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~ Spotlight on ~

change our lives’ underlines. Patent protection can be very Similarly, in May 2019 Chinese conglomerate Alibaba an-
expensive and not always efficient against infringements or nounced its intention to integrate the technology of block-
abuses (as in the case of ‘patent trolling’). Adopting block- chain into its own intellectual property protection system,
chain technology within a patent system may reduce ineffi- which comprises global brands and enterprises.
ciencies in recording the time of registrations in an efficient
way, perhaps even across several national patent systems. According to Alibaba, the project will allow ‘seamless inte-
gration of blockchain with the platform of digital copyright
The e-commerce industry, too, can deeply benefit from the protection that also includes visual content. This platform,
use of blockchain. The following are some of the potential called Ali IPP, has an intention of serving millions of enter-
benefits: prises and brands, both small as well as medium scale. This
platform will make it possible to link the electronic deposits
Higher transparency and consumer trust of global brands directly with the Internet Court. It will
First of all, blockchain may bring additional safety to e- primarily offer a powerful means to protect litigation rights.’
commerce transactions, particularly by reducing the cases of
chargeback in which, following a dispute on an online trans- Other applications
action, the bank forcibly removes funds from the merchant’s Blockchain is also a powerful tool to better manage cus-
bank account. tomer loyalty rewards programs.
Merchants can easily issue and grant redeemable reward
Indeed, as blockchain transactions occur instantly and are re- points based on customer spending. The reward points may
corded at every location of the network, such transactions can- be redeemed across various e-commerce sites, which can use
not be easily hacked or faked. Not only will the embedding of the loyalty programs to attract more customers and expand
blockchain technology in e-commerce therefore reduce the rate their reach.
of cyber-crime cases, but it may also enhance trust between
consumers and retailers owing to its transparency. One of the main issues with loyalty programs is that cus-
tomers often fail to spend such points. Within a customer
Lower payment processing fees loyalty program, blockchain allows instantaneous transac-
From flat-rates to percentages of the total transaction (or tions so that points can be issued, registered and used in real
a mixed solution), payment processing fees are usually per- time, making it easier for customers to use them. Also, un-
ceived as rather high by e-commerce merchants. der a blockchain solution, the risk of a breach is minimised,
as it will be harder for consumers to abuse the program.
Online transactions via blockchain occur directly between
merchants and consumers, without any need for hefty trans- Moreover, using blockchain technologies allows for receipts
action costs. This benefits consumers, who usually bear the and warranties to be stored in a shared ledger, with both
extra costs, and merchants, who can offer products at more merchants and consumers capable of managing and transfer-
competitive prices. The only costs are meant to run the net- ring all relevant information. Consequently, this leads to a
work behind the blockchain, which validates transactions. reduction of administrative costs for merchants, especially in
However, at the current stage these fees are still lower than the case of product returns. ••
those of the traditional digital payment providers.

Solving counterfeit goods and IP-theft
Blockchain enables merchants to track every link in the sup-
ply chain: from manufacturing to distribution, from trans-
port to end sale, with full analytical data enabling merchants
to assess the origin of each product, trace its ownership and
provide true authentication.

In August 2018, the global courier UPS applied for a pat-
ent to use blockchain technology to plan package routes
and track them on a worldwide scale, as they are handled
by multiple carriers. According to UPS, ‘the application
describes storing data regarding point of origin, destination
and shipment parameters, generating a transportation plan,
tracking and completion of the shipment, including pay-
ment, using blockchain technology.’

Alan Rhode is a co-founder at Taxmen, the one-stop-shop for legal and tax services to the e-Commerce industry.

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