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Importance of Identity


Viral Distribution

What Is CloakX? An Introduction

The CloakX system offers a method of protecting digital media from theft or unauthorized usage. What is different about CloakX? The primary difference is that the permission to use digital content is associated with a user's identity, rather than the devices he owns.

Unlike traditional protection schemes, CloakX gives the user more flexible usage rights. As a result, there are tremendous benefits:

  • The content is not locked to individual playback devices or computers, and so users can easily migrate content across different platforms and devices.
  • The system can be applied to any type of digital content ranging from software to video, music, and print.
  • Users are permitted, even encouraged, to share media with each other because permission to use the content is separated from its acquisition. Thus, licensed content can be publicly distributed without compromising copyrights.
  • No connection to a local or wide area network is required, and so the CloakX system can be used in environments ranging from a single computer to the most complex enterprise networks.

In sum, the CloakX system will be embraced by both buyers and sellers alike because it offers benefits to all. While securing the legitimate copyrights of media owners, it does not impose unacceptable restrictions on users of the media. It assures a free market system, in which the creator of an innovative product is rewarded for his efforts, and the user pays a fair price for a product he wants.

Why CloakX Is Not Digital Rights Management

Conventional DRM systems are a very one-sided affair: The owner has all the rights, and user rights are minimal. With most existing DRM schemes, all users are presumed guilty of piracy.

To most users, the R in DRM seems to stand for Restrictions, rather than Rights. The zeal to preserve owner rights has resulted in such draconian measures as rootkits and other intrusive software being installed on users' computers without their knowledge. As a consequence, users realize that others can take ownership of portions of their computers.

The CloakX solution differs from DRM:

  • CloakX does NOT lock licensed content to a single computer.
  • CloakX does NOT lock licensed content to a specific output device (media players, set top boxes).
  • CloakX does NOT hide behind the Digital Millennium Copyright Act in an attempt to coerce users into relinquishing their fair usage rights.
  • CloakX DOES allow the user to recover licensed content even if lost due to computer or storage crashes.
  • CloakX DOES provide the right and ability to transfer ownership of licensed content
  • CloakX DOES provide the migration of content to multiple devices (for example, a user who buys a digital movie purchased to play on a computer can also play it on a portable player or set top box).

With the CloakX scheme, users are granted a bundle of implicit permissions in exchange for the copyrights that belong to the owner. This is consistent with the core principles of copyrights that were articulated long before the existence of digital media.

CloakX Intellectual Property

Like copyright laws, patent laws were originally enacted to encourage new ideas by ensuring inventors a fair chance to benefit from their inventions. Patents worked well in the days of individual inventors, but now patent mills acquire patent rights not to promote creativity and growth, but for the sole purpose of blackmailing other companies into paying large royalty payments to avoid prolonged and expensive legal actions.

CloakX does actively pursue patent protection for critical technologies. However, CloakX uses this IP portfolio to help prevent others from trying to monopolize the market, not to extort undeserved royalties nor to prevent others from entering the market. We at CloakX readily license our intellectual property to anyone willing to accept and extend the open, user-focused philosophy that we embrace.

Patents don't kill creativity; patent mills kill creativity.

Existing Patent Applications: 20050204405, 20050216548, XPay PPA

The Importance of Identity

Very little happens in the real world that is not predicated on identity. While people can obviously make a cash purchase anonymously, consumers are generally uncomfortable making a significant purchase from an anonymous seller, say, from a street vendor or from the trunk of a car. Very few transactions are enhanced by true anonymity.

Paradoxically, such anonymity has long been held to be an important tenet of the Internet. Somehow, people feel comfortable receiving an email from violentmaniac@hotmail.com, but they feel uneasy getting a phone call or letter from a similar identity. As a result, there have been many attempts to establish concepts like trust, authenticity, and accountability on the Internet. These characteristics flow quite naturally from identity, rather than the other way around.

Excessive identity requirements can be just as undesirable as anonymity. Law-abiding citizens are appropriately concerned about the growing number of demands for multiple forms of identification, like social security numbers, driver license numbers, passports, and credit card account numbers. Providing such sensitive information does little to prevent fraud and instead is resulting in escalating reports of identity theft. The cure is worse than the disease.

Viral Distribution or Sharing

The CloakX system provides users with responsible identity, providing only the information required to assure the integrity of a specific transaction. By associating content with the user's CloakX identity, licensed media is treated the same as it would be in the physical world. It can be played and used wherever the user is. It behaves as if the user has written his name on it as a means of making sure that it functions for him and no one else. Because of this identity association, the media can be easily and freely recovered if lost. In addition, a user can share the media with others and receive a financial reward when the shared media is then registered or purchased by the recipient. We refer to this concept as Viral Sharing.

Media Protection and Distribution: Viral Sharing

Figure 1 illustrates the CloakX Digital Media protection and distribution process:

Figure 1 How Viral Sharing Works
  1. Publish Content
    • Rights owner uses CloakX Publisher Application to publish content.
    • Server adds description and key to databases and seeds the content to the content repository
  2. Locate Content
    • Buyer searches content database and
    • locates content to download.
  3. Obtain Content
    • Buyer initiates download,
    • CloakX Server records transaction ID for future compensation distribution
    • Buyer receives transaction ID from server and receives content from repository
  4. Purchase Content
    • Buyer sends purchase request (with transaction ID and content ID) to Selling Agent.
    • When purchase is complete, Selling agent transfers decryption key to Buyer's SCD.
  5. Register Purchase
    Selling agent records sale with server by sending transaction ID and proof of purchase
  6. Distribute Compensation
    CloakX server keeps track of compensation due to involved parties (Rights owner, sales agent, repository owners and CloakX), and periodically distributes credits as appropriate.

CloakX Components

Traditional network and computer security systems often refer to the three A's: Authentication, Authorization, and Accounting. These components are necessary, but they are not sufficient for real-world applications. The CloakX system goes beyond these, and consists of three core components: Protection, Sharing, and Payment.

Protection: The CloakX concept of Protection encompasses the three A's:

  • Authenticate the user's identity
  • Verify his/her Authorization to participate in the requested transaction
  • Provide the Accounting audit trail necessary to provide the level of security appropriate for the transaction

The two parties in any CloakX interaction are identified and certified to the level required, and only to the level required, for each party to be assured of the legitimacy of the other. No information is disclosed or exchanged unless required to ensure the transaction is irrefutable.

Protection goes beyond the three A's, however, and includes the encryption and encoding of protected content to ensure its usability by authorized users.

Sharing: CloakX-protected content can be used only by a properly identified user; a user who does not have CloakX identification cannot use the content. The content publisher can determine rules for sharing. For example, users with valid CloakX identification but no authorization for the specific protected content may be granted limited usage rights (time-limited reduced functionality or quality, for example) until they purchase additional usage rights.

The CloakX system enables a CloakX user to share protected content via a peer-to-peer network or by any other available means. This shared content is traceable to the sharing user, who then receives compensation when another user receives and purchases the content.

Payment: CloakX provides an integrated payment function that is enabled by the identity process. This makes it possible to conduct on-line or off-line commerce without the direct exchange of any confidential information such as credit card numbers.

The CloakX payment system is ideally suited to the low monetary value transactions typically associated with digital media purchase or rental.

  • Pre-authorized transaction limits for off-line
  • Usable both on-line and off-line
  • True authorized transaction limits for off-line
  • Secure credit card replacement for online transactions
  • Integrated with other applications, including video, software

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