Blockchain Evidence Accepted in Copyright Case

According to an article on The Fashion Law, AZ Factory, the label of fashion designer Alber Elbaz, has won a copyright infringement lawsuit against a wholesaler it accused of ripping off its designs.

AZ Factory filed the lawsuit in 2022. It accused French fashion wholesaler Valeria Moda of copying and selling two of Elbaz’s designs, Love from Alber and Hearts from Alber.

The court ordered Valeria Moda to pay €11,900 ($12,800) in damages and €3,500 ($3,800) in legal costs. The court also ordered Valeria Moda to pay for the publication of a condemnation against it in three professional journals.

Though the case was relatively straightforward, AZ Factory’s use of blockchain-based evidence has generated headlines. As part of their evidence, they provided blockchain-backed timestamps to show both when Elbaz created the designs and that he was the author.

The court accepted that evidence and, along with the other facts in the case, ruled in favor of AZ Factory.

For blockchain enthusiasts, this is likely a significant win. For years, cryptocurrency and blockchain fans have touted the tech’s use in cases like this.

However, before those supporters celebrate, they should understand that this case’s impact is extremely limited.

Understanding the Case

The facts of the case are incredibly straightforward. AZ Factory accused Valeria Moda of printing two of its designs on lower-quality products, similar to countless other fashion-based cases.

To that end, there doesn’t seem to have been that much of a dispute here. There was little doubt that the work was protected by copyright, little doubt about who the owners were, and the infringement was exceedingly clear.

This was, by and large, an open-and-shut case.

What makes this case stand out is the blockchain element. In 2021, the company uploaded Elbaz’s sketches and drawings of the designs to BlockchainyourIP, a French company that uses blockchain technology to create timestamps and digital fingerprints.

Note: Elbaz passed away in April 2021, and it is unclear if this was done before or after his death.

AZ Factory then presented that evidence to the court, which it accepted as proof of ownership. According to the original article, the court found this evidence both “legitimate and compelling.”

On one hand, this seems to legitimize blockchain evidence. To some degree, it does. The court accepted the evidence and cited it when deciding the case.

But this raises a simple question: Would AZ Factory have lost this case without the blockchain evidence?

The answer is probably not, which presents a significant challenge for those wanting to celebrate this as a blockchain victory.

The Limited Impact

For those who want to herald this case as a significant moment for blockchain technology, there are three issues to consider.

First, the ruling is from France. While it would likely be similar in any EU country, it would not be similar in the United States. The United States requires copyright holders to register their work with the US Copyright Office (USCO). That registration serves as prima facie evidence of both ownership and time.

In short, the blockchain-generated evidence would be largely superfluous. The blockchain wouldn’t provide new evidence without a large gap between creation and registration. Even then, the courts will give the USCO registration far more weight.

That leads to the second problem: AZ Factory didn’t need the blockchain evidence. There’s tons of evidence that they own the design and that it was released in 2021. This includes social media, online videos and media coverage, to name a few.

This case didn’t turn on the issue of ownership. While it may have made things easier for AZ Factory, it wasn’t necessary.

Finally, even if we agree that AZ Factory needed a non-repudiation, there’s no reason it had to be a blockchain one. There are many copyright non-repudiation services out there. Most services use a traditional database, which could have been equally effective in this case.

While the choice to use a blockchain is unusual and the court’s acceptance of it interesting, it’s ultimately much ado about nothing.

Bottom Line

To be clear, if you don’t live in the United States, a non-repudiation service is likely a good idea, and a blockchain-based one could be an excellent choice.

However, this ruling isn’t a milestone for the courts’ support of blockchain or the use of blockchain to solve copyright issues. Blockchain is not, never will be and never can be a panacea for copyright’s woes.

But that doesn’t mean there aren’t some applications where blockchain could be helpful. It’s just those uses that are limited, and, in most cases, other tools can work equally as well.

So, while this story is interesting, it doesn’t change the calculus regarding blockchain and copyright.

Blockchain may have a space in copyright, but this isn’t representative. Other evidence could have worked, and there was no reason the evidence presented needed to be on the blockchain. Other technologies could have filled the role.

That’s why significant challenges remain when trying to marry copyright and blockchain. The two simply aren’t a natural fit.