How can blockchain certificates be leveraged in the intellectual property space? It becomes gradually acknowledged that blockchain certificates can help prove the rights over creative & innovative assets with the outlook of creating fairer conditions and more trustworthy business interactions. Unfortunately, despite all the goodwill and newly created trust, some situations might and will still end up as a dispute to be settled in front of a court. Should that happen, having created robust documentation and proof can only be beneficial, but how does it work in practice?

In civil litigation, any form of evidence can generally be submitted to the court. That is, the court accepts not only physical documents but also digital data as evidence. Of course, civil procedure laws vary from country to country, but electronic evidence is recognized in many legislations such as the EU, the United States, or Japan. Since it can be said that blockchain certificates are a kind of digital data, it should be accepted in most courts as admissible evidence.

So, you can submit the certificate to the court. However, the question is how judges evaluate the evidence. Let's to through an example relevant for e.g. the German or Japanese system: in these systems, it is up to the discretion of the judge to decide whether the certificate will be taken into consideration. If the judge believes the authenticity of the certificate, it will become the basis of the judgment. (as opposed to the US system, which relies on a jury)

Let's suppose that the claim of a defendant in a dispute could be validated with the data certified with a blockchain transaction. The judge decides on the authenticity of the submitted evidence based on the opinions of both parties. The defendant will explain the concept of blockchain immutability achieved with the consensus mechanism, and the other party will argue the possibility that the information on the blockchain has been tampered with. After the judge considers both stories and takes a position regarding the authenticity of the information, s/he will make a decision accordingly.

Theoretically, the transaction history of a blockchain can be altered if more than 51% of the mining power is controlled. Practically, the more decentralized a Blockchain network and the more numerous the participants, the more difficult it becomes to accumulate enough processing power to compete and take over control. Hence the importance of the nature of the blockchain in question: the more open and public the blockchain network, the more robust it can become (note by the author: public in this context means anyone can participate and doesn't refer to the public availability of evidence embedded on the chain). That's how the Bitcoin, based on a public blockchain, can boast an impeccable track record of over 10 years. For a court case, this means that the more decentralized the underlying technology, the more trustworthy the evidence.

That being said, because precedent cases on this topic have not been accumulated outside of China (where the Hangzhou Internet Court has recognized data timestamped through Bitcoin as valid evidence), there are some uncertainties about which decisions a judge would take, the main obstacle will presumably lie in the judge's understanding of the underlying technology.

Here, the presence of an independent expert might be required to provide the education needed for a fair and sound assessment. Moreover, the "modern" blockchain-based evidence can be strengthened by complementary, more traditional evidential methods. Digital timestamping has been around for years and is usually provided by governmental bodies, restricting their validity to their respective geographies but easing their recognition in courts.

In summary, in order for the information recorded a blockchain to be acknowledged in civil litigation, it is necessary to convince the judge of its authenticity.

If you can (1) explain blockchain immutability to the judges in an easy-to-understand manner, (2) use public blockchain network with robust technology, governance, and a proven history, and (3) reinforce their authenticity with supplementary evidence, then the information will be the basis of the judgment.

Over the years, Bernstein has followed the topic closely and gathered explicit and implicit signs, decisions and legislation going in the direction of acceptance of blockchain records in court. They can be found here.