on the platform.

BMW – Traceability of spare parts

BMW has deployed the PartChain platform, a blockchain solution that aims to increase transparency and traceability in its international supply chain. The platform allows BMW to track the entire journey of components from source to manufacturing plants, facilitating improved audit efficiency and compliance. PartChain was developed with the goal of bringing suppliers onto a common blockchain system, ensuring that supply chain data is securely recorded and continuously verifiable.

PartChain uses Hyperledger Fabric blockchain technology, combined with cloud services from Amazon Web Services and Microsoft Azure, providing high scalability, processing speed and security. In the pilot phase, the platform has been applied to monitor headlights from the supplier Automotive Lighting, and BMW is now expanding the project to more suppliers, along with deployments at 31 of the group's production sites.

BMW also has a long-term goal of using blockchain to trace the origin of important raw materials, such as cobalt – an essential component in electric vehicle batteries.

Besides PartChain, BMW has applied blockchain in other projects such as VerifyCar, partnering with VeChain to develop an app that helps used car buyers verify mileage and maintenance history.