§ Blockchain-mediated Licensing - Legal Engineering for Artist Empowerment

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Blockchain-mediated Licensing

Legal Engineering for Artist Empowerment

Contributors: Charles Adjovu; Ewa Fabian

LEDGERBACK.COOP

LEDGERBACK.COOP
Contents
About The Emerging Technologies Research Group
Acknowledgements
Disclaimers
Publishing Information
Reading Guide
1. List of Abbreviations and Acronyms
Abstract

Abstract
Introduction
I) Background Research
- 1) Literature Review 2
  - 1.1 Scoping Review
  - 1.2 Research Questions
  - 1.3 Report Structure
  - 1.4 Research Methodology
    - 1.4.1 Search
    - 1.4.2 Screening
    - 1.4.3 Review Results
  - 1.5 Music Business Perspective
    - 1.5.1 Blockchain Impacts & Policy Concerns
    - 1.5.2 Blockchain Supply Chain
    - 1.5.3 Blockchain-based Music Platforms
  - 1.6 Legal Perspective
    - 1.6.1 Electronic Signatures & Evidence
    - 1.6.2 Contract Law
    - 1.6.3 Copyright Law
  - 1.7 Automation Perspective
    - 1.7.1 Smart Contracts
    - 1.7.2 Metadata
    - 1.7.3 Semantic Web
    - 1.7.4 Ricardian Contracts
    - 1.7.5 Online Dispute Resolution
    - 1.7.6 Legal Engineering
  - 1.8 Value Web Perspective
- 2) Music Industry Supply Chain and Work Registration Standards
- 3) Legal Frameworks Primer
  - 3.1 International Copyright Treaties
  - 3.2 United States of America (USA)
    - 3.2.1 Copyright Law
    - 3.2.2 Contract Law
    - 3.2.3 Electronic Records & Signatures
  - 3.3 European Union (EU)
    - 3.3.1 Digital Single Market
    - 3.3.2 Copyright
    - 3.3.3 Electronic Identication
    - 3.3.4 General Data Protection Regulation (GDPR)
  - 3.4 Alternative Dispute Resolution
- 4) Music Licensing Primer
  - 4.1 Music License Typology
  - 4.2 Licensing Approaches
    - 4.2.1 Blanket Licensing Model
    - 4.2.2 Compulsory Licensing Model
    - 4.2.3 Creative Commons Licensing Model
  - 4.3 Territorially-restrictive Licensing
  - 4.4 Licensing Costs and Issues
- 5) Technology Primer
  - 5.1 Blockchain
  - 5.2 Smart Contracts
  - 5.3 InterPlantery File System (IPFS)
  - 5.4 Application Programming Interface (API) and Data Oracles
  - 5.5 Decentralized Applications (DApps)
  - 5.6 Digital Assets
  - 5.7 Non-fungible Tokens (NFTs)
  - 5.8 Linked Data
  - 5.9 Ricardian Contracts
II) Ricardian Contract
- 6) Motivation
- 7) Decentralized Media Platforms
  - 7.1 Musicoin
  - 7.2 Resonate
  - 7.3 Choon
  - 7.4 Creativechain
  - 7.5 LBRY
  - 7.6 Ujo Music
  - 7.7 The Wicked Costs of Decentralized Media Platforms
  - 7.8 The Need for Greater Licensing Options
- 8) Methods
  - 8.1 Practical Tokenized Drafting (PTD)
    - 8.1.1 Core Principles
    - 8.1.2 Core Design Practices
  - 8.2 Automating Legal Prose
  - 8.3 Automated Music License Methods
- 9) Discussion
  - 9.1 Standard Form Design
  - 9.2 Research Limitations
  - 9.3 Future Research Areas
Conclusion
References
Appendix

About The Emerging Technologies Research Group

The Greyscail Blockchain Review is housed in the Emerging Technologies research group at the Ledgerback Digital Commons Research Cooperative (LDCRC). The research group’s mission is to increase innovation di usion of Web3 and other emerging technologies that empower individuals and peer-to-peer interactions so that they become commonplace in our society. This research report is one activity towards achieving that vision. As the Emerging Technologies research group aims to be platform-agnostic, open and inclusive, we have licensed this report under an open access license. Additionally, we aim to make this report available on multiple platforms, regardless of the platform’s underlying technology so that even those who are not yet part of the Web3 ecosystem can enjoy this report.

Acknowledgements

We would like to thank everyone who helped us in developing this research report. Speci cally, we would like to thank Coopérative Kleros, Veri Media, and our music composer interviewee.

We would like to thank Coopérative Kleros for providing input on blockchain-based ADR and escrow, and on addressing copyright issues in the music industry.

We would like to thank our music composer interviewee ¹ for providing input on the issues and concerns faced by music composers and how such concerns could be addressed.

We would like to thank Veri Media for providing input on how a musician can register with Veri Media to receive a metadata bundle for their musical work.

Charles Adjovu would like to thank Ewa Fabian for inspiring him to continue his research at Ledgerback Digital Commons Research Cooperative (LDCRC) after seeing her blog post reviewing LDCRC’s rst report on this topic, reinvigorating his desire to work on this research report, and to dive deeper into blockchain applications for the music and legal industries.

¹Name excluded to preserve interviewee privacy

Disclaimers

Contact: Charles Adjovu, [email protected].

Any dispute related to the use of this work that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules.

The opinions expressed in this publication are those of the authors and do not necessarily re ect the views of Ledgerback Digital Commons Research Cooperative (LDCRC), its Board of Directors, its Members, or its affiliates.

The mention of any trademark, copyright, name, logo, or other protected intellectual property, or proprietary property is solely for normative purposes. All rights are reserved to their respective owners.

Nothing contained herein should be construed as, or is intended to be, nancial or legal advice. This research report is intended solely for research purposes.

You agree and acknowledge that no attorney-client relationship of any kind shall be created from reading this research report or from any future uses of this research report.

While the authors aim to provide up-to-date and accurate information, the authors make no guarantees about the recentness or accuracy of the information contained in this report.

Publishing Information

Publishing

Publisher Ledgerback Digital Commons Research Cooperative
Emerging Technologies Research Group
Las Vegas, Nevada, USA

Design & Layout Ledgerback Digital Commons Research Cooperative

Contact Ledgerback Digital Commons Research Cooperative
Email: [email protected]

Excluded Sections If you would like access to the sections excluded from this version of the final print, please send an email to [email protected] with the subject line: “Access to Excluded Sections of the Blockchain-mediated Licensing Report”.

Excluded sections:

List of Cases
List of Statutes

Suggested Citation Charles Adjovu and Ewa Fabian, Blockchain-mediated Licensing: Legal Engineering for Artist Empowerment 1 - 99, Greyscail Blockchain Review (GreyscailØLDCRC 2020).

Author Information

Affiliations Ledgerback Digital Commons Research Cooperative, Las Vegas, Nevada, USA Charles Adjovu

Independent Researcher Ewa Fabian

Identifiers ORCID: Charles Adjovu: 0000-0001-6206-9546

Corresponding Author Correspondence to Charles Adjovu.

Ethics Declarations

Funding Statement This report received no external funding

Conflicts of Interests The authors declare no conicts of interest

Rights and Permissions

Open Access This report is licensed under a Creative Commons Attribution 4.0 International Public License (CC-BY 4.0) license, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

If material is not included in the report’s Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the intellectual property holder. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/.

The use of the Ledgerback Digital Commons Research Cooperative (“LDCRC”) name or logo for any purpose other than for attribution shall be subject to a separate written license agreement between LDCRC and the user and is not authorized as part of this CC-BY 4.0 license.

CRediT Authorship & Contribution Statement

Charles Adjovu: Conceptualization, Writing - original draft, Writing - review & editing, Software, Project administration, Data curation, Methodology.

Ewa Fabian: Conceptualization, Writing - original draft.

Charles Adjovu and Ewa Fabian jointly contributed to the International Copyright section of the Legal Frameworks Primer. Ewa Fabian contributed the European Union (EU) section of the Legal Frameworks Primer and the Views on Smart Contracts subsection of the Automation Perspective. Charles Adjovu contributed all other parts of this report.

Release Delay and Quality of the Literature Review

Technical issues prevented us from completing the editing process for this version of the report, in particular for Part I, by the expected release date. We apologize for any ambiguity, awkward phrasing or inaccuracies that may be appear in Part I. Our need to rectify our failure to meet the expected release date led us to release this version of the report, even with some errors, because we wanted to make the report (at least an acceptable version of the report) available to the public as soon as possible. For the above reasons, our Literature Review in Part I is more akin to an annotated bibliography than a traditional literature review. We apologize for the lack of critical analysis and integration of our sources in the Literature Review and for its extensive length. Lastly, we apologize for any inconvenience our delay in releasing this version of the report may have caused.

Alternative Titles

A list of alternative titles for this report:

Computer-mediated Licensing: Legal Engineering for Artist Empowerment;
Computer-aided Licensing: Legal Engineering for Artist Empowerment;
Techno-licensing: Legal Engineering for Artist Empowerment;
Technology-mediated Licensing: Legal Engineering for Artist Empowerment;
Internet-mediated Licensing: Legal Engineering for Artist Empowerment;
Web-mediated Licensing: Legal Engineering for Artist Empowerment;
Blockchain-augmented Licensing: Legal Engineering for Artist Empowerment;
Network-mediated Licensing: Legal Engineering for Artist Empowerment;
Computer-assisted Licensing: Legal Engineering for Artist Empowerment; and
Can’t Stop The Music Licensing: Legal Engineering for Artist Empowerment;
Ricardian Contracts for Music Licensing: Legal Engineering for Artist Empowerment;
Web3-mediated Licensing: Legal Engineering for Artist Empowerment; and
Global Licensing with Web3 Technologies: Legal Engineering for Artist Empowerment.

You may use one of the alternative titles of this report if it better suits your needs.

Peer Review Status

This report has not been peer reviewed. We do invite peer review of this report and any such peer review may be sent to the contact or corresponding author for this report.

Audience

This report is intended for multiple audiences, including legal practitioners² wondering how Web3 technologies will a ect legal drafting, researchers who want to understand how blockchain technology interacts with legal frameworks, music industry stakeholders who need deeper insights on blockchain’s impact on the industry, students at the university level whose interests or focus is on blockchain, law, or music, and participants in the Web3 ecosystem who are interested in this area or intend to disrupt the music industry. Given the audience diversity, we included a reading guide to help readers navigate this report and focus on the areas important to them.

²Legal practitioner and legal professional are used synonymously throughout this report.

Reading Guide

This reading guide, further described below, is meant to help readers navigate through this report in an easy-to-read manner.

You may read this report in non-sequential order because each chapter is independent of the other chapters. Though, we do recommend reading each chapter to have a greater understanding of the intersection of music complexity and Web3 technologies.

If you have prior knowledge on any of the perspectives in the Background Research section, we recommend moving on to the other perspectives.

If you are interested in the research literature at the intersection of music complexity and Web3 technologies, please refer to the Background Research section.

If you are interested in a brief introduction to digital music supply chain and work registrations standards, please refer to Music Industry Supply Chain and Work Registration Standards.

If you are interested in the legal frameworks, please refer to the Legal Frameworks Primer in Part I.

If you are interested in music licensing speci cally, please refer to the Music Licensing Primer in Part I.

If you are interested in the relevant technologies, please refer to the Technology Primer in Part I.

If you are interested in our development of the Tokenized Music License (TML), a Ricardian Contract standard form for music licensing that interacts with Web3 technologies (RC-Web3 Template), please refer to Part II.

For an essential reading of this report, we recommend reading the Literature Review in Part I and the Methods and Discussion in Part II.

List of Abbreviations and Acronyms

ADR Alternative Dispute Resolution

AMP Allocation for Music Producers Act

API Application Programming Interface

ASCAP American Society for Composers, Authors and Publishers

AT Audit Template

BY Attribution

CBD Crea-based Dollar

CC Creative Commons

ccREL Creative Commons Rights Expression Language

CC BY Attribution

CC BY-SA Attribution-ShareAlike

CC BY-ND Attribution NoDerivs

CC BY-NC Attribution NonCommercial

CC BY-NC-ND Attribution-NonCommercial-NoDerivs

CC BY-NC-SA Attribution-NonCommercial-ShareAlike

CGY Crea Energy

CID Content Identifier

CISAC International Confederation of Societies of Authors and Composers

CLASSICS Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society

CMO Collective Management Organization

COALA-IP Coalition of Automated Legal Application - Intellectual Property

CWR Common Works Registration

DAO Decentralized/Distributed Autonomous Organization

DApp Decentralized Application

DC Draft Commentary

DDoS Distributed Denial of Service

DeFi Decentralized Finance

DID Decentralzied Identifiers

DHT Distributed Hash Table

DLP Drafting Legal Prose

DLT Distributed Ledger Technology

DMCA Digital Millennium Copyright Act

DOJ Department of Justice

DPoS Delegated Proof-of-Stake

DRM Digital Rights Management

DSP Digital Music Service Providers

ERC Ethereum Request for Comments

E-sign Electronic Records in Global and National Commerce Act

EM Entity Model

ETH Ether

EU European Union

EUIPO European Union Intellectual Property Office

EVM Ethereum Virtual Machine

FAQ Frequently Asked Questions

GDPR General Data Protection Regulation

GUI Graphical User Interface

HTTP Hypertext Transfer Protocol

ILP InterLedger Protocol

IP Intellectual Property

IPFS InterPlanetary File System

IPLD InterPlanetary Linked Data

ISNI International Standard Name Identier

ISP Internet Service Provider

ISRC International Standard Recording Code

ISWC International Standard Musical Work Code

IT Information Technology

JSON JavaScript Object Notation

JSON-LD JavaScript Object Notation-Linked Data

LBC LBRY Credits

LCC Linked Content Coalition

LD Linked Data

MAR Minimum Automation Requirements

MCF Musicoin Foundation

MIT Massachusetts Institute of Technology

MLC Mechanical Licensing Collective

MLR Minimum Legal Requirements

MMA Music Modernization Act

MME Music Moves Europe

MRO Mechanical Rights Organization

MTR Minimum Technical Requirements

MVD Minimum Viable Data

NC NonCommercial

ND NoDerivs

NFT Non-fungible Token

NOI Notice of Intention to Obtain a Compulsory License

OMI Open Music Initiative

PKI Public-Key Infrastructure

PNK Pinakion

PoC Proof-of-Concept

PoS Proof-of-Stake

PoW Proof-of-Work

PPP Pay-Per-Play

PRO Performing Rights Organization

PSC Programming Software Components

PTD Practical Tokenized Drafting

P2P Peer-to-Peer

P&S Prose and Software

RC Ricardian Contract

RDF Resource Description Framework

REL Rights Expression Language

RMI Rights Management Information

RRM Rights Reference Model

RL Release License

SA ShareAlike

SACEM Society of Authors, Composers and Publishers of Music

SSID Self-Sovereign Identity

ToS Terms of Service

TPS Transactions-per-second

TRIPS Trade-Related Aspects of Intellectual Property Rights

TML Tokenized Music License

TPM Technological Protection Measures

TT Test Template

UBI Universal Basic Income

UCC Universal Copyright Convention

UCC Art. 2 Uniform Commercial Code Article 2

UETA Uniform Electronic Transactions Act

UNCITRAL United Nations Commission on International Trade Law

URI Uniform Resource Identifier

URL Uniform Resource Locator

US/USA United States of America

USD United States of America Dollar

USPTO United States Patent and Trademark Oce

VARA Visual Artists Rights Act

WCT World Intellectual Property Organization Copyright Treaty

WIPO World Intellectual Property Organization

WTO World Trade Organization

W3C WorldWideWeb Consortium

XML eXtensible Markup Language

ZKP Zero-Knowledge Proof

Abstract

Licensing is one of the essential means of exploiting the monetary value of a musical work, and yet it is an area fraught with many issues and transactional costs which make it a difficult process for individuals and organizations. Many issues in music licensing arise from the legal complexity (e.g., national and international copyright law), business complexity (authentication, tracking, accounting, etc.), value web complexity (transparency of relationships among stakeholders), and technical complexity (e.g., establishing a global repertoire database for music, sufficient metadata standards) of working with music. Then, in addition to these issues, there are specific transactional costs (identification, negotiation, monitoring, and enforcement) associated with the licensing process. To mitigate the complexity and transactional costs associated with music and the licensing process, researchers and technologists have been investigating how new technologies and design models from the Web3 space, such as blockchain, linked data and Ricardian Contracts, can automate processes to reduce complexity, speed up payments, improve tracking, and provide other benefits in the music industry. In our report, we make our own attempt to reduce the complexity and transactional costs in the licensing process by developing an automated music license. In doing so, we first conducted a literature review synthesizing the intersection of music complexity and Web³ technologies to provide background and context to automating music licensing. Then we developed the Practical Tokenized Drafting (PTD) method, a set of core principles and practices for drafting Ricardian Contracts that interact with Web3 technologies (RC-Web3 Templates), and the Tokenized Music License (TML), an RC-Web3 Template standard form for music licensing on the OpenLaw platform. Both the PTD and TML can be adapted to meet the needs of music industry stakeholders and provide guidance to legal practitioners in drafting RC-Web3 Templates.