LVMH Moet Hennessy Louis Vuitton SE, the owner of the iconic Louis Vuitton fashion label and some of the best-known brands in the world, is preparing to launch its own blockchain platform built on Ethereum, to assist in the prevention of counterfeit goods, as well as the secure the provenance of legitimate goods.

BLOCKCHAIN AND ETHEREUM

Blockchain, in short, is an incorruptible time stamped series of data, that is managed by a cluster of computers; each of these “blocks” of data is secured and bound to each other through an incorruptible chain.

A blockchain built on Ethereum keeps a record of every transaction and reports these transactions in their most recent state. Blockchain built on an Ethereum platform is supposed to be secure and tamper-proof in that third parties cannot make any changes to these “blocks” of data.

APPLICATION IN FASHION

Such a system, when in play, will allow customers to verify the authenticity of the products they are buying, including on secondary markets and beyond, usually fraught with counterfeit items. The Global Brand Counterfeiting Report 2018 reported that luxury brands are incurring losses of $30 billion through the sales of these knock-offs.

LVMH have employed a full-time blockchain team working covertly for over a year in partnership with Microsoft Azure, Microsoft’s cloud computing service created for the purpose of testing and development of application, and ConsenSys, a blockchain software technology company. The code name for the project is AURA.

The platform has been built using Quorum a blockchain product based on Ethereum which was developed by JP Morgan.

Expected to go live this summer the company will utilise AURA along each step of their supply chain allowing the genesis of its goods to be chartered from raw materials, to point of sale, to beyond the second and third hand goods market. For example, with a Louis Vuitton travel bag, AURA could track the farm the leather originated to the store it was first sold and then to each of the third-party sellers.

USE IN THE INDUSTRY

As the application of the blockchain technology can be used to ensure authenticity, the supply chain tracking system is of particular interest to rivals in the industry and LVMH’s plan is to eventually extend AURA’s availability to its competitors in a ‘white-label’ format.

AURA would be the operating system running behind the brands who use it, who can then track the provenance of goods. The user would not see AURA, but can access the system via a Louis Vuitton application, or that of another luxury brand.

The company are aware that rivals might be wary of using a competitor’s product, so LVMH are donating all intellectual property rights to a separate corporate entity, which will then be owned the brands who are participating. Consequently, and for example, LVMH and Dolce and Gobanna Luxembourg S.R.L. could be equal owners of the IP rights in AURA.

This industry standard is very much in alignment with the European Union Intellectual Property Office’s recent push for collaborative anti-counterfeiting efforts.

FUTURE APPLICATION OF AURA

Although AURA’s initial purpose is to ensure the authenticity of items, LVMH have suggested that future developments will allow the platform to further protect intellectual property rights, provide exclusive offers and for use in preventing fraud.