Future is at the door
In our turbulent time of geopolitical turmoil, when everything is evaluated according to the preferences of the majority of countries given to a certain security system or a certain alliance of the world leaders, one can see a certain inevitable third path destined for all residents of planet Earth. The path, which is aimed at finding solutions serving the interests of all mankind, eliminating the differences between black and white, things familiar and alien. Unlike trade capital, pursuing its closely personal, selfish aims, the fledgling intellectuals employed in systematization of intellectual property, also uproot the established stereotypes in the process. Despite the established pessimistic statements of the majority of Armenian population, which I am not afraid to define as menial, like the ones that “we are a small and weak country”, “Armenia is subdued by Russia”, one can see the first signs of dignified, equal partnership. The IPChain association currently active in Russia, which operates in the field of intellectual property rights, has made a wonderful proposal for equal partnership to the Armenian government. IPChain is an initiative aiming to seek mutual benefit and dignified partnership. To tell the truth, the first time I heard about it as another idea from Russia, I immediately thought it to be some regular shady undertaking. To everyone’s enjoyment, this time I couldn’t be more wrong. The interviewee of Scannews.am is the president of IPChain Association, head of the Confederation of Rightholders’ Societies of Europe and Asia (CRSEA) Andrey Krichevsky.
– Mr. Krichevsky, thank you for accepting our invitation for the present interview. I would like You to present the main idea of your activities to the general public, as simple as possible. What does IPChain do and what aims does it pursue in the foreseeable future?
– In order to provide a clear picture, I believe, we need to make a brief insight. There is an international patent system uniting patent agencies from different countries, and each of these countries has its own patent database. Unfortunately, as the said patent databases were formed a long time ago, part of them has not been digitalized properly, or has not been digitalized at all yet. It varies from country to country. Of course there is an existing system of patent search, and all databases are interconnected one way or another, it is all local and does not allow to create technology assembling systems; in other words, patents today serve as protective instruments rather than development-oriented ones. Suppose I am using patent search, looking for something, and I discover something – not quite what I am looking for, but still something; then I start wondering whether it is the right stuff, then I try to purchase that patent and in the end it turns out that I am buying a “pig in a poke”. No one knows the whole legal record there, whether the patent has been confirmed or it is debatable. There are lots of such dark areas. But for the main issue, let us look at the very essence of a patent – what is it? Say, I have invented something, developed it and came up with some things – and then at some point I realize that it needs protection. So I turn to a patent agency and submit my findings. They take them from me and store somewhere until they conduct an expert evaluation and issue the patent. Until the very moment when the patent is granted to me, I remain unprotected, despite that I am the one who has created and developed all that, spending my money, time and efforts, and most importantly, my creative potential. One must understand that intellectual ownership of an invention is not something granted simultaneously with the patent, it is not just the document (the document is merely recognition of the fact by the state, an official seal). Intellectual property is something far bigger. It can be broken down into two major blocks: copyright and industrial property right. On the one hand, these are seemingly two sides of the same coin, because at a certain stage it is still copyright (while I am creating and developing stuff). Well, for example, I have developed a cup. I have a sketch drawing – which is copyrighted by me – but then I thought that it is one nice cup which can be realized through industrial production. Then I undertake patent registration and get it to an entirely different level. So, the aim of our system is to consolidate all stages of existence of an idea and demonstrate that in reality, there are no borders between the idea, designing, know-how, industrial samples, useful model and realization of a patent. The system is more global, nothing like it exists in the world yet, it was developed a year ago and includes organizations being the largest players on the intellectual property market from different fields. Not only patents, it also includes movies, music, images, texts, even TV channels that own their individual intellectual products – broadcasting in its widest sense; it also includes pharmaceutics, not only regarding patents, but also know-hows, because a significant part of intellectual property nowadays is stored in form of know-hows rather than patents, which means creative ideas written down on a piece of paper and stored in a safe. Currently it is the safest but old-fashioned protection method, which does not provide any opportunities for further evolution. All of this has to be assembled into a single “data lake” (a trendy term with the same meaning as “database”), and we need to distribute this base, so that it is not controlled by a single holder but rather by all participants of the network, and, using network mechanisms, exchange information, knowledge and opportunities with maximum ease and use this “data lake” as a foundation to build new services, new products, develop technology assembly systems which yet seem absolutely incredible (machines that can imagine and invent things based on earlier inventions). There are current attempts to create such thing, but they lack infrastructure, i.e. the initial data. IPChain is this very infrastructure.
-Are you saying that it is… the first such thing worldwide?
– Exactly. Intellectual property is an institute universally recognized and respected, it is much talked about, but no one wonders about its nature. Sometimes people think: “well, intellectual property rights will protect me”. In reality, it is not quite so: intellectual property is the only existing instrument for transfer of intellectual product and creativity into real financial exchange, into the economy. Thus, when I realize it as an intellectual property object, I obtain a patent, a certificate of authorship and I deposit it somewhere – this is the only instrument available to me for further promotion of the product in the surrounding environment, put it into production, use any other opportunities. Currently, intellectual property is the main instrument for the economy, as creativity and human capital which produces this creativity are becoming its main resources.
– Do you believe that at some point, intellectual property can be included as a separate article into the state budget?
– The choice of the right approach is important here. If you review the state as a monopolistic subject, as a business unit (I am talking about a state where the share of the state within the economy is really high), then undoubtedly for the state, maximization of intellectual property ownership and gaining profit from it is a goal in itself. But in theory, the current tendency is different: efficient economy dictates a decrease of the state share of economy, and in this sense, it is advantageous for the state to develop intellectual property because it is a driver for the development of innovational economy, it is the driver for the development of vast numbers of start-ups, new businesses, which in their turn increase their capitalization using intellectual property. As we can understand, business growth and business capitalization growth means an increase of state profits in form of taxes. Thus, in essence, the system of interaction between the society and the state is quite simple: the state creates an environment where the society can exist in comfort, develop and conduct its activities, and in turn, the society pays taxes in order to allow the state to function. For the state, intellectual property is a very comfortable and most importantly, up-to-date instrument for support of the economy, business and creativity in the country in general.
– Well, as I understand, we are talking about rather advanced and large resources and instruments. Who will they be controlled by?
-The one who controls information controls the world. Undoubtedly, information about intellectual property objects has a great value. You know, just like in the past, when the one who knew where oil was had a certain power – one could either develop the deposit themselves or sell the information. Nowadays creativity in its practical sense has a strong claim to replace oil. Actually, intellectual property is the embodiment of creativity. If you know much about intellectual property, for example, about its owners, its nature, its areas of application – then you have power. However, putting it all into one place or granting to a single person is risky and most importantly, it is inefficient, as one subject, one party will never be able to realize all opportunities the world gives – it is physically impossible. Thus the most efficient model for interaction between countries (I do not mean diplomatic, state-level interaction, but rather scientific, innovational, which you can call “business-like”) is a network model, where all users of the network have an equal share of information and have full access to it.
Current networking models, especially the blockchain technology, allow to facilitate interaction without the traditional control models. There are several principles of interaction – or, more precisely, consensus achievement algorithms – in blockchain networks. One of them – actually, the most relevant in our case – is the so-called Proof-of-Authority, when network nodes are authorized to approve transactions – it means that for example, you input information into the net regarding an intellectual property object that you possess and that has been the subject of a business deal. Then the nodes can say “We believe that is wrong”, which means “no”, accordingly providing the relevant argument. This becomes possible, if, for example, a single node has information that the deal was illegal. But in essence, each node puts its reputation and finances at stake by introducing invalid, i.e. wrong information into the net. So we can see that each user of the network is absolutely equal to others both in decision making, information access and the rights for information input.
– Your idea seems absolutely global and very altruistic. Where is the catch? Can this be happening in the 21st century?
-It is a very familiar situation. At the founding congress of the Eurasian confederation of rights owners societies, our fellow expert from Kazakhstan, upon hearing all that, asked us directly: “Everything’s fine, but where’s the catch?”. Most peculiarly, there is none. You see, it’s like this building, it is here now, but before, it wasn’t here, was it?
– No, it wasn’t.
– What was first, erection of the building or earthworks? There had been some smaller houses here, which were demolished and then a foundation pit was dug out. What was next? Communications were laid. You have to lay the pipes first, otherwise the construction of this building, and another one, and later extensions – it is all pointless. The building has an obvious business value for companies and private individuals, apartments are rented, offices work, it features stores which produce trade. And the pipes are a baseline resource, which actually has to remain non-commercial, or to put it simply, public. Well, IPChain is a non-commercial project, it doesn’t feature any business, any single owner – there is only an association developing standards for information storage, nothing more. This is the place where we mutually agree how to store information. in case we don’t like something, we can make changes. Then we will come to the most interesting part: constructing “buildings” – I mean, digital service platforms. Our economy is the economy of platforms now, it is dominated by platforms, and here we move to the commercial segment. While developing a non-commercial project, our interest lies in the creation of an infrastructure (global, of course) where we will all be able to do business, create profitable services and develop new products. Such infrastructure (we call it digital “infrastructure of trust”), by utilizing blockchain technology, ensures that one cannot alter any information. Once input there, it cannot be changed, everyone will see it, which means ultimate transparency.
-Aren’t you afraid that the commercial segment will simply devour the creative one?
-It is physically impossible. The power of network interaction lies in the fact that no one can devour the whole thing. You have an infrastructure, which is common for all simply by its technological principle, not because of people sitting there talking and negotiating; that would be a very shaky foundation. But here, it is technologically designed in such a way, that you can violate all the rules, but then everything crumbles and in the end, nobody will get anything. Is that possible? Of course, everything is possible. That’s what wars are for. But if we do not try to ruin everything, it will remain a public infrastructure, available for all. There is no catch. Actually, the aim was to create a system where one doesn’t need to fear that there is any. I don’t want to live in the world where I don’t trust people, I want to be able to trust them – of course, only until they try to deceive me. But I want to have the power and the ability to take that risk.
-So in essence, it is an attempt to make the world a better place, right?
-Yes, indeed, we hope that in the future, one will be able to make deals safely. IPChain is built in such way that within the network you don’t need to worry – once you have entered it and reviewed all information, what remains is exclusively your own commercial risk (e.g. you buy a song, thinking that it may become a hit, but you don’t need to worry that it may have been sold five times already). In truth, up to now an intellectual property lawyer has been specializing in wrestling down “pigs in a poke”. Every movie, every piece of music or patent is such “pig in a poke” and the lawyer is needed primarily to hogtie it, only then he can evaluate its skin pattern and the quality of its bacon.
-What about Armenia, are relations on this issue improving or not?
– We took a very simple path. We wrote a letter directly to the prime minister. You know, usually people try to find connections, facilitate something – but we took the simplest path, and it has worked, our idea has been approved.
-Has already been approved. So, this is advantageous for Armenia as well, isn’t it?
-I’m sure it is.
-If I got it right, any physical person can take part in the project, am I correct?
-Not quite so. It is a corporate system. The thing is, we are building an infrastructure of trust. An infrastructure of trust within a network is possible only when each participant has a reputation which they thrive to uphold. Thus we take the biggest players on the marked as network nodes, because they will not take the risk of mistakes, for them it means a financial liability as well, and finances are the least they can lose; reputation is everything. Each of these nodes in turn can grant network access to any physical or legal entities. But only via the nodes, rather then directly; one cannot simply toss random information in there. One has to introduce new information responsibly, because anyone involved in the network becomes responsible for their actions, and it is our responsibility as network organizers to motivate people – without intimidation or enforcement – to uphold the principles of honesty and responsibility for information within the network and ensure the transparency of all transactions.
-Does the project cover the territory of the ex-USSR or not?
-No, we are aiming to become global. Now we are negotiating with Israel, Spain, soon we will move further.
-Is there any political agenda involved?
-Absolutely not. You see, the very essence of the project is maximization of the volume of information within the network.
-Well, the project looks almost too spotless. Are you really that positive?
-The project is good, it is the right thing. You know, there is this Metcalfe law which states: “practicality of a network is in reverse ratio to the number of participants of the network squared”. In our case too, the more participants there are, the more useful the network will be for all its participants. Actually, then we come to a pragmatic interest: the bigger infrastructure you have, the more you can build on it. If all you have is cold water, you certainly can build something, but if you also have heating, power lines, etc., this gives you entirely different opportunities. Our aim is to include maximum opportunities into the infrastructure. Everyone believes that intellectual property means only movies, music and patents, but they are wrong. It also includes some incredible things, like biometric data – a digital avatar of a person. Say, you have an Apple Watch, which constantly accumulates information feedback from you and stores it somewhere. It is your data, you generate it and accordingly, it is also your property. It needs treatment, storage and control.