EUIPO completes blockchain authentication pilot

The EU Intellectual Property Office (EUIPO) has been piloting a blockchain-powered authentication system for good moving through the supply chain, and ahead of a more widespread rollout has given it a name – EBSI-ELSA.

The platform is designed to protect consumers from counterfeit and otherwise illegal goods by promoting information sharing among participants in the supply chain, and is the culmination of a four-year project to come up with an open-source blockchain-based system for anti-counterfeit.

The overarching aim is to provide a unified approach that avoids the use of a myriad of different technologies and closed platforms, which according to the EUIPO create ‘silos’ that are “vulnerable to exploitation by criminal networks.”

Earlier this year, the EUIPO partnered with four brand owners, two logistics operators and the Dutch customs authority to road test EBSI-ELSA – or European Blockchain Services Infrastructure-European Logistics Services Authentication to give its full name.

The voluntary system relies on the creation of “digital twins” for products that can be scanned and verified as they move through the supply chain from the manufacturing site to local distribution centres in the EU.

The technology underpinning the system emerged from the EU’s Blockathon competition in 2018, and works with any form of serialised label that can be used to generate a digital identity, including QR codes, 2D datamatrix codes and RFID tags.

Using this approach, only when the virtual twin is together with the physical product can the authenticity of the product be confirmed, and if absent the authenticity of the product is called into question.

While there’s no need for individual product identifiers – as is mandated for example on individual packs of prescription medicines in the EU – use of these is recommended for the other business benefits this can bring such as opening communication channels with consumers.

Along with authentication, the system is designed to provide supplementary information about transport, facilitate enforcement if suspect events are recorded, and allow consumer access to provenance information for products.

“By the end of 2023, EBSI-ELSA is expected to be an open-source platform to authenticate products and exchange data between all the parties in the supply and logistics chain, interconnecting products’ ‘track and trace’ solutions with the risk analysis systems of enforcement authorities and the EUIPO tools,” said the agency.

If implemented at scale, custom officers, as well as transport and logistic operators, could focus their efforts on suspicious goods, while brand owners can use the authenticity claim in litigation cases – for example in cases involving parallel imports – and get an overview of their products’ journeys from manufacturer to reseller.

“By 2024, the objective is to synchronise IP authenticity management between all the parties involved in a supply chain,” it said.

According to the EUIPO, around 6 per cent of imported products in the EU infringe the intellectual property of brand owners.