Our rights process is broken. Can blockchain fix it?

Jane Tappuni
Opinion - Publishing Monday, 4th June 2018

Jane Tappuni makes the case for a global rights database using blockchain technology

I'd like to make a case for some transformative thinking about how the publishing industry manages rights. I have spent more than 20 years in the industry working with rights, and the past 10 years in publishing technology with a focus on transactional rights processes. In my opinion, the rights process is ripe for innovation, because the systems are built to work alone rather than as part of a rights ecosystem. The parts of the value chain are siloed and disconnected from each other.

These technology systems are often managed by IT departments that don't understand the rights process. Publishing houses don't even have reliable rights systems, instead relying on Excel spreadsheets and paper-based processes. This does not serve the industry or our authors well. It is time to consider an open approach to ownership and transaction.

Rights ownership is inherently complicated. IP for a work might sit in several places. The work may have multiple licensees, but the tracking of the work doesn't sit in one place, making it very hard for the licensor to get a full picture of rights distribution.

What is blockchain?
Building a global rights database using blockchain technology is, in my view, the obvious solution. Here is a simple definition of blockchain: it is a way of decentralising transactions, taking them out of our corporate systems and making them open and accessible to all. The solutions can be completely open or can be created to be open and closed. Closed solutions are called permissioned blockchains, and can be used to protect sensitive data where needed. (If you want to know more about blockchain, I recommend you read this excellent article from my colleague Tom Cox.)

So how can this be helpful to the publishing community?

One of the most significant things that blockchain solves is identity management. It is the reason why fintech and banks are so interested in it. About 20% of a bank's time is taken up with "Know Your Customer" processes, or verifying who people are, and blockchain can help to solve this issue. There are whole nations looking to build borderless immigration on blockchain, notably the Dubai Government.

These identity management issues are very similar to IP management issues in the publishing industry. Just like a person, a work in publishing has an identity. In fact, when it comes to IP, a work can have multiple identities.

If the issues are similar, then maybe the solutions are similar.

Global database
Imagine a world where rights ownership data sits in a public global rights database that can be accessed and added to by all publishers and agents. How transformative would it be if that process were taken out of the IT department's hands, and out of the current rights solutions, and into a "giant spreadsheet in the sky" that no one owns but is a universal true data set? This is a real possibility with blockchain. It could result in greater accuracy, more trust, smoother royalty processing, and more flexible licensing.

I know that blockchain is not a magic bullet, but it can solve some fundamental problems in trust, identity and data management. For it to solve our problems, we need to be clear on what our use case is and what problem we want to solve. According to a recent study by Deloitte, 92% of the 26,000 blockchain-based projects that have been created over the last two years are now dead - we don't want to become part of that statistic. So, before embarking on a blockchain project, you need to ask yourself a set a questions, beautifully defined here by Wesley Graham.

There are some great base technologies we could use to build the solution. For example, companies such as Hyperledger have created private enterprise blockchains designed to decentralise transaction ecosystems, supporting the global business transactions of major technological, financial and supply chain companies. More interestingly, Amazon has announced a developer platform for blockchain.

Building the solution
In publishing, we have a supply chain and there is value in IP, so the industry can use these base technology platforms to build a blockchain solution. One approach would be to use Etherium, Hyperledger, or the new Amazon solution as a base platform, and then to build what is called smart contracts on top to run the rights tracking/royalty calculations. These smart contracts are not contracts in the traditional sense, but programs that execute calculations.

Although the smart contracts are different from normal contracts, they can take us to the same conclusion. They are basically bits of software that automate the execution of processes - in our case, the contract.

On my recently completed course at Oxford University Said Business School Blockchain Strategy Programme, one of the lecturers, Meltem Demiorors, defined the basic principles of smart contracts as being "observable, enforceable and verifiable". "Observable" means that any party involved in the deal or negotiation can view the terms and clauses. This could include third parties involved in negotiation and payouts. "Enforceable" means that the clauses need to be met to execute. This will require a dependency on a blockchain protocol and some sort of payment mechanism. "Verifiable" means the ability to revisit if there is a disagreement and the need to verify the rights in case of dispute.

These smart contract solutions could sit in what are called permissioned blockchains to keep the information private. The smart contracts can be public or private - ie owned by no one or owned by the publisher.

Other industries that handle IP are way ahead of publishing. Consider music, for example. Services such as Mycelia and Ascribe allow artists to assign each piece a unique cryptographic ID. Its complete history is available on the blockchain to track attribution and trace where the artwork spreads.

To be successful, our new system would need to be an inclusive system for all. It must be easy to capture rights information. I think this is possible, but the biggest question is: who should be building this blockchain rights database? In other industries, competition is intensifying, with Google, Amazon, governments, the world's biggest banks and tech companies all experimenting with blockchain. We need publishers associations around the world to help gather a consortium of key publishers to bring them to the table. They could collectively engineer a shift in behaviour of ownership internally into the public domain in the same way that digital music took music from ownership to access.

It's time for a totally different approach in the way we think about rights identity management.

Jane Tappuni is general manager (consulting) at IPR License. She has more than 20 years of publishing experience, and is a specialist in publishing technology, with a focus on transactional IP management and solutions. She is a graduate of the Oxford University Said Business School Blockchain Strategy Programme.

IPR License is owned by the Frankfurter Buchmesse, Copyright Clearance Center and the China South Publishing & Media Group. It is a place to discover and buy international rights and permissions online. IPR is committed to developing transactional IP tools to help publishers, authors and agents sell rights.