Investor Relations

Part 3: Blue Spike Proffers a Technical Solution with a
Social Enforcement Mechanism

The technical philosophy and software products that Blue Spike brings to the task of securing intellectual property are based on the realities of making markets, an enterprise that requires transparency and maximal communication between creators and consumers.

Rather than attempt to covert information, signals and intellectual property objects, Blue Spike's technologies establish title and responsibility for them by embedding concealed digital watermarks into the fabric of the object containing the consumers or distributors' identifying information. They are entwined in such a way that the carrier itself, a song for example, is destroyed when the watermark is removed - a feat achieved, in part, by incorporating the signal itself into the watermark.

Practically speaking, this gives artists and distributors hooks for locating and claiming title to their works that have been purloined and posted on the Web.

Blue Spike waits for the day when an infringement case includes a court sequence in which a digital signature recovered in a piece of media that has been illegally posted online. For music that is distributed in wholly digital formats online, digital watermarks can contain title data and personal information about the consumer, providing a powerful deterrent from casually copying and sharing music files with unknown parties on the Web as is the scheme in file-sharing programs like Freenet and the Napster.

Watermarking covertly can also provide a powerful disincentive to would-be pirates and their accomplices among resellers and distribution agents.

Note: Films are pirated these days with hand-held video cameras taken into theaters, often in collusion with the theater owners. Watermarked prints of a film that includes the theatre operators' identities would provide an incentive to protect their screening from unauthorized recording of the film to avoid expensive business consequences.

By any measure, downloading music has proven to be one of the killer applications for the Web, although building a white market for music has been hampered by the development of the fast-acting, though profitless, black market sector.

Establishment of a white market alternative will require development of shrinkage control techniques, online distribution auditing systems, appropriate pricing models and touch-and-go or automated payment systems (Show us the streaming cash!) and consumer incentives that will drive them over to the white market and keep them there. For many of these essential functions, digital watermarking provides the greatest functionality with the lowest technological (and user) burdens.

Part 2:
 Blue Spike's Digital Watermarking Emerges as the
 Rational Choice for Fighting Piracy

Part 3:
 Blue Spike Proffers a Technical Solution with a
 Social Enforcement Mechanism

Part 4:
 Music: Just the Overture