Blockchain and Trade Secret Asset Management Demystified

As the Moderator of Workshop B–the Blockchain Bootcamp–at LegalWeek in NYC (Hilton Midtown) on Monday, January 28, 2018, I was pleased to be able to demystify the relationship between the use of a blockchain platform and automated trade secret asset management.

Blockchains are designed to be immutable. Each block contains a hash (a digital fingerprint or unique digital signature), timestamping, and the hash of the previous block The previous block hash links the blocks together and prevents any block from being altered. When a block of data is chained to the other blocks, its data can never be changed again. It is immutable.

Having a shared “blockchain” ledger, in effect, automatically creates a single source of truth and this automatically creates inherent trust in the digital information, together with an immutable timestamp. In other words, a blockchain platform is self-authenticating.

Using blockchain technologies in an automated trade secret asset management system is revolutionary. Once trade secret metadata is entered into the blockchain, there is no possibility of records being altered or falsified. You cannot go backwards to a previous block–blocks only go forward.

On September 7, 2018, the Supreme People’s Court of China declared that blockchain records will now be accepted as legal evidence. In the United States, Vermont is the first state to amend Rule of Evidence 902 providing for the self-authentication of a digital record registered in a blockchain if it is accompanied by a written declaration of a qualified person under oath verifying

1. The date and time the record entered the blockchain;

2. The date and time the record was received from the blockchain;

3. That the record was maintained in the blockchain as a regular conducted activity; and

4. That the record was made by the regular conducted activity as a regular practice. [Such as an automated trade secret asset management system.]