EBSI projects
EBSI-ELSA (EUIPO)
Helping enterprises, consumers, and EU economies at large address the counterfeiting of products by increasing supply chain transparency.
The vision
The European Union Intellectual Property Office (EUIPO) and European Blockchain Services Infrastructure (EBSI) have joined forces to undertake the EBSI-ELSA project
Together, the EBSI-ELSA project worked with the Netherlands customs authorities, Transport and Logistics Operators Jet Air Services and KLM Cargo, and brand owners Mercedes-Benz Tech Motion and Harman International, to address the pressing issue of counterfeiting in supply-chain management.
Public organisations
Private companies
Customs authority
The challenge
Counterfeit consumer goods in European supply chains
Counterfeit and pirated goods accounted for 5.8% of EU imports in 2019, amounting to EUR 119 billion. The consequences extend beyond financial losses, posing risks to consumer health and undermining societal and economic frameworks. Various technologies have been deployed to combat counterfeiting, but criminal networks exploit the siloed nature of these systems.
To address counterfeiting, EU regulators have introduced unique product identifiers (UPIs) in sectors like pharmaceuticals and tobacco. Whilst UPIs address the challenge, their implementation does not currently extend beyond these two industries.
The opportunity
Blockchain technology has the potential to revolutionise IP enforcement
Web3 allows harnessing blockchain technology to authenticate products and enhance supply chain transparency, posing a unique opportunity to revolutionise intellectual property enforcement and combat the growing threat of counterfeit goods in the EU.
With this opportunity in mind, the project focuses on creating a blockchain-based infrastructure to combat counterfeiting through the use of three main technologies:
- Verifiable Credentials (VCs): to format, present, and formalise claims to trademarks or design rights held by IP rights holders.
- Non-Fungible Tokens (NFTs): to represent the digital twins of products.
- Blockchain ledger: to create an audit trail and provenance of products.
The project
Building the foundations of a new supply-chain logistics infrastructure
The European Blockchain Services Infrastructure (EBSI) allows the EBSI-ELSA project to design, build, and operate the next generation of decentralised supply-chain logistics services for the benefit of EU economies.
The EBSI-ELSA project aligns with the EU's digital policy and circular economy goals, aiming to develop traceability system capabilities by 2028 using the Digital Product Passport (DPP).
Within this context, EBSI is used as the trust model to issue and verify verifiable credentials, sign NFT metadata for authenticity, and to register information about supply chain events in the ledger. Additionally, the project uses Non-Fungible Tokens (NFTs) to represent digital twins of products, where IP rights holders are free to choose their preferred NFT platform and blockchain, ensuring market flexibility.
EBSI allows this project to project to build decentralised counterfeit prevention services with the objective to build an infrastructure designed to:
- Allow IP rights holders to collect digital signatures about their existing Trademark and Design rights using an authentication package.
- Allow the exchange of information between IP rights holders, law enforcement authorities, and intermediaries.
- An open-source API peer-to-peer logistic module with a blockchain-based track and trace service creating an audit trail of the history of a shipment and its provenance.
The scenario
Discover the scenarios
1. Registration of trademark and creation of digital twins
Virginia is a brand protection officer at Doll-e, a company that sells dolls for children. Doll-e handles its supply chain a little differently. The company creates digital twins of its products for authentication, guaranteeing transparency in the supply and logistic chain, and offering digital information to the end consumers about their favourite product (warranty, authenticity, loyalty program).
- To begin the process, Virginia 1 requests a Trademark (Verifiable Credential) from EUIPO for the dolls. The European Union Intellectual Property Office (EUIPO) 2 issues her the Trademark ID credential which she 3 stores in the company's digital wallet (or alternatively stored in the IP Wallet provided by the EUIPO).
- Virginia then 4 downloads the EUIPO anti-counterfeiting metadata library and prepares information about the digital twin. Once done, she merges this library with the Trademark ID Verifiable Credential to create a unique file.
- Virginia then creates 5 a digital twin (NFT) which contains the unique file. Virginia can repeat the action for each doll or prepare the batch for all products requiring a digital twin.
- Once all digital twins are created, Virginia 6 installs a logistic module from EUIPO into the Doll-e IT systems. The Doll-e IT system then binds the DID of the Trademark ID VC to authenticate the logistic module.
- Finally, Virginia prepares and then 7 issues a shipment and connection request to the logistic operators, in this case HTL Cargo. The shipment request contains (amongst other shipment information), data about the product digital twins (NFT) and Trademark ID VC.
2. Verification by logistics operator
Jimmy is an operation process owner at HTL Cargo, a well known freight forwarder for import/export in the European Union. HTL Cargo wishes to further increase security and efficiency of operations by enabling transparency in the logistic chain between its clients, major brands, and law enforcement authorities.
- To do this, Jimmy 8 installs the logistic module from EUIPO into HTL Cargo IT system and accepts the connection to Doll-e's logistic module.
- Jimmy then 9 receives the shipment request from Doll-e and verifies the brand's identity against the EBSI ledger. Jimmy can 10 verify the Trademark Verifiable Credentials of the products digital twins (NFTs), by looking at the NFT properties containing the unique file and matching it against the EBSI ledger by using the NFT Viewer.
- HTL Cargo then 11 issues a shipment offer to Doll-e that may include segment offers from carriers.
- Virginia accepts the offer, appends the shipment request contract on behalf of Doll-e, and 12 grants access to EBSI's timestamping API to HTL Cargo and related shipment Carriers.
- HTL Cargo and potentially involved carriers use their logistic module and the timestamping API to 13 create an audit trail of every event for the shipment during its logistic journey, using the EBSI ledger as its source of truth.
3. Verification by customs authority
Frank is a customs officer in charge of pre-arrival assessment of products at an EU Member State customs authority. EU Customs Authorities wish to increase efficiency of movement of goods across international borders by having additional and trusted information on shipments and products.
- To achieve this, HTL Cargo 14 grants access to its logistic module information to the customs authority where Frank works in charge of the border control to see information about the shipment and products.
- Frank receives a notification from HTL Cargo and accesses the logistic module. The customs authority 15 verifies the shipment contract and the digital twins of the products to authenticate their Trademark, validating the customs authority pre-arrival assessment. He can also 16 verify the audit trail of events of the shipment against the EBSI ledger.
- During the logistic journey, any intermediary in charge of handling the product can scan the product serialisation code and 17 verify the Trademark VC, guaranteeing the product's authenticity.
- Optionally, at the end of the product journey, Doll-e can 18 transfer the digital twin (NFT) of the product to the end consumer to trigger after sale or to grant access to loyalty programs and services.
The project plan
Current implementation stage and plan
Next steps
Mobilisation of the ecosystem is key to driving adoption
Achieving this unified cross-border counterfeiting supply chain management framework demands a strategic and operational paradigm shift, mobilizing a vast ecosystem involving enterprises and consumers. and EU economies at large. EBSI-ELSA will officially go-live as a Minimum Viable Product in April 2024. For this purpose, EUIPO has:
- Published a call for interest to collaborate in live environment, open until end of April 2024
- Made a preliminary assessment on cost benefit for brands to onboard EBSI-ELSA, which will be refined late 2024 based on live environment results
As the ecosystem grows, questions related to standards, governance and integration to other IT systems to fight counterfeits will be discussed until late 2024, where EUIPO will detail EBSI-ELSA product roadmap and upgrade plans.
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