|  | By: Nicholas BENTLEY Mail: Nicholas(at)commonrights.com December 2005
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# The Right Track Notes on the Right Track as presented to the 22nd Chaos Communication Congress (22C3), December 2005. Today I want to present my 'Private Investigations' into copyright and its future in the digital world. Is Copyright on the Right Track? ### Summary: First I want to give short introduction to copyright and where we are today. Then I want to present Intellectual Contributions which I see as a use model for examining how the copyright regime works and how society wants it to work Third, I talk of the Rights Office system, this is my proposal for dealing with copyrighted works in the digital world without the need for strong DRM and TPMs, levies, or control of copies. RIGHT ON - finally I want to ask if a rights system is the way forward and what needs to be done to achieve this. I ask you wait and ask questions at this time. CC - note the symbol at the bottom of the page - might this be part of copyright's future? I will come back to this. [Back to slides] ### Copyright is part of our Intellectual Property regime that includes: Copyright Patents Trademarks Industrial secret I will be concentrating on copyright however some of what I propose could have an impact on other areas of IP especially patents and the relationship of software to copyright and patents. A topical subject for hackers I feel. [Back to slides] Movie - Copyright history by Rick Fulkerson: Thanks to Rick Fulkerson for letting me use this. It raises three important points: This is a very American view but it could end up being true for the rest of the world? Will DRM produce a total lockup of digital content in the future and what can we do about it? Were all those clips copyrighted? Can I claim 'FAIR USE' to show this film because it demonstrates the problems of using works in the digital world? This is a very fuzzy area we need clear rules. Despite Rick's pessimistic view of copyright I believe that analogue copyright has worked well for 200 years - See all the books in the world that are distributing information and rewarding authors - however it needs careful shepherding for a successful future. [Back to slides] DRM, in particular Technical Protection Measures (TPM), are seen by some as the only way to protect copyrighted works in a digital environment. At the other extreme there are those who follow Jefferson's words to the letter and think all intellectual content is and should be free of any restrictions. I will argue that there is more to it than the above, that authors and artists still need to be rewarded for their work, that society actively needs to protect the flow of ideas and information, and so we should look closely at how copyright can serve us in the future. [Back to slides] ### Lawrence Lessig - Calls for balance between Technology / copyright / laws: "The balance of IP regimes is a function of the technology of the time...... As the technology of copyright has changed so to have the laws." "The problem here is not the technology, not something called copyright, the problem here is a law, a regime, not fit to the technology." (Library of Congress - The Digital Future - C-span) [back to slides] I'm with Lessig here - we need to consider how we can change the regime to fit the technology. But before we consider this I would like to put forward another factor that influences our thinking in the area of copyright - ### Intellectual Contributions: ### When we think of books we think of physical property - the physical book. The name of the regime Intellectual Property (IP) reinforces this thinking. What happens if we started thinking of Intellectual Contributions (IC)? What happens if we start thinking of all the other works and ideas that came be the book as contributions to the book? Let's think IC for a few minutes. An author writing a new book relies on all the books and ideas that came before and these all contribute to her new work. In the field of science contributing works are usually cited. By the way, I am using books as the example here however I believe the same is true for all media - music, films, etc. And talking of citations, they can be considered as contributions to the preceding works even if after the fact. Many scientists are judged by how often their work is cited. Looking at more of these reverse contributions: Taking the broadest view there are many contributions to a work - Recommendations, reviews, quotations and, perhaps most important, payments in money although I maintain that all these contributions are an important part of the copyright model. Now to take a more formal view of these contributions. The distribution of content and remuneration::
> In the top half (green) you see the authors and artists at work and these works are intangible at this stage. In the bottom half (purple) these works are reproduced in tangible copies and it is mainly via these copies - the transition from intangible to tangible and back- that the contributions are passed from one creator to the next and payments for tangible goods made. Intangible - you can't get hold of the idea or expression in the author's head for instance. Tangible - once produced in physical copy (the book) you can get a hold of it. And I go further to distinguish the economic 'goods' in this model: Private goods (square boxes) an economic term for a good that is rivalrous and excludable. A loaf of bread, for example, is a private good: its owner can exclude others from using it, and once it has been consumed, it cannot be used again. Public goods (round boxes) goods that are hard or even impossible to produce for private profit, because the market fails to account for its large beneficial externalities. By definition, a public good possesses two properties: * Non-rivalrous — its benefits fail to exhibit consumption scarcity; once it has been produced, everyone can benefit from it without diminishing other's enjoyment. * Non-excludable — once it has been created, it is very difficult, if not impossible, to prevent access to the good. When I am presenting my ideas to you they are public goods for instance. I can't talk to one half of the room and tell the other half not to listen. OK I have managed to put the back half of the room to sleep already and they are not hearing me but that is a different argument. If we look at the intellectual goods of the analogue world the potentially public 'expression' becomes a private good in the form of a book, say, and the intangible is tied to the tangible and so the contributions are always effective as private goods are traded: Unless you have a printing press handy books are hard to reproduce and so the average person would just buy a book from the publisher. The books being a private good (excludable and rivalrous) allowed for trading. Notice this self-regulating effect of analogue books - mostly people can't reproduce them and hence only a small amount of enforcement is required. What happens when we move to the digital environment: Digital copies of the content suddenly appear to be public goods and intangible in addition. The loss of the transition to and from the tangible world destroys many aspects of the contributions chain and at the same time the self regulation of copies disappears. DRM SYSTEMS attempt to reverse this trend by locking up copies with ciphers and instigating central control of the copying process thus trying to restore tangible control. Even if with, enough regulation and technical control, you could make this work then there are still problems as far as the Intellectual Contributions model is concerned: The system is no longer self regulating and this has an impact on privacy and freedom of use. Potentially the feedback chain is disrupted -fair use: Recommendations Quoting First sale Levy Systems just want to let the content go and put taxes on services and hardware. This also poses problems to the contributions model: Do all the artists get properly rewarded for their work? The content needs to be properly identified for the feedback contributions to work. So, analogue copyright appeared to work digital implementations appear to have problems. Is there another way that society can regulate intellectual contributions in a digital world? The answer I believe is to recognize where the real private goods are. It is these goods that should be traded and remunerated. As I have said, with analogue books the private goods (books) were widespread and with digital they all but disappear. Looking at the model above, there remains one private good - the square boxes - the author's work in bring the contenr to life and the consumer's consumption. I propose that we apply the regulation regime at this level and we do this by granting rights to all the players in the system:
What if each author is granted rights (already is under copyright) to their private good - their work - and each consumer is granted rights when they obtain legal access to the content. The trading of these rights in a regulated system thus could introduce a new tangible layer into the model where contributions, including exchange of money, can have their full effect. Each exchange of rights represents a transition to the tangible and hence a contribution. ### To recap so far: Copyright has worked well - don't abandon it. All contributions to the author's work are important. Property distorts our thinking - where is the property in digital bits? DRM/TPMs try to reintroduce the physical, tangible, excludable goods status to content in the digital environment - is this the best way to go? A new regime to suit the technology might be to regulate the remaining private good - the author's and users rights. Now I suggest a distributed system on the Internet that can achieve 'rights' regulation without central control while protecting the freedom, privacy, and rights of everyone. ### Rights Office System: Fisrt I will explain the basic operating principles and then the results that it produces: Distributed system of secure servers / databases on the Internet that I call 'Rights Offices'. There will be many of these Offices. Some Offices represent primary rights holders (authors) some represent secondary rights holders (consumers). I just use Authors and Consumers here as a simple example. There could be chains of offices representing different players in the system. i.e. publishers, distributors, libraries. I emphasize that middlemen are not necessarily excluded from the system because, for clarity of the process, I talk of authors and consumers. The rights offices and users wll exchange information using secure protocols. Process of transferring rights and issuing identifications: Consumer buys intellectual work from Author. Author Rights Office (ARO) generates a unique identification (ID) Consumer Rights Office (CRO) also generates its own unique ID. The ARO and CRO exchange these IDs and keep a record of the transfer. The Identifications are opaque - that is the offices are identified but not necessarily the individual users. Both of these IDs are attached to the content as it is transferred to the consumer to conclude the exchange. From then on the Rights Offices will confirm valid content and IDs and confirm the rights of access to content by the rights holders. To emphasize that there will be many offices all interacting with many users: Here is a closer look at the identified content: The PRD produces a tangible private good related to a piece of content because the PRD can't be changed without both rights holders agreeing. The Universal Resource Locators (URLs) should be persistent - maybe part of the handle system. Notice where the symbol at the bottom of this presentation comes in! It identifies mine and your rights to this presentation (expression) of my ideas. ## Rights Office System ### Numerous independent, secure, Rights Offices ### Exchanging secure information ### Numerous unique, persistent, pairs of IDs ### attached to content ### IDs are opaque - Identifying:- ### office, content, rights ### but not users. ### Rules for Identified Content: Removing or corrupting the identifications (PRDs) makes the copy illegal. Anyone who owns one of the PRDs can make unlimited copies. Only someone holding 'identification rights' can issue new PRDs ### User Rights: Typical rights ## Common Rights ##### Anyone can consume content with valid ID ## Author's Rights ##### All Rights - Copyright ## Consumer Rights ##### Private Rights / Public Sharing ## Commercial Rights ##### Issue PRD' As with any copyrighted work the author owns all the rights to the work for a limited time. In the Rights Office system this would include: The right to issue new identifications (PRDs) to their content and distribute copies. The right to grant rights to others. Everyone else would have one basic right - The right to consume the content if a properly identified copy is made available to them. Once the work moves to the public domain (after the lapse of copyright say) anyone can freely use the content but they still can't claim it as their own. The rights of individual consumers to the content depends upon what rights are licensed to them by the primary rights holder. The typical minimum right for an average consumer might be: Private Rights - unlimited copies for their own use - transfer copies to known acquaintances A second general right for some content might be: Public sharing - transfer copies to anyone. Commercial rights for publishers and distributors would be more complex but would probably include 'identification rights'; the right to issue PRDs. ### Results of Rights Office System: ### Rights Offices store transactions - a contract ##### All users can confirm rights - retrieve content ### System is self-regulating: ##### Offices confirm / duplicate each other's registrations - and it is in the interests of each office to protect the rights of it's users. ##### Malfunctioning office can be bypassed just like any other faulty node. ##### Every copy is identified - no reason to remove IDs All players have unique records of the transactions stored in their rights office - a form of contract or license. Enables them to retrieve content even if they have lost all copies. Users can confirm their rights to content but are not identified by the Identifications (PRDs). The system is self regulating: The rights offices confirm / duplicate each others registrations - it is in the interests of each office to protect the rights of its users. A Rights Office that is malfunctioning can be bypassed just like any other faulty section on the Internet. Every copy of the content is identified by the two IDs (PRD) that identify the legal source of the work and there is no advantage in removing these identifications. Why make the copy illegal by removing the PRD when anyone is allowed to hold an identified copy? ### Advantages: Some of the advantages of the DIPR system would be: Clearly defined rules for using identified digital products. Registered consumer rights to intellectual products. Protection of all personal information. Protection of the common right of access to intellectual works for education and social purposes. Automatic and permanent archives of intellectual works. Avoidance of technically complicated and expensive centralized access control systems - device transparency Avoids the need for systems of nondiscriminatory taxes on digital media and services. Many new marketing strategies for the rights holders who can form peer-to-peer partnerships with consumers. A technical framework to support all other rights management and metadata systems. ### Business Models: ## Registered rights allows ongoing partnership: ### future products ### upgrades ### recommend content to others - earn refunds ### pre-sale of rights ## Use of P2P networks ## Micropayments - Rights Offices / Bank The registered partnership between the primary rights holder and the consumer allows for business models that reinforce the advantage of having bought rights to the content. e.g. discounts on future products, upgrades, even a model where the consumer could be encouraged to recommend the content to others and receive a partial refund if the third party purchases their own copy. Pre-sale of rights to a work could be an option to cover production costs for the artist or author for example. As soon as the work is complete all registered rights holders would have instant access to the work. P2P - because we now don't care where the content is or how many copies there are we are 'free' to put identified content on P2P networks and the rights in the RO system will determine who has a right to copy the content. Micropayments - Secure Rights Offices could become banks ### The above are business models for distributing content but in addition there are business opportunities for Rights Offices: Offices and services Download on demand Rights management Banking ### Why will the Rights Office system work? ##### Magnatunes - shareware for music ##### Marillion - fanbase ##### EU consumer survey - 63% would pay more ##### Software shareware models ##### ##### Creative Commons ##### Self regulatin I can't say for certain it will work, I have not proved the system with any tests, however there are already some businesses out there using some aspects of the model and they are already sucessfulso this is encouraging: Magnatunes - uses a shareware model for music but is still earns more that the average asking price. "Our empirical analysis shows that the average payment is $ 8.20, far more than the minimum of $ 5 and even higher than the recommended price of $ 8." Some music groups such as Marillion are supported by a strong fanbase and have put up the albums for pre-order. The EU, Indicare consumer survey, found that 63% people say they would pay more for 'a song you can do whatever you want with.' And of course you all know of the software shareware model. Creative Commons - A system like this could add buzz to CC licensees The one big problem with a CC license is that it is issued to the work and hence that license is available to everyone. Rights Office licenses are for individuals. All these businesses would only be improved with a formal rights system backing them up. Self Regulation - As I said before, the Offices will have an incentive to work within the rules or they will be bypassed by other offices and in turn offices will want reliable users and vice versa. Could go for gradual implementation and work with other schemes Feasibility: Study by Dhamija & Wallenberg Technically feasible? Incentives to circumvent Burden of monitoring Efficiency of funds distribution Privacy and fair use International? ### What incentives to buy? #### This is a question of balance; will there be sufficient remunerated use compared to the unremunerated use of the product? ##### Direct Benefits: Permanent right of access No limit on number of copies Rapid access anywhere Freedom to creat derivative works ##### Moral Advantage: Demonstrate rights to content Demonstrate support of artist ##### Dynamic Benefits: Distribution chain established Consumers can share in success of Author The issue of incentives in the Rights Office system is not a simple question to answer. It is a question of balance; will there be sufficient remunerated use compared to the unremunerated use of the product? Analogue copyright relied on this balance, will enough people buy their own copy of the book from the right holder compared to the second hand sales and lending of the book. There is also the enforcement side of the copyright rules to ensure that a third party did not take advantage of the right holder’s work and start illegally printing and selling copies. The reproducer and distributor of unauthorized copies of the book could be prosecuted, if discovered. Note how, for a long time, in the analogue world this tended to be self-regulating; it was difficult for most people to start printing books and fairly obvious when they did so. The Rights Office system also relies on balancing remunerated and unremunerated use and on legal enforcement of some rules but the dynamic of the digital world is different and hence the rules and balancing act are different. For example, one physical copy of the book can’t travel too far but digital copies can multiply around the world in hours. The new rules in the Rights Office system are:- 1) Don’t remove the rights identifiers (PRD) from the manifestation. 2) You can’t do anything with a manifestation if you don’t own an identifier. These rules will need to be enforced by legal means but they will also tend to be self regulating. For rule 1), why remove the identifiers when you can legally hold a copy of the manifestation with the identifiers attached? Regarding rule 2), someone can pass on a copy of the manifestation without owning an identifier but this copy will tend toward having no value therefore why would the perpetrator risk punishment for an illegal transfer when there is nothing to be gained from it. This concept, that copies tend to have no value in the Rights Office system, is difficult to grasp for most people coming from the physical world of copyright but it is a fundamental point. As mentioned in the original article, another tendency in the Rights Office system is that all copies will always identify the right holder, another important feature. So much for the rules, now the balancing:- The new balance that has to be struck in the Rights Office system is between the incentives to own rights to a work compared to having access to a work for which you have no rights. The incentives to own rights to the work can be listed as follows: A. Direct Benefits: 1. Permanent right of access to the work – a long-term investment. 2. No limit on number of copies made to provide access. 3. Peer-to-peer networks can be used to provide best access for rights holders. 4. Freedom to create derivative works. (The rules can be extended for commercial use of these works.) B. Moral Advantage: 1. Ability to demonstrate a right to the work. 2. Ability to demonstrate support for the artist. C. Dynamic Benefits: 1. A distribution chain is established for providing future updates. 2. A model is established where consumers can share in the success of the right holder: • There is potential for a referral model. If a consumer persuades a friend to buy a copy the original consumer could obtain a small referral refund. On a larger scale, imagine a reviewer who attracted a large consumer following for a new work this reviewer could potentially earn more than just a refund on the original purchase price. • A pricing model based on the number of manifestations sold. Early buyers would initially pay a commercial rate based on predicted sales. When the work outperforms this sales figure the early buyers could start earning a refund thus sharing in the success. • Reductions on follow up works from the same right holder. • Reductions on associated products. On concert tickets for instance. 3. Pre-buying – An independent artist could pre-sell their work during the production phase and so cover some of their costs. A major feature film could be pre-sold before releasing it to the private market to ensure a reasonable distribution level. 4. Innovative schemes such as ‘microrefunds and the "don't pay" button’ (Brad Templeton) could be established. The peer-to-peer structure of the Rights Office system supports these dynamic models which are probably the most important aspect of the intellectual property system. Although to work to maximum advantage the offices would need to support the funds transfer aspect of the contributions model. The contributions model identifies the creative effort of the author as the valuable commodity in the contributions chain and this effort is probably not limited to one work but to a series of books, songs, or other works. Therefore the dynamic effects where a satisfied consumer comes back again and again can be used to maximum advantage in the Rights Office environment to promote remunerated use over non-remunerated use. In summary:- Whereas analogue copyright relied on the limitations of physical property to provide the conditions for the incentives to pay to operate the Rights Office system relies on a self regulating legal and economic model to limit the distribution of illegal copies and on a dynamic, ongoing, partnership between right holders and right consumers to generate the incentive to pay. Will these benefits to the consumer paying for an identified work out way possible ‘free’ access without any of these benefits? I can’t give a guarantee or a ratio of remunerated to unremunerated works, the original sale price of the work will have an influence on the equation, but I believe it is worth investigating further considering the other benefits to society identified in the original article. The same question can be asked of DRM systems, what is the ratio of remunerated to unremunerated copies? If this number proved to be similar between Rights Office and DRM systems then the technical and social benefits of the Rights Office approach might make it look very attractive. ### Right on: ## Legal or technical impediment? ## Promotion of principles ## Development ##### Rights Office protocols ##### Persistent identifier framework ##### Standard licenses ## Help If the will was there to establish a Rights Office system there is no obvious legal or technical impediment to doing so. The fact that no central control of the numerous distributed Rights Offices is required just as there is no central control of the Web makes the possibility of establishing a global system more feasible. Users who decide to use Rights Office could have their products compete with other intellectual property distribution methods and the best would win out. Some of the practical obstacles and steps to be taken can be listed as follows: Promotion of the subtle principles involved in exchanging rights in the Rights Office system, such as, how the independent Rights Offices will tend to be self regulating, and how legal copies can compete with illegal copies. Help - I need your feedback Development of open Rights Office protocols. Development of an initial set of standard licenses. Development/adoption of the appropriate persistent identifier framework. Implementation of a basic Office system and user interface. Enforcement of the principle that a work should not be separated from its identifiers would need to be vigorously supported with a publicity campaign and where necessary legal sanctions. ## Right On 2: ## Is copyright on the Right Track? Not yet and I have proposed a distributed rights based system, a regime to suit the technology, that might provide a solution. I have shown one chain of reasoning that suggests this track - namely Intellectual Contributions. It is technically complicated but no more than any other Internet protocol and less than putting DRM in every piece of hardware. I am not a lawyer, not a social scientist, not an economist, not even much of a hacker these days, but I believe all these disaplins need to come together to find a solution to exchanging intellectual products. I have not had time to explain anywhere near all the principles so please, if you have comments, feedback, ideas, or want to know more lets get together and talk some more. More information can be found by following the PRD identifications. ## Reference: Managing copyright in a digital world - http://www.indicare.org/tiki-read_article.php?articleId=133 - (local copy) Rights and Intellectual Contributions - http://www.omidyar.net/group/intellectual-contributions/ws/ic_rights/ - (local copy) Distributed Intellectual Product Rights (DIPR) - http://www.commonrights.com/ - (local copy)
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