Making Digital Product Passports Work
How the Mattereum Asset Passport Solves the Problems Inherent in Digital Product Passports
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The Gartner report on the top trends impacting manufacturing for 2023 predicts that 50 percent of the top ten consumer goods manufacturers will have introduced digital product passports (DPP) for at least one of their product categories by 2027, and the EU is intending to require DPPs for a wide range of products by 2024.
It is one thing to aspire to something, another to make it work
It is one thing to aspire to something, another to make it work, and there is little evidence that the work has been done by the EU or other bodies to truly understand what the implications of creating or operating DPPs are. Mattereum, however, in developing the Matterum Asset Passport (MAP), has done that work and as a result has a form of fully functional DPP that is already available, with all the liability problems implicit in DPPs addressed and solved.
The Mattereum Asset Passport provides an infrastructure for an open, standard, interoperable, legally binding, multi-party format for the digital product passport data that is already in existence and working. It is also machine-readable, structured, and searchable because it is on the blockchain
Why is the liability issue important? Well, for a start, a DPP is guaranteeing something, and if it is doing that, at some point someone is going to buy a product that doesn’t live up to the DPP guaranteed standard, then what?
If there isn’t a warranty mechanism, it’s not going to be worth the pixels it’s made of
Imagine I bought a product with a DPP that says that it was vegan, but it is not vegan; I complain to the manufacturer or supplier and if there is a warranty they can give me a refund as fulfilment of a contract that they have with me through the warranty. If on the other hand, there is no explicit contract then at that point, they have a much harder time finding a reason legally to give me the money. They’re just sort of making a payment to some random person and then they have to make a decision that it’s being justified essentially as a PR matter. If that doesn’t work I then have to go for full scale litigation to get my money and for many things, it’s just not worth the cost. So, if there isn’t a warranty mechanism to support a DPP, it’s not going to be worth the pixels it’s made of because there’s nothing to provide guaranteed restitution if its claims are not true.
A cautionary example is what has happened with the verified credentials movement. This is a way of having a third party verify facts about someone online, say, if they are over 18 when they want to look at a website with violent content. Verified credentials allows a website to make a challenge to a user asking “is this person over 18?” and the user’s website then relays a confirmation from something like their bank to verify that they are over 18. This assumes everyone has a digital wallet that stores all their verified credentials. It is a process that has been working its way through the online ecosystem for something like 15 years, but they still haven’t addressed what happens if a verified credential is wrong, either one way or the other, and lets an under 18 into the site or locks someone over 18 out. Who’s carrying the legal responsibility? And what’s the procedure for making a correction to the credentials? The answer is nobody knows. They are still discussing the liability framework associated with bad information and verify credentials. As it turns out, it seems to me that the verified credential business essentially means palming off responsibility onto a third party, and any resolution of errors is currently only possible through lawsuit, and this is one of the reasons the system hasn’t been adopted as widely as anticipated. This is not a satisfactory state of affairs, and if the DPP does not solve the liability issue up front, it will go the same way, seriously undermining the effectiveness of the whole project.
It solves the liability problem at the outset
Mattereum Asset Passports come with a built-in legal layer, providing a warranty claim mechanism that addresses liability. This occupies the space where there is a contractual obligation which is stronger than a PR claim, but less massively expensive and costly than doing a full scale litigation. The result is an orderly and cost effective resolution of any conflict that arises from the claims in a DPP. It solves the liability problem at the outset, removing the need for 15-plus years of wrangling and wilful blindness, while enhancing customer trust in the DPP.
But this isn’t the entire liability problem, finished products are usually made of many different materials and components, all from different sources, each with their own particular liabilities. The result is that any DPP for a product comes with a hidden chain of product liability within it.
Imagine a DPP that attests that a product is made out of a legitimate recycled plastic, but I find it is 100% low quality new manufacture PVC, and has potentially carcinogenic contaminants in it as well. Even if the DPP has the immediate liability issue sorted so that I can make a claim from the retailer; they then have a claim against the supplier, and in turn, the supplier has a claim against the manufacturer of the item, who has one against the supplier of the plastic, and in turn they have one against the plastic manufacturer. That whole chain is implicit in the DPP provided with the product. Horrible, long drawn out, messy and exactly the sort of thing a DPP is meant to avoid.
Mattereum’s Asset Passport has explicit mechanisms built in to deal with liability chains
How does Mattereum’s Asset Passport solve that issue? They have explicit mechanisms built in to deal with liability chains. They carry with them legally enforceable warranties, valid in 170 jurisdictions (i.e. effectively everywhere) for each stage of the process. That means that the final purchaser will find a warranty from the plastic manufacturer that it is 100% recycled, safe material, with a financial penalty set against it in the event that their claim turns out not to be true. This means that the purchaser of the product doesn’t have to claim from the seller, setting off the whole tedious claim chain, they have a warranty right there from the original source that they can make a claim against. No liability chain, just swift and effective restitution.
How do you update a Digital Product Passport?
The final area where there is a fog of confusion about DPPs is how do you update one? If I have a product with a DPP, then I repair or refurbish it, what happens to the DPP? Have I voided it unless it’s done by very specific people? That is possible, it’s pretty much what happens with a lot of tech today; you can’t field strip and repair your iPad, it has to go back to Apple or your warranty is void, and in fact, with printers, they are notorious for noticing that you’ve interfered with them and spontaneously bricking.
That’s not going to be a great way forward for DPPs, particularly if you want them to contribute to sustainability, where products have a long life and support the spiral economy. It’s possible of course to have separate DPPs for each part — here’s a DPP for the wheel, here’s a DPP for the handlebars; you could do that, but it’s complicated and runs the risk of turning the whole thing into a massive bureaucratic burden for the manufacturer. With a MAP, when something is repaired or refurbished all that needs to happen is that there is a new warranty added to the passport that replaces the manufacturer’s warranty with the refurbisher’s warranty, or specifically warrants a particular repair. That’s quick and easy to do, and if the repaired part goes wrong, you know you need to make a claim against the warranty from the repairer, not anyone else. The whole thing doesn’t need a new DPP, liability is accurately assigned and anyone can provide a warranty, it doesn’t have to be the original manufacturer. It’s simple, avoids loads of bureaucracy, is fair, flexible and enables sustainable use of the product instead of a direct route to landfill as soon as something goes wrong. Indeed, the Mattereum system gives the people who supply warranties, including the manufacturer, a cut of every second, third, fourth sale so they are incentivised to make things robust and repairable so that they get income from them throughout their lives, not just when they sell a new one.
the Mattereum Asset Passport provides the only existing viable solution for a workable Digital Product Passport
We think the Mattereum Asset Passport provides the only existing viable solution for a workable Digital Product Passport, and the only one likely to be fully operational on the timescale that the major brands and the EU are talking about implementing them. They could reinvent the wheel, come up with something where crucial foundations are fudged in order to get the thing in use, or they could use the system that is already working.
Mattereum is ready to speak to anyone who needs a DPP system to make it work for their brand, we know we can do it, it is already working for Mattereum’s clients, right now.
If you are working on a Digital Product Passport project that you think could be enhanced by the Mattereum system get in touch with us via contact@mattereum.com
