ContentGuard Holdings, Inc. v. Amazon.com Inc. et al

Filing 1

COMPLAINT FOR PATENT INFRINGEMENT against Amazon.com Inc., Apple, Inc., BlackBerry Corporation (f/k/a Research In Motion Corporation), Huawei Device USA, Inc., Motorola Mobility LLC ( Filing fee $ 400 receipt number 0540-4447766.), filed by ContentGuard Holdings, Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Civil Cover Sheet)(Baxter, Samuel)

Exhibit K

111111

1111111111111111111111111111111111111111111111111111111111111
US008583556B2

United States Patent

(10)

Dunkeld et al.

c12)

(45)

(54)

METHOD OF PROVIDING A DIGITAL ASSET
FOR DISTRIBUTION

(75)

Inventors: Bryan Dunkeld, Sausalito, CA (US);
Edward Lambert, Mercer Island, WA
(US)

(73)

( *)

Notice:

5,629,980
5,634,080
5,646,997
5,646,999
5,649,013
5,699,427
5,765,152
5,809,317
5,841,978
5,845,281

Assignee: Content Technologies, LLC, Kirkland,
WA (US)

US 8,583,556 B2

Patent No.:
Date of Patent:
A
A
A
A
A
A
A
A
A
A

*
*
*
*
*
*
*

511997
511997
711997
711997
711997
1211997
611998
911998
1111998
1211998

Nov. 12, 2013
Stefik et a!. . ... .... ... ... ... ... . 70 5154
Kikinis et al.
Barton .......................... 7131176
Saito ............................... 705154
Stuckey eta!.
Chow eta!.
Erickson .
111
Kogan eta!. .................. 7151236
Rhoads ......................... 7091217
Benson eta!.
111

(Continued)
Subject to any disclaimer, the term of this
patent is extended or adjusted under 35
U.S.C. 154(b) by 0 days.

(21)

Appl. No.: 13/210,153

(22)

Filed:

FOREIGN PATENT DOCUMENTS

wo
wo

0111623
0138993

212001
512001

(Continued)
Aug. 15, 2011

(65)

OTHER PUBLICATIONS

Prior Publication Data

US 2011/0302065 Al

Bartolini, F. et a!., "Electronic Copyright Management Systems:
Requirements, Players and Technologies," dexa, lOth International
Workshop on Database & Expert Systems Applications, 1999, 3
pages.

Dec. 8, 2011

Related U.S. Application Data

(62)

Division of application No. 10/016,325, filed on Dec.
10, 2001, now Pat. No. 8,001,052.

(51)

Int. Cl.
G06F 21100
(2013.01)
U.S. Cl.
USPC ............................................... 705/51; 705/53
Field of Classification Search
USPC ............................................................ 705/51
See application file for complete search history.

(52)
(58)

(56)

References Cited

U.S. PATENT DOCUMENTS
5,410,598
5,444,779
5,519,778
5,568,550

A
A
A
A

*
*

411995
811995
511996
1011996

Shear .............................. 705153
Daniele
Leighton et a!. ................ 380130
Ur

(Continued)
Primary Examiner- Evens J Augustin
(74) Attorney, Agent, or Firm- Marc S. Kaufman; Stephen
M. Hertzler; Reed Smith LLP

(57)

ABSTRACT

Digital assets are provided for distribution within an electronic network. The digital asset includes digital content that
is associated with a digital rights holder. A serial number is
provided for (embedded within) the asset; this number
uniquely identifies a first introduction of digital asset for
distribution within the electronic network. The asset is then
posted in a number oflocations so that it can be distributed to
users. A transaction database is updated to reflect occurrences
of different instantiations of the asset.
27 Claims, 3 Drawing Sheets
102

----------------~~~~---------------------

lm
I SYSTEM
I

D

N~~~~~K~:;;;=:;=;;~~

RIGHTS HOLDER
NETWORK DEVICE

122

,-----:~~-~----------- -----------,

104

D
CUSTOMER NETWORK DEVICE

I

~

124

n l ___________________________________ j

110

US 8,583,556 B2
Page 2
(56)

References Cited
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Rhoads ......................... 382/233
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Saito
Ginter et al ................... 713/176
Logan et al ................... 715/203
Downs eta!.
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Ginter et al.
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Fritsch
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Ginter et al.
111
Kauffman et a!.
Rhoads
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Rhoads
Pensak eta!.
Linehan .......................... 705/65
Fanning eta!.
111
Gruse eta!.
Farber eta!.
Iwarnura ....................... 713/176
Delano
111
Tsuria et al ................... 380/202
King eta!. ...................... 725/97
Rhoads ......................... 382/100
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Dutta et al.
Ginter et al ................... 713/193
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111
Kogota et al.
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Rhoads ......................... 382/100
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Meyer eta!.
Litai et al ...................... 713/185
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Kocher ......................... 713/176
Peinado
Stach
Weaver, III et a!.
Jones et al .................... 382/100
Hunter eta!.
Mourad et ...................... 705/64
Sharnoon et a!.
111
Cooper et al. . ................. 726/26
Levy ............................. 713/176
Hirano eta!.
Rhoads
Stefik eta!.
Asai et al ...................... 375/220
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Schneck et a!.

200110025341
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A1
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A1
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*
*
*
*
*
*
*
*
*

9/2001
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1112001
1112001
1112001
1112001
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1/2002
112002
212002

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Marshall
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wo
wo
wo

0144973
0175794
0178303

6/2001
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OTHER PUBLICATIONS
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Edition. Que Publishing, 2000 ISBN0-7897-2445-6. Front and back
matter, chapters 1-27, 228 pages.
White, Ron; "How Computers Work," Millennium Edition. Que Publishing, Indianapolis, 1999. ISBN 0-7897-2112-0. Chapters 1-9,
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US 8,583,556 B2
Page 3
(56)

References Cited
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No.
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* cited by examiner

No.
No.
No.
No.

~

102

FIG. 1

00

•

,---------------~~~=~j_
INDEX

~

~

~

/114

I

~

=
~

108 \

TRANSACTION
SYSTEM
DATABASE
NETWORK
DEVICE ~~-S-ER-----:-:-IA-:-L--:-N-:-:-U-;-:-M-;-;B:;-;:E::-;:R~
I

______ _

-------

----

ASSIGNMENT
MODULE

~r
RIGHTS HOLDER
NETWORK DEVICE

122/

116

N

~

N
0

....

SERIAL NUMBER
RECONCILIATION
MODULE
ACCOUNTING
MODULE

l

L----------------------- ----------~---------

z
0
~
....
(.H

rFJ

=....

('D
('D

126

---------------------------------

.....

0

.....

(.H

-~~~-~-

104

124

d

rJl
00

I
I

I
I
I

I

124

____________________________________ j

I
I

(i
110

:
I

L-----------------------------------

u.
00
w
u.
u.

0'1

=
N

U.S. Patent

Nov. 12, 2013

Sheet 2 of 3

US 8,583,556 B2

FIG. 2
(V

PREPARE MP3 MUSIC FILE

210

(V

GET SERIAL NUMBER AND OFFSET
FROM SERIAL NUMBER ASSIGNMENT MODULE

212

(V

CREATE MARKED MP3 MUSIC FILE

214

(V

PLACE FILE ON HOST SERVER

216

(V

RETURN FILING INFORMATION
TO SERIAL NUMBER RECONCILIATION MODULE

218

(V

UPDATE TRANSACTION
DATABASE

220

(V

222

UPDATE
INDEX

U.S. Patent

Nov. 12, 2013

Sheet 3 of 3

US 8,583,556 B2

FIG. 3
31 ~

BROWSE INDEX

+

SELECT FILE

31 2

l
GET SERIAL NUMBER AND HOST

314

J..
316

~

GET NEW SERIAL NUMBER AND OFFSET FROM SERIAL NUMBER
ASSIGNMENT MODULE

J..
318

CONTACT HOST WITH SERIAL NUMBER AND NEW SERIAL NUMBER

~
320 ~

HOST SERVER SEND TRANSACTION INITIATION INFORMATION TO I
SERIAL NUMBER RECONCILIATION MODULE

~
322I~

HOST SERVER SEND FILE TO CUSTOMER

J..
324

HOST SERVER SEND TRANSACTION COMPLETION INFORMATION
TO SERIAL NUMBER RECONCILIATION MODULE

~
CUSTOMER MARK FILE WITH NEW SERIAL NUMBER

326

328

~
CUSTOMER SEND TRANSACTION COMPLETION INFORMATION TO
SERIAL NUMBER RECONCILIATION MODULE

~
330

SYSTEM UPDATE DATABASE

~
SYSTEM UPDATE INDEX IF NECESSARY

332
334

l

CALCULATE COMPENSATIONS

US 8,583,556 B2
1

2

METHOD OF PROVIDING A DIGITAL ASSET
FOR DISTRIBUTION

desirable to allow peer-to-peer transfer (or controlled centralized distribution) of assets in formats that are already widely
adopted and popular while identifYing payment and usage
restrictions at the time of transfer.

CROSS REFERENCE TO RELATED
APPLICATIONS

SUMMARY OF THE INVENTION
The present application claims priority under 35 U.S.C.
§120 and is a divisional ofSer. No. 10/016,325 filed: Dec. 10,
2001 entitled System & Method for Unique Digital Asset
Identification and Transaction Management, now U.S. Pat.
No. 8,001,052 which is also incorporated by reference herein.

10

FIELD OF THE INVENTION
The present invention relates to providing digital assets for
distribution within a network.

15

BACKGROUND OF THE INVENTION
Historically distribution of intellectual property works has
been controlled through the production of quality reproductions on a medium that can be sold to interested parties. With
the advent of the Internet and its subsequent distribution
capability and broad acceptance, intellectual property assets
that can be digitized can now be reproduced and distributed
without quality degradation or compensation to the rights
holders. New systems for controlling the distribution, royalty
payment, and terms of use for these assets are being created to
better take advantage of and mitigate the disadvantages of this
new medium.
As a first step many rights holders have begun to add digital
watermarks to their assets. Assets are then distributed in a
variety of ways to customers who have paid for them. When
an asset is encountered in questionable circumstances, the
watermark is identified and the user is asked to produce proof
of purchase for that asset or face consequences. These watermarks are applied at the time the digital asset is created and
used for identification and enforcement purposes. Unfortunately, the use of watermarks alone is not sufficient to ensure
that transfers of digital assets are properly accounted for.
Another approach has been to encrypt assets before distribution. Before the asset can be used, the purchaser must
acquire a key to unlock the asset. This places a great demand
on customers and runs the risk of increasing frustration levels.
This also requires secure key management thus shifting the
problems to another asset that must be managed. Encrypted
assets have been popular among rights holders but to date
have not been widely accepted by customers.
Some rights holders are establishing new media formats
that contain mechanisms to control usage. Such distribution
methods can control numbers of playbacks and still be portable for use on properly equipped machines. For the consumer this means adopting new (and potentially incompatible) media formats, technology, and hardware. This
approach requires a high degree of industry adoption and
customer base penetration to be successful.
As a method of preventing copies from being pirated, some
systems are trying to establish a market for streaming assets.
This allows for a controlled one time delivery and use of the
asset by the customer. At present customers have not fully
adopted this medium for a variety of reasons. In particular, it
lacks the convenience of portability and playback and as yet
paying for subscriptions has not proved a popular model.
Accordingly, there is clear and compelling need for an
improved system for introducing, distributing and tracking
digital assets in a mauner that balances the needs of rights
holders and end users. In addition, it would be extremely

20

25

30

35

40

45

50

55

60

65

A primary object of the present invention, therefore, is to
provide an improved system and method that overcomes the
aforementioned disadvantages of the prior art;
A further object of the present invention is to provide a
system and method for permitting rights holders to introduce
digital assets into a controlled distribution/tracking network
under suitable terms of use and other customized, flexible
distribution conditions;
A further object of the present invention is to provide
end-users and other consumers of digital content with an easy,
flexible and relatively transparent environment for locating,
securing and enjoying digital assets of interest;
A related object of the present invention is to ensure that
such digital assets are substantially backwards compatible
with the large existing infrastructure of installed hardware
devices/software that play an assortment of digital content,
such as MP3 players, MPEG 2 players, etc., so that users do
not have to make additional investments in proprietary hardware and software;
Another object of the present invention is to provide a
digital asset management system and method that tracks
transfers of digital assets within a network, so that terms of
use compliance issues, accounting issues, etc., are transparently and accurately recorded;
A related object is to provide a tracking mechanism and
method that relies primarily on creating separate instantiations of a digital asset to facilitate tracking of the latter;
Still a further related object is to provide a tracking and
accounting system and method that is reasonably robust and
trustworthy so as to overcome rights holders doubts and
uncertainties concerning the use and distribution of their
products;
Another related object is to reduce the need for cumbersome encryption/licensing procedures which inhibit user
interaction and thus the potential market for distribution and
enjoyment of digital assets;
Yet another object of the present invention is to ensure that
a tracking system and method is sufficiently flexible to
accommodate a variety of different digital content media, and
a variety of different computing platforms used by end users;
A related object of the present invention is to provide users
with a peer to peer environment for exchanging digital assets,
to ensure that a distribution system is compatible with existing practice, tastes and preferences;
It will be understood from the Detailed Description that a
number of different unique inventions are presented by the
present disclosure, each of which can be implemented in a
multitude of different embodiments. Furthermore, it will be
readily appreciated by skilled artisans that such different
embodiments will likely include only one or more of the
aforementioned objects of the present inventions. Thus, the
absence of one or more of such characteristics in any particular embodiment should not be construed as limiting the scope
of the present inventions.
In accordance with one aspect of the present invention, a
digital asset is marked with a unique serial number using
steganographic techniques at the time the asset is introduced
into a system. The digital asset is also marked with a new
unique serial number each time it is transacted within the
system.

US 8,583,556 B2

3

4

In accordance with another aspect of the present invention
the serial number is recorded in databases where it is linked to
specifics about the time and parties involved in the transaction
as well as additional information such as details of ownership,
royalties, and terms of use associated with the digital asset.
Another aspect of the present inventions concerns a system
for distributing digital assets in a peer-to-peer connectable
environment across a network, including between a first peer
network device and a second peer network device connected
to the Internet. The system includes a first rights-holder server
coupled to the network and adapted to introduce a digital asset
into the peer-to-peer connectable environment. The digital
asset audio, video, picture and/or text based data associated
with a first set of distribution rules, which in a preferred
embodiment, are not static, and can change from transfer to
transfer. A second host server is coupled to the network, and
such server stores and distributes the digital asset to end users.
A third management server is also coupled to the network,
and it is adapted to track transfers of the particular digital
asset over the network and to generate tracking records as sociated with such transfers. With this architecture, transfers
over the network involving the digital asset, including
between the first peer network device, the second peer network device and/or the second host server are all processed in
accordance with the desired first set of distribution rules set
out by the rights holder.
This architecture ensures security, compliance, and
accountability for each instantiation of the asset. Furthermore, it enhances user ease of use since the customer peer
network device can obtain the digital asset from the second
peer network device and/or the second host server, and without requiring further authorization from the first rights-holder
server. Thus, transfers of the digital asset are also performed
in a peer to peer fashion over the network.
In a preferred embodiment the digital asset is modified for
each transfer, and this modification is used by the third management server for generating the tracking records. Again, the
modification does not alter user-perceptible content of the
digital asset. Further in a preferred embodiment, the modification constitutes an original or altered identification label
(serial number) for the digital asset so that each transfer of the
digital asset is associated with a unique identification label.
Furthermore, to assist the tracking of the digital asset, a separate and new instantiation of the digital asset is created for
each transfer occurring over the network between peer
devices.
The first set of distribution rules include indexing information, terms of use, and a location of the second host server to
facilitate transfers. The digital asset can also be encrypted to
reduce unauthorized transfers over the network in a manner
similar to that used in prior art systems.
Another aspect of the present inventions is directed to a
rights holder system for introducing digital assets into an
electronic network distribution system. The system includes a
first computer coupled to the electronic network distribution
system, which again, includes the Internet. A client/server
software module includes software routines to perform at
least the following operations: (1) receiving and storing a
digital asset on the first computer; (2) processing administration information for the digital asset, including an asset identifier and a rights-holder identifier, and associating the same
with the digital asset; and (3) interacting with a digital asset
management system to generate a modified version of the
digital asset. The modified version of the digital asset is based
on the administration information and tracking history information provided by the digital asset management system.
Thereafter the modified version of the digital asset is posted to

any one or more locations suitable for download by the peer
devices from the electronic network distribution system.
Accordingly, the modified version of the digital asset is configured so that a tracking history can be maintained by the
digital asset management system of each transfer of separate
instantiations of the digital asset between peer devices
coupled to the electronic network distribution. This formatting of the digital asset, therefore, allows it to be securely but
easily transacted at later time, and with a varying set of
distribution rules.
The administration information includes, among other
things, terms of use and expiration data for the digital asset.
Furthermore, the administration information can include a set
of distribution rules that can be changed so that later instantiations/transactions of the digital asset within the electronic
network distribution system can be controlled on a transaction by transaction basis.
The rights holder system is further configured to receive
accounting information from the digital asset management
system, including: (a) information concerning the number of
instantiations of the digital asset created by transfers within
the electronic network distribution system; (b) revenue
derived from and/or to be credited for the transfers.
A further aspect of the present invention is directed to an
improved system for exchanging digital assets over a network
in a peer to peer fashion including a first computer coupled to
the network, the first computer storing a digital asset which
includes both digital content and a first unique identifier associated with a first instantiation of the digital asset; and a
second computer coupled to the network. A first software
routine executing on the first computer and/or the second
computer is adapted to coordinate transfer of the digital asset
to the second computer. By creating a second instantiation of
the digital asset for the transfer to the second computer,
including a second unique identifier, peer-to-peer transfers
can be accommodated and yet still accounted for properly.
If either of the two client devices thereafter elects to host
the digital asset, a second transfer of the digital asset can
occur from either the first computer and/or the second computer, the second transfer further using a third instantiation of
the digital asset and a third unique identifier. In a preferred
embodiment, the client computer devices can include a portable electronics device, a personal computer, a personal digital assistant, and/or a telephone, and the digital content of the
digital asset includes an MP3 based audio file.
In another variation, the second unique identifier is based
on combining information from any one or more of the following: a first id for the first computer, a second id for the
second computer, an asset id for the digital asset, a customer
id, a randomly generated number and/or a time of the transfer.
To increase the utility of the system, a catalog of available
digital assets is maintained at the first computer; this catalog
may be based on a centralized database of items, or may
reflect only items available in nearby download locations.
Thus, the second computer can poll other computers coupled
to the network to determine an optimal transfer source for the
digital asset.
Preferably, before any assets are transferred, an authorization routine-adapted to secure agreement from a user of the
second computer to access terms associated with the digital
asset-is first executed.
Also in a preferred embodiment, a setup routine is executed
for the end user. This routine is adapted to set up a transaction
account with a digital asset management system separate
from the first computer and the second computer.

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The user's transaction account includes an identifier for a
user of the second computer, identifiers for any transfers
performed by the user, and billing information associated
with the transfers.
In a further variation, the first computer can also elect to
perform hosting functions, and thus receive credits from the
digital asset management system for all authorized transfers
made of digital assets.
Another aspect of the present invention is directed to a
system for managing transfers of digital assets over a network. This aspect includes a management computer coupled
to the network (Internet) and supported by a variety of software modules and file structures including tracking databases. A first software routine executing on the management
computer prepares a digital asset for transfer over the network
in accordance with a set of distribution rules (preferably
provided by a rights holder). A modified version of the digital
asset is generated by the first software routine including a
unique identification number associated with a first instantiation of the modified version of the digital asset. A second
software routine executing on the management computer
tracks transfers of the digital asset over the network, by correlating a separate instantiation of the digital asset created for
each transfer occurring over the network.
In this fashion, transfers of the digital asset can take place
in a peer-to-peer manner over the network in coordination
with the management computer and such that a complete
tracking history for the digital asset is maintained by the
system. To assist in locating and transferring digital assets,
electronic indexes and catalogs are provided by the management computer.
Preferably, the set of distribution rules are provided by a
rights-holder management system, and include restrictions
on terms of use and time periods of use. The set of distribution
rules include information on title, author, and identification
numbers for the digital asset.
In a preferred embodiment, the unique identification number is a serial number embedded into the first instantiation of
the modified version of the digital asset using a steganographic process. To facilitate tracking of later transfers, a
subsequent unique identification number used for a second
instantiation of the digital asset. In some applications the
subsequent ID can be derived in part from the unique identification number.
Further in a preferred approach, the first software routine
uses an index to further identifY network accessible locations
available for transfers of the digital asset.
In another variation, an accounting routine is used by the
digital rights management system for performing accounting
functions in connection with the transfers, including crediting
of rights holders accounts, crediting of transaction host
accounts, and/or debiting of user accounts.
In still another variation, a monitoring routine performs
authentication operations on digital assets stored and/or
transferred between client systems over the network. The
authentication operations include a determination of an
embedded serial number of a digital asset and an identification of a last authorized transfer of the digital asset. Depending on the findings of such monitoring routine, adjustments
can be made to a user account, including access privileges, to
ensure compliance with the terms of use and other distribution rules.
Further in a preferred embodiment of this aspect of the
invention, a tracking database keeps a tracking history for the
digital assets, including all transfers over the network. This
history can be derived from the unique identification (serial)
number embedded steganographically within certain portions

of the digital asset. To facilitate locating the embedded serial
number, an offset can be computed and stored in a header or
other portion of the digital content file.
In a preferred implementation, therefore, distributions of
the digital asset over the network are not preconditioned on
securing authorization for individual copies of the digital
asset.
Other aspects of the present invention are directed to novel
and improved methods of introducing, transferring, tracking
and managing digital assets across a network, including in a
peer to peer connectable environment.
These include a method of distributing digital assets in a
peer-to-peer connectable environment across a network,
including between a first peer network device and a second
peer network device, which includes the following steps: (a)
introducing a digital asset into the peer-to-peer connectable
environment, the digital asset having an associated first set of
distribution rules; and (b) storing and distributing the digital
asset at a first network accessible location so that a transfer of
the digital asset can be made by the first peer network device
and/or the second peer network device; and (c) generating a
tracking record associated with the transfer; and (d) repeating
at least step (c) for any subsequent transfers of the digital asset
within the network.
In accordance with this improved transfer methodology the
initial transfer, as well as any of the subsequent transfers over
the network involving the digital asset between the first peer
network device, the second peer network device and/or the
first network accessible location are processed in accordance
with the first set of distribution rules and are associated with
tracking records.
In addition another aspect of the invention concerning a
method of introducing digital assets into an electronic network distribution system includes the following steps: (a)
receiving and storing a digital asset on a first computer
coupled to the electronic network distribution system; and (b)
processing administration information for the digital asset,
including an asset identifier and a rights-holder identifier; (c)
associating the administration information with the digital
asset; and (d) interacting with a digital asset management
system to generate a modified version of the digital asset, the
modified version of the digital asset being based on the
administration information and tracking history information
provided by the digital asset management system; (e) posting
the modified version of the digital asset to a location suitable
for download by client devices from the electronic network
distribution system.
In this fashion, the digital asset is configured in a manner
such that a tracking history can be maintained by the digital
asset management system of each transfer of separate instantiations of the digital asset between peer devices coupled to
the electronic network distribution.
Another aspect of the present invention concerns a method
of exchanging digital assets over a network and includes the
steps of: (a) storing a digital asset on a first computer coupled
to the network, which digital asset includes both digital content and a first unique identifier associated with a first instantiation of the digital asset; and (b) coupling the first computer
to a second computer over the network; and (c) creating a
second instantiation of the digital asset, including a second
unique identifier; (d) storing the second instantation of the
digital asset at the second computer.
Still a further aspect of the present invention is directed to
a method of managing transfers of digital assets over a network, and includes the steps of: (a) coupling a digital asset
management computer to the network; and (b) providing a
digital asset to the digital asset management computer;

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and( c) providing a set of distribution rules for the digital
asset; and (d) preparing a modified version of the digital asset
for transfer over the network in accordance with the set of
distribution rules, the modified version including a unique
identification number associated with a first instantiation of
the modified version of the digital asset; and (e) tracking
transfers of the digital asset over the network. With this inventive process, a separate instantiation of the digital asset is
created for each transfer occurring over the network, thus
facilitating accurate tracking, accounting and security for
such asset.
Yet another object of the present invention is directed a
more detailed method of providing a digital asset for distribution including the steps of: (a) preparing a digital asset for
distribution over an electronic network, the digital asset
including digital content that is associated with a digital rights
holder; (b) providing a serial number for the digital asset, the
serial number being uniquely identified with a first introduction of digital asset for distribution within the electronic network; and (c) embedding the serial number within the digital
asset so as to generate a first instantiation of the digital asset
suitable for distribution over the electronic network; and (d)
placing the first instantiation of the digital asset in one or more
locations accessible by users of the electronic network;
and (e) providing a list of the one or more locations so that the
users of the electronic network can locate the first instantiation of the digital asset; (f) updating a transaction database
associated with the digital asset to reflect an occurrence of the
first instantiation of the digital asset; (g) updating a digital
asset index database with administrative information associated with the digital asset, including a list of the one or more
locations, terms of use of the digital asset and category information for the digital asset. Using this inventive method,
users of the electronic network can monitor the digital asset
index database before electing to access the first instantiation
and/or later instantiations of the digital asset.
Another object of the present invention includes a method
of distributing a digital asset within an electronic network that
includes the steps of: (a) providing an index of digital assets
available for distribution over the electronic network, each
digital asset having a first serial number associated with a first
transfer within the network, and including digital content that
is associated with a digital rights holder. The index thus
includes a list of one or more locations for the digital assets,
terms of use of the digital assets and category information for
the digital assets.Additional steps performed also include: (b)
providing a second serial number for the digital asset in
response to a request for a second transfer of a digital asset,
the second serial number being embedded within the digital
asset; and (c) transferring the digital asset from a host server
to a client device in response to a confirmation of acceptance
of the terms of use for the digital asset; and (d) updating a
transaction database associated with the digital asset to reflect
the second transfer of the digital asset.
Accordingly several objects and advantages of the invention include:
Peer-to-Peer Structure Preserved.
Assets may be transferred in a peer-to-peer environment.
This allows greater transfer performance by decentralizing
distribution and allowing any copy of an asset to become a
source for additional copies. This advantage leads to lower
operational overhead, greater transfer speed, and more robust
transfers. Peer-to-peer transaction structures are proving very
popular with users. Rights holders are not enamored with
such distribution schemes, however, as assets are being
acquired without transaction history or rights compensation.
The present invention remedies these shortcomings by creating transaction records and accountability while preserving

the ease of use of a peer-to-peer transaction structure. Additionally the structure of tracking transactions allows the
incentivization of hosts in the system by compensating them
for hosting transfers, a short coming in the present peer-topeer structures where only a small percentage of network
participants elect to host asset transfers.
Media Agnostic.
Since digital media formats are receptive to steganographic
techniques without noticeable quality degradation, assets
may be distributed in popular media formats. This removes
any requirements for specialized software or hardware for
media playback and allows media to be used in already popular devices and methods and allows portability to playback
systems outside the network. Additionally the present invention may be overlaid on existing ownership identification and
rights management schemes already present in existing and
future media formats.
Flexible Transaction Terms.
Present and proposed file exchange systems that provide
for compensation terms treat the initial distribution of an asset
as the one for which compensation may be obtained and that
compensation is static. The present invention treats each
instantiation of an asset as unique and as such the terms of
acquisition can be flexible with respect to time, parties
involved in the transaction, prior purchasing, intended usage,
etc. Further more any asset can be linked to the specific terms
under which it was transferred at any time by referencing the
serial number to the transaction record.
Rights Protection.
Since each asset is marked at the time of transfer, ownership is asserted, royalties due can be calculated, and terms of
use can be articulated. These terms can change with each
transaction or conditions surrounding the transaction as necessary. Since assets can be identified by their mark, other
naming schemes can be used for indexing or other purposes
without affecting or obscuring ownership, royalties, terms of
use, or any other parameter that may be associated with the
asset or the transaction. Assets both in and out of the system
can be identified through their mark. Furthermore a full transaction history can be constructed by linking the most recent
mark back through the centrally recorded transaction history.
This can be useful for tracking deviant use or distribution of
assets.
From the discussion below it will be apparent that the
present invention can be used in complementary fashion
alongside any of the aforementioned prior art approaches and
technologies. Indeed one of the primary objectives of the
present invention is to work with popular existing media
formats and media exchange paradigms. Thus, another
advantage of the present scheme is that preexisting installations and/or implementers can easily overlay the techniques
discussed herein to supplement the functionality of such systerns.

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BRIEF DESCRIPTION OF THE DRAWINGS
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FIG. 1 is a block diagram illustrating the basic components
of a digital asset distribution/tracking system configured in
accordance with a preferred embodiment of the present
invention.
FIG. 2 is a flow chart showing the preferred steps involved
to introduce a digital asset into a digital asset distribution/
tracking system configured in accordance with the preferred
embodiment of the present invention.

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FIG. 3 is a flow chart showing the preferred steps involved
to transfer a digital asset in a digital asset distribution/tracking
system implementing the preferred embodiment of the
present invention.

purpose of ownership enforcement. Steganography has also
been used in some applications to hide information within
assets. In a preferred embodiment of the present invention
steganography is used in an entirely nnique fashion to track
digital assets through intelligent marking. These markings
mark an asset in such a way as to not degrade its quality, and
provide a means of linking that asset to a transaction record.
Furthermore, the mark is embedded in such a way that removing or altering it in a non-detectable way is difficult. This new
use of steganography techniques, therefore, allows a rights
management system to be employed with existing formats
and transaction methods.
One key purpose of the present inventions is to allow individual customers to trade digital assets with each other while
compensating rights holders for their work. The described
system allows each asset to be identified and tracked (preferably) at the time the asset is transferred. While the described
preferred embodiment describes a system for trading MP3
files in a peer-to-peer environment many other configurations
of assets and networks are possible.
Structure of the Preferred Embodiment
A preferred embodiment of a digital asset distribution/
tracking system 100 constructed in accordance with the
present inventions is illustrated in FIG. 1. The system is
composed of several components including a Network 102,
through which a number of separate Network Connections
104 are provided to a System Network Device 106, a Rights
Holder Network Device 108, a Host Server Network Device
110, and a Customer Network Device 112. It will be understood by those skilled in the art that other components may be
connected to Network 102, and that not all connections
shown need to be active at all times. There are also several
software components associated with the aforementioned
network-connected devices, including an Asset Index 114, a
Transaction Database 116, a Serial Number Assignment
module 118, a Serial Number Reconciliation Module 120, a
Rights Holder Module 122, and Client Server modules 124
and 126.
Network 102 is preferably the Internet, but could be any
implemented in any variety of commonly used architectures,
including WAN, LAN, etc. Network Connections 104 are
conventional dial-up and/or network connections, such as
from analog/digital modems, cable modems, etc., between
any conventional network device and an Internet Service
Provider in combination with browser software such as
Netscape Navigator, Microsoft Internet Explorer or AOL. In
most applications, Rights Holder Network Device 108 and
Customer Network Device 112 will be typically personal
computers, while the System Network Device 106 and Host
Server Network Device 110 are typically network servers. Of
course, other structures and architectures may be more suitable on a case by case basis for any particular implementation
of the present inventions, and so the present inventions are not
limited in this respect.
Software elements of the present invention typically will
be custom tailored for a particular application, but preferably
will include some common features, including the following.
Operating on System Network Device 106 are the following software routines and/or supporting structures, which
implement a form of digital asset management. First, an Asset
Index 114 contains a list of digital assets available on the
network organized and searchable by Title, Artist and other
attributes as determined by customer popularity, system
administrative requirements, and the like. A Transaction
Database 116 contains information about each transaction
that takes place within system 100 with a serial nnmber primary key linked to such information as asset, rights holder,

DETAILED DESCRIPTION OF THE PREFERRED
EMBODIMENT
Overview
The present invention relates to methods and a system for
monitoring the transfer of digital assets within a network. A
preferred embodiment embeds a unique serial number in each
instantiation of an MP3 File at the time of transfer within a
peer-to-peer internet based MP3 file distribution system. This
provides a number of advantages explained further below.
Historically the concept of an "original" and a "copy" had
real meaning. Quality typically degraded as assets were copied outside of the manufacture's control. Monetization of
originals was the only certain revenue stream to the asset
Rights Holder. Technological advances have since allowed
duplication of originals without quality degradation or discernable differences from those released by the manufacturer.
Consequently the present inventions use a mechanism for
linking assets to Rights Holders and monetizing every instantiation of that asset. The concept of"original" and "copy" are
dispensed with. Transactions and asset paths are tracked to
provide convenient distribution while at the same time assuring proper compensation for Rights Holders and authorized
distributors.
Recently peer-to-peer distribution systems have proved
very popular, particularly for audio files formatted according
to the MP3 standard. They require low overhead by the maintainer and increase access speeds and decrease download
times because of the number of choices of locations from
which an asset may be downloaded. The main drawback has
been monetizing the transactions and paying royalties to the
rights holders of the digital assets being traded. This is in large
part because there is no mechanism currently to track the
assets as they are transferred.
More traditional distribution schemes control the distribution of assets through centralized control. This requires more
capital investment by the provider and does nothing to ensure
proper rights management once the customer has the asset
(i.e., later downstream transactions to another user). Asset
origins cannot be traced once the asset has been distributed to
the customer. Furthermore, an entirely centralized distribution system does not scale well, and cannot exploit the many
benefits of a peer to peer environment. As explained below, a
preferred embodiment of the present invention retains the
advantages of a peer-to-peer distribution while marking each
distributed asset for later identification at the time of transfer,
linking the asset to specific usage rights, and providing for
royalty compensation to the Rights Holder of the asset.
New peer-to-peer distribution schemes are beginning to
emerge that incorporate digital rights management. However
these schemes rely on encrypting the assets or the adoption of
new proprietary (and backwards incompatible) asset formats
by customers in order to provide rights management. A preferred embodiment of the present invention avoids these pitfalls while retaining the advantage of distributing assets in an
immediately useful and popular format by using steganographic techniques to mark each asset without impairing its
playback quality, or its usability across a variety of preexisting hardware and software computing platforms.
Steganographic techniques have been used in the past in a
limited fashion to watermark assets to identify ownership.
Typically this is done at the time the asset is formatted for the

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time of transfer, length of time of transfer, customer, host of
transfer, terms in effect at time of transfer, etc. A Serial
Number Assignment Module 118 doles out unique serial
numbers in response to a transaction request. A Serial Number Reconciliation Module 120 receives assigned Serial
Numbers from Serial Number Assignment Module 118 and
reconcile them with completed transaction updates from customers. A Serial Number Reconciliation Module 120 periodically assesses transfer completion performance based on
open and closed transactions associated with transaction
hosts and the time it took for transactions to complete.
On the Rights Holder Network Device 108, a Rights
Holder Client module 122 communicates with Serial Nnmber
Assignment Module 118 and Serial Nnmber Reconciliation
Module 120 to allow a rights holder to introduce an asset in to
the system. As used herein, a rights holder refers to an entity
that has at least some ownership interest in some form of
content to be disseminated within system 100, and who
wishes to be compensated in some fashion for distribution/
use of such content in accordance with a set of distribution
rules (discussed later). In this regard, Rights Holder Network
device 108 may be shared by any number of individuals,
corporations, etc., who wish to introduce content to system
100.
On Host Server Network Device 110 a Client Server module 124 allows two parties involved in a transaction to transfer
an asset between them over network 102. This device further
acts as an initial repository and later accessible download site,
if desired, for introductions of digital assets.
System Network Device 106 further includes an Accounting Module 126 to reconcile accounts of the Rights Holder,
Host, and Customer after the completion of each transaction.
It is expected, for example, that some or all of such entities
may share in the compensation charged for each transaction
according to some tailorable formula. This module also calculates transaction performance characteristics such as time
of transfer, volume of transfers, and percentage completion
for the Hoster, Customer, Rights Holder, and the individual
digital asset, which information may be periodically updated
in Index 114 and Transaction Database 116.
It will be apparent to those skilled in the art that this is not
the entire set of software modules that can be used, or an
exhaustive list of all operations executed by such modules. It
is expected, in fact, that other features will be added by
system operators in accordance with customer preferences
and/or system performance requirements.
Operation of the Preferred Embodiment
As seen above, a system 100 is essentially a type of commerce system for peer-to-peer transactions of MP3 format
music files. There are two major processes involved in its
operation, as well as a number of secondary operational processes discussed further below. The first primary process
involves introducing assets for sale or trade in to the system.
This process is outlined in FIG. 2. The second primary process involves the actual purchase, trade and tracking of music
files within the system. This process is outlined in FIG. 3.
Introducing Digital Assets
As illustrated in FIG. 2 the first step 210 to introducing a
digital asset into an electronic network distribution system is
for a Rights Holder (or other authorized party) to prepare or
acquire an MP3 formatted music file (or some other digital
content) for introduction into system 100. Such digital content may arrive from any number of different sources, and
through various delivery mechanisms, including fixed media,
standard wire based connections, wireless connections, etc.
Moreover, while the preferred embodiment is beneficially
used with an MP3 based file system, the present invention is

not limited in this respect. Any number of well know types of
electronic content can be put into suitable form for distribution within system 100.
In step 212 the Rights Holder runs a copy of the Rights
Holder software 122 on Rights Holder Network Device 108
to provide a Serial Number Assignment Module 118 on System Network Device 106 with identifying information about
themselves and indexing information for the content (file) to
be introduced. Typically this information would include all
the information that might be useful for indexing the asset
within Index 114.
For example:
performer/artist
producer/ agent
label
writer/creator
description
title
Terms of use information governing the transactions would
also be included such as terms and expiration. Administrative
information could also be included such as an Asset Identifier,
a Rights Holder Identifier, and a copyright registration number or the like. The Rights Holder software would receive
back an Asset Identifier, a Serial Number, and an Offset.
Other types of information and variations on the above will be
apparent to those skilled in the art from the present teachings.
For instance, it may be useful to provide a pointer or URL
with the content which specifies a network accessible database providing additional historical, biographical, and trivia
data concerning the asset or its creators. Furthermore, it may
not be necessary in all cases for a Rights Holder to provide
explicit information for each separate asset introduced. In
other words, it is possible that Rights holders can specify a set
of implicit distribution rules in advance, so that some distribution systems will only require a minimal set of final distribution rules before the asset can be introduced.
In step 214 an Asset Identifier is preferably placed in an
obvious location within the MP3 music file itself-mostpreferably in the comments section of a tag portion of such file, or
in an extended title field, or even pre-pended to such file. The
Asset Identifier includes an Offset; the Offset specifies where
to place a Serial Number in the MP3 file being marked, using
steganographic techniques. A preferred approach is to use the
Offset to specify a valid frame and word count within the MP3
file to begin the marking. The Serial Number is then encoded
one bit at a time in the least significant bit of successive data
words until the entire Serial Number is encoded. The frame
CRC, if present, is also modified to reflect a new CRC for the
frame.
It should be remembered that these are simply preferred
approaches for the embodiment described herein, and that
many other suitable variations are possible for any particular
application. For instance, the Offset may not be needed in
some cases because it can be set to some default value for a
particular rights holder, or even randomly generated at the
time of transfer. The Offset could also be encrypted, and/or be
referenced with respect to some other identifying point within
the file, such as an object contained therein. These are but
examples of course, and the present invention is not limited to
any particular implementation.
Furthermore, for some types of content, it may be possible
to identifY non-critical or blank data areas that are more
appropriate for steganographically embedding the Serial
Number. Other variations and modifications will be apparent
to those skilled in the art. In a preferred embodiment, the
Offset and (at least initial) Serial Nnmber are preferably
provided by the System Network Device 108, but could be

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provided by Rights Holder Network Device 108 in some
applications. Similarly, Asset Identifiers may be automatically generated without requiring specific input from a rights
holder. In step 216 the marked file, representing a modified
version of the original MP3 file, is placed on a Host Server
110 within system 100 as the initial (first) instantiation of a
digital asset that now can be transferred and easily tracked.
While shown as a separate device, Host Server 110 could be
the Rights Holder Network device 108 itself, a third party
service provider device, any customer device within the systern, or any combination of such devices. Similarly, System
Network Device 106 is shown as a separate system, but,
again, in some applications could be integrated in some form
as part of Rights Holder Network Device 108 and/or Host
Server Network Device 110.
At step 218 Rights Holder module 122 interacts with and
provides Serial Number Reconciliation Module 120 at System Network Device 106 with the locations on which the
digital asset may be found, including at one or more separate
network accessible Host Server Network Devices 110. The
latter device may be connected to Network 102, and/or may
provide other data paths for downloading files across some
other transmission medium, such as a wireless network.
In step 220 Serial Number Reconciliation Module 120 then
updates Transaction Database 116 with any information provided to Serial Number Assignment Module 118 during step
212.
In step 222 Serial Number Reconciliation Module 120
updates Index 114 with appropriate category listings, terms of
use, and servers 110 on which the digital asset may be found
for the digital content (MP3 music file) introduced.
At this point, therefore, the Rights Holder Network Device
108 has successfully completed any material steps for introducing a digital asset for distribution. As created, this digital
asset can be downloaded by any number of peer devices 112
and subsequently tracked by a digital asset management system as transfers take place within system 100.
While not explicitly shown or described herein, the details
of the various software routines, executable code, etc.,
required to effectuate the functionality discussed above are
not material to the present invention, and may be implemented in any number of ways known to those skilled in the
art.
Transfers of Digital Assets to/between Peer Devices
Much more common, of course, will be customer transactions as documented in FIG. 3. Beginning in step 310 a
customer uses their copy of Client Server module 124 to
browse an Index 114 resident on System Network Device
106. As alluded to earlier, the Customer Network Device 112
can connect to Network 102 in any number of different ways,
including through land-based and wireless channels. To
obtain access to System Network Device 106, a user first sets
up an account in any conventional fashion, including with
user identification information, user charge account information, and other similar data.
After reviewing Index 114, a user than makes a selection of
a digital asset to acquire in step 312. This step also preferably
includes a review and acknowledgement of at least some
portions of the set of distribution rules associated with the
selected digital asset, including the terms of use, before proceeding to further steps. Again, Index 114 is shown as being
located at System Network Device 106, but it may be conveniently placed at other locations for perusal.
Based on indexing information for the selected digital
asset, several host options may be presented to the customer
and may include any location that is available to transfer the
selected asset including Rights Holder Network Device 108,

3rd party hosters (such as Host Server 110), System Network
Device 106, and/or other customer network devices 112. In
another variation, to further enhance the usability of system
100, the user can also be presented with various additional
options for download, so that, for example, a first connection
to Network 102 might be used for browsing/selecting assets,
while a separate connection (Internet, wireless, cable based,
etc.) is used for downloading the actual assets. This would
further allow data traffic to/from customers and download
sites to be managed and divided intelligently according to
cost, availability ofbandwidth availability, etc. For instance a
user could employ a hand held PDA device 112 having access
to a narrowband channel for selecting a particular item, and
then indicate that an actual download of the digital asset to a
separate customer network device 112' be done using a relatively high speed broadband connection.
In step 314 Client Server module 124 gets the location of
host and asset identifier information from Index 114 which
correspond to a selected digital asset (MP3 music file) to be
downloaded. Accordingly, at this point, a proposed data path
is established for a new transaction involving a transfer
between two separate computers coupled to network 102, of
a particular instantiation of a digital asset, including in a peer
to peer fashion between two client devices 112. For ease of
use, the setup and transfer may be performed by either or both
of such devices.
As noted earlier, a first instantiation of the digital asset is
created based on an original offset and serial number embedded within the digital content. To allow for tracking of the
particular transfer, a new instantiation of the digital asset is
made. In step 316 Client Server module 124 gets a new serial
number and new offset for this transaction from the Serial
Number Assignment Module 118. The new serial number and
new offset are used to create a unique instantiation of the
digital asset for the particular transaction. Thus, instead of
merely copying the digital content as part of the transfer, the
present invention creates a separate instantiation to facilitate
tracking of each transfer (or transaction) within system 100.
In some applications where security and accounting is not
as critical (or can be remedied by other mechanisms consistent with the present teachings) it is possible that actual separate instantiations of the digital asset might not be required.
Instead, it might be more practical to simply track the pointto-point movement of a digital asset across network between
one or more Customer Network devices 112, and/or Host
Server Network Device 110.
Serial Number Assignment Module 118 also preferably
passes on such details as:
serial number
customer identifier
asset identifier
agreed to terms of use
host identifier
to Serial Number Reconciliation Module 120 which will keep
these items until step 328 or a routine clean up should the
transaction never complete.
In step 318 Client Server module 124 on Customer Network Device 112 contacts corresponding Client Server module 124 on Host Network Device 110 to begin the process of
transferring the file. As mentioned earlier, it is not necessary
that such actual file transfer occur over the same channel/
session, or even the same network 102.
In step 320 Client Server module 124 at Host Server Network Device 110 sends tracking information to Serial Number Reconciliation Module 120 such as:
customer identifier
host identifier

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new serial number
old serial number
asset identifier
The Serial Number Reconciliation Module records this
tracking information along with a time stamp for further use
during step 328. Again, it should be emphasized that these
items for the tracking information are merely illustrative of
the various kinds of useful information that can be maintained, and other examples will be apparent from the present
teachings. It is expected, in fact, that the precise types of
information to be maintained will vary significantly from
application to application.
In step 322 Host Server Network Device 110 sends the
selected digital asset to the customer using any desired standard file transfer method (including conventional internet file
transfer techniques) which could include a mechanism for
recovery/completion of the transaction if the transfer is
incomplete.
At the completion of the transfer, Host Server Network
Device initiates step 324 by contacting Serial Number Reconciliation Module 120 to report completion of the transfer or
its abandoument and the reasons for such. This may be as
simple as reporting just the new serial number but may also
include information about the process of the transfer itself
including number of transfer attempts, interruption information etc. Serial Number Reconciliation Module 120 the (optionally) adds a time stamp to the tracking information and
saves it for step 328.
At step 326 Customer Client Server module 124 marks the
digital asset file with the new serial number and offset preferably using the same steganographic technique described
above in connection with FIG. 2, and then stores the digital
asset in a form suitable for later retrieval and play on the
user's system. Accordingly, at the end of the transfer, a second
instantiation of the digital asset has been completed and
stored for later transfer to yet another customer if desired.
Customer client server module 124 also contacts Serial
Number Reconciliation Module 120 in step 328. It reports the
transaction as being complete and also indicates whether and
where the second instantiation of the digital asset can be
found for transfer to other customers in system 100. Serial
Number Reconciliation Module 120 time stamps this transaction.
In step 330 Serial Number Reconciliation Module 120
wraps up the transaction. An entry is made in Transaction
Database 116 including such tracking information as:
new serial number
old serial number
customer identifier
host identifier
terms agrees to by the customer
asset identifier
Of course, other databases may be updated including a
customer database (not shown) that may indicate account
status and a host database (not shown) that may indicate
quality and volume of the transactions involving that particular host.
In step 332 Index 114 is updated to reflect whether the
customer indicated that they are becoming a host for this
digital asset.
As a final step 334 accounting tasks are performed by
Accounting Module 126. This could include crediting the
account of the Rights Holder according to the agreed upon
transfer terms, crediting the account of the transaction host,
and debiting the account of the customer that received the
transaction. Other conventional accounting operations can

also be performed in accordance with the needs and options
desired for a particular implementation.
As with the digital asset introduction software modules, the
various software routines, executable code, etc., required to
effectuate the functionality discussed above are not material
to the present invention, and may be implemented in any
number of ways known to those skilled in the art.
Other Features & Variations of Present Invention
Rogue Assets and Asset Monitoring
In another variation of the present invention, detection of
"rogue" assets is performed prior to transfers. By this it is
meant that a first customer may attempt to download a digital
asset from a second customer, and in the process of doing so,
System Network Device 106 may detect that there is no
appropriate tracking record reflecting a prior authorized
transfer to such second customer. Should a rogue asset be
uncovered it can be analyzed to determine what asset it is
(asset identifier, name, performer etc). At that point it can be
searched for the embedded serial numbers that will lead to a
complete transaction history for the asset when it was legitimately transferred. The last legitimate transaction can indicate where the asset escaped the system. To prevent further
unauthorized transactions, appropriate countermeasures can
be taken; for instance, the second customer's access privileges may be suspended or eliminated. At the very least, the
source of the rogue asset would have to explain how it came
in to their possession, and such actions are likely to inhibit
further unauthorized disseminations of digital content. Furthermore, since a complete transaction histories are kept for
each digital asset, it is not possible for users to simply extract
proprietary content without being held accountable for their
actions. In contrast, in existing distribution schemes, it is
essentially impossible to determine the origin of unauthorized distributions. Furthermore, the present system is sufficiently flexible in that it may still allow a "rogue" asset
transfer to be completed by simply converting it to an authorized digital asset with new tracking information. In this
manner, the user's experience is not burdened by such monitorings, and in particular, the first user is not burdened with
the task of determining the legitimacy of assets made available within system 100.
As a further enhancement to the system, proactive asset
monitoring measures can also be taken. Possible repositories
of assets can be searched and the assets checked for legitimacy following a similar approach to that outlined in the
previous paragraph.
Distributed Index in Peer to Peer Implementations
As described above, system 100 has a centralized index
114 at System Network Device 106. In another variation,
System 100 could also be implemented in a more true peer to
peer fashion with Client Server module 124 including additional software that can catalog the MP3 music files it has
local access to, as well as poll "nearby" Client Servers of
other customers' network devices 112 for MP3 file attributes
it is looking for, thus creating a form of distributed index 114.
Accounting Module Variations
Accounting Module 126 is also a centralized system that
provides accounting functions for system 100. Some implementations could be coupled with a third party accounting
system or a peer-to-peer accounting method. Furthermore,
some implementations may not require an accounting module
at all.
Similarly, in system implementations where centralized
management is not desirable or possible, Client Server module 124 could pass along administration information with
asset transfers while maintaining a local transaction database
equivalent of centralized transaction database 116. An

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accounting of transfers and transactions could then be made
on a periodic basis by having an accounting server check the
local transaction databases of client network devices, or having such devices report their own records to such servers. This
variation, therefore, uses a kind of electronic "meter checking" to monitor usage, downloads, etc.
Thus, as is evident from the above, a primarily peer-to-peer
transaction system can be built that allows exchange of existing formats while tracking licensing, royalties, and providing
rights management.
Serial Number Variations
The preferred embodiment uses Serial Numbers that are
assigned centrally in a random unique way. Serial Numbers
could also be generated either centrally or local to the transaction and guaranteed uniqueness by aggregating information unique to the transaction; for example: the host id, customer id, asset id, and time of transaction.
Asset Introduction Variations
Although in the preferred embodiment Rights Holders
introduce their assets into system 100, this is not required to
exploit the benefits of the inventions herein. So, system 100
will easily accommodate digital assets introduced by parties
other than the Rights Holder, as long as there is some additional mechanism for identifying and attaching appropriate
rights to such assets. This can be done through any number of
conventional programming techniques known to those skilled
in the art.
Customer Network Devices
As noted earlier, a Network device (including Customer
Network Device 112, Rights Holder Network Device 108,
System Network Device 106 and/or Host Server Network
Device 11 0) need not be constantly connected to network 102
to be a part of system 100. In fact, in many cases, Customer
Network Device 112 users do not stay connected at all times
to their ISP. Transaction information and requests could be
stored up on such devices for transmittal at an appropriate
future time with the necessary resources. Thus, deferred or
time-divided transfers are also easily effectuated within the
parameters of the present inventions.
In another variation, a Network Device might work with
multiple digital asset management systems 100 on the same
or different networks 102. In other words, different markets or
environments could be used to distribute different types of
digital assets based on different distribution rules and in
accordance with the present teachings.
In a further variation, a network device may be able to
move digital assets singly or in bulk according to a set of
distribution rules between different digital asset distribution/
tracking systems. For example, musical tastes tend to start in
certain geographic areas and then migrate to others. The top
10 favorite music pieces from one geographic region for a
particular demographic group could thus be automatically
transferred on a regular basis as part of a "stocking" routine at
Rights Holder Network Device 108 to ensure popular support
for the system.
In some instances, a user of a network device 112 can also
elect to perform hosting functions. In exchange for supporting such transfers, the user can be given some form of credit/
reimbursement/discounts from the digital asset management
system for all authorized transfers made of digital assets.
Ratings for various peer based hosts can also be maintained to
increase the popularity and appeal of system 100.
In another application of the present invention, customer
network device 112 may comprise a form of digital jukebox
or kiosk located at a physical facility such as a restaurant, a
bar (or similar entertainment establishment) or it could even
be integrated as part of an airplane (transportation) seat enter-

tainment system. The digital jukebox stores and presents
content for selection to prospective customers in any number
of conventional ways. For example, a conventional monitor,
display, etc., can provide album, artist, song information visually to a user. Selection of a particular track can be made using
any number of conventional mechanisms, including touch
screens, keypads, buttons, etc. A conventional debiting system (coin or credit based) is used for collecting payment from
the user. After verifying payment and selection, the digital
jukebox preferably creates yet another instantiation of the
digital asset chosen by the user, and such information is again
tracked by system network device 106. In this fashion, a
versatile, easily modified digital jukebox with access to a
wide variety of content can be implemented in a variety of
facilities. This application may be desirable where it is
desired to minimize investment in fixed media (such as CDs,
Records, tapes, etc.) which rapidly become obsolete due to
changing tastes, and which require a fixed capital investment
on the part of the proprietor.
Furthermore, client server 124 of the digital jukebox itself
may include a centralized computer that is accessed by a
number of distributed access nodes (not shown) at any particular facility. For instance in a casino, healthclub, or similar
establishment a variety of fixed stations can be presented with
trackable content (i.e., visually on a screen or audibly through
a speaker, headphone or earphone) to a particular user to
enhance his/her experience in a particular forum. This
approach is also advantageous in mass transportation systems, such as airplanes, trains or cruise ships, and can be
integrated within a personalized passenger seat entertainment
system. Furthermore, from the perspective of digital rights
holders, this approach may be attractive because the possibility of unauthorized accesses is greatly reduced in such controlled facilities.
To further augment the capabilities and attractiveness of
this approach, a mechanism for providing music samples can
be included as well, to increase likelihood and ease of use for
the customer. For example, a small speaker, headphone or
earphone is used as an output device, and in a fashion so as to
not interfere or be disturbed by a main audio output provided
by the digital jukebox. While such types of sampling are
provided by some online sites (such as Amazon for example)
the applicants are unaware of any such functionality provided
at a physical facility in a digital jukebox.
In yet a further variation, the customer network device 112
can be implemented in the form of a digital vending machine,
or a similar architecture suitable for hot-docking a phone, an
MP3 player, or the like. For example, a number of conventional hand held devices now utilize memory stick technologies from a variety of vendors. By including some programming functionality in a digital vending machine, a user can
select, store and/or play content on a portable personal digital
appliance by modifYing a modular memory device used by
such appliance. Similarly, many hand held devices (including
MP3 players) include standardized bus interfaces, including
USB types, Firewire, etc. By including such bus on a digital
vending machine, programming content on such hand held
devices also becomes possible.
Digital Assets
Although the described preferred system 100 is optimized
for transacting MP3 music files, as used herein, the term
"digital asset" is intended in its broadest sense to encompass
any number of different types of content, items (or electronic
proxies for physical items) that can be distributed electronically. For instance, the present inventions could also be
applied to other audio formats, video, pictures, interactive
games, virtual experiences, programs, instruction sets,

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e-mail, webpages, advertisements, text (newspapers, books,
op-ed pieces, articles and similar human readable media), etc.
In other envirouments, digital assets could also be a form of
electronic proxy and thus represent tangible goods such as
merchandise to be delivered, merchandise redemption tickets, periodical products, etc. Similarly, Rights of use products
can also be represented as digital assets such as event entry,
time-share slots, pay per view, club membership, car rental,
accommodation, travel, restaurant reservations, etc. Subscription products can also be represented as digital assets
such as product of the month, magazine subscriptions, vacation clubs etc. Service products can also be represented such
as car washes, haircuts, auto service, shipping, telephone
service, house cleaning, etc. Financial products can also be
represented as digital assets such as insurance, financial asset
certificate, mortgages, loans, futures, income streams, digital
cash, credit, dividends, etc. Commitments can also be represented as digital assets such as mortgages, loans, rent, short
sales, subscriptions, etc. A variety of asset types could be
managed by the same system simultaneously. Different products could also be combined in to a single digital asset.
Accordingly, the present inventions are expected to enable
a wide variety of unique, useful and popular electronic market/distribution communities because the principles are easily extended to a wide variety of tradable items.
Steganographic Variations
While the preferred embodiment discussed above uses a
steganographic technique for embedding a serial number in
an MP3 file, there are many other approaches that could
accomplish this same function. Furthermore, it is expected
that the particular mechanism used to provide and associated
serial numbers will be different from application to application, because various digital asset formats are receptive to
different approaches.
In addition, as alluded to earlier, digital asset serial numbers could be prepended or postpended; alternatively, unused
portions of the digital asset could be used to store the serial
numbers. Finally, a modified format for a digital asset could
be created to accommodate the serial number, such as new
variation of an MP3 file, MPEG file, etc. For example, one or
more standards groups or industry groups may utilize a form
of digital asset that includes fields intended to accommodate
a serial number.
Tracking Variations
The preferred embodiment embeds successive serial numbers in the media file in different unique locales for each
instantiation of the digital asset, in a kind of passport-stamping approach This makes it harder to remove traces of the
transaction history and easier to identify the transaction history, including all transfers occurring over the network,
should the need arise. However in some cases the particular
media for a digital asset may be better suited to storing only
one or a limited number of serial numbers. In such cases the
entire transaction history can be reconstructed by recovering
a single serial number since each transaction references the
serial number of the previous transfer, and database 116
maintains a record of each transfer.
The preferred embodiment describes the process of asset
exchange by referring to the serial number as being linked in
a one to one relationship with a transaction, and having a
value based in some fashion on the characteristics of the
transaction. Nonetheless, in another variation, it could just as
easily be structured around the one to one relationship of the
serial number and every instantiation of any asset, so that the
serial number has a value based in some fashion on the characteristic of the digital asset.

Network Variations
System 100 described in the preferred embodiment makes
use of a network 102 (preferably the internet) as well as a
variety of network devices such as personal computers, and
servers. System 100 could just as easily been described on any
network 102 to which network devices and storage devices
are attached. Possible devices include PDA's, cell phones,
smart appliances to name a few. Possible networks include
private network systems and future public network systems
using cable, telephone, optical, wireless, fiber, and other pipe
and broadcast technologies.
It can be seen quite clearly that the present inventions
provide an additional measure of flexibility in managing digital assets within a particular distribution environment. It is no
longer impossible to achieve the dual aims ofboth security for
the rights holder, and ease of use for the end user. By permitting digital assets to be easily transacted in an open environment, and without cumbersome proprietary formats, the
usability and attractiveness of a digital asset distribution network is considerably enhanced. The present invention
achieves such goals by making the process easy for the various related entities and by operating in the background or in
a transparent fashion that does not impede the utility and
security of the overall system. In contrast to prior art systems
which simply allow wholesale copying of digital assets without accountability, the present invention also addresses the
needs and concerns of digital rights holders to ensure their
participation and ultimate success of the system.
Although the present invention has been described in terms
of a preferred embodiment, it will be apparent to those skilled
in the art that many alterations and modifications may be
made to such embodiments without departing from the teachings of the present invention. Other types of components
beyond those illustrated in the foregoing detailed description
can be used suitably with the present invention. Similarly,
descriptions of many common components usable with the
inventions and known to skilled artisans have been omitted so
as to not obfuscate the present teachings. Accordingly, it is
intended that the all such alterations, modifications and additions be included within the scope and spirit of the invention
as defined by the following claims.
Finally, it should be noted that the Title and Abstract of the
present disclosure have been provided solely to satisfy certain
U.S. governmental administrative requirements, including
the indexing requirements of37 C.P.R. 1.72, and for no other
purpose. As such, such portions of the present disclosure
should not be relied upon for interpreting and/or limiting the
scope of the present claims.
What is claimed is:
1. A method implemented by one or more computing
devices for providing a digital asset for distribution, the
method comprising:
storing, by at least one of the one or more computing
devices, the digital asset, the digital asset including digital content;
associating, by at least one of the one or more computing
devices, an asset identifier with the digital asset to
thereby generate a first instance of the digital asset, the
asset identifier identifYing the digital asset;
receiving from a user, by at least one of the one or more
computing devices, an acceptance of terms of use of
digital assets;
providing, by at least one of the one or more computing
devices, a list of one or more digital assets to the user, the
list including the digital asset;
receiving from the user, by at least one of the one or more
computing devices, a request for the digital asset;

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in response to the request for the digital asset, creating, by
at least one of the one or more computing devices, a
second instance of the digital asset for transfer to the user
device, the second instance of the digital asset including
content and at least one other portion, and embedding in
the at least one other portion of the second instance of the
digital asset at least a customer identification associated
with the user and the asset identifier, wherein other
instances of the digital asset have customer identifications embedded therein and the customer identifications
are used to track instances of the digital asset;
detecting, by at least one of the one or more computing
devices, a transfer of the second instance of the digital
asset to the user based at least in part on the customer
identification;
debiting an account of the user related to the transfer of the
second instance of the digital media asset to the user; and
updating, by at least one of the one or more computing
devices, a transaction database to reflect a transfer of the
second instance of the digital media asset to the user.
2. The method of claim 1, further comprising storing
administrative information including terms of use specifying
time periods of use.
3. The method of claim 1, wherein transfers of said digital
asset take place in a peer-to-peer manner over the network and
a complete tracking history for transfers of said digital asset to
users is maintained by at least one of the one or more computing devices.
4. The method of claim 3, wherein each transfer of an
instance of said digital asset is given a unique asset identifier
which is embedded within such instance.
5. The method of claim 1, further comprising performing
authentication operations on digital assets transferred
between user devices, said authentication operations including a determination of an asset identifier of a digital asset and
an asset identification of a last authorized instance of said
digital asset.
6. The method of claim 5, further comprising adding
authentication numbers to any digital assets that are found on
client systems user devices and which do not have an authorized transfer record.
7. The method of claim 1, wherein a tracking history for
said digital asset, including all transfers, can be derived from
said asset identifier.
8. The method of claim 1, wherein distributions of said
digital asset over said network between user devices are not
preconditioned on securing authorization for individual copies of said digital asset.
9. The method of claim 1 further comprising updating a
transaction database to indicate identities of parties involved
in a transfer of said digital asset, and a timestamp for the
transfer.
10. The method of claim 1 wherein said digital content
further includes advertisements.
11. The method of claim 1 wherein said digital content
includes audio and/or video data.
12. A computer system for providing a digital asset for
distribution, the system comprising:
one or more processors; and
one or more memories operatively coupled to at least one
of the one or more processors and having instructions
stored therein that, when executed by at least one of the
one or more processors, cause at least one of the one or
more processors to:
store the digital asset, the digital asset including digital
content;

associate an asset identifier with the digital asset to
thereby generate a first instance of the digital asset,
the asset identifier identifying the digital asset;
receive from a user an acceptance of terms of use of
digital assets;
provide a list of one or more digital assets to a user, the
list including the digital asset;
receive from the user a request for the digital asset;
in response to the request for the digital asset, create a
second instance of the digital asset for transfer to a
user device, the second instance of the digital asset
including digital content and at least one other portion, and embedding in the at least one other portion of
the second instance of the digital asset at least a customer identification associated with the user and the
asset identifier, wherein other instances of the digital
asset have customer identifications embedded therein
and the customer identifications are used to track
instances of the digital asset;
detect a transfer of the second instance of the digital
content to the user based at least in part on the customer identification;
debit an account of the user related to the transfer of the
second instance of the digital media asset to the user;
and
update a transaction database to reflect a transfer of the
second instance of the digital media asset to the user.
13. The system of claim 12, wherein said instructions further cause at least one of the one or more processors to save
administrative information including terms of use specifying
time periods of use.
14. The system of claim 12, wherein transfers of said
digital asset take place in a peer-to-peer manner and such that
a complete tracking history for transfers of said digital asset to
users is maintained by at least one of the one or more computing devices.
15. The system of claim 12, wherein each transfer of an
instance of said digital asset is given a unique identifier number which is embedded within such instance.
16. The system of claim 12, wherein the instructions further cause at least one of the one or more processors to
perform authentication operations on digital assets transferred between user devices over the network, said authentication operations including a determination of an asset identifier of a digital asset and an asset identifier of a last
authorized instance of said digital asset.
17. The system of claim 16 wherein the instructions further
cause at least one of the one or more processors to add authentication numbers to any digital assets that are found on client
systems user devices and which do not have an authorized
transfer record.
18. The system of claim 12, wherein a tracking history for
said digital asset, including all transfers, can be derived from
said asset identifier.
19. The system of claim 12, wherein distributions of said
digital asset over said network between user devices are not
preconditioned on securing authorization for individual copies of said digital asset.
20. The system of claim 12 wherein the instructions further
cause at least one of the one or more processors to update said
transaction database to indicate identities of parties involved
in a transfer of said digital asset, and a timestamp for the
transfer.
21. The system of claim 12 wherein said digital content
further includes advertisements.
22. The system of claim 12 wherein said digital content
includes audio and/or video data.

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23. The method of claim 1, wherein the at least one other

portion is an unused portion.
24. The method of claim 23, wherein the at least one other
portion is a header.
25. The method of claim 12, wherein the at least one other
portion is an unused portion.
26. The method of claim 12, wherein the at least on other
portion is a header.
27. A computer system for providing a digital asset for
distribution, the system comprising:
one or more processors; and
one or more memories operatively coupled to at least one
of the one or more processors and having instructions
stored therein that, when executed by at least one of the
one or more processors, cause at least one of the one or
more processors to:
store the digital asset, the digital asset including digital
content including audio content;
associate an asset identifier with the digital asset to
thereby generate a first instance of the digital asset,
the asset identifier identifying the digital asset;
provide a list of one or more digital assets to a user the
list including the digital asset;
'

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receive, from a mobile device associated with the user a
request for the digital asset and an agreement ~o
access terms;
in response to the request for the digital asset, create a
second instance of the digital asset for transfer to the
mobile user device, the second instance of the digital
asset including digital content and at least one other
portion, and embedding in the at least one other portion of the second instance of the digital asset at least
a customer identification associated with the user and
the asset identifier, wherein other instances of the
digital asset have customer identifications embedded
therein and the customer identifications are used to
track instances of the digital asset;
transfer the second instance of digital content in accordance with at least one distribution rule that changes
over time, the distribution rule including terms of use
and a host server location;
update a transaction database to reflect a transfer of the
second instance of the digital media asset to the user
debiting an account of the user related to the transfer. '

* * * * *