Blockchain Research Embraced in Global Fight Against IP Theft

“If I understand Blockchain correctly, it will revolutionize tracking of goods somewhat like how GPS revolutionized navigation.”

That statement was made by U.S. Congressman Ralph Abraham, member of the Committee on Science, Space, & Technology, at their May 8th congressional hearing on the topic: Leveraging Blockchain Technology to Improve Supply Chain Management and Combat Counterfeit Goods.

At the hearing representatives of the following private and public entities testified:

• U.S. Department of Homeland Security (DHS) Cyber Security Division
• Maersk, Global Trade Digitization
• United Parcel Service (UPS) Global Customs Brokerage
• Ruby Law – IP Law Firm

THEIR TESTIMONY SPEAKS FOR ITSELF

Here are the highlights of what each of the witnesses and legislators had to say during the 2-hour hearing:

Dr. Douglas Maughan, Cyber Security Division, Director, Science and Technology, U.S. Department of Homeland Security

PRO

• The blockchain is moving rapidly from hype to reality
• Holds potential for enhanced transparency and auditing
• Greater supply chain visibility to combat the distribution of counterfeit products
• Automation of paper-based processes
• Private industry is leading the way in Blockchain development
• DHS and Customs and Border Protection (CBP) has been the most active operational component to partner with science and technology on the use of Blockchain technology for its mission
• The applications are unlimited in how we can use Blockchain technology

CON

• One concern is a lack of Global standards so we’ve been working towards that end
• At the core of Blockchain technology is cryptography and the concern is that our cryptographic systems (algorithms) eventually can be broken using quantum computing by our adversaries
• How do we make the Blockchain algorithms quantum computing resistant, or, at least allow our quantum cryptography to last a lot longer?
• We don’t know when Quantum computing is going to be here
• Quantum computing is 10-15-20 years out

 Mr. Michael White, Head of Global Trade Digitization, Maersk

PRO

• The industry operates today much as it has since the introduction of shipping containers in the 1950’s
• Many processes are manual, time-consuming, and too often paper-based with transactions still frequently coming today via fax machine…
• In 2016 Maersk and IBM began collaboration with the goal of digitizing the global supply chain
• In our analysis, an open and neutral industry platform consisting of at its core of a worldwide network of interconnected supply chain participants is by far the best way to drive efficient, transparent and secure global trade
• The trust necessary to build this network would not likely exist without Blockchain technology
• Blockchain makes this unprecedented collaboration possible by ensuring the security, trustworthiness and permission accessibility of sensitive information is spread across heretofore-segregated enterprises
• As the Blockchain platform grows and the networks multiply it will generate billions of dollars in savings
• Blockchain is not a solution looking for a problem
• Blockchain is specifically fit-for-purpose for global supply chains
• Blockchain can be a game changer

Mr. Chris Rubio, Vice President Global Customs Brokerage Staff, UPS

PRO

• Blockchain can bring together buyers, sellers, suppliers, payment companies and logistics companies to provide end-to-end supply chain visibility while addressing privacy and data security concerns
• UPS sees 4 key benefits for our company and our customers: integrity, transparency, interoperability, and security
• What we envision is a permission network of traders
• Through the exchange of info, fraud can immediately be detected via the technology and those scored negatively can be removed from the networks
• Blockchain advances IPR protection
• From our side, it’s about reducing friction in the supply chain and streamlining the exchange of information
• Blockchain provides the opportunity to digitize transactions and share that info through the network and as we can collect info near real-time it will speed up supply chain product delivery

CON

• Despite the potential upside to the widespread adoption of Blockchain a couple of key barriers exist that must be overcome
• First the linking of all physical objects to the digital stream
• Currently individual items may be tagged digitally with RFID, near field communication or two-dimensional barcodes, however, in order for Blockchain to realize its full potential all products would have to be tagged digitally requiring an overhaul in today’s supply chain practices

Mr. Robert “Bob” Chiavello, IP Law Firm, Ruby Law

PRO

• The way this is going the Blockchain will be like a digital hologram equivalent to a trademark or a watermark you would find on paper identifying the product itself as an authentic legitimate product

Congresswoman Suzanne Bonamici

PRO

• Blockchain potential uses include tracking legitimate drugs in the fight against illicit drugs (like fentanyl from China) and can be used in food safety so customers can know exactly where food (seafood for example) came from

Congressman Don Beyer

PRO

• Believes the U.S. should take the lead in Blockchain innovation and research
• China opened the first Blockchain open lab
• Dubai recently said it will be the first Blockchain powered government
• Singapore’s exploring it
• Russia’s state-run bank (Sberbank) is exploring it
• EU launched its Blockchain observatory and forum

CON

• Concerned will Quantum computing change Blockchain’s effectiveness

Congressman Barry Loudermilk

PRO

• I have often said if we can get over the stigma of cryptocurrency and look at the technology beneath it, Blockchain could be a solution to a lot of our cybersecurity and data protection issues[1]

[1] U.S. Congress, Committee on Science, Space, & Technology Hearing: Leveraging Blockchain Technology to Improve Supply Chain Management and Combat Counterfeit Goods, May 8, 2018, https://science.house.gov/legislation/hearings/subcommittee-oversight-and-subcommittee-research-and-technology-hearing-0

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