E-commerce System Aids Copyright Cause

One of the world’s largest banks jumped into the global electronic commerce market recently by announcing a product designed to solve digital copyright issues that have roiled the music industry and discouraged other publishers from selling their products online.

London bank NatWest Group and Silicon Valley’s InterTrust Technologies collaborated to create the Magex e-commerce system, which will launch in October. The service provides copyright protection while allowing content providers such as record labels and financial publishers to set rules that determine how their products are priced and used. NatWest executives said Reuters, Dun & Bradstreet and Equifax will be early users of Magex.

For instance, a consumer who wants to buy a Dun & Bradstreet report would read an abstract of the report and download a piece of software called a DigiBox. The report remains encrypted until payment is made through a digital wallet the consumer also downloads to her computer. Dun & Bradstreet can set separate prices for different uses of its reports, such as viewing, printing or downloading only the charts from the document. If the consumer e-mails the report to colleagues, it remains encrypted until the new reader makes a payment.

“We thought for some time that the growth of the digital economy would be inhibited by concerns over security. What we needed was to tackle the security and protection of intellectual property,” said NatWest Executive Director Bernard Horn.

NatWest and InterTrust officials said one of Magex’s biggest appeals will be the return on investment from ‘superdistribution’. If a music fan likes a particular song, she might send it to a dozen friends, each of whom would have to pay to listen to the track. Consumers, in effect, become salespeople for publishers.

“A content provider might choose to reward customers who are good distributors with a discount,” said NatWest executive Andrew Farrow. “You can also price content differently over time. You might price a stock market report at a premium in week one and less in week two.”

The bank will process payments made by Magex users. InterTrust is providing the technology for the system.