Led by the European Union Intellectual Property Office (EUIPO), the working project – namely Anti-Counterfeiting Blockathon Infrastructure[i] – which is set to be materialised towards the end of year 2023, aims at integrating distributed ledger technology (DLT) and non-fungible token (NFT) models in order to allow for the creation of a distributed registry system. Here, will be able to create NFTs which would uniquely represent underlying produced goods and record them on a DLT registry, essentially enabling a tamper-resistant and time-stamped supply chain tracking system for product authentication.
IP infringements such as counterfeiting form part of the reality of world trade – including imports to the European Union (EU) from third countries, which is considered as not only adversely impacting economic growth, but also as posing a threat to consumer safety and health.
In order to address this ongoing issue, under the proposed project as goods would travel through a supply chain, their digital representation in the form of unique NFTs would pass through assigned wallets of stakeholders involved who are given access to the portal. It is argued that the combination of unique product identification and the continuous transfer of digital attributes and credentials between wallets could effectively render the authenticity of goods. The proposed peer-to-peer portal will take the form of an open source application programming interface (API) server acting as a bridge between the stakeholders’ information silos, whereby the nodes will verify data exchanges and create an audit trail of the history of a given shipment.
Additional APIs could seemingly be blended in the said infrastructure to ensure other functionalities and use case scenarios. These include, but not limited to, integration with the European Blockchain Services Infrastructure (EBSI) whereby the storage of consumers’ NFTs and other digital certificates in a single streamlined location at the EU level could in theory be facilitated.
It is notable that the EUIPO also plans to design an identity management system acting as a knowledge repository for storage of stakeholders’ identities as well as product locations.
As the project is at its infancy, any remark would be of speculative nature. Nevertheless, it is only fair to reflect on the ways in which the overall architecture aspires to address the possible shortcomings regarding, but not limited to, reliance on oracles and external data throughout supply chains and the potential problem of ‘single-point-of-failure’ with the EUIP becoming the single repository for storage of identities and digital signatures of stakeholders.
Given that the lack of interoperability among different DLT systems has been seen as one of the main drawbacks when it comes to feasibility and functionality of initiatives with DLT enabled protocols at their core, supply chain is no exception. As the project is set to evolve to allow “brand owners to choose their own NFT platform, manufacturers to leverage their existing physical identification technology, and logistics operators to use their track-and-trace system of choice”, questions regarding interoperability and scalability do not seem farfetched.