“Smart Contracts & Alternative IP Systems” – COALA Blockchain Workshop Hong Kong

On the second day of COALA’s Blockchain Workshop in Hong Kong, one of the discussions that took place was ‘Smart Contracts and Alternate IP Systems’. The focus of this topic was on how the blockchain could support, supplement or complement IP registration and tracking.

Moderating the talk was Primavera De Filippi, faculty associate at the Berkman Center for Internet & Society at Harvard Law School and researcher at the National Center of Scientific Research (CNRS) in Paris.

Answering her questions were:

  • Juan Benet, creator of IPFS and founder of Protocol Labs.
  • Simon de la Rouviere, developer at ConsenSys.
  • Trent McConaghy, co-founder and CTO of Ascribe.

Giving a brief introduction on themselves, the group discussed how to use blockchain to secure IP.

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Benet began by explaining that rather than holding records and documents on blockchain, using vast amounts of data, he instead was focused on using systems based around the blockchain to store the information. He emphasized the importance of having the ability to create both public and private documents, which could be stored on a decentralized system – not owned or controlled by a single entity. Not only would this give more power to the users but would also protect the information in the event of one part of the system failing.

De la Rouviere, who mostly develops apps on Ethereum, gave the example of some of his work securing the IP of music by using blockchain technology, allowing the artists to store the rights to their work and dispersing Ethereum when bought. Next on his agenda was to use blockchain in a similar way to protect the IP of art and other forms of media in addition to music.

Finishing off the initial question, McConaghy highlighted the raw deal that architects of new work have when putting their creations on the internet, pointing out that it was hard to get IP and expensive to hire lawyers. Also raised was the issue of proving the authenticity of a piece of work and the consumer’s right to own it; as he stated, you can buy a masterpiece, but if you don’t own the IP it’s worth no more than the canvas it’s painted on. Evidencing Ascribes use of blockchain he explained how uploading work registers copyright, and using blockchain allowed the record of ownership to be documented and transferred.

Next up was a question from De Fillipi, playing Devil’s Advocate, who asked if IPFS’s distributed archive of digital content was just another version of P2P filesharing, and if it could be used for copyright infringement or if there were safeguards in place to prevent this.

In response, Benet laid out the state of the internet at the moment. Mentioning Bittorrent and Kazaar in particular, Benet pointed out the lack of protection in http, and that a piracy ecosystem already existed. Against what was already in place, he claimed IPFS wouldn’t add any possibilities that were not already available, so the situation wasn’t going to get any worse.

However, he continued that IPFS wanted to protect people who were sharing legally, although there was an inherent problem in the system being global, as countries have different views on what is legal and illegal. The model they are currently working with was to hand the decision over to the users. The only data that IPFS downloads is what it is told to and there would also be lists of ‘problematic’ files, both suspected and confirmed, for users to review before they downloaded them. Users have access to a report function for ‘bad’ content which will be passed on to the relevant authorities who will make the final decision. This solution, Benet claims, gives the owners of the individual nodes the decision on what to access which could be based on regional laws or, more altruistically, the ability for people under unjust oppression to have a channel for free speech or to fight against an immoral system. Nevertheless, Benet stressed that this was new ground and they welcomed any concerns and feedback that people had.

Adding to this, De la Rouviere raised concerns of copyright infringement, with artists submitting work that was not (wholly or partially) their own. There would be issues in the future if others wanted to create a derivative work using the piece on the blockchain, as the original creator of the work would receive no recognition or payment. He explained that for now it was up to the artists to monitor but looking ahead it might be possible to introduce incentive schemes to avoid copyright infringement.

Ascribe was targeted by the next question, with De Filippe asking if it helped with the problem currently with the internet of taking a lot of time trying to find the creator of content and determining its availability for use. She also asked what was to prevent people going outside the system as it was not mandatory.

McConaghy replied although it was not necessary to upload and register everything at once, it provided a trail of ownership that could easily be traced and that this ‘chain of providence’ was inherently worthwhile to creators and customers to keep the value of their work. Tracking the validity of the item in question provided a natural incentive as it ensured its worth so, whilst people could go off the blockchain, it would not be beneficial to them.

To this, De la Rouviere queried if the process was reversible, to which McConaghy stated that it was, as the blockchain is simply used as proof of the IP ownership and transaction taking place, whereas the actual transaction happened with normal legal documents so issues could be taken to a court of law.

Benet interjected that with blockchain, people could collaborate on a piece of art or work, adding information from their own nodes. Blockchain would allow verification of their legitimacy as well as giving an overview of the history of its creation, allowing patents and developments to be traced back to its inception. He also pointed out the benefit for ‘the little guys’ who find it hard to go through patent applications, as with the timestamping option provided by blockchain they can prove ownership or input into the development of a project.

To finish, De Filippi questioned the panel about the costs of tracking digital ownership and focusing on asset exclusivity, rather than designing a model based around rewarding popularity.

Currently, McConaghy answered, there are only a couple of business models available – like advertising and streaming – but there could be hundreds of options. The issue he posed was that time and money prohibited new users from this and that it should be made easier. Using Ascribe as an example he said that artists could specify if the value of their goods was to be based on scarcity, popularity or distribution.

The artist being allowed to make the choice was De la Rouviere’s position. Competing against many things, distribution was the limiting factor he identified and stated that it needed to be made easier.

An existing model was explained by Benet, whereby an artist (for example) put up work to view and then people had the option of making micro-transactions, if they liked the work, to support the artist. He noted that this has proved to be extremely lucrative for some artists. However, Benet went on to say that he believed that people who contributed to such work also deserved recognition. Citing the Medici as being historically famous patrons of art, he postulated that, were the artists to go on to prosper, there could be a possibility of people becoming ‘backers of art’, but clarified that this was still very much in its infancy.

De Filippi ended the discussion with a reiteration of the fact that, by using a blockchain, a more direct payment from consumer to maker was possible, with cutting out the middle man resulting in potential decrease costs for the customer, whilst simultaneously providing increased revenue to the creator.