Blockchain on the Red Carpet!

Blockchain has consistently been a sought after concept since a decade of its entry into the world market.[1] The multi-fold level of authenticity backed by security checks makes it the next big thing sought by industries ranging from finance to fashion. It is capable of revolutionizing many sectors that have an urgent need for development.  

So what exactly is Blockchain?

In simple terms, blockchain means the computational recording of a series of individual blocks (intermediaries) placed in one complete chain or circuit which helps trace the participants belonging to that chain, the entire journey of a product. These blocks represent the different stages/steps that exist in the product cycle and provide a mechanism to check them which ensures a minimum level of authenticity of the products which are finally available for the purpose of consumption.

Blockchain and IP

The inclusive nature of IPR did not allow for blockchain technology to stay out of its realms for a long time. Initially, the use of blockchain was heavily relied upon in one type of IP, patents, which is now diluting with due time and awareness and other types of IP like trademarks, copyrights, and even designs are welcoming the blockchain technology. The shared goal of IP and blockchain, which is to create a network of trust by maintaining the authenticity of any creative work and at the same time protecting those creative rights, is fundamental to the relationship between blockchain and IP. In the near future, we are sure to witness the growth of an interdisciplinary approach to the study of IP and blockchain.

Blockchain and Fashion Industry

The fashion industry can be a little hesitant to adapt to the world of technology but the interface between the fashion industry and technology can never be undermined. For that matter be it the iconic Versace “jungle dress” worn by Jennifer Lopez that crashed Google and led to the creation of Google Images or be it the use of 3D (three-dimensional) design and printing technology used by Iris van Herpen to create futuristic couture pieces, technology is braided in the fashion industry.

The case with blockchain technology is no different and as early as in 2017 the use of blockchain was first experimented to run a full collection which was successfully attempted by designer Martine Jarlgaard at the London Fashion Week (LFW).[2] In the summer of 2019, San Francisco jeweler‘ Brilliant Earth’ in partnership with Everledger came together to introduce blockchain-integrated diamonds.[3] The world’s largest luxury conglomerate, Moët Hennessy Louis Vuitton (LVMH), has collaborated with Microsoft and Consensys to create “Aura”, a platform to check upon the counterfeit goods by means of blockchain technology.[4] These examples are a testimony to the visionary nature of the fashion industry in incorporating the changes that occur with time.

A stoppage to counterfeits is what is deemed to be the most celebrated of all benefits accruing from the adoption of blockchain technology in the fashion sector. Counterfeits are intrinsically hazardous to the health of a brand. They offer cheap alternatives in the same trade dress thus making it practically impossible at times to differentiate the fake from the real ones. The counterfeits enjoy a market worth $300 billion.[5]  The staggering share of counterfeits in the market is a matter of serious concern because counterfeits do not exist in isolation and tend to take a toll on the workers manufacturing them, brand repute, and many veiled procedures that go untraced. For example, any cosmetics brand which claims to be vegan and gluten-free would find its counterfeits using hazardous chemicals which is sure to cause serious infections and risks of skin cancer too.[6] Blockchain helps trace the sources of raw material used, the origin of the goods, and its subsequent transfers which assure the authenticity of products to the consumers which the counterfeit goods could not. This mechanism helps maintain a fake-free supply chain.

Blockchain also offers smart contracts that are easier to access and handle than the traditional contracts. They can be used to establish and enforce IP agreements such as licenses and allows for the transmission of payments in real-time to IP owners.[7] They are best suited for standard-form contracts which are less subjective in nature and ensures that the transactions are far less opaque, verifiable, and impenetrable.[8] They also ease out the process of maintaining register to keep records of all executions mentioned in the contract. These contracts can be best used for license agreements which is an important part of the fashion cycle.

The benefit of tracing the product origin in a supply cycle helps identify the condition of workers. It is a widely accepted brutal truth of the fashion industry that major brands across the world target cheaply available and manually efficient Asian workforce for the majority of their produce. The conditions in which they work and remunerations paid are both deplorable in nature. The saddest part about the whole system is the employing of child labor to produce luxury goods.[9] Blockchain could help consumers make conscious choices and help boycott brands that use child labor for their manufacturing process by tracing the roots of the raw material procurement process and early stages of fabric production.

The benefits of RFID (Radio Frequency Identification) Chips or QR (Quick Response) Codes also come handy to track the journey of a cloth.[10] This system proves effective when luxury items are sold from customer to customer. This customer to customer transfer can take place through auctions or on personal levels too. This entire system is a boon to the vintage/classic item collector’s that spend millions in buying pieces of fashion that can be compared to the richest pieces of art. Digital Clothing, which is a new phenomenon where digital clothes are produced and mostly auctioned, employs the trust created out of blockchain to ensure that no rip-offs are created of the same digital garment.[11]

The above mentions are the select honorable ones and being at a very nascent stage it would be interesting to look at the inter-relationship between the two. Blockchain is slowly seeping in the fashion industry and is taking over the conventional ways of doing business. This is a must-watch moment in the history of fashion which has come long after the age of liberation in which women were freed from the painful corsets by Coco Channel back in the 1920s.

Blockchain and Geographical Indications (GI)

GIs wedding with blockchain could be the most groundbreaking leap for the development of GI. In India, GIs are the worst affected by counterfeits and low investments. In this article, we would dwell only on the ways to combat counterfeits. Blockchain could prove the most effective way to ensure product quality and consumer safety. With the introduction of blockchain, consumers would be easily able to differentiate the products and trace the origin of the products. The place of origin of a product is what makes GI most effective and this could help GIs receive international recognition for their quality of products.

The deplorable state of GI is well known to us and we see no reform coming anytime soon. So, the government has time to plan out a policy to integrate the GIs in the blockchain-fold. Communities sharing GIs are not well technologically equipped to introduce blockchain technology on their own. Thus through increased governmental intervention in bringing blockchain to GI could save the dying GI industry.

Conclusion

Blockchain is a timely savior. As the fashion industry is heading towards its goal of sustainability, reducing counterfeits in the market is a necessity. In the absence of a strong authoritative body in place to look after the abolishment and punishment for counterfeiting, many countries lack the motivation to stop the circulation of counterfeit goods in the market. Also, the quantity produced stands at a staggering number which keeps us guessing at the level of exploitation and environmental damage that underwent in the production of such goods.

The effectiveness of blockchain would be tested in the near future when we actually get to see the implications of its usage. There have been reports of blockchains being hacked which is shocking and concerning at the same time.[12] It is with increased governmental intervention and the presence of strong cyber laws in a nation, blockchains cannot otherwise guarantee protection in the life-cycle of a product. Given the expensive and complex nature of blockchain technology, it would be interesting to see how this technology would be beneficial for young and emerging fashion brands that generally lack financial investments. The absence of blockchain laws in major raw material supplying countries like India and Bangladesh poses another question as to the effectiveness of blockchain technology. Therefore it seems that we are not yet ready to fully embrace blockchain technology and with governmental participation, this process can be eased out through policy considerations and timely planning. 


[1]https://www.forbes.com/sites/bernardmarr/2018/02/16/a-very-brief-history-of-blockchain-technology-everyone-should-read/.

[2]https://www.lsnglobal.com/fashion/article/21894/martine-jarlgaard-on-blockchain-technology-and-the-future-of-sustainable-fashion.

[3] https://www.brilliantearth.com/conflict-free-diamonds/

[4]https://www.itrportal.com/articles/2019/05/21/lvmh,-consensys-and-microsoft-announce-aura,-a-consortium-to-power-the-luxury-industry-with-blockchain-technology/.  

[5]  https://www.visualcapitalist.com/300-billion-counterfeit-goods-problem/.

[6]  https://www.bbc.com/news/uk-45313747.

[7]https://www.wipo.int/wipo_magazine/en/2018/01/article_0005.html#:~:text=Smart%20contracts%20could%20be%20used,music%20or%20an%20image%20file)..

[8]  https://www.mondaq.com/india/copyright/715818/smart-contracts-in-ipr-paradaigm.

[9]https://www.hannessnellman.com/news-views/blog/blockchain-a-new-trend-in-the-fashion-industry/#:~:text=Uses%20of%20Blockchain%20in%20Fashion%20Industry&text=By%20combining%20blockchain%20technology%20with,garment%20to%20the%20end%20consumer

[10]https://www.hannessnellman.com/news-views/blog/blockchain-a-new-trend-in-the-fashion-industry/#:~:text=Uses%20of%20Blockchain%20in%20Fashion%20Industry&text=By%20combining%20blockchain%20technology%20with,garment%20to%20the%20end%20consumer

[11]https://www.designboom.com/technology/digital-clothes-virtual-fashion-carlings-the-fabricant-11-18-2019/#:~:text=digital%20fashion%2C%20which%20refers%20to,the%20negative%20effects%20of%20manufacturing. 

[12]https://www.technologyreview.com/2019/02/19/239592/once-hailed-as-unhackable-blockchains-are-now-getting-hacked/.  

Leave a Reply

Your email address will not be published. Required fields are marked *