6 Ways Smart Contracts are Revolutionizing Copyright Protection
The disruptive potential of smart contracts and block chain technology can not be overstated.
While smart contracts are utilized in various sectors, their use in intellectual property management is, without a doubt, revolutionary.
Below are six ways smart contracts will help uphold copyright protection, ensuring creatives benefit from their intellectual investments.
In this article:
∘ Immutable Ownership Records
∘ Automated Royalty Payments
∘ Digital Content Authentication
∘ Transparency in Licensing Agreements
∘ Decentralized Distribution Platforms
∘ Smart Contract Escrow Services
∘ Final Thoughts
1. Immutable Ownership Records
Block chain technology is celebrated for its tamper-proof and transparent nature.
One of the characteristics of block chain technology is provenance, which allows participants to ascertain the source of assets and how the ownership of said assets has evolved.
By using smart contracts, artists can create immutable ownership records, eliminating ownership disputes that are rife in the creative industry.
Creating an immutable record of ownership will save artists billions of dollars consumed in lengthy litigations.
A smart contract contains the creator’s name, the date they created a particular work, and their work’s publication date. It also contains rights that flow from the underlying asset. For example, licensing agreements.
Apart from protecting the artist, this information helps people to know whether a particular work is under copyright protection.
Smart contracts are agreements whose execution is automated, or self-executing programs contained in a block chain.
A famous example of smart contracts in action is the Digital Rights Management (DRM) system, widely used to manage and distribute copyrighted works.
💡 Recording and tracking assets, tangible and intangible, via traditional methods is streneuous: it’s expensive and ineffective.
For instance, it takes months to register artistic works in Copyright offices.
Since smart contracts operate on a decentralized network, they are safer and more transparent.
Once a transaction is recorded, all participants can see it in real-time. Attempts to corrupt information recorded on a block chain are detected immediately.
Artists can use smart contracts to prove ownership and enforce their rights, reducing infringement and unauthorized use cases.
⚡Also Read: Unravelling Traditional Contracts v. Smart Contracts: Exploring Legal Frontiers
2. Automated Royalty Payments
As previously stated, smart contracts are agreements whose execution is automated. Once a triggering event occurs, a smart contract executes.
Smart contracts are essential to businesses, because they help to automate payments, and track assets.
In the creative industry, smart contracts will ensure artists are paid promptly for their work through automation.
Additionally, smart contracts will enhance transparency in tracking how an artist’s work has been used and the revenue raised.
Automation of royalty payments limits administrative costs tremendously. This highly benefits artists as it guarantees them a more significant share of the revenues flowing from their works.
Smart contracts execute payment of royalties per the rights holder’s terms. Where there are several rights holders, smart contracts automatically pay each artist their due per the contractual terms.
Smart contracts distributed revenues to the artists of the song Tiny Human by Imogen Heap
Payments flowing from the song are automatically paid to the artists who contributed to the music through intelligent contracts.
They no longer need to rely on intermediaries to get paid. It also makes it easier for artists to detect fraud concerning their royalties, as any corruption is readily apparent.
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Artists play a critical role in our society and, as such, deserve adequate compensation for their intellectual investments.
Indeed, creators have bemoaned piracy, exploitation by media and recording companies, the rise of streaming platforms, and weak and ineffective systems of protection, for decades.
Through smart contracts, block chain technology can remedy these issues quickly and cost-effectively.
3. Digital Content Authentication
The creative industry is among the oldest and most cherished cultural institutions . Despite the significant role it plays in societies, it is stifled by piracy, among other unfair practices.
The music industry, for instance, is plagued by the prevalence of music streaming platforms, intermediaries, and pirates.
Blockchain technology enables robust content protection systems through smart contracts and decentralized content streaming platforms.
The proliferation of digital content brings forth significant issues for copyright holders. However, smart contracts are capable of revolutionizing the processes of digital content authentication.
Smart contracts provide creators with an innovative way of proving the legitimacy and authenticity of content in a fast, secure, and cost-effective manner.
Smart contracts help ensure that the content consumed is authorized and that creators’ rights are upheld.
Smart contracts enhance the process of digital content authentication by leveraging block chain technology’s transparency, immutability, and automation capabilities.
This is what an intellectual property expert had to say regarding the impact of block chain tech on intellectual property protection.
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The protection of intellectual property rights through tokenisation is potentially the biggest prize out there waiting to be collected.
Lars Seier Christensen, chairman of the Concordium Foundation and founder of Saxo Bank.
⚡Read More: How Can Businesses Navigate The Legal Complexities Of Smart Contracts?
4. Transparency in Licensing Agreements
Blockchain technology establishes trust across business networks, including the entertainment industry.
It does so by providing participants with tamper-proof records of transactions signed by relevant counter-parties.
Smart contracts will streamline licensing, making it easier for artists to grant others permission to use their works.
Licensing agreements are critical in the world of intellectual property. They enable holders to have some degree of control over the use and distribution of their works.
Smart contracts provide rights holders with a revolutionary solution that upholds the transparency, and the effectiveness of licensing agreements. Smart contracts do this by automating payment structures and terms and conditions.
Smart contracts self-execute when a triggering event occurs. In licensing agreements, the triggering event would be the satisfaction of terms and conditions, like payment schedules, usage rights, payment of royalties, etc. All these conditions can be coded in a smart contract.
By coding the terms and conditions of a licensing agreement in a smart contract, everyone gains a clear and transparent understanding of the terms and conditions.
Since terms are pre-programmed and indelible, there is no room for misinterpretation or confusion. Smart contracts cultivate trust among participants, limiting the risk of disputes.
5. Decentralized Distribution Platforms
Block chain technology has not only enhanced intellectual property protection, it has also revolutionized content distribution.
Decentralized content distribution platforms have drastically affected how content is shared and consumed.
They utilize smart contracts and distributed ledger technology to establish peer-to-peer ecosystems.
These systems REMOVE the need for intermediaries, allowing content creators to distribute their works directly to consumers.
Decentralized distribution platforms, including streaming services, publishers, and record labels, eliminate the need for go-betweens.
Smart contracts enable content creators to connect directly with their fans, ensuring fair revenue distribution.
Indeed, for many years content creators have suffered at the hands of record labels, publishers, and streaming services due to unequal revenue-sharing deals.
Decentralized distribution platforms offer creators greater control and ownership over their works.
💡Using smart contracts, it’s possible to enforce specific terms and conditions, including royalty structures and usage rights.
Decentralized distribution platforms enable content creators to share and distribute their content according to their preferences.
Decentralized distribution platforms are steadily gaining popularity across the entertainment industry, with artists like Pitbull and Lupe Fiasco advocating for their use.
6. Smart Contract Escrow Services
Innovative contract escrow services are gaining considerable traction in intellectual property protection.
Smart contracts provide content creators with a secure and reliable way of conducting transactions, and facilitating licensing agreements, among other things.
Innovative contract escrow services utilize distributed ledger technology and the automation capabilities of smart contracts to establish tamper-proof environments for intellectual property protection.
Traditionally, transactions involving intellectual property were fraught with risks. Risks of uncertainty and leakage of sensitive information were significant concerns to creators.
Smart contracts eliminate these risks by acting as automated, neutral intermediaries, ensuring participants satisfy their contractual obligations before self-executing.
Innovative contract escrow services store content, money, and intellectual property involved in a transaction.
💡Smart contract escrow services benefit both sellers and buyers of intellectual property. Both can rest assured that smart contracts can only release funds or transfer ownership of assets once the pre-programmed terms and conditions are satisfied.
Smart contracts limit the risks of non-delivery and fraud simultaneously. Smart contract escrow services are especially useful in managing licensing agreements.
Creators of digital content or software use smart contract escrow services to monitor compliance, enforce usage, and automate the payment of revenues.
Final Thoughts
Smart contracts streamline copyright protection through immutable records of ownership, automating royalty payments, authenticating digital content, powering decentralized streaming platforms, ensuring transparency in licensing agreements, and providing smart contract escrow services.
Creators lose billions of dollars annually due to infringement of intellectual property rights. Artists are rarely remunerated adequately for the effort they put into producing works of art.
Everyday professional and amateur artists hand over billions worth of intellectual property to media comapnies and social media platforms.
Unfortuantely, artists are not recognized adequately for their investments and are not payed sufficiently for their works. Smart contracts promise to deliver a brighter future to artists.
Undoubtedly blockchain technology and smart contracts are revolutionizing the management of intellectual property.
From smart contract escrow services to creating immutable ownership records, smart contracts guarantee users’ security, transparency, and efficiency.
Smart contracts enable creators and businesses to secure their intellectual property using distributed ledger technology and automation capabilities.
As blockchain technology and smart contracts continue to develop, copyright protection will transcend greater heights to ensure creators are adequately protected and remunarated for their intellectual investments.
