Tag Archives: block-chain

BlockChain Registration: Proof of Existence Is Not Proof of Ownership

By Joe Naylor, President and CEO of ImageRights

There is a dangerous movement afoot; the idea that registration of your images on the blockchain is a cheap and simple alternative to registration with the United States Copyright Office. It is not.

Those providing copyright registration services based solely on the blockchain will argue that inscribing a hash of your image along with its accompanying metadata creates an immutable record of your copyright ownership. False.

Read the entire article here.

Proof of Existence Is Not Proof of Ownership

By Joe Naylor, President and CEO of ImageRights

 

 

There is a dangerous movement afoot; the idea that registration of your images on the blockchain is a cheap and simple alternative to registration with the United States Copyright Office. It is not.

Those providing copyright registration services based solely on the blockchain will argue that inscribing a hash of your image along with its accompanying metadata creates an immutable record of your copyright ownership. False.

What these services offer is the second largest application of the blockchain after Bitcoin: Proof of Existence.

What these services prove is that your image file with the meta data you input existed at the time that the hash was created and inscribed into the blockchain. However, what they fail to acknowledge is that the information can be easily manipulated. Almost anyone can download an image and edit the metadata, populating the data fields with whatever information they choose.

To emphasize the point, here is an example of a photo that was registered through a blockchain copyright registry service along with its blockchain certificate of registration. The only problem is that this photo was not shot by me nor do I own the copyrights to it, John Smith does.

And now let’s imagine the worst-case:

  1. John Smith takes a photo, posts it to his website and inscribes the JPEG file with a blockchain copyright registry service.
  2. I download the image from his site and change the EXIF metadata of the file to my name, thereby creating a twin-JPEG with 100% identical image content, but different bytes.
  3. I register my file with another blockchain copyright registry, which works even if both registries are on the same blockchain because the bytes are different due to the different name I entered in the EXIF meta data.
  4. John Smith’s registry shuts down (e.g. goes bankrupt, management decides it’s not a profitable business unit, etc.). The blockchain still contains the inscribed hash for John Smith’s file; but nobody can find John Smith’s inscription unless they have a bit-identical copy of the image file John Smith registered.
  5. I start licensing the copy John Smith’s image that contains my name in the EXIF data to unsuspecting buyers.

The messaging from the blockchain copyright registration services is extremely harmful to both the creators and users of the photographs. Many users searching the blockchain may take their claims as reliable and fail to perform their due diligence to verify the information provided on the blockchain.

If my image is viewed as authentic, solely because the work is inscribed on the blockchain under my name and falsified copyright information, then I can steal potential sales from the original photographer. Some may even try to go as far as pursuing copyright infringement claims for images they do not actually own the copyright to.

Essentially, these blockchain copyright registration services are proving that you had a specific file at a specific time; but, they cannot make any guarantees about the creation of the file, the content in those files, or the true copyright ownership of those files.

Whatever your position ideologically, the law states that you can’t file a copyright infringement complaint in US federal court if you haven’t registered the image with the US Copyright Office (USCO). Without a timely registration, meaning the image was registered within three months of publication or before the start date of the infringement, you are unable to seek statutory damages of up to $150,000 per infringed work or attorney’s fees. If this crucial step is missed and the copyright information is only inscribed to the blockchain, without a USCO registration, there are potentially hundreds of thousands of dollars that could be lost in a copyright infringement case.

It is also important to know that a major differentiator between a blockchain registration and USCO registration is that the U.S Copyright Office Certificate of Registration serves as prima facie evidence that you are the copyright owner of the image. Prima facie is Latin for “at first look,” or “on its face,” referring to a lawsuit or criminal prosecution in which the evidence before trial is sufficient to prove the case unless there is substantial contradictory evidence presented at trial. Blockchain registration certificates do not carry this legal weight.

Furthermore, when you register works with the USCO, you must acknowledge and agree to the following:

17 USC 506(e): Any person who knowingly makes a false representation of a material fact in the application for copyright registration provided by section 409, or in any written statement filed with the application, shall be fined not more than $2500.

*I certify that I am the author, copyright claimant, or owner of exclusive rights, or the authorized agent of the author, copyright claimant, or owner of exclusive rights of this work and that the information given in this application is correct to the best of my knowledge.

Currently, there are not any blockchain registration services that require such an agreement or that can impose such fines by statute for fraudulently misrepresenting copyright ownership information.

While registration with the US Copyright Office can be expensive, don’t be deluded into thinking that the blockchain is some cheap cure-all for legally protecting your copyrighted work. The blockchain is not a government registry, but rather by definition is a distributed ledger without any central authority. Anyone can inscribe whatever they want in the blockchain without any legal recourse. That’s not quite the case with the United States Copyright Office. Proof of Existence is not Proof of Ownership.

 

 

 

A Coming Change: KodakOne Attempts to Prevent Unlicensed Use of Pictures

by Nancy E. Wolff and Kyle Brett.

On January 9th, Kodak announced its intention to enter the cryptocurrency craze by developing a blockchain-based service that presumably allow participating photographers to get paid each time their licensed work is used on the Internet without their prior consent. As described on the company’s website, the digital platform, currently referred to as KODAKOne, will “provide continual web crawling to monitor and protect the [intellectual property] of images registered in the KODAKOne system.” Upon detection of an unlicensed use, Kodak will manage the post-licensing process and (i) have the picture removed, or (ii) compensate the participating photographer in the company’s own currency, referred to as KodakCoin. By December 11th, the company’s stock had more than tripled.

Read entire article here

KodakOne Attempts to Prevent Unlicensed Use of Pictures

by Nancy E. Wolff and Kyle Brett.

On January 9th, Kodak announced its intention to enter the cryptocurrency craze by developing a blockchain-based service that presumably allow participating photographers to get paid each time their licensed work is used on the Internet without their prior consent. As described on the company’s website, the digital platform, currently referred to as KODAKOne, will “provide continual web crawling to monitor and protect the [intellectual property] of images registered in the KODAKOne system.” Upon detection of an unlicensed use, Kodak will manage the post-licensing process and (i) have the picture removed, or (ii) compensate the participating photographer in the company’s own currency, referred to as KodakCoin. By December 11th, the company’s stock had more than tripled.

While digital photo licensing is a concept as old as the first website, and entire businesses are built around assisting photographers in the collection of royalties, KODAKOne’s innovation seems to be in its attempt to leverage blockchain’s strengths against traditional photo licensing’s weaknesses in securing compensation for unauthorized online uses. For example, in order to be compensated for an unlicensed use of a photograph, a photographer (or its representative) would have to own the the copyright, detect an unlicensed use, contact the unlicensed user (if possible), engage in a discussion regarding compensation and agreeing on compensation, and wait to be compensated by the unlicensed user or initiate a DMCA process to have the unlicensed picture removed or bring a copyright action. Here, blockchain technology (a digital ledger in which transactions are recorded publically) allows the KODAKOne platform to automate all of the foregoing by simultaneously serving as a database of rights, detecting an unlicensed use across the entire Internet and seamlessly compensating a participating photographer in its ecosystem’s own currency. In addition, “accredited investors” can buy KodakCoins and purchase the rights to license a picture registered with KODAKOne.

That being said, there are several potential issues with Kodak’s premise, first of which is whether photographers will even want to be compensated in KodakCoins. Yet, according to a Kodak spokesperson, “KodakCoins can be exchanged for U.S. dollars and the exchange will be announced in the coming weeks.” So, provided that the margins of the exchange rate (even if not the best) are commercially reasonable, KODAKOne may provide a way for photographers to recoup some profits from unlicensed uses that would have otherwise provided none.

From here, it is not difficult to see where Kodak may hope its idea grows: if KODAKOne successfully manages, markets and monetizes the rights to digital pictures, Kodak may eventually attempt to add IP rights to digital videos and digital music on their platform, becoming an entire marketplace for digital art and entertainment. But, nonetheless, it is an idea fraught with historical failures: over the years, the music industry has wasted millions of dollars attempting to build a central music rights database, such as Global Database Repertoire (GRD). In GRD’s case, a collection of organizations attempted to build a joint database that, like KODAKONE, would have primarily allowed for a rights holder to (i) register their work once with GRD, instead of numerous times in different countries, (ii) track royalties and guarantee the rights holder was paid promptly and fairly, and (iii) initiate cease and desist actions against unauthorized users.  But, in 2014 and after more than 12 million dollars was spent developing the database, the effort to build GRD was abandoned as organizations pulled out over concerns regarding control and the potential loss of revenue from an efficient GRD. In Kodak’s case, and because the company will control the entire platform from the outset, KODAKOne may not be beleaguered by same set of problems that shelved GRD.

Yet, there are still remaining legal questions that must be answered before KODAKOne is declared an industry salve, and many industry experts are skeptical about Kodak’s entire endeavor, some suggesting it is at best doomed to fail and a worst a final trick from historically troubled company. A question, for example, is whether Kodak will request that unlicensed users pay for their infringement (as the mechanism to compensate participating photographers) and, if so, what will be the amount that Kodak requests an unlicensed user to pay? In current practice, depending on the copyright status of the picture at issue, the appropriate fee would either be the reasonable licensing fee or a multiplier of the licensing fee. If KODAKOne does not, at a minimum, collect a reasonable licensing fee, many photographers may choose to not register with the platform and instead to hire a third parties to crawl the Internet for unlicensed uses and negotiate for a much higher settlement. Another example of an outstanding legal question is what language the KODAKOne Terms and Conditions will have around “exclusivity”—that is, whether KODAKOne has an exclusive right to manage the rights of a given picture. If KODAKOne does have an exclusive right, the platform may indirectly create an incentive for photographers to not put their best work on the platform and, as of the result of that, buyers may be disincentived from using KODAKOne as a primary resource for licensable pictures.

Notwithstanding the many open questions, Kodak has taken a creative step forward for itself and the discussion of rights management has a further addition into the exciting cryptocurrency space. But, as with all new areas, right holders should consult a lawyer before participating.