CBP IP Blockchain Test Had 'Success and Value,' Agency Says

Customs and Border Protection found “success and value” from its recent “proof of concept” using blockchain to track intellectual property license information, said Vincent Annunziato, director of CBP’s business transformation office, in the agency's report. This second test increased complexity over the previous POC, Wednesday's study said. “The Business Transformation and Innovation Division (BTID) recommends moving forward with maturing these tests as we take on the mission of re-engineering the supply chain,” Annunziato wrote. The simulation "demonstrated the value of emerging standards in Blockchain, Verifiable Credentials, Authorization Capabilities, Encrypted Data Vaults, Decentralized Identifiers and other emerging global open standards,” the agency said. Trade participants used the standards “to register a product’s physical features, e.g., trademark locations, stitching, logo placement, along with information related to organizations licensed to manufacture and import a product.” There are hurdles. “Although license holders may have restrictive contracts about the distribution of licensed goods, a violation of those contracts [is] not enforceable by CBP,” it said. “What CBP needs to verify at import is not whether or not there is a license to 'import' but rather whether or not the IP was legitimately licensed.” An issue emerged in evaluation of "a public-facing web page where a consumer, at the point of making a purchase, can scan in a product code and get information about whether or not that specific product is a legitimate, licensed good,” CBP said. "There was no mechanism to prevent bad actors from re-using valid serialized [global trade identification numbers] on invalid goods, leaving customers to believe they had a valid product when in fact it was a counterfeit.” The POCs "have been vital in not only shaping the global standards being pursued at the W3C" consortium and by the Internet Engineering Task Force "but have also led to a new area of standards related to increasing trust and verifiability on the Internet," CBP said. "This is demonstrated by W3C Membership's broad support for the creation of the Verifiable Credentials Working Group and the Decentralized Identifier Working Group citing" Department of Homeland Security, CBP and "industry involvement as a key motivator for the creation and investment in these global standards setting groups," said CBP: Plans are being "pursued for launching more global standards groups to take the remaining technologies identified in this PoC."