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SWOT Analysis: Coalition of Automated Legal Applications – Intellectual Property (COALA IP)

Organization: [1]

COALA IP – Coalition of Automated Legal Applications – Intellectual Property

  • A blockchain-ready, community-driven protocol for intellectual property licensing.

Background: [2]

Formed to “connect creatives with audiences via seamless IP handling”

  • COALA – spinout from MIT & Harvard for blockchain workshops. COALA meets 3-4 times per year.
  • COALA IP is a working group that started in Fall 2015. COALA IP meets at each COALA workshop and communication takes place regularly in between workshops.
  • Contributors from COALA, IPFS, UjoMusic / Consensys, Mycelia, Ascribe / BigchainDB, more. COALA IP has relations with Mediachain, SoundCloud, Open Music Initiative, W3C, etc.

Objective: [3]

“COALA IP’s goal is to establish free, open, and easy-to-use methods of recording attribution and related metadata about works, assigning or licensing rights, mediating disputes, and authenticating claims by others. We believe there should be a global standard at the data level, without the need for centralized control.”

“COALA IP’s vision will be realized through 3 key efforts:

  1. Authoring a guide to provide an overview of the field and the need for a technical specification to represent intellectual property rights on distributed ledgers (see Introduction);
  2. Defining a technology-specific, but ledger-agnostic, free and open messaging and communication protocol for intellectual property rights and licensing transactions (see Implementing the RRM); and
  3. Building a community to define a minimally-viable set of data for the description of intellectual property rights and licensing agreements.”

SWOT Matrix:

  

 

Executive Summary:

Today decentralized application (DApp) platforms like Ethereum, Cardano, and NEO implement contractual governance models unique to their own technology and smart contract parameters. While they share similar values (e.g. smart contracts are efficient tools for disintermediating 3rd party costs), they do not share a global standard for recording, assigning or licensing the IP rights critical to effective smart contract governance. Set out to align “the fundamental mismatch between current IP law and the web,” the COALA IP protocol excels at unifying technical specification frameworks and intellectual property (IP) rights reference models (RRM). As a Free and Open Source (FOSS) decentralized protocol, COALA IP lays the foundation for automating IP attribution, licensing, and discovery with blockchain and distributed ledger technologies (DLT).

COALA IP’s unique value proposition is 3-fold. It is interoperable, extensible, and immutable. Interoperating with existing standards organizations, global IP authorities, and evolving distributed ledger technologies makes COALA IP extremely versatile. COALA IP’s ability to align individual components of disparate technologies and legislations makes the protocol stand out. Furthermore, its capacity to support, complement, or supplement current IP schemata with new datatypes, attribution models, and licensing metadata makes the COALA IP protocol both interoperable and forward-compatible. As blockchains and DLTs continue to grow in popularity, COALA IP’s protocol can be easily amended and extended into the future. The permanent nature of hashing timestamped IP rights data to the blockchain means that IP attributions are immutable, provable, and highly redundant. This permanence can provide assurance to content creators, connectors and publishers alike, and enable a mechanism for automatic IP rights discovery and provenance proof. As a thoroughly documented protocol, COALA IP excels at making it easy for creators, connectors, and publishers to understand how IP rights are stored, managed, and used. Altogether, COALA IP stands out as a foundational, multifaceted protocol with room for growth.

As an early mover in a nascent industry, COALA IP faces technical and resource limitations. Currently, blockchains do not offer scalable solutions. Despite Bitcoin’s recent Segregated Witness soft fork, which increased the number of transactions per block and lowered transaction costs, its blockchain still cannot accommodate high transaction volume. Limited blockchain scalability remains a weakness of Ethereum and the other leading blockchains too. These limitations translate to COALA IP’s inability to deliver production-ready decentralized IP management solutions at scale. Whereas COALA IP’s interoperability sets the stage for cohesive protocol development, its incomplete reputation rankings and undefined rights resolutions schemata currently limit the scope of COALA IP’s objective. Today COALA IP can help creators and publishers register IP rights, attributions, and licenses on the blockchain but it cannot fully resolve rights conflicts or attribution disputes. The lack of resources needed to deliver a production-ready protocol capable of resolving attribution errors and rights conflicts slows progress and limits functional use cases. Until reputation management and rights resolution procedures are functional, COALA IP will not be a fully shippable protocol. Currently, COALA IP’s weaknesses prevent it from mainstream deployment and adoption.

Although COALA IP’s internal weaknesses hinge on technical and resource limitations, its FOSS licensing and community-driven ethos present opportunities to overcome these limitations externally. Blockchain and distributed ledger technologies are at the forefront of emerging tech excitement. The exciting promise that these revolutionary technologies offer comes with strong economic incentives. Recently reported in The New York Times, “Gartner, a research firm, projects the global business benefits of blockchain technology will total $5 billion in 2018 and more than quadruple to $21 billion by 2021.” As free and open source software, COALA IP offers external businesses, non-profits, and universities a jumpstart on automating IP rights, attributions and licensing. Because the COALA IP protocol is free and open source, it lowers the barrier to entry for external IP integrations. The protocol’s platform-agnostic functionality means that external organizations can integrate COALA IP with their own blockchain or DLT. In turn, these external integrations could provide valuable use cases for growing and adapting the COALA IP protocol across industries. This community-driven effort of development, collaboration and integration is significant because it enables organizations using current IP management standards to adapt and benefit from blockchain technology moving forward. Today, many businesses acknowledge that IP licensing conflicts are difficult to track down and costly to settle. Although intellectual property should operate in the same way online as it does on offline, there is not an automatic process for content creators to register IP or a way for publishers to trace provenance in the event of a rights conflict. COALA IP presents content creators, connectors and publishers with the opportunity to overcome these obstacles with quick and inexpensive IP audits and IP rights attribution models that enable automatic provenance traceability by default. COALA IP’s promising external opportunities outweigh its current limitations.

While functional in beta, current products using the COALA IP protocol (e.g. UjoMusic) would likely break down if they were to onboard mainstream media partners. This is due in part to the underlying weakness of blockchain scalability limitations. If the blockchain or distributed ledger implementing COALA IP cannot scale to accommodate high transaction volume, it will slow down or break, and the protocol will be rendered useless. Another external element that could cause trouble for COALA IP is its current inability to resolve rights conflicts. In the event that a content creator or publisher incorrectly attributes IP using COALA IP, the incomplete rights resolution process could cause costly, external legal trouble for that party. Given today’s evolving regulatory landscape, deploying COALA IP in production could backfire and threaten the protocol’s success. In particular, the fines and penalties associated with General Data Protection Regulation (GDPR) non-compliance could cause tremendous financial trouble for smaller organizations that deploy COALA IP too early. With a new, overbearing EU copyright law moving towards legislation in July, the costs associated with non-compliance or misattribution could grow even larger. Conversely, global technology giants like Facebook, Apple, Microsoft, and Google face a different reality. Their financial and legal capacity to weather non-compliance fines and penalties sets them apart from small- to medium-sized businesses. Moreover, big tech incumbents are already forming their own partnerships to shake up the IP management space. On June 21, 2018, Ernst & Young and Microsoft launched a blockchain solution for content rights and royalties management for the media and entertainment industry. Their solution will utilize Microsoft Azure and JPMC‘s proprietary blockchain protocol, Quorum, to deliver novel IP management solutions starting with XBOX and its longtime gaming partner, Ubisoft. The status and scale of private solutions from COALA IP’s centralized competition threatens attentional attrition of their foundational FOSS protocol. The blockchain space is exploding with exciting breakthroughs and new decentralized applications every day; however, relatively few blockchain experts exist. In addition to facing stiff protocol competition, COALA IP faces an uphill battle for finding and retaining technical talent.

SWOT:

Strengths: Internal characteristics of the business or project that give it an advantage over others:

  • Provable: Publicly prove rights, attribution, and provenance of IP data
  • Immutable: Permanently write tamper-proof IP rights and attribution data to the blockchain
  • Interoperable: Exchange blockchain-agnostic IP rights and licensing data globally, intra- and interledger*
  • Extensible: Protocols: New datatypes and entity attribution metadata can be added over time to supplement existing and future data and protocols
  • Accessible: Access transparent, robust IP documentation online (becoming more multilingual)

Summary: COALA IP lays the foundation for automated intellectual property management that is easy to integrate, update, and maintain across blockchains.

Weaknesses: Internal characteristics of the business that place the business or project at a disadvantage relative to others:

  • Limited Blockchain Scalability: Current blockchains cannot scale to accommodate throughput of mainstream media IP integrations
  • Incomplete Reputation Ranking: Lack of reputation ranking governance leaves copyright and licensing disputes ripe for conflict and escalation
  • Undefined Rights Resolution Schemata: Undefined schemata* move the onus of dispute resolution to dapp developers
  • Uncharted Territory: Lack of established protocol for automating IP rights attribution and discovery leaves formalization open ended
  • Limited Resources: Lack of resources dedicated to formalizing IP specs stall protocol development

Summary: As an early mover in a nascent and largely undefined industry, COALA IP faces technical and resource limitations.

 

Opportunities: External elements in the environment that the business or project could exploit to its advantage:

  • FOSS Codebase: Free and open source (FOSS) IP rights, attribution, and licensing specs put developers, rights holders, businesses, etc. in the driver’s seat
  • Autitable IP Provenance: Quickly and inexpensively search and verify IP rights, attribution, and licensing provenance to exploit today’s IP weaknesses
  • Platform-Agnostic Protocol: COALA IP protocol enables IP rights and attribution integrations with many blockchains and distributed ledger technologies
  • Community-Driven Contributors: Growing body of contributors, decentralized protocols, and blockchain startups (e.g. Ujo Music, IPFS, Ascribe, etc.)
  • Industry Versatility: Use cases for automating IP attribution, licensing, and discovery span the global market and can quickly adapt to evolving, highly nuanced IP law

Summary: Although COALA IP’s internal weaknesses hinge on tech and resource limitations, its free and open source protocol and community-driven ethos present opportunities to overcome these limitations externally.

Threats: External elements in the environment that could cause trouble for the business or project:

  • Costly Attribution Settlement: The immutable nature of blockchains and the lack of settlement schemata threatens COALA IP success in practice
  • Uncertain Regulation: The piecemeal reality of blockchain and cryptocurrency regulation causes uncertainty worldwide and could threaten COALA IP’s future success
  • Sudden Mainstream Adoption: Sudden mainstream adoption without scalable blockchains threatens network congestion and non-functional protocols
  • Big Tech Competition: Given COALA IP’s limited resources and massive industry interest in blockchains, big tech competitors could deliver usable protocol standards quicker
  • Attentional Attrition: As new blockchain protocols for IP management take center stage, development efforts of the FOSS COALA IP protocol could fade

Summary: COALA IP faces stiff competition from big technology incumbents that are able to deliver functional, fully vetted blockchain protocols at scale.

 

Conclusion:

COALA IP successfully laid the foundation for intellectual property rights management and licensing solutions capable of integrating blockchain and distributed ledger technologies. Its early foothold in an extremely young industry enabled critical thinking and necessary coalition building. As a protocol, COALA IP’s success largely depends on the success of the technologies and decentralized applications deploying it. This double-edged sword proves problematic for COALA IP today, although future tech integration and adaptation opportunities abound. What’s more, COALA IP has succeeded as a model for private protocol developers. That Microsoft, EY, and JPMC just announced a private competitor to COALA IP 3 years after its protocol started being developed should be viewed as a sign of success. Given its history, unique value proposition and the benefit of healthy competition, COALA IP could also be incorporated by other industry leaders and formalized into a new intellectual property licensing standard moving forward.

References:

Keywords and Definitions:

  • FOSS – Free and Open Source
  • CC – Creative Commons
  • LCC Framework – Linked Content Coalition
  • LCC EM – Linked Content Coalition Entity Model
  • Entity Model defines an Entity composed of 5 key attributes:
  • Category: A broad category the Entity belongs to (e.g. Language=iso3166-1a2:EN (“English”))
  • Descriptor: The name of the Entity (e.g. Name=”Andy Warhol”)
  • Quantity: A numeric value related to the Entity (e.g. Height=20cm)
  • Time: A time or date related to the Entity (e.g. DateOfCreation=1999)
  • Link: A link to another Entity (e.g. “Andy Warhol” ––isCreator––> “32 Campbell’s Soup Cans”)
  • LCC RRM – Linked Content Coalition Rights Reference Model
  • The LCC Rights Reference Model (LCC RRM) is a formal framework representing intellectual property rights. The RRM describes a high-level data model built on top of the LCC Entity Model, composed of the following entity types:
    • Party: A person or an organization (e.g. “Richard Prince”, “American Apparel”, or “Sky Ferreira”)
    • Creation: Something created by a Party (e.g. “Untitled Instagram Portrait”)
    • Place: A virtual or physical location (e.g. “New York City” or “http://www.newyorkcity.com“)
    • Right: A set of permissions that entitle a Party to do something with a Creation (e.g. production and sale of t-shirts bearing the Creation)
    • RightsAssignment: A decision by a Party resulting in the existence of a Right (e.g. “Richard Prince grants American Apparel the right to produce and sell t-shirts bearing Untitled Instagram Portrait in North America”)
    • Assertion: A claim made about the substance of a Right (e.g. “Richard Prince claims he has copyright to Untitled Instagram Portrait”, or “Sky Ferreira claims she has copyright to Untitled Instagram Portrait”)
    • RightsConflict: A statement of disagreement over a Right (e.g. “Sky Ferreira and Richard Prince both claim copyright to Untitled Instagram Portrait”)

Semantic Web – Web of Data

  • The ultimate goal of the Web of data is to enable computers to do more useful work and to develop systems that can support trusted interactions over the network.

RDF – Resource Description Framework

  • Framework for describing ontologies

URI – Universal Resource Identifier

  • Makes resources and content addressable

URL – Universal Resource Location

  • Address of where content resides

ccREL – Creative Commons Rights Expression Language

  • The standard recommended by Creative Commons (CC) for machine-readable expression of copyright licensing terms and related information.1

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Alex Broudy is a Senior Business Analyst (CSM) focused on blockchain product analysis, social media marketing, omnichannel commerce, and analytics. The goal of CryptoPidgin is to simplify the sprawling and fast-moving trends in Blockchain, Crypto, and Web3.

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