NFT Smart Contracts for Automated Patent Licensing on Distributed Ledgers
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Solution Overview
Problem
Existing patent licensing processes are complex and time-consuming, and there is a need to improve the ability to license patented technology using non-fungible token-based distributed ledgers to provide clear title to assets.
Innovation Solution
A method utilizing a distributed ledger infrastructure that automates the licensing process by using non-fungible tokens (NFTs) and smart contracts to establish and manage patent licenses, involving computing entities that communicate through private and public networks to verify, generate, and update blockchain records.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If manual drafting and computation of license agreements is used, then licensing can be performed with existing processes, but the process becomes complex and time-consuming
Solution Approach 1:
The patent replaces manual mechanical processes of drafting and computing license agreements with automated computational systems. Smart contracts on blockchain automatically execute licensing terms, eliminating the need for manual legal document preparation and computation, thereby reducing both time and complexity while maintaining licensing functionality
Solution Approach 2:
The licensing system enables self-service through automated smart contracts that automatically verify patent ownership, generate license agreements, and process transactions without human intervention. The blockchain infrastructure automatically maintains licensing records and enforces terms, allowing the system to serve itself rather than requiring manual processing
2Productivity
If distributed ledger technology is implemented, then licensing efficiency is improved, but system complexity increases
Solution Approach 1:
The blockchain infrastructure serves multiple functions simultaneously: it stores patent ownership records, executes smart contracts for licensing, maintains immutable audit trails, and enables automated transactions. This multi-functionality consolidates what would otherwise require separate systems into a single unified platform, improving efficiency without proportionally increasing complexity
Solution Approach 2:
The system performs preliminary actions by pre-programming licensing terms into smart contracts and pre-verified patent data on the blockchain before actual licensing occurs. This preparation work is done in advance, so that when licensing is needed, the automated execution can proceed immediately without manual setup, thereby improving efficiency
Data Source
AI summary
A method for utilizing a patent distributed ledger includes a computing device of a computing infrastructure obtaining an indication of potential use of a set of patents by a user computing device and issuing a bilateral licensing request to the user computing device. The method further includes interpreting a request from the user computing device to cause a license of the set of patents for use by the user computing device to produce licensee information and identifying a non-fungible token (NFT) associated with the set of patents. The method further includes establishing agreed license terms and agreed payment terms of a smart contract to produce a new smart contract and causing generation of a new block with the new smart contract for a blockchain of the patent distributed ledger associated with the NFT.