1、 2 NOTICE This Guidance does not constitute legal advice. It is intended to provide technical guidance and suggestions as to best practice for legal practitioners when dealing with matters involving blockchain and distributed ledger technology. The authors of this Guidance accept no liability for an

2、y claim in connection with any action or inaction of any party acting in reliance on the contents herein. 3 CONTENTS FOREWORD 8 PRESIDENTIAL FOREWORD 9 INTRODUCTION 10 COMMON ABBREVIATIONS 13 CHAPTER SUMMARIES 14 KEY RECOMMENDATIONS 17 SECTION 1: COMMERCIAL APPLICATION 24 Introduction 24 Public vs p

3、rivate? 24 Private vs central database? 25 Setting up a private blockchain 25 Use case 26 Contracting for private blockchains 28 Who owns IP in the blockchain? 29 Conclusion 29 SECTION 2: SMART CONTRACTS AND DATA GOVERNANCE 30 PART A: SMART CONTRACTS 30 Introduction 30 Objectives of the coding sub-g

4、roup 30 Experts and evidence 30 Definitions 31 Findings 32 Advantages and disadvantages of Smart Legal Contracts 32 Data governance 34 Digitisation 34 Choice of platform 34 Effective and efficient digitisation 35 4 Additional comments 37 Automating transaction elements best concluded off-chain 38 Di

5、spute resolution considerations 38 Regulatory considerations 38 Decentralised Autonomous Organisations and the impact they may have on the legal profession 39 What is a Decentralised Autonomous Organisation (DAO)? 39 PART B: DATA GOVERNANCE REQUIREMENTS SMART CONTRACTS 42 Introduction 42 What is a s

6、mart contract? 42 The elevated role of data and data governance in smart contracts 43 Data governance 44 Dimensions of data quality 46 Data required to assess the data quality of a data variable and quality control policies 46 SECTION 3: BLOCKCHAIN CONSORTIA 48 Introduction 48 What is a blockchain c

7、onsortium? 48 Types of blockchain consortia 48 The rise of blockchain consortia 49 Blockchain consortia models 50 Contractual consortium model 50 Joint venture model 51 Developer Agreement and Participant Agreement Models 52 Is there a preferred model? 53 Legal risks and issues 53 Conclusion 61 SECT

8、ION 4: DATA PROTECTION 63 PART A: DATA PROTECTION 63 5 Introduction 63 Experts and evidence 63 What is Personal Data? 64 Technical measures for re-identification pseudonymous or anonymous? 66 The benefits of blockchain as a means to achieve GDPRs objective 67 PART B: DATA SECURITY ENHANCING MEASURES

9、 69 Introduction - Zero Knowledge Proofs 69 Proof of Age example 69 Types of Provable Knowledge 70 State of technology 70 ZKP and blockchain 71 ZKP and blockchain privacy 71 ZKP and blockchain scalability 72 Other Privacy Enhancing Technologies (PETs) 72 SECTION 5: INTELLECTUAL PROPERTY 74 Introduct

10、ion 74 Copyright infringement on the Blockchain 74 Trade Mark and Design Rights 79 Database rights 80 Confidential information 83 Patents 84 Issues for further consideration 85 Conclusion 87 SECTION 6: DISPUTE RESOLUTION 88 PART A: DLT AND LITIGATION 88 Introduction 88 The changes to the traditional

11、 risk landscape for lawyers 88 Examples of DLT and litigation 89 6 The role that the judiciary and magistracy will play in DLT and fair trials 90 PART B: OPTIONS FOR ON-CHAIN DISPUTE RESOLUTION 91 Introduction 91 Current availability of on-chain dispute resolution mechanisms 92 Scope, soundness and

12、(ii) identify and set out areas in which further guidance is required from regulatory authorities or other bodies. In support of these objectives, the members of the Group analyse real life use case examples of DLT. They consider a variety of technical, legal and practical issues and are supported b

13、y academics and technologists, businesses and individuals, and lawyers and non- lawyers from a number of different industries. The Group has held a number of seminars, presentations and meetings to consider these issues, including presentations given by experts such as Cassius Kiani (Atlas Neue), an

14、d Professor Michael Mainelli (Z/Yen Group). A full list of experts who have addressed and fed into the Groups work is set out at Annex 3. Guidance I see 2020 as a breakthrough year for DLT. The disruption caused by the COVID-19 pandemic has forced governments and businesses to re-evaluate their serv

15、ice and business models more fundamentally than ever before. Organisations that have historically been slow to embrace change lawyers included are now, by necessity, making great strides to innovate and are looking to emerging technologies such as blockchain to help them do so. The purpose of this G

16、uidance is to set out suggested best practice for legal practitioners working on transactions involving Smart Legal Contracts and solutions to anticipated problems. In particular, the Guidance sets out some key issues for legal practitioners to be aware of when advising on DLT-related matters such a

17、s commercial applications, smart contracts, data governance, blockchain consortia, data protection and security, intellectual property, dispute resolution and cryptoassets. The Guidance also identifies some areas in which further guidance is required from regulatory authorities or other bodies. To d

18、ate, the only formal legal statement in the UK in respect of DLT-related matters focuses on addressing very specific and limited questions, with the specific objective of providing answers to critical legal questions under English law and a legally recognised reference for counsel and the judiciary.

19、 I am referring to the UK Jurisdiction Taskforces Public Consultation3 and subsequent Legal Statement on 3 UKJT Consultation paper, The Status of Cryptoassets, DLT and Smart Contracts Under English Private lLaw (London: The LawTech Delivery Panel, 2019) Accessed 28 December 2019 11 the status of cry

20、ptoassets and smart contracts under English private law (Legal Statement).4 This Guidance does not propose to build on the Legal Statement but rather (as noted above) to look at a number of different areas of concern where there is the need for clarity and/or additional guidance from regulatory auth

21、orities or other bodies. I hope this Guidance is useful for legal practitioners. For the avoidance of doubt, this Guidance is not intended to be prescriptive or rigid in its application. Given the current state of DLT maturity, any prescriptive approach would likely fail. Moreover, definitions used

22、are intended to be interpreted broadly. The multiplicity of definitions used in relation to DLT and blockchain technology remain inconsistent and this issue is complicated particularly in this space by the divergence between legal practitioners and technologists on specific definitions in a given co

23、ntext, a simple example being the different interpretation of the word “execute” for a lawyer and a coder. The need to “craft simple yet usable definitions of the technology” is one of the primary recommendations of The European Union Blockchain Observatory Phil Leonard (Waterfront Solicitors LLP) f

24、or his endless enthusiasm and support; and Sian Harding (Mishcon de Reya LLP) for assisting with the final compilation of the report. Special thanks also to all those who lead the sub-groups and have written submissions to this Guidance, including: Jonathan Emmanuel (Bird Sue McLean (Baker McKenzie

25、LLP); Akber Datoo, (D2 Legal Technology); Adi Ben-Ari (Applied Blockchain); Rosie Burbidge (Gunnercooke LLP); John Shaw, (Blake Morgan LLP); Charlie Lyons-Rothbart (Wiggin LLP); Will Foulkes (Thrings LLP); Marc Jones (Stewarts LLP); Charlie Morgan and Natasha Blycha (Herbert Smith Freehills LLP); Cr

26、aig Orr QC (One Essex Court); Heenal Vasu (Allen Laura Douglas (Clifford Chance LLP), Ceri Stoner and Jennifer Anderson (Wiggin LLP), and Tom Grogan (Mishcon de Reya LLP). And finally, my special thanks to William McSweeney, The Law Society of England and Wales, and the dauntless early readers of th

27、is Guidance including: Cassius Kiani (Atlas Neue); Adam Rose, Nina OSullivan, Elena Georgiou, Shulamit Aberbach, Oliver Millichap, Laura Price, Niara Lee, Henry Farris 4 UKJT, Legal Statement on Cryptoassets and Smart Contracts (London: The LawTech Delivery Panel, 2019) Accessed 28 December 2019 5 T

28、he European Union Blockchain Observatory Wendy Saunders, Thomas Gooch, and Elina Kyselchuk (Herbert Smith Freehills LLP); and Sam Quicke (Linklaters LLP). 13 COMMON ABBREVIATIONS AML Anti-Money Laundering API Application Programming Interfaces DAO Decentralised Autonomous Organisations DLT Distribut

29、ed Ledger Technology GDPR The General Data Protection Regulation (EU) 2016/679 IoT Internet of Things IP Intellectual Property IPR Intellectual Property Rights SLC Smart Legal Contract UKJT UK Jurisdiction Taskforce ZKP Zero Knowledge Proof 14 CHAPTER SUMMARIES Commercial Application: Covering key c

30、onsiderations relevant to the conception, application and adoption of blockchain / DLT technologies by an enterprise including: public vs. private blockchains; setting up a private blockchain; and contracting for private blockchains. This section includes a use case example in the retail and consume

31、r sector with a private blockchain being used to track and trace goods. Smart Contracts and Data Governance: This section is split in two parts. Part A provides an in-depth analysis of the advantages the impact of blockchain on the in-house tax function; and the impact of blockchain on tax authoriti

32、es. 17 KEY RECOMMENDATIONS Commercial Application Recommendations: The key recommendations of the Commercial Application section have significant crossover with other sections of the Guidance, with an emphasis on greater clarity for both developers and participants regarding: liability for lost or c

33、orrupted data, standards of data security for blockchain service providers, availability of dispute resolution mechanisms and clarity on IP ownership in the context of DLT and blockchains. Law Society and o the data quality parameters should define the contract scope, including scenarios in which au

34、tomated performance would not be within the expectations of the contracting parties. Applications of smart contracts should assist parties with their wider data governance and quality compliance obligations, for example through the provision of data lineage to back up any automated performance step

35、by way of an audit trail. This may be particularly necessary for certain applications in regulated areas (as required by BCBS239 (Principles for effective risk data aggregation and risk reporting) in the banking industry). Law Society o the provision of a procurement and risk tool kit which includes

36、 the main considerations to be considered when entering into a consortium, enabling SMEs and other stakeholders to follow best practice. Data Protection in contrast, the Article 29 Working Party (now the European Data Protection Board) suggests that a risk-based approach is not appropriate. Further

37、guidance is required from data protection authorities in relation to this, as well as the elements that should be taken into account when assessing whether information is personal data, particularly in relation to how such data is stored, transferred and expressed on DLT and blockchain platforms. In

38、 considering the steps to take to prevent identification when using blockchain technology, we note that there is at present no legal certainty for developers wishing to handle public keys in a GDPR compliant manner, and it is considered that further guidance is needed from data protection authoritie

39、s in respect of this. In addition, we consider that some of the questions to be addressed by the ICO and other data authorities should include the following: o Does the use of a blockchain automatically trigger an obligation to carry out a data protection impact assessment? o Does the continued proc

40、essing of data on blockchains satisfy the compelling legitimate ground criterion under Article 21 GDPR? o How should erasure be interpreted for the purposes of Article 17 GDPR in the context of blockchain technologies? 19 o How should Article 18 GDPR regarding the restriction of processing be interp

41、reted in the context of blockchain technologies? o What is the status of anonymity solutions such as ZKP under GDPR? o What is the status of the on-chain hash where transactional data is stored off-chain and subsequently erased? o Can a data subject be a data controller in relation to personal data

42、that relates to them, particularly in the context of a data subject operating a node on a DLT or blockchain platform? o How should the principle of data minimisation be interpreted in relation to blockchains? Law Society o Determine how copyright law will be applied to DLT in the areas identified; o

43、 Establish which protections database creators will be entitled to, and whether the protections subsist in DLT; o Identify the minimum-security standard for confidential information to be stored on- chain; and o Ascertain what influence other territories will have on IPRs, and how these rights will

44、be enforceable given the distributed nature of DLT. Dispute Resolution Recommendations: There are at present no recognised standards or judicial treatment which might make on-chain dispute resolution mechanisms a viable alternative to traditional dispute resolution options. Guidance from the judicia

45、ry and arbitrational bodies as to the effectiveness and form of on- chain dispute resolution mechanisms would be incredibly useful in improving commercial confidence in the ability to successfully seek remedies without recourse to litigation, the costs of which would likely be increased due to the t

46、echnology. We consider that authoritative guidance should be developed and published regarding best practice standards for digitised dispute resolution solutions, including on-chain elements where appropriate, to expedite the efficiencies and legal insights of such solutions. In particular: o guidan

47、ce from the London Court of International Arbitration (LCIA) as to whether it envisages the need for specialist rules or whether the flexible design of the current regime is deemed to be sufficient; and o the potential for arbitrational bodies to endorse, or otherwise provide guidance, on current fo

48、rms of on-chain dispute resolution such as Kleros, Juris, Codelegit, and Confideal. Parties should consider entering into a master or umbrella dispute resolution agreement that codifies the agreed applicable law and dispute resolution procedure throughout the chain and allows for disputes to be join

49、ed or consolidated where appropriate, further to the Financial Markets Law Committee (FMLC) report. 21 Parties should consider carefully the choice of law, depending on the quality, willingness and expertise of lawyers and the judiciary in the jurisdiction of choice. Those which have so far shown a willingness to engage constructively with DLT include Englan