Interplay of IPR Law and Blockchain Technology



A Blockchain is a publicly accessible and decentralised database like a ledger that is distributed over the Internet. In simple terms, it is a permanent, unchangeable, transparent public record keeping system of blocks over the internet on which all the information stored lives forever and where the exchange of such records can take place seamlessly ensuring privacy. This technology maintains transaction records publicly in codified form, with information protected by algorithms and each block of information immutably linked to the last block. Every new set of information added as a block gets linked together with the earlier blocks forming a chain of information.

Blockchain is the technology behind the famous bitcoins which is a cryptocurrency invented in 2008 by Satoshi Nakamoto. In the entertainment industry, Blockchain technology provides innovative opportunities to address issues related to distribution complexity, management of creative rights and digital piracy. Blockchain and its disruptive, decentralized nature could very well result in a complete makeover of the existing media value chain and its workings. The blockchain technology is still in its nascency in the media industry and has immense possibilities and areas / scenarios where the technology can essentially see a growth in the near future in the media and entertainment space.

Digital rights management (DRM) is a way to protect copyrights in the digital media. With the ever-growing digital media, now more so with the rise in plethora of online digital content, there are many key players who would want and require their Intellectual property rights protected to the highest level possible. With the use of technologies copyright infringement can be limited and use of copyrighted works and proprietary software can be regulated. The digital rights management allows authors, musicians, movie professionals, and other creators to prevent unauthorized use of their content and licence the use of their content to known parties.

The collection and distribution of royalty payments in the music business has only become more and more complex and opaque with the growth of music streaming services. Each time a song is streamed online or played in the background of a TV show, restaurant or adverts for instance, the distributor/broadcaster must compensate the respective music’s copyright holder. However, the same often gives rise to disputes as the accuracy of such songs/tracks being played and the number of times them being played can often be inaccurate to compute the accuracy and compensation rates of such royalties. With use of blockchain, if a database is maintained of each piece of music being played by every person on the database, the royalties can be directly collected from the party exploiting such music and independent artists, composers and other artists do not need to depend on collecting agents, societies and publishers.

The blockchain technology would aid in intellectual property protection as well. The owner of a content will register on the database how they will want their content to be used and distributed and the decentralized ledger will ensure the distribution of the content in a regulated manner avoiding any piracy. There will be clarity on where a content originated from, who submitted it, who used it and the manner of usage and the restrictions thereon, putting an end to disputes. The decentralized, peer-to-peer structure of blockchain could enable content creators-such as musicians, or writers-to directly distribute their work to consumers, bypassing traditional distribution channels and leaving a larger share of revenue for content creators themselves. This could impact everyone from large media houses to independent bloggers, helping artists form a direct relationship with consumers.

Another progress made in the area of blockchain technology are smart contract. Smart contracts unlike our traditional legal contracts, which require some numerous human hours of drafting and negotiations, are quick self-executing contracts with the terms of the transaction circling the contract between the parties written into lines of code. The code controls their execution, with the transactions being transparent, trackable and irreversible. For example, if A and B have a deal that as soon as A transfers an ‘X’ amount of money to B towards purchasing a particular album owned by B, B will send the entire album file to A. As soon as the chain records that A has received the ‘X’ amount of money, the album automatically gets sent to B completing the transaction under the contract. Smart contracts are indeed a smart way to allow trusted transactions and agreements to be carried out among anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.

As with the enhanced tracking of music use, blockchain could empower other types of content owners to retain better oversight of their copyrighted material. Illegal peer-to-peer file sharing of television shows, movies or other content is already common, but file sharing could become a legitimate practice that can be controlled and monetized. When consumers purchase or subscribe to blockchain-hosted content and then share it with a friend, content owners could track and charge a fee for that distribution. This would create an additional revenue stream for content creators and provide better transparency on how copyrighted assets are consumed and shared.

Currently, in India, there is no specific law that governs and regulates blockchain technology, however, depending on the sector to which it is applied to, it may attract regulations / restrictions on its usage from the sector specific authorities such as when the Reserve Bank of India in 2018 issued a circular prohibiting all regulated entities (such as banks) from dealing in or providing services towards the facilitation of virtual currencies which was struck down by the Hon’ble Supreme Court in 2020. Meanwhile, the Department of Economic Affairs, Ministry of Finance has drafted the ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’ which proposes to prohibit a wide range of activities in relation to cryptocurrency in India.

Since it is an emerging technology, it will take some time for the industry and its players to put forth their utmost trust on to it too. Moreover, it would mean shaking up the status quo and replacing that with an absolute new technology which has only begun to be advantageous for a small number of key players in the technology space and start-ups. It will be very interesting to see the developments in the media and entertainment industry with respect to the same. The Blockchain technology is being seen and promoted useful (in theory) for small players and content creators, because it essentially means taking the controlling power of content from such large key-players, larger organisations such as a studio, aggregators, and bringing the requisite digital rights to the people who are the actual owners and creators.

As Blockchain applications become more prevalent and mainstream, with growing times and smart contracts deliver benefits in licensing and distribution of content, the entertainment industry is bound to adapt to the technology, hopefully, sometime in the future. Exponentially growing online-streaming of music, e-learning will be the space where Blockchain technology is adopted before the world sees a full-fledged reproduction of the same in the films and production side of the business. We are yet to witness a world where block chain technology disrupts the traditional method of functioning of various sectors taking it to a whole new level which will only happen when it will be more integrated into the society and its fullest potential is tapped.


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