Blockchain technology opens up the possibility for a provider to offer an immutable registry of transactions, held on a decentralized network of computers. While financial applications continue to dominate the blockchain development landscape, as we’ve detailed in prior posts there are a growing number of companies offering registries for digital content, including Monegraph, ConSensys, Stem, Mediachain, ascribe and others.
A content registry, for the most part, is a registry of the ownership of intellectual property, most prominently copyright. Ideally, such a registry would accurately record original ownership of a work, and then also record all subsequent transactions involving that work. Since copyright interests are divisible, this can become an extremely complicated tree of transactions, very rapidly.
The blockchain enables powerful tools for maintaining and tracking this web of ownership and transactions. Is it possible that blockchain registries provide such significant advantages over government registries, that decentralized blockchain registries may one day replace centralized registries such as the one maintained by the U.S. Copyright Office?
Let’s start by taking a quick look first at how copyright registration works in the United States.
U.S. Copyright Office
Years ago, registration of works with the Copyright Office was required in order to receive protection under U.S law. That is no longer the case. Although this often surprises people,there is no longer any requirement to register a work with the Copyright Office in order to protect it in the U.S. (or in most other countries). Copyright protection is now extended to works upon the moment of their creation.
As the Copyright Office states in its “Copyright Basics” circular:
In general, copyright registration is a legal formality intended to make a public record of the basic facts of a particular copyright.
Approximately 475,000 works are registered each year with the Copyright Office, for a fee of $35 to $55 per work. This number represents, of course, only a fraction of the copyrightable works actually created each year in the United States, especially if you count works created for social media, such as small graphics and memes, amateur photos, blog posts, and the like.
Before a work is registered, the Copyright Office will perform a review of the application to make sure that it meets the requirements for registration, although it does not engage in an in-depth substantive review of the work itself in most cases.
Although registering works is not required, registration does provide some important additional legal advantages in the U.S.:
You have to register before you can sue someone for infringement (and within a certain time frame in order to recover statutory damages and attorneys fees).
If you have timely registered, your copyright interest will be presumed valid and the facts in your certificate of registration will be treated as true, by U.S. courts, unless another party rebuts that presumption.
Your registration puts the world on notice that you own the copyright, making it difficult for infringers to argue that their actions were innocent.
In addition to recording ownership of works, you can also record transfers of copyright with the Copyright Office. Recordation of assignments, licenses and other transfers is not mandatory, but like initial registration it confers certain legal benefits, such as establishing legal priority between conflicting transfers, and providing “constructive notice” of the facts stated in the recorded document to the public.
Receipt of a registration certificate may take a number of months, but if approved the date of registration is retroactive to the date you submitted the application; in other words, the processing time is not held against you.
Finally, when you register a work, you must provide a “deposit copy” of the work, which the Copyright Office retains.
Thus, to summarize, the Copyright Office maintains (1) a record of copyright ownership for those who chose to register their works; (2) a record of copyright transfers for those who wish to record those transactions; and (3) a copy of any work that has been registered.
Of course, the Copyright Office provides many other services besides recordation and archiving of works, including advising Congress and educating the public on copyright issues, and administering statutory royalties, to name just a few. And, as a chronicle of our cultural heritage, the Copyright Office’s records – which consist of 45 million cards in the Copyright Card Catalog covering over 200 years from 1870 to 1977, and over 16 million online entries since 1977 – are enormously important.
But the question at hand is: Should the Office handle copyright registrations in the future?
Blockchain Registries for Copyright
As a ledger of ownership, a blockchain-based registry may hold some distinct advantages over the Copyright Office’s database of works:
First, the decentralized and cryptographically-secured aspects of the database may make it less susceptible to catastrophic loss or failure, or hacking.
Second, registration is essentially instantaneous, and likely will cost many orders of magnitude less than even the relatively low $35 currently charged by the Copyright Office.
Third, recordation of subsequent transactions will also occur in real-time and be fully traceable up and down the “tree.”
Fourth, blockchain registries may provide more effective notice to the world of an author’s ownership interest, given their public nature (although this may not be true if there are multiple, competing blockchain registries).
However, there are two key functions that the Copyright Office performs that at present a blockchain-based registry cannot perform. Blockchain registries do not create the legal presumptions and entitlements provided to federally-registered works in the U.S. Blockchain registries also do not provide any archiving function for the underlying works. We address each below.
No Legal Presumptions or Entitlements
The right to go to court to enforce a copyright interest, in the U.S., is a creature of statute. As is the right to collect damages and attorneys fees if successful. Registering a work on a blockchain will not provide such rights, unless Congress amends the Copyright Act. It is not impossible that this might happen sometime in the future, if blockchain registries become an accepted method of providing public notice and securing ownership and transfer information, but don’t bet on it happening right away. For now, registering a work with the Copyright Office is the only means of securing these rights.
In any event, registration on a blockchain registry and with the Copyright Office need not be mutually exclusive. Nothing prevents an author from registering his or her work on a blockchain registry, and then later registering with the Copyright Office should the need arise (for instance, if the author discovers that someone is infringing the work, or if the work becomes very popular). The only downside to this approach is that the author would not be able to sue for damages occurring prior to seeking federal registration, and would not be able to elect statutory damages or collect attorneys fees at all.
The presumption of validity afforded to a copyright registration is also statutory, but it stands in a slightly different position, since a defendant can always rebut the presumption of ownership with contrary evidence. Indeed, a competing blockchain registration with an earlier timestamp might well constitute the type of evidence a court might consider in rebutting such a presumption; consequently, a blockchain record should provide relatively strong evidence of validity of a copyright in the first instance, once courts become more familiar with the technology.
No Archiving Function?
In large part, the archiving of a “deposit copy” by the Copyright Office along with copyright registrations facilitates the growth of our national library, the Library of Congress. But it also serves the purpose of tying an actual example of the work in question to the ownership information in the registration record, such that ownership information can be located in the future, and so that potentially infringing works can be compared with the original.
Blockchain technology also aims to create an indelible “tie” between the original work and ownership information, but it does so by creating a digital signature or cryptographic “hash” based on the contents of the digital file and the owner’s identifying information. Arguably this linkage is more immutable than the link provided by a deposit copy and ownership data held in a centralized system like that of the Library of Congress/Copyright Office.
However, there are a few caveats. First, blockchain registries do not themselves contain copies of the digital content, but rather the digital fingerprint of the content’s ownership/registration information (and that of any subsequent transactions). This means that to, for instance, compare a potentially infringing work with an original work, some overlay on the blockchain system must make this comparison. To do so, generally the entity offering the blockchain-based registry must also provide some type of archiving service for the base file that will be compared against new content using various filtering/matching algorithms.
Currently, companies offering blockchain solutions appear to be handling the archiving/hosting of underlying content in different ways. Some host the content in their own centralized (typically cloud-based) system. Others may use a separate, distributed system such as the Interplanetary File System (IPFS) for archiving the actual content.
One might think that the fact that different providers are handling content archiving in different ways might lead to another potential strike against blockchain registries as compared with the Copyright Office: different, competing registries. That is, an argument might be made that unless and until a single blockchain-based registry becomes dominant, or the different registries become interoperable (perhaps a more likely result), there may be a reluctance on the part of authors to use such a registry because there is no centralized system for resolution of conflicts.
This criticism is probably overblown. Given the immutable time-stamp afforded by blockchain registration, there is little ability for parties to “game” the system(s), and most disputes over ownership should also therefore be readily resolved. However, some form of interoperability between platforms, or at least agreement on standards for identifying and resolving similar/identical works, would certainly be helpful.
Given that the large majority of works (especially those small, short and amateur works mentioned above) created in the U.S. likely go unregistered, an inexpensive blockchain registry would seem to be a good option for authors who want to create a “time stamp” for the creation of their works. This would also permit persistent attribution for, and ultimately monetization of, such works. The point is that the blockchain allows for information to be publicly recorded about certain works that might otherwise never be recorded.
One could imagine a kind of dual-track system beginning to develop: Blockchain registration for small, short or amateur works, and continued federal registration for more substantial works of authorship such as novels, plays, and film. There would be much cross-over, of course: Owners of shorter works that acquire sufficient fame or value might ultimately want the additional protections of federal registration, and owners of longer works might first informally register to preserve their ownership and attribution claims.
Perhaps this cross-over could even be facilitated: the Copyright Office might ultimately consider allowing works first registered to a blockchain registry to flow more easily into the federal registration system, when an author decided that it was important to gain the additional protections. (Of course, all of this assumes that Congress does not eventually provide such protections to blockchain-registered works directly.)
One final thought for today is that one wonders if the Copyright Office might even consider blockchain technology (likely a permissioned blockchain) as it begins to implement its planned overhaul of its IT systems. In support of the Copyright Office’s Fiscal 2017 Budget Request to Congress, Maria A. Pallante, the Register of Copyrights, said in a recent statement:
….The challenge today is ensuring that the U.S. Copyright Office can meet the future needs of these essential industries.
That challenge is highlighted by the evolving role of technology in creative enterprises. At the time work began on the current online copyright registration system in the early 2000s, high‐speed internet access was not yet widespread, smartphones were an uncommon sight, and Pandora had yet to launch its music service. To take one example, if you were a musician, it was unlikely that you would use a phone to capture a newly created song.
Today, it is commonplace for musicians to record songs on a smartphone or tablet, capturing in real time all the data needed to satisfy copyright registration requirements. It therefore makes no sense to require a musician to put down her smartphone, log on to the Copyright Office website, and complete a lengthy online process just so she can protect her work. Instead—with the press of a button in her music recording app—she should be able to seamlessly send her song and the associated data to the Copyright Office for examination and registration. By the same token, a digital music service trying to license that song and millions of others shouldn’t have to slog through the Office’s website, searching for songs one at a time. Instead, the service should be able to connect its servers directly to the Copyright Office via an API and search our data in real time. It is thus clear that making incremental improvements to our existing systems will not be enough. We must shift the approach entirely, and provide a flexible platform that others can build upon for the effortless protection and licensing of copyrighted works.
In connection with this request, the Copyright Office also released a provisional IT modernization plan. The plan states
This IT Plan, when implemented, would change a number of existing paradigms. Copyright Registration would move away from a large proprietary software product managed by the Copyright Office to a model that enables third parties to build a variety of products on an open source technology platform that can seamlessly interoperate with Copyright Office systems.
Although the Copyright Office ultimately might determine that a decentralized registry does not make sense given its functions and role, it may well be appropriate to consider this new technology in all of its burgeoning forms as the Office attempts to further develop and ultimately implement its plan. Given how quickly technology is changing, it is likely in the interests of all stakeholders to engage in constructive conversations around how these differing registries might co-exist and/or interrelate.