With computers and digital technologies at our fingertips, information gathering and storage has never been simpler or faster. Blockchain is one cutting-edge record-keeping method that links transactions in such a way as to give users a historical view of an asset or item while simplifying complex tasks.
Another benefit from blockchain's creation is "smart contracts", which take advantage of technological developments to add lines of code into it that "self-execute" automatically and facilitate transactions that are transparent, irreversible, and trackable over the distribution network.
Smart contracts provide a convenient platform to conduct "trusted transactions and agreements" between network participants without external enforcement mechanisms or central verifications being required, thus making value-added transactions possible involving money, real estate and services such as digital subscription services possible through smart contracts. Their advantages are their efficiency, user friendliness and ability to eliminate redundancies from systems.
Smart contracts could also play an invaluable role in contract administration and enforcement when applied to digital products that can easily be replicated and shared, particularly those created using code against itself - potentially contributing significantly towards building out an entirely new "Digital Rights Management" framework.
What Is a Smart Contract?
Smart contracts enable an agreement or contract's necessary tasks to be automated by self-executing programs known as smart contracts, making transactions irrevocable and traceable once complete. Smart contracts remove the need for central authorities or outside enforcement mechanisms by providing trustworthy transactions between dispersed participants without needing central authorization, judiciary systems, or outside enforcers; instead, enabling trustworthy agreements amongst anonymous participants directly among each other using blockchain technology as its foundation - although most commonly associated with Bitcoin today.
What Does Copyright Protect?
Black's Law Dictionary defines copyright protection as "the legal recognition and sanctioning of literary property as recognized and sanctioned by positive law." Stated, copyright provides authors of original works a legal safeguard; whether their works are published is irrelevant. As per the U.S. Copyright Office website, copyright does not protect "facts, ideas systems methods of operations." but rather covers "literary, dramatic musical, artistic works such as poetry novels, movies, songs , computer software architecture..." Although copyright doesn't protect methods of expression (but may protect expression itself).
These pieces must take the form of "tangible expressions," produced independently by their authors with minimal creativity, housed on "permanent media'' that allows "more than short-term replication or communication, and satisfy a set of preconditions in order to qualify as copyright material. A work may then be protected through copyright laws. Copyright is now an essential legal protection for websites and online material, protecting an array of intellectual property assets. Copyright protection is an invaluable way for writers and other intellectual property holders to safeguard their work from duplicators, reuse, or distribution without proper author permission. Copyright protection secures exclusive rights that benefit creators while still permitting advances in arts and sciences.
Smart Contracts And Copyrights
Copyright and smart contracts are forging an intimate partnership. Since copyright provides legally enforceable protection, using smart contracts to negotiate agreements between parties seems logical, given that this technology could soon play a vital role in law enforcement efforts. Smart contracts' automated procedure adds greater certainty to transactions, with their pervasive usage - even across global society - offering significant advantages that cannot be overlooked when employing them. As smart contract copyright does not involve human contact and fundamentally transforms traditional contractual schemes, they remain novelties in many countries when combined with copyright protection implemented on distributed ledger chains. If widely adopted and adopted for copyright law systems, however, disruptive technologies like smart contracts could "change the game."
Read More: Unlocking the Power Of Blockchain: A Comprehensive Guide to Smart Contracts
Can Smart Contracts Be Used To Protect Copyright?
As smart contracts remain relatively untested and new to most jurisdictions, their use for copyright protection remains highly contentious and intriguing. While case law precedent and legislation support using smart contracts to secure copyright rights in some places, their applicability in others remains less certain; even within existing frameworks of electronic agreements, there could still be variance.
Smart contracts may not provide an effective method to protect copyright in jurisdictions with standard contractual affairs requiring written agreements and human verification of terms and conditions. Parties involved should understand any risks or obstacles involved with using smart contracts within their current environment.
Issues And Challenges
Technical Capabilities May Not Exist
At times, parties might lack access to smart contract technology or may lack tech savvy; trying to implement changes on an already agreed upon template could result in programming errors which nullify an agreement and potentially incur unintended liabilities. Understanding code and the way a smart contract operates requires unique knowledge that may or may not ever become widely recognized.
The Exercise Of Discretion By The Parties May Not Be Possible
Contractual discretion can often be an invaluable resource in negotiations between contract parties, particularly when one or both determine it would be in their best interests to alter certain provisions, accept partial fulfillment, or invoke clauses such as force majeure, unfortunately, due to being preprogrammed events and thus unlikely incorporating discretion into its "logic of the system," any tools that the parties previously relied upon are likely lost forever.
Modifications To The Contract May Not Be Possible
Conventional contracts allow parties to quickly alter, revise or terminate agreements through written agreement, but smart contracts don't offer this same flexibility due to blockchain's rigid structure that makes any further adjustments arduous; further elaborations could increase transaction costs substantially and make traditional contracts more cost effective and adaptable to meet party needs thereby eliminating their need.
Risk Of Hacking And Cybersecurity Issues
As with anything automated, anything fully automated is susceptible to cyber hacking in today's ever-evolving cybercrime landscape. According to an article published last December, Ethereum smart contracts worth approximately $4.4 million were at risk due to "poor coding that contains bugs." Cryptocurrencies such as bitcoin were once thought unhackable, but cybercriminals have proven this wrong by taking approximately $2 billion worth in cryptocurrency theft between 2017 and 2019 alone. Similar risks and weaknesses apply with copyright smart contracts - parties should plan ahead in case something goes amiss.
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Conclusion
Smart contracts have the potential to improve copyright protection while fortifying the current legal enforcement framework. Still a long way to go before smart contracts are extensively employed, though. Because this new technology is still developing, it is a little early to predict whether smart contracts will be useful in replacing or augmenting previous enforcement methods, ineffectual and unenforceable, or eventually prove a damage to existing enforcement mechanisms. This portion of a smart contract is still important for the time being since it permits careful selection of the site and applicable laws, which can assist in mitigating some of these potential issues.
Governments will need to bolster any gaps in the legal environment by developing specific legislation and regulatory codes that pertain to these kinds of transactions in order to provide clear guidance and ensure enforcement. Following that, case law will develop to provide the law with further guidance and context. Unfortunately, though, this process will not progress at the same rate as technology. If the contractual parties are uncertain about the benefits of utilizing a smart contract, a traditional contract has to be thoroughly investigated as an alternative.
