Nike’s plan to prevent counterfeiting by securing products using blockchain

Transcript of the audio summary

Manufacturers of high-quality products like footwear, designer wear, bags, etc. are plagued by the sale of counterfeit goods. Digital products too, are subject to unauthorized sale and reproduction. This erodes a brand’s value and compromises the user’s perception of the product. Nike’s patent is about cryptographic digital assets for products using blockchain control logic. A digital asset helps the buyer or seller to trade securely and store the product in a cryptocurrency wallet.

Here’s an example of how this technology can be used with a pair of shoes. A person buys a shoe from a registered seller. A unique physical shoe identification code is linked to a unique owner ID code of the buyer. A unique key is issued to a cryptocurrency wallet account associated with the owner ID code. The buyer retrieves a digital shoe with a cryptographic token. A key, token and digital shoe are assigned to the owner ID code.   A decentralized computing system using wireless communication over a distributed computing network stores the digital shoe ID codes in a cryptographic asset registry.  Users can access the digital shoe by using an application on their smartphone, smartwatch or computers. The selling and buying of the shoe are thus performed using a secure blockchain transaction.

Terminology used in the patent

A blockchain is a decentralized, distributed, and oftentimes public, digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks

Cryptographic token –  Security tokens are tools that allow one to prove one’s identity electronically.   A token where the secret is a cryptographic key is a cryptographic token.

Unique non-fungible token (NFT) – A non-fungible token (NFT) is a special type of cryptographic token which represents something unique. https://en.wikipedia.org/wiki/Non-fungible_token

Reader may also refer to this article to know more about non-fungible tokens and how they can be used to identify physical objects.

Fig 1 – Lateral side-view of an athletic shoe 10 with a collectible digital asset protected by a cryptographic token. The token is provided through a blockchain ledger.

12 – Shell-like, closed toe heel configuration for encasing a human foot consists of three sections.  Toe box 12 A,

an arched mid-section called a vamp 12B, a rear quarter 12C.

14 – Sole structure

15 – Ankle opening provides access to interior of the shoe

18 – Tongue

20 – Shoelace

22 – Insole

24 – Midsole – underneath the insole

26 – Outsole

Fig 2- Decentralized computing system 30 for mining, intermingling and exchanging cryptographic digital assets. Here the asset is a shoe

34 – High-speed server computing system or a mainframe computer capable of handling bulk transactions, data processing, resource planning

36 – Cloud computing system acts as a middleware for IoT (internet of things), WoT (web of things), IoAAF (internet of adaptive apparel and footwear), M2M (machine-to-machine) services. This system connects an assortment of heterogeneous electronic devices with a service-oriented architecture (SOA).

38 – Network consisting of a combination of public network like Internet to private networks like local area network, wide area network, cellular systems, etc

User 11 conducts data exchanges via wireless network 38 between a user device 39 like a smartphone 40, smartwatch 42 and the host server 34 and cloud system 36.

44 – Computer-generated digital shoe

46 – Encrypted token key

48 – CryptoKick  Owner ID

50 – CryptoKick Physical ID

When a consumer buys a genuine pair of shoes (kicks), a digital representation of the shoe is generated. This digital shoe is linked to the consumer and assigned a cryptographic token. The digital shoe and the cryptographic token together represent a “CryptoKick“.

Fig 3 – Functional structure of a decentralized computing system 30.

Refer to Fig 2.

User 11 operates a user device 39 which can be a laptop computer, a smartphone 40, a smartwatch 42, a stand-alone video game console, smart footwear or apparel or any other internet enable device. The user device provides a cryptographic token key that permits the user device to read encrypted data associated with the token. The user can transfer ownership of the token. The virtual object generator 62 and blockchain 60 communicate with the digital marketplace 64. 3rd party integration services can make the virtual object available for external use.

Fig 4 – Flowchart for generating collectable cryptographic digital assets

Refer to Fig 2

101 – Method 100 begins with processor-executable instructions for a programmable controller. This controller calls an initialization procedure for a protocol to generate a cryptographic digital asset like a computer-generated digital shoe 44 and encrypted token key 46.

This initialization procedure is performed each time an authentic footwear 10 is manufactured, purchased by user 11, and when the user 11 unlocks the access key 46.

This procedure can also be manually activated by an employer at a POS terminal (point of sale) or manufacturer.

103 – Determine if user 11 has procured a cryptocurrency wallet. If the user has not acquired a digital blockchain locker, the method continues to block 105 to set up a blockchain locker.

107 – If the user has a suitable digital blockchain locker, the method 100 automatically links the digital blockchain locker to a personal user account  Remote host system 34 will retrieve a unique CryptoKick Owner ID 48 from encrypted relational database through cloud computing system 36. The CryptoKick Physical ID 50 associated with personal footwear 10 is linked to the user’s personal account.

109 – Input/Output block unlocks or enables the cryptographic digital asset associated with the footwear 10. This can be also done by salesperson scanning a UPC or UPID on the shoe box 10.

111  – A cryptographic digital asset of the transacted footwear is generated by creating an unique, encrypted asset code with an address, a token, and a public and private key pair.

113 – Cryptographic digital asset is linked with a unique owner ID code. The keys are stored in the user’s digital blockchain locker

115 -A virtual representation or a computer-generated avatar of the shoe of the cryptographic digital asset is produced.

117 – A machine learning process is executed to generate the image features through a neural network

119 – The computer-generated avatar or digital art is uploaded to the cloud computing system 36

121 –  A digital notification such as email or push notification is sent to the user’s 11 smartphone 40, smartwatch 42 or any other personal computing device

123 – The remote host system 34 converts the data stored in encryption keys into a visual image that is displayed to the user 11 on a web-based graphical user interface.

125 – The cryptographic digital asset can be posted to an online crypto-collectible marketplace for sale or breeding.

Fig 5 – Representative of a graphical user interface of a smartphone illustrating a library of cryptographic digital assets

40 – Smartphone

64 – Marketplace like an online store

80 – Virtual objects

The digital marketplace 64 represents multiple virtual objects 80. The marketplace permits the organized trade sale/purchase of the virtual objects between parties. On closing a sale, the marketplace 64 updates blockchain 60 with the new ownership details

Fig 6 – Representative of a graphical user interface of a smartphone illustrating the breeding event or collaboration between two cryptographic digital assets

Two digital asset owners 82 and 84 can collaborate and crossbreed their digital assets to create a new cryptographic digital asset (an offspring).

A “Collab Science” algorithm can be employed to determine which asset is designated as the “Sire” and which one would be the “Dam”. Also, the algorithm would determine which of the parent code subkeys will be used to build the cryptographic token key for the resultant digital asset.

Fig 7 – Method for acquiring a digital collectible linked with a sale of a physical product

User 11 brings a smartphone 40 in close proximity to a physical product 200. The product has a unique ID  (UPID) like a QR code, bar code, RFID tag, NFC tag, etc. The smartphone recognizes the code and transfers the digital asset 202 like a CryptoKick linked with the product 200 to the user’s digital locker 204. The digital locker 204  is in communication with a blockchain service 60

Fig 8 – A method of acquiring a digital collectible during a product promotional giveaway

User 11 locates a virtual object 210 (a CryptoKick) hidden in the scoreboard 214, in an arena 212 using an AR capability of a smartphone 40.

The phone 40 initiates the transfer of the digital asset 202 to the user’s locker 204 that communicates with the blockchain service/network 60.

Fig 9 – Ilustrates a video game interface 220. This illustrates an object as an apparel similar to footwear.

• A Video game interface 220 and a display 222 is integrated with a user device 39 like a smartphone 40 or a tablet or stand-alone gaming console.
• The user device 39 executes a digital application 224 which requires user input to control the virtual character 226 within a virtual environment 228.
• Character 226 has multiple attributes 230 that are controlled by the application 224, Interaction with other characters 232 is also controlled by the application 224 or by other users in a networked environment.
• The character 226 can be outfitted with a digital collectable , apparel 234, using a unique digital token on the blockchain 60.
• The application 224 can access the genetic code of the digital asset on the blockchain 60 via interface 236.
• The user can lease out the CryptoKick for use in say a baseball game for 1 week, a soccer game for 2 weeks, etc.

Fig 10 – Illustrates a user’s avatar and a pet

A user’s avatar 226 takes his pet CryptoKicks 240 for a virtual walk. Interacts with an avatar of another user 232 within virtual world 228.

The user can take care of his pet directly or through third-party transactions.  The virtual pet goes through various life stages and unlocks different real-life sneaker versions of itself that a user can purchase in stores.

Fig 11 – Illustrates multiple users engaged in a digital collectable card game

Game server 300 is in communication with multiple user devices 39 like smartphones 40, smartwatches 42 or computers.

Each user device 39 is linked to a separate digital locker 204 through which users access their digital assets from the blockchain 60. Each asset is represented as a digital card on the user’s device. Game server 300 manages the rules of the game.