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May 31, 1999

Piracy Protection

Police: NatWest Group's Magex system will prevent piracy of copyrighted material after it has been purchased.

By Amy K. Larsen

ne hurdle blocking content providers from selling online is concern about what happens to their intellectual property once consumers buy it. Whether they're selling a news article or sound track, merchants want to control how their goods are distributed after the point of sale.

The NatWest Group this week will launch a secure infrastructure system for processing online sales and managing rights to digital content, including MP3 music files. NatWest will unveil Magex, a system developed with digital-rights specialist InterTrust Technology Corp., to prevent piracy of copyrighted material after it has been purchased.

Part micropayment system, part conventional online credit-card transaction processor, Magex adds a third dimension by acting as a digital-rights patrol cop. The system applies rules established by the electronic-commerce merchant, limiting or extending consumer-access rights to content based on those rules.

Here's how it might work on a Web site that sells music: Consumers fill out a form at the site once with their credit-card billing information, which is stored at the NatWest Magex site in a digital wallet. For 25 cents, the customer can listen to a sound track, while for $1, he or she is given rights to copy the music. To control what happens to the content after it's downloaded, a 5-Mbyte file that limits reproduction and replay is downloaded along with the music.

Andrew Farrow, head of commer- cial development for NatWest Magex, acknowledges that earlier micropayment systems that required software downloads failed, but he says the quality of digital media has advanced to the point where consumers are willing to pay for it. Says Farrow, "At the end of the day, this is totally driven by quality. If you put out decent quality, people are willing to pay a fair price for it."

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