Blockchain cannot create ownership, so what is its practical significance for intellectual property

The legal reality of ownership and the difference between on-chain tokens

When minting non-homogeneous tokens (NFTs) or recording transactions, it is easy to mistakenly assume that the buyer now owns the underlying art, music, photography, or intellectual property. However, legal reality is often not that simple. Although blockchain can reliably prove the existence of a specific digital record at a given point in time and make that record almost impossible to tamper with, intellectual property rights are not automatically transferred. Recording the token ID on the ledger does not give legal ownership of the asset itself. Intellectual property rights are granted through traditional legal frameworks: copyrights come from copyright laws, patents come from patent offices, and trademarks come from trademark regulations. Blockchain technology is just a parallel infrastructure, not a replacement for these established systems. This distinction became clear after the U.S. Copyright Office and the U.S. Patent and Trademark Office completed their joint NFT study. The two agencies determined that existing intellectual property laws are fully capable of dealing with matters related to NFTs and concluded that new legislation or specialized registration systems are neither necessary nor recommended. The U.S. Patent and Trademark Office's current trademark review guidelines clearly point out this difference: NFT can identify digital assets, contain information about its creator and ownership history, and point to where the underlying asset is located, but the token itself is not an underlying good or service. To understand how this works in practice, consider a piece of digital art sold for $100,000. Unless a separate agreement expressly transfers copyright, the buyer receives only tokens and not the creator's exclusive right to copy, distribute, display or adapt the work. U.S. copyright law strictly distinguishes between asset ownership and copyright ownership, allowing the independent transfer of these rights through formal contracts. Although specific rules vary from jurisdiction to jurisdiction, the same core principles apply internationally. As the World Intellectual Property Organization (WIPO) points out, under the Berne Convention, copyright protection is automatic, so creators do not need to rely on blockchain to establish their legal rights. The blockchain can record that a claim has been made, but it has no power to determine whether the claim is legally valid.

Why can't blockchain create or enforce intellectual property

If someone uploads a photo they have not created, hashes it, and casts an NFT, the blockchain can faithfully record the transaction, but it cannot determine whether the person is a fraudster. The ledger has built-in understanding of author identity, contract, employment relationship, inheritance, license agreement or court decision. Blockchain can create tamper-proof records, but if the initial entry is wrong, blockchain will not magically make that information correct. In addition, there are jurisdictional issues. For example, patents are regional. Patents granted in one jurisdiction do not automatically create enforceable patents elsewhere. However, blockchain transactions can occur globally in seconds. This means that ledgers and legal systems follow fundamentally different rules. The blockchain statement is: "Wallet A transferred token X to Wallet B," but the legal system may need to answer whether a wallet actually owns intellectual property, what rights were transferred, and whether the license is exclusive.

What blockchain really does: Timestamping and traceability

区块链最强大的应用之一是其IP溯源跟踪功能。创作者不必将整个受版权保护的作品上链，而是可以为文件生成加密哈希并将其记录在区块链上。如果文件发生变化，其哈希值也会改变，稍后有人可以计算原始文件的哈希值并与区块链记录进行比较，这在纠纷中非常有价值。假设两位设计师声称他们首先创建了相同的标志。区块链时间戳并不自动确立法律上的作者身份，但它可以提供证据，证明某个特定版本的文件在某人手中于特定时间存在。这比“区块链证明所有权”的主张范围要窄得多，因此更易于辩护。

智能合约可能使许可更加高效

The more promising opportunity may not lie in proving who owns the intellectual property, but in managing what the owner allows others to do with it. For example, according to the International Federation of the Phonographic Industry (IFPI), global recorded music revenue will reach US$31.7 billion in 2025, with streaming accounting for 69.6% of revenue. Paid subscriptions to streaming media alone generate more than half of global recorded music revenue, and behind these billions of dollars is a huge amount of licensing data. So, who owns the music? Who owns the recording? What usage behaviors occurred? Licensing agreements can stipulate that whenever a certified event occurs, a payment can be triggered, the platform can report usage, the oracle can transmit relevant data, and the smart contract can calculate and allocate payments based on predefined rules. Research published in Blockchain: Research and Applications describes the combination of "smart legal contracts" with blockchain smart contracts as a potential architecture for handling legally binding agreements, automated rights transfers, and royalty payments. Recent research proposes "smart licensing" that can automate royalty calculations, transaction execution, and payment allocation across multiple blockchain networks.

Oracle problem is a weak link

This is the most difficult problem faced by many tokenized intellectual property management systems, because blockchain is very good at answering what happens on the blockchain and much worse at answering what happens in reality. Suppose a songwriter licenses a track for $0.01 per commercial streaming broadcast. A smart contract can calculate payments, but who will tell it that 4.7 million legal plays occurred? Blockchain cannot listen to Spotify and independently determine whether reported numbers are accurate. Information must be provided by a oracle or a trusted data provider. Consider patent licensing again; smart contracts may automatically release royalties when product sales reach 1 million, but blockchain cannot independently verify manufacturing records unless a trusted external data source provides information. Blockchain can automate rules, but it cannot automatically verify every fact on which the rule relies. The same issue exists with ownership; if two companies dispute who owns the patent, linking both claims will not resolve the dispute, and the court, patent office, or contract dispute mechanism may still have to make a decision.

Lessons learned from MetaBirkins and Nike-StockX cases

The NFT craze has produced useful real-world demonstrations of this difference. Artist Mason Rothschild created "MetaBirkins", the digital version of the NFT of the Hermes Birkin package. Hermès sued for trademark infringement and dilution. In 2023, a U.S. jury found Rothschild responsible and awarded Hermès US$133,000. The court subsequently issued a permanent injunction. Blockchain does not resolve disputes, but trademark law does-a point that is easily overlooked during the NFT boom: Putting assets on a blockchain does not separate it from existing intellectual property laws. The same principle also emerged in the dispute between Nike and StockX. Nike filed a lawsuit against StockX over NFTs related to Nike shoes, accusing it of trademark infringement and counterfeiting. In 2025, the two parties settled the case, but early in the lawsuit, a federal judge found StockX responsible for selling 37 pairs of counterfeit Nike shoes. Technology has changed, but legal issues have not.

Blockchain is better than ownership in terms of traceability

This assertion provides a more practical framework for understanding blockchain's role in intellectual property. Blockchain can record the registration time of digital objects, retain evidence that specific records have not been changed, and provide a transparent history of token transfers. It can also display the chain of custody of records and enforce royalty rules written to smart contracts. What it cannot establish alone is legal ownership. The blockchain does not verify whether the person who minted the token actually owns the underlying copyright, whether the contract transfers full ownership or only grants a license, or whether the underlying work infringes on someone else's intellectual property rights. It has not yet been able to determine which country's laws should govern the dispute, which is why there is a direct answer to the question "Can blockchain enforce copyright": it cannot be enforced alone. Blockchain can strengthen evidence, simplify administrative processes, and automate some licensing efforts. The legal system still determines who has rights and how they are enforced.

Future intellectual property management may be a mixed model

The most realistic future is not blockchain replacing copyright offices, courts, collective management organizations and licensing departments, but hybrid systems. Creators can establish rights under existing laws, hash relevant documents, record traceability on the blockchain, attach legally enforceable licenses, and use smart contracts to automate part of the royalty payments. Music platforms can use blockchain as a ledger of shared rights, while traditional legal agreements define what these records mean. Patent portfolios can use blockchain to create an auditable history of licenses, while the patent office remains responsible for the underlying rights. The World Intellectual Property Organization (WIPO) itself is exploring this direction, with its Blockchain Working Group committed to developing standards that address interoperability, governance and regulatory standards in blockchain-based IP ecosystems and pointing out the true value of technology. Blockchain does not require the creation of ownership to be useful; it can make ownership records easier to verify, make traceability easier to audit, make licensing rules more machine-readable, and make certain royalty flows more automated. The mistake is to expect ledgers to become law, while the more valuable opportunity is to use ledgers to make the management of legitimately existing rights cheaper, faster, and more transparent. This is much more bland than the promise of "blockchain creates digital ownership," but it is also a promise the technology is more likely to fulfill.