DEW

Cat’s Paw: The Promise and Peril of Decentralized Creativity

When the developers behind the viral sensation CryptoKitties first turned their virtual cats loose on the blockchain they intended to hew closely to the blockchain ethos of decentralization. Accordingly, the only components of the game actually registered on the Ethereum blockchain are the ownership of the individual cats and the cats’ “digital DNA” that allows them to “breed” with other virtual cats to create new unique CryptoKitties.

The actually renderings of the kitties — the goofy, cartoonishly colored cat images that have seduced users into the world of crypto and virtual assets — were never added to the chain.

“The code is all open-source. I was really hoping that people would start to do their own renderings of the cats,” CryptoKitties Fat Cat Mack Flavelle told a packed house at the Digital Entertainment World conference this week. “If you wanted to go in and change the code so that your cat rendered with antlers you could do that. It’s your cat.”

Had the code for rendering the images been added to the blockchain it would have become immutable, which would have made modification of the code impossible.

“Decentralization meant decentralization,” Flavelle said.

That philosophy carried over to ownership of the intellectual property in the images as well. Part of goal in launching CryptoKitties, Flavelle explained, was to introduce people without a background in blockchain or cryptography to the concept of owning virtual assets, which mean Axiom Zen, the studio behind CryptoKitties, abjuring any interest of its own in the images.

“We we get questions from people asking whether they can make a t-shirt with their cat on it to give to someone, and we’re like, ‘knock yourself out.'” Flavelle said. “If you want to print up 800 t-shirts with your cat and sell them you can. It’s your cat.”

As a proof of concept, that approach has worked spectacularly. CryptoKitty owners have quickly become possessive toward their cat and put great store in its appearance, according to Flavelle. The vast majority of the buying and selling of the cats, along with their “breeding” rights, he said, has been transacted directly between owners, rather than through CryptoKitties’ own marketplace, implying that players indeed view the images of their virtual cats as having real value, independent of the platform they were born on.

To date, 10 CryptoKitties have sold for more than $100,000 each, Flavelle reports.

The success of CryptoKitties’ decentralized model, however, turns out to have a dark side. According to Flavelle, scammers have seized on the popularity of CryptoKitties to try to defraud people of money by selling them fake kitties. With no fixed code for the images on the blockchain, and no claim of rights in them itself, Axiom Zen has found itself with few technical or legal tools to pursue the scammers.

Flavelle said he is searching for ways to prevent scammers from infiltrating the CryptoKitties ecosystem without compromising its decentralization, but is yet to hit on a workable solution.

“It’s a problem we need to solve,” he said. And a possible warning sign for other entrepreneurs looking to democratize and decentralize the creative process.

From Art to Artificial Intelligence

The U.S. Patent and Trademark Office last week held its second public meeting on Developing the Digital Marketplace for Copyrighted Works, where one of the topics of discussion was whether and how works authored by a computer running artificial intelligence software should be regarded for purposes of copyright law (disclosure: I was an informal adviser to the PTO on the program for the event).

The question is not merely academic. Companies like Amper Music in the U.S. and Aiva Technologies in Luxembourg are using A.I systems today to create original production music, while Google engineers have taught A.I. systems to create music and art, and to take photographs that professional photographers have trouble distinguishing from professional landscape shots. Works created at least in part by machines are already entering the stream of commerce.

KlarisIP managing partner Edward Klaris

There is a broad, although not universally shared, consensus among legal experts that under U.S. copyright law, non-human actors, whether machine or monkey, cannot be considered to own a copyright. But that still leaves a host of vexing questions likely to occupy courts for many years. If the machine cannot own the copyright on a machine-made work, can anyone, and if so, whom? The owner of the machine? The author of the software program? The human who pushes “start”? Or, should machine-made works be considered in the public domain?

If a copyright is to be assigned, how much creative input must a human provide, and at what stage of the process, to claim it? If there is no copyright, what if any other legal basis is there for licensing their use?

At the Digital Entertainment World conference in Los Angeles February 5-6, KlarisLaw and KlarisIP managing partner Edward Klaris will explore some of those questions in a special presentation called From Art to Artificial Intelligence.

Klaris previewed some of his thoughts on the topic in a blog post this week for Intellectual Property Watch:

The concept of encouraging the production of creative work by protecting it — incentivizing authors financially — is embedded in our Constitution. The Intellectual Property Clause expressly aims “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

In drafting the black-and-white clarity of this clause, our framers could hardly have anticipated the highly gray area of bots making copyrighted works.  You don’t have to incentivize a bot; a machine simply does what it was programmed to do without any need for financial motivation.  That is why the court declined to award a copyright in a work created by a monkey.  Monkeys are not financially incentivized to create works, and even if they were, the monopoly afforded copyright holders was not intended for animals.

In a world where bots may eventually dominate the creative space — manipulating, arranging, color-correcting, filming, and ordering literary, audio and visual content – courts may decide that works created without human input belong in the public domain with no protection. Or, if copyright is granted, bots’ output would be protected for potentially more than 100 years under current copyright law.  Which is better?  What path best promotes our country’s fundamental interest in “the progress of science and useful arts”? And, should copyright subsist for fewer years under certain circumstances?

Klaris’ presentation will be held on February 6 as part of the RightsTech track at DEW. To view the full RightsTech agenda click here. For information on how to register for the event click here.

 

NMPA CEO David Israelite to Speak at DEW on Modernizing Music Licensing

Just before Christmas, a bi-partisan group of lawmakers introduced the Music Modernization Act, which, among other things, would create a new blanket license for mechanical reproduction rights to musical compositions and establish a new entity to collect and distribute mechanical royalties.

The bill is meant to address one of the abiding sources of friction within the digital music streaming business. Musical compositions in the U.S. are subject to a compulsory mechanical license, meaning anyone can record a song and sell copies of that recording by sending a notice of intent (NOI) to the composition’s copyright owners and paying a per-copy royalty set by the Copyright Royalty Board.

Unlike the public performance right, however, where performance rights organizations (PROs) like ASCAP, BMI and SESAC aggregate millions of compositions and offer a blanket license covering their entire repertoires, anyone availing themselves of the compulsory mechanical license is required to identify and pay the appropriate copyright owners individually. Where the copyright owners cannot be identified or located, the user can file the NOI with the U.S. Copyright Office and the royalties paid are held in escrow until the rights owners are located.

The system worked well enough for many years when it was rare for anyone or any outlet to make bulk use of the mechanical reproduction right. With the rise of digital streaming, however, which has been held to implicate both the public performance and the mechanical reproduction right, the lack of an efficient system for administering mechanical rights has been a constant source of tension, between digital service providers like Spoity and Apple Music on the one hand, and music publishers and songwriters on the other.

That tension has frequently erupted into litigation, including the $1.6 billion lawsuit filed against Spotify in December by Wixen Music Publishing over Spotify’s alleged failure to pay required mechanical royalties.

Should it become law, the Music Modernization Act could go a long way toward easing those tensions. Since it’s introduction, in fact, the bill has gained broad support throughout the industry. In a rare show of unity, a group of more than 20 industry organizations representing music publishers, songwriters, record labels, PROs, and service providers issued a joint statement earlier this month endorsing the bill and urging its passage.

Much of the credit for the bill’s introduction and for rallying support behind it belongs to the National Music Publishers Association (NMPA) and its CEO David Israelite, who worked closely with the bill’s sponsors on Capitol Hill and helped broker the joint statement. Israelite will sit down with me for a special fireside chat at Digital Entertainment World on February 5th to discuss the Music Monetization Act, as well as other issues facing the industry, including the music industry’s notorious data challenges, and the future of performance rights licensing in the wake of recent court cases.

This week, we asked Israelite a few preliminary questions to set the stage for his fireside chat:

RightsTech Project: Last week, a group of music industry organizations jointly endorsed the Music Modernization Act, the Classics Act and the AMP Act. To what do you attribute the sudden outbreak of cooperation among so many different stakeholders?

David Israelite: We have a window of momentum and consensus that is ripe for action. Congressional leaders like Judiciary Committee Chairman Bob Goodlatte, who retires this year, has made copyright reform a priority, and with songwriter champions like Rep. Doug Collins (R-GA) and Rep. Hakeem Jeffries (D-NY) offering consensus bills like the MMA – and the Senate hopefully following suit – there is a real opportunity to move legislation that will significantly help the future of songwriting. Additionally, the MMA is not a wish list for music publishers and songwriters – it is a bill that took months to negotiate because it helps both the tech and music industries. No one got everything they wanted – but both sides are better off with the MMA. DiMA, which represents the biggest tech companies in the world is supportive, as are the biggest songwriter groups in the U.S.

Largely because of the momentum around the MMA – the music industry has coalesced around other music bills that will help legacy artists and producers. As I have always said – we are stronger together – and we have a great opportunity to not just help our segment of the pie – but to advance the whole creative class. After years of trying to develop and unite around reasonable reforms, it is truly exciting that today we stand together and that Congress is invested in these changes as well.

Where do you think the debate over the BMI/ASCAP consent decrees goes now in the wake of the 2nd Circuit decision?

BMI’s win sends a strong message that the DOJ cannot simply reinterpret decades of industry practice and upend the lives of thousands of songwriters. The new leadership in DOJ’s antitrust division hopefully offers a new path forward, and I believe they are looking at the consent decrees with fresh eyes. My hope is that they will ultimately abolish them altogether and give songwriters the free market that other intellectual property owners enjoy.

3) What is NMPA’s position on the various PRO database initiatives (ASCAP/BMI; ASCAP/SACEM/PRS)?

The PROs currently offer searchable repertoires. Their efforts to create a single database will bring clarity to the industry – however these initiative will take time and money. I look forward to seeing their progress in the coming months.

Click here for information on how to register for Digital Entertainment World.

 

Announcing RightsTech@DEW

We’re pleased to announce the official dates for the next RightsTech@DEW conference. The event will be held on February 5 and 6, 2018, at the Marina Del Rey Marriott in Los Angeles as part of Digital Media Wire’s Digital Entertainment World expo.

The RightsTech Project will host a dedicated track of panels, presentations, and keynotes on each day of the expo, while attendees will enjoy access to the entire two-day expo, including tracks on movies and television, games and interactive entertainment, brands and advertising, VR and AR, and more.

Topics in the RightsTech track will include:

  • The future of machine-readable rights
  • Solving music’s black-box data problem
  • Hollywood and blockchain
  • Alternative financing models for artists and creators
  • Rights, derivative works, and user-generated content
  • Artificial intelligence
  • Metadata
  • Registration and authentication
  • Valuing rights and royalties
  • and more

For information on how to register click here. For RightsTech speaking opportunities contact Paul Sweeting at paul@concurrentmedia.com. For sponsorship opportunities contact Andrea Elliott at andi@rightstech.com. For all other inquiries contact Tinzar Sherman at tinzar@digitalmediawire.com.

 

 

RightsTech in La La Land

The RightsTech Project is heading to La La Land February 1 and 2. Not the movie, the Marina, as in the Marriott Marina Del Rey in Los Angeles, where we’ll be hosting a two-day conference track as part of Digital Entertainment World.

Recognized by Hollywood insiders, digital influencers and industry leaders throughout the world as a “must-attend” event, now in its 4th year Digital Entertainment World (DEW) is where you want to be if you are in the business of creating or monetizing digital entertainment content.

As with the RightsTech Summit last year, RightsTech @ DEW will feature speakers from across multiple media verticals, including music, film and television, and video games. Topics include:

  • Inside the Black Box: Solving the Music Industry’s Data Problem
  • Making Blockchain Pay: Remittances, Micro-payments and Cryptocurrencies
  • Does Hollywood Need a Blockchain?
  • Rights I/O: Mapping Rights-In to Rights-Out
  • The Future of Music Royalties
  • Remix This: Derivative works and User Generated Content

Speakers include:

Bill Colitre, Music Reports
Russ Crupnick, Music Watch
Jonathan Azu, Red Light Management
George Howard, Open Music Inititative/Berklee College of Music
John Frankenheimer, Loeb & Loeb
Danny Anders, ClearTracks
Ivica Simatovic, Gamecredits
Ken Umezaki, dotBlockchain Music Project
Bryce Weiner, Tao Network
Zach LeBeau, SingularDTV
Jason Kassin, FilmTrack
Bryan Walley, Exactuals
Joel Jordan, SynchTank
Jeff Ponchik, Repost Nation
GregDi Benedetto, Music Aficionado
Fred Goldring, Music Aficionado
Lee Greer, National Performance Rights Exchange (NPREX)
Neeta Ragoowansi, NPREX
Erik Steigen, USA Media Rights
Tomas Likar, Hyperwallet Systems
Ralph Simon, Mobilium Global
Rian Bosak, Fullscreen
Joe Moschella, Jukin Media
Kuni Takahashi, Rumblefish
Stephen White, Dubset Media
Tamany Bentz, Venable LLP

The two days will also feature special presentations from technology developers and leading industry analysts.

Several rights-tech entrepreneurs are also among the finalists in the DEW Startup competition, with the winner to be awarded at the event.

The full agenda for the RightsTech track at DEW can be found here. Information on how to register for DEW can be found here.

 

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