Current and Emerging Requirements for Digital Rights Management Systems Through Examination of Business Networks

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1 Current and Emerging Requirements for Digital Rights Management Systems Through Examination of Business Networks Eetu Luoma Department of Computer Science and Information Systems University of Jyväskylä PO Box 35, FIN JYVÄSKYLÄN YLIOPISTO Tel (0) GSM (0) Abstract Digital Rights Management (DRM) is an issue of controlling and managing digital rights over intellectual property. Current research on the DRM domain focuses on specifying requirements for management systems from variety of perspectives, however, mainly concentrating on protecting rights in business to consumer trade with certain mechanisms. This article takes a novel viewpoint in evaluating DRM issues from the perspective of networked business operations. In contrast to recent studies on DRM, the article evaluates the creation and delivery of content in along an asset creation-delivery continuum in terms of role specifications, content processes and management of digital rights over content, i.e. assets, in formations of firms. Our interest in this conceptual study is on the issues of networked business models and, consequently, we contribute in defining and analyzing the complexities of such scenarios and from case scenario deriving emerging requirements for digital rights management in the introduced context. While simultaneously providing certain advantages to enterprises, the inter-organizational interdependencies in networked business model are prone to cause conflicts, thus, creating an increased need for control, contracting and coordination activities. We conclude that in order to build trust between various actors, multiple agreements describing rights and obligations of operation and over assets needs to be negotiated and signed, thus, establishing a requirement for utilization of standardized digital rights expressions and efficient agreement creation and management. Hannu Vahtera Department of Computer Science and Information Systems University of Jyväskylä PO Box 35, FIN JYVÄSKYLÄN YLIOPISTO Tel (0) GSM (0) Introduction Digital Rights Management (DRM) is an issue of controlling and managing digital rights over intellectual property. Recently, it has broadened its scope to description, identification, trading, protection, monitoring and tracking of rights over tangible or in-tangible assets. [5] The research and development activity has therefore evolved from being merely a content protection concern to more extensive approach; in addition to legal and technical issues, it incorporates sociological, business and organizational matters. Given the variety of different perspectives and novelty of the domain, the research is still focused on specifying more complete business requirements from which the technical requirements may be derived. Considering the organizational and business perspective, competitive business environment forces enterprises to concentrate on their core-competencies and to outsource/buy other functions into/from markets. [8] At the same time the customers are becoming increasingly demanding, and to successfully meet the customers demands, the enterprises are forced to combine their corecompetencies by combining their intangible and tangible assets and by collaborating with one another [1]. Current research done on Digital Rights Management (DRM) seems to have a focus on the management of digital rights of an asset in a linear value chain, where the creator of an asset is a single entity and where the operations mainly take place on the customer side [See e.g. 5, 9, 12, 15]. Additionally, the current models are mostly concentrating on the business to customer (B2C) segment, where the applicable delivery channels are typically bookstores or book-selling portals and where the asset is available to almost any consumer /04 $17.00 (C) 2004 IEEE 1

2 However, rapidly changing business environment is increasing the competition between companies and due to the introduction of new requirements for organizational business models, it becomes evident that the issue of DRM should also be analyzed from beyond the barrier of visibility of conventional DRM research as illustrated in figure one. This extended viewpoint takes networked business-operations that enables to take the asset creation into consideration, but should also acknowledge the varying viewpoints of those individual organizations that participate in inter-organizational business networks [3]. Emphasis needs to be given to the research of the business-to-business (B2B) segment. The following figure one illustrates the distinct viewpoints of/for DRM research. Figure 1. The distinct views of the DRM field in asset creation-delivery continuum Within the lower circle of figure 1 we illustrate the focus of DRM research on the customer side where the existing research has identified the various actors, roles and viewpoints necessary for delivering the asset to the customers. Typically, the business operations performed on this side are demonstrated with a push funneled value chain, where the assets sequentially flow from one actor to another until it reaches the customers, after customer demand materializes. In contrast, we illustrate the life-cycle of an asset from creation to delivery as an asset creation-delivery continuum, in which the asset creation and customer sides are seen as interrelated and in which, the actions of enterprises or misuse of an asset has consequences for the functioning of the value-creating formation of firms as a whole. In particular, we position our discussion to B2B segment, and in that context argue that the production should (instead of being push-funneled) be pull-funneled. Altogether and given the importance of adopting on changing business environment, lack of DRM studies taking into account B2B setting, asset creator side and networked business model to proposes an essential problem for defining the organizational needs and information systems development requirements for Digital Rights Management. To address these matters, this conceptual study examines what are the scenarios in network business operations needed to manage, what are the necessary role specifications, responsibilities and operations on the creator side that take place for the asset to be created, and evaluate how the DRM system requirements should evolve for these operations to be successful. In the first section of this article we introduce current research findings on DRM domain and the prevailing DRM requirements that we believe to lack the viewpoint for networked business operations. The second section of this study introduces the characteristics of assets creation on the creators side, which differs from traditional linear value-chain-like thinking of asset creation and delivery due to the creation of assets in formation of firms and in B2B segment. Therefore, in section three we add the considerations of networked business-operations and its implications into the equation. In the light of this different business model, in section four we derive and analyze emerging DRM requirements to support networked business operations. The fifth section concludes this article by introducing and summarizing the factors, which in our opinion, are necessary to be considered in an attempt to specify the requirements for digital rights management systems in a networked business model. 2. Existing requirements for digital rights management systems Development on digital rights management domain has already provided valuable frameworks for specification of initial system requirements from business and organizational perspective. These frameworks may be broadly divided to those considering information management and to those specifying DRM processes. Additionally, a variety of frameworks and workflows are presented for content protection in delivery channel (see e.g. Rosenblatt et al. for the DRM reference architecture [15]). Information management frameworks comprise specifications of generic domain entities [7,14,16], which are further complemented with various digital identification, descriptive metadata and digital rights expression schemes. Luoma et al. have suggested an integrated domain model entailing different entity categories, which /04 $17.00 (C) 2004 IEEE 2

3 distinguish the evolution stages of digital creations and agreements created, processed and used through a basic value chain [9]. The model (see figure 2) clarifies the data collection and management requirements as attributes to the basic entities - the metadata describing the content, the roles and details of individuals and organizations, and details of offers and agreements expressed in digital rights expression languages, such as ODRL and XrML [6,2]. Contributors stress the importance of identification mechanisms and descriptive metadata, since identifying and describing the domain entities with proper metadata one shall enable the required DRM functionalities. Figure 2. Integrated Domain Model for Digital Rights Management Luoma et al. [9] The key elements of the domain model [9] are the agreements, which represent a variety of agreement documents and their contents; e.g. copyright agreements by which the creator s rights are transferred to corporate parties and licenses expressing the allowed utilization of asset by distributors and customers. Once digitalized and as current DRM technologies are applied, the agreements are described using digital rights expressions, which consist of permissions, constraints and requirements of material utilization and description of ownership possibly shared among several parties. Permissions are connected to the usage of the material (e.g. displaying the material), to downstream transfer of the material (e.g. selling the material), to content management (e.g. making a duplicate or backup of the material), and to the reuse of the material (e.g. aggregating the material). Permissions can have constraints such as assigning the permission to a group of individuals, to some IP address space or for a period of time. Moreover, the rights holder may set some requirements concerning the utilization of the material, for instance pre-use or per-use payments. Iannella s functional architecture for digital rights management identifies three categories of digital rights management activities [5]. In the first, intellectual property asset creation and capture, the underlying question is how to manage the creation of content and rights so they can easily be traded. This category further divides into tasks, which are applied to ascertain confirmation of rights to re-use existing content, assign right owner(s) and rights to new content and which allow processing of content through workflow steps for review and approval of rights. Basically, the latter implies rights specifications to be stored and managed in a way that they may be efficiently used later. Intellectual property asset management [5] includes repository and trading functions. Repository functions are applied to authorize access and retrieval of content and their relating metadata and rights descriptions in databases. In the upstream processes, content is accepted from the creators and added into content management system. On the other hand, trading functions enable the assignment of licenses or selling outright by agreements for rights over content. These functions furthermore comprise management of payment data flows and, if required, content may need to undergo specific fulfilment operations to satisfy agreement provisions - for example, content is packaged and protected for particular usage. Along the value chain, business-to-business trading of rights is carried out through syndication processes, which involves providing access to content for authorized intermediaries and supplying information on e.g. the subject, format, timeliness and rights of the content. Rights descriptions here provide intermediaries with directions from which content they may choose and what are the rights they are approved to redistribute. The Information and Content Exchange (ICE) is a known protocol sustaining syndication relationships [17]. According to ICE, communication is enabled by two software components: syndicators and subscribers. Syndicators offer content packages for subscription. These packages are placed into catalogues, which the subscribers may browse and then choose to pull packages from the syndicators web sites or databases. Subscribers /04 $17.00 (C) 2004 IEEE 3

4 may negotiate terms for each individual package or let the syndicators automatically push content packages according to fixed schedules. Technical procedures in software components enable the interpretation of delivery rules and business terms inside pulled or pushed content package. The third activity category according to the Iannella s functional architecture is intellectual asset usage [6]. It consists of permission management enabling the usage environment, e.g. rendering applications, to enforce and honour the rights to utilize the content according to the provided rights specifications and of tracking management responsible for monitoring the usage of content in case tracking is required in license conditions. This task also involves tracking and recording of trading transactions. Introduced activities of the functional architecture may be reflected to digital media management value chain and may be divided among value chain participants [12]. Such analysis concludes in separation of intermediaries roles and establishment of three broad categories of processes concerning digital rights management [12]: 1. Content processes that shall enable the creation, capture, formatting, packaging, protection and storage of assets and that shall provide control over when and how content is utilized. 2. Finance processes that shall enable players along the value chain to receive considerations for their investments (through financial clearing house). 3. Rights management processes that shall enable authorization of utilization for distributors and customers (through content clearing house). As a conclusion, the current system requirements for Digital Rights Management focus on management of information on digital rights related to assets, i.e. creation, capture and management of digital agreement details, content, rights and financial clearance, and secure and traced management and distribution of assets. At present, these requirements are mainly considered in the context of value-chain operations as shown in figure 3., summarizing discussion above. Figure 3. The Digital Rights Management activities and processes in the context of simplified value chain (adapted and combined from Iannella (2001) and Pagani (2003)) 3. Networked business operations The economical environment is moving from production-based to customer-oriented organizations, which typically take the form of cooperative, networklike formations of separate companies specializing in their core competencies [10]. In many industries, customers expect the organizations to be able to offer comprehensive services throughout the entire lifecycle of their product. To be able to respond to the emerging customer demand, organizations are forming company networks, which are referred as Value Creating Systems [13] or Value Nets /04 $17.00 (C) 2004 IEEE 4

5 [1,13]. Especially in the mature and technologically saturated industries, where the companies interests are vested, organizations have an incentive for co-operation across the boundaries of individual organizations [3]. In formations of firms the level (depth) and nature of inter-organizational interdependence is likely to influence the potential and source for conflict, thus, creating an increased need for coordination of activities [8]. These three types of inter-organizational interdependencies, pooled-, sequential- and reciprocal interdependencies (Thompson, 1967 [19] later in Kumar & Van Dissel, 1996 [8]) each have a distinct set of characteristics that influence the workability of the formation of firms as a whole. Generally speaking, the probability of occurrence of unwanted socio-technical issues increases the more complex the networked operations are [8]. The architecture of a formation of firms can be static or dynamic (a.k.a. temporary networks or modular networks) in nature [4]. In this article we use the concept of architecture to describe the permanence of formations of firms. The main difference between these architectures is that a formation of firms with a static architecture is a more stable formation of firms, in which the companies have a network-wide strategy complementing their individual intra-organizational strategies. Formations of firms with a dynamic architecture are constructed from able participants when a customer order is received and dissolve after the customer demand has been satisfied. Making a distinction between the static and dynamic architectures is a significant factor to be considered as it influences the level, occurrence and amount of sociotechnical factors within the network and thus constitutes towards the functionality of the network as a whole. To prevent occurrences of difficulties emerging from sociotechnical issues, the organizations aim to forge long-term business relationships with the partners they have most trust in. In static networks the agreements are often blanket agreements that define issues such as prices, schedules, and most importantly the rights regarding ownership-, reuse- as well as sales and distribution of the asset(s). With the usage of blanket agreements there is lesser need to undergo timely and costly negotiations with each of the partners every time a customer order is received. As explained earlier, the current research on Digital Rights Management seems to concentrate mostly on evaluating the system requirements in a push-funneled setting on the B2C segment, where the final assets sequentially flow from one participant to another and finally to the customer. In our opinion this traditional research approach fails to identify the asset creationdelivery process as a continuum where the actions taken or misuses occurring on either sides, creation side or the customer side (please refer to figure 1) have consequences on the future functioning of the valuecreating network. We argue that the business segments (B2C or B2B) in the context of DRM are inherently different, since the role specifications and responsibilities, and asset creation and delivery operations vary depending on the production typology (push-funneled or pullfunneled). As such, the research separating these two interrelated viewpoints cannot serve as a basis for developing feasible guidelines and solutions for DRM systems A Scenario for Deriving Requirements The role specifications and the underlying business logic requires for a closer examination on both sides of our asset creation-delivery continuum. The following figure, 4, is a simplified illustration of a viewpoint that we use to explain the effect of the changing networked mode of operations on the asset creation-delivery continuum. Figure 4. Networked business model where a temporary (dynamic) network is formed from participants (Partner P) of two static networks /04 $17.00 (C) 2004 IEEE 5

6 With figure four we consider the importance of understanding the individual viewpoints of the actors contributing towards the creation of a final assets, and the challenging role of an integrator/content provider on the B2B segment where the production of digital asset is pulloriented. Figure is an illustration of a case, in which the creation of a digital asset is performed according to customer specifications. Both formations of firms 1 and X are networks with static architectures built on the longterm, trustful relationships of their participants (Partners Integrator/Content provider and the Customers in the Formation of Firms 1 (FF1) AND Partners in Formation of Firms X (FFX)). The partners of the formations of firms operate as content providers in the formations they participate in. In our example, the network-view of organizing activities and tasks becomes complicated when the creation of the digital assets requires joint activities of partners from two separate formations of firms (FF1 and FFX). A temporary Formation of Firms 2 (FF2) is formed for this purpose. It utilizes the infrastructure of the FF1 and one participant (partner P) from the FFX. There are various roles in our example that we will define by combining role descriptions from the fields of DRM and networked business operations. In figure four, the resource pools in the middle of the Formations of Firms (Resource pool X in the FFX and Resource pool 1 in the FF1) are the repositories that contain the contents of their related Formation of Firms. The content is an output of the partners that, when combined, form the final asset to be delivered to the customers. The Integrator/Content provider is the owner of the repository used in the FF1 and also the FF2 and, as a result, it also possesses the digital rights of the asset. All of the partners have access to the shared repository of their formation of firms, and also the communication between the parties may either be conducted through this common repository, or reciprocally through direct contacts between partners [8]. The interdependency between the participating organizations depicted in our example is an example of a pooled interdependency [8]. In such business model, one participant of the formation of firms takes the role of an integrator that designs core technologies, coordinates processes, performs marketing functions and manages the relationships of the network participants [18]. The role of an integrator is usually taken by the hub-organization of a particular formation of firms. In our example it is the party that receives the customer order and that assembles the formation of firms needed in fulfilling the customer demand materialized. In a case of content processes (described in section two) the role of an integrator as described previously is inadequate, as it must also take responsibilities attached to the role of a content provider. [Content provider] is responsible for making a creation available for exploitation or use, namely, making products. Additionally, the content provider operates in various functions concerning the control and management of the creation, payments and intellectual property rights [9]. The main responsibilities of an integrator/content provider somewhat differ in the asset creation-delivery continuum, when the role is perceived from the viewpoint of the network participants of different formations of firms and from the viewpoint of the customer: 1. From the viewpoint of the partners of a static network FF1, the network leader (integrator/content provider) is responsible for the protection of the digital rights to their respective rights owners for the assets created in the temporary network FF2. 2. In the temporary formation of firms 2 the partners of a temporary network FF2 view the integrator/content provider as a network leader, a party that controls the activities of the network, and is also responsible for the contract management in FF2. 3. From the customer viewpoint, the integrator/content provider is seen as a party that utilizes the works of others in creating content and is responsible for the protection of the digital rights to the IPR owners or their representatives [7] Increasing responsibilities to prevent sociotechnical issues from occurring In the same setting, where the creation of a final asset requires for the expertise of a partner from outside of the static network (FF1) to be used, the viewpoints regarding the temporary formation of firms (FF2) and its related socio-technical factors needs to be considered from various viewpoints: 1. In a temporary network FF2, the partners and the integrator/content provider of FF1, because of lack of trust - especially towards partner P that is a new entrant - have a need to protect their corecompetencies and ensure that the digital rights over their assets is honoured after the temporary formation of firms 2 dissolves. 2. The partners of FFX perceive the partner P joining into a temporary formation of firms (FF2) as being responsible for ensuring that the digital rights and agreements of FFXs assets are enforced and honoured also when the partner P is operating outside of the static network it initially belongs to (FFX). To meet these requirements, the integrator/content provider of the temporary formation of firms (FF2) forms an agreement regarding the rules of accepted conduct, costs, schedules and issues of digital rights with the participants of FF2. As the majority of partners in FF2 are also partners of FF1, it is likely that the integrator/content /04 $17.00 (C) 2004 IEEE 6

7 provider already has a valid blanket agreement with the partners of FF1, thus reducing the transaction costs resulting from the need for negotiating and contracting. Once the partner P enters the FF2 network, and adds it s output into the resource pool the control and ownership over digital rights of the final asset become unclear if: 1) The partner/content provider only agrees to sell e.g. digital rights regarding the reuse, sales and distribution of it s output to the integrator/content provider, but maintains the ownership. 2) The digital rights of the output of the partner P are owned by also other participants of FFX, causing a need for the integrator/content provider of FF2 to undergo negotiations with each of the right owners. As a result of these possible scenarios the integrator/content provider of FF2 might face a situation where it no longer owns the sole contents of the repository, making it difficult to later on to modify or update the digital assets functionalities. The roles and responsibilities of an integrator/content provider, in both managing the digital rights throughout the asset creation-delivery continuum and in ensuring fluent business operations on the creator side, increase in a networked B2B business setting where asset creation is pull-funnelled. The integrator must in its formation of firms and towards the customer act as a: 1. Controller: Ensure that the agreements are honoured throughout the continuum, because misuses in either side have an effect on the other side, not least because misbehaviours increase the likelihood of unwanted socio-technical issues to occur, and effectively undermine trust between network participants [3] 2. Communicator: Effectively communicate with the customers and the creators in order to gather, derive and communicate the necessary asset requirements and specifications 3. Constructor: Construct an effective formation of firm by contracting additional resources (participants) to its formation of firm when needed 4. Contractor: Manage the agreements, such as blanket agreements with key-partners and temporary agreements with subcontracting partners, throughout the whole continuum As illustrated, even when backed up with extensive agreements and blanket agreements, trust is a major issue in ensuring effective operations under networked modes of operations. It is evident that the traditional role of a clearinghouse, granting usage rights regarding the asset usage, is somewhat unclear when operating under networked modes of operations. Integrator/content provider performing the role of a clearance house in its network increases its operating costs, but is also unacceptable for the participants of related formations of firms, as it opens up a window of opportunity for opportunistic behaviour by the integrator/content provider itself. As a remedy, we suggest the usage of third-party clearinghouses that should control the questions of usage rights in both sides of the asset creation-delivery continuum on creators and customer side. 4. Emerging requirements for DRM from networked asset creation activities As narrated in our example on the networked asset creation, networked operations may introduce complicated requirements for the network participants in terms of managing digital rights of the networks assets. Such conditions bring about difficulties, especially 1) as the creator side consists of partners and content providers involved in multiple networks, and as 2) new partner/content provider, being already a member of another network (FFX) joins into a temporary network (FF2), and is therefore tied to both agreements made in its originating network and also to the agreements of the current network. The partner is also responsible for the control and management of the digital rights of its originating network, when applicable. From the integrator/content provider point of view, there is a risk of a misuse of the assets on the customer side which will reflect to the creator side and result in decrease of trust among the content creators and possibly in compensations for the rights owners for the breach of agreements. Furthermore, another risk factor is the misuse of common asset, containing information crucial to the integrator (core competencies), on the networked creator side. As a consequence, the abovementioned issues cause an increasing need of negotiating, controlling and contracting for the integrator party, thus, increasing costs of operating [20]. Therefore, in the current situation, the integrator must endure the responsibility of managing digital rights over assets created and delivered, thus, take actions to manage digital agreements, to protect and trace asset utilization and provide clearinghouse services in its own networks. Additionally, as elaborated in the example above, several enterprises may need to take an integrator/content provider role as they represent their own static network when participating in another temporary formation of firms, thus, take responsibilities of digital rights management. We suggest utilization of standardized digital rights expressions and efficient agreement creation and management to emerge as important requirements for managing digital rights in networked business model. Currently, few special schemes (e.g. ODRL and XrML) expressing the agreement terms in digital environment exist. The networked business model shares requirements for description of rights as they are transformed into digital expressions. Similar requirements transpire to express rights and obligations over assets; the rightsholder and the division of ownership, permissions to utilize, transfer, manage and re-use the assets, constraints /04 $17.00 (C) 2004 IEEE 7

8 to the utilization of assets, and requirements for the utilization of assets. Although we recognize deficiencies in current schemes (compare to requirements set by Milosevic [11]) in addressing true business agreements, we promote a standardized way to express rights that we consider to have an effect on supporting fluent business operations, decrease of transaction costs, as the volume of agreements negotiations decreases. Motivation for efficient creation of agreements brings along additional requirements. First, together with the creation of asset, rights to the content are confirmed, established and further assigned to parties operating in one network. In case agreement terms are to be managed digitally, we are expected to capture agreement terms into digital expressions once these are assigned, that is, ownership to the asset is declared and/or divided. Besides the advantages gained through digitalization and automation of information management, digitalized agreement terms will be utilized with the assets once delivered. Before presenting the digital content, special rendering applications interpret most of the specified digital agreement terms, e.g. in licenses, indicating whether and how user of the application is allowed to access and utilize the asset. There are also simple approaches to produce those digital expressions. However, the current approaches rather reflect the way those languages express rights than actual agreement templates and agreements. In contrast, creating agreement templates and agreement for the exchange of content is highly demanding, since it requires both legal expertise and understanding of business models. Agreement documents must conform to the legal foundations, especially due to the current dissonance in international copyright laws and provisions, and reflect the enterprises or organizations way of operating. Thus, a need to use formal agreement language still exists. On the other hand, we believe the introduced networked business model will become more common, result in more frequent construction of dynamic formations of firms to fulfill customers needs, and consequently may generate an increase in amount of signed agreements for temporal relationships. Therefore, representatives of parties call for a straightforward creation of agreements through selecting from available, predefined agreement terms and through minor modifications to the terms, if necessary. This applies to both initial assignment of creators rights to corporate parties and to the distribution of rights for utilizing the content between parties and customers. A need exists, then, for providing an information system architecture and defining processes that allows the creation of agreements in digital environment and that conforms to the requirements set by legal and business matters of contracting. Furthermore, a requirement emerges to allow the creation of digital agreements templates that include possible agreement elements and parts, and from which the agreements may straightforwardly be created through simple selections and minor modifications. Additionally, a need exists to capture the terms of established agreements to digital expressions in order to enable digitalization and even automation of distribution and handling of the agreement terms. Such capturing must produce a set of digital rights expressions according to standardized schema, which may be interpreted by information processing systems and on the digital delivery channel by rendering applications enforcing rights and obligations. 5. Summary and conclusions In the sections above, we have considered the management of digital rights from a perspective so far neglected in the DRM research. In the business-tobusiness segment, where turbulent economical, technical and organizational environment is driving the change towards the networked business model, the creation and delivery of an asset differs in terms of configuration of the creator side, and operations and responsibilities taken by enterprises. Our study therefore contributes in indicating the similarities and discrepancies of role specifications and responsibilities, content processes and of the digital rights management functions to the current DRM research that the new viewpoint of asset creationdelivery continuum in networked business-operations brings about. Pull-funneled production of digital assets results in an increasing amount of temporary formations of firms to be created for integrator/content providers to satisfy customer needs. When the temporary formations of firms are composed of participants from static, possibly competing, formations of firms the importance of management of digital rights increases. As a result, the temporary network participants have multiple overlapping roles, as the content these participants provide might be created, or have components created, in other formations of firms. Under networked modes of operations the ownership of digital rights of an asset become unclear when the asset is composed of contents created in another formations of firms, and where the content provider of a temporary formation of firms does not wholly own the digital rights over its content provided. Consequently, failure to reliably manage digital rights of assets in temporary networks results in the increasing occurrence of socio-technical issues throughout the asset creationdelivery continuum, e.g. lack of trust, which has negative, and possibly severe, implications for the interorganizational business relationships of companies. To avoid socio-technical issues from occurring, and for future collaboration between enterprises to be /04 $17.00 (C) 2004 IEEE 8

9 possible, the importance of effective and inexpensive contract-, controlling- and monitoring activities in interorganizational formations of firms increases. The increased need of controlling is a direct result for the requirement of ensuring that the digital rights of rights owners are respected as well as that the network participants operate according to agreements. Importance of managing contracting activities on the other hand is needed for the temporary network creation to be conducted rapidly and so that the necessary viewpoints of both the temporary network and the individual network participants are considered. Monitoring activities are needed both to ensure fluent business operations of a network and to proactively prevent unwanted sociotechnical issues from occurring. Relating back to our example presented in this article, we would recommend the role of a clearing house to be outsourced/bought to/from a third-party/markets. We back our recommendation up by stating that a participant of a formation of firms taking responsibility for the activities of a clearing house opens up an window of opportunity for opportunistic behavior. In order to reduce transaction costs and to better support the challenges raising from the networked business model described above, we suggest a set of emerge system requirements to enhance establishment of particular agreements, licenses etc. and promote increase in adoption of standardized way to describe rights and obligation over assets, in digital rights expressions in order to facilitate automated management of such descriptions. We have defined requirements for efficient system architecture and method for creation of agreements in reciprocal network. The system and method shall: - Enable creation of agreement template from which the actual agreement can be straightforwardly made, through minor selections and modifications, - Present such agreement templates and agreements with formal agreement language (humaninterpretable) that the agreements would support legally valid business transactions and reflect business behind the negotiated and signed agreement, - Enable capturing of the agreement terms into digital rights expressions (machine-interpretable) in to order to enable efficient management of those expressions. These requirements are valid and technical issues unsolved also in traditional DRM research and effective solutions to address these matters are subject to further research. References [1] Bovet, D. and Martha, J., Value Nets. Breaking the supply chain to unlock hidden profits. John Wiley & Sons, New York. [2] ContentGuard, I. extensible rights Markup Language (XrML) 2.0 Specification, Available: [3] Heikkilä J., Reijonen P., and Vahtera H. Beliefs and Perceptions on IOS Adoption on a Supply Network, to be published in IRIS 26, [4] Hoogeweegen, M. R., Wim, J. M., Teunissen, W. J. M., Vervest, P. H. M., Wagenaar, R.W., Modular network design: Using information and communication technology to allocate production tasks in a virtual organization, Decision Sciences 30(4). [5] Iannella, R. Digital Rights management (DRM) Architectures, D-Lib Magazine, 7(6). [6] Iannella, R. Open Digital Rights Language (ODRL) Version 1.1 [pdf]. IPR Systems, 2002 Available: [7] IMPRIMATUR. Synthesis of the IMPRIMATUR Business Model, 1999 (IMP/4087). [8] Kumar, K & Van Dissel, H. G., Sustainable Collaboration: Managing Conflict and Cooperation in Interorganizational systems, MIS Quarterly, (September), [9] Luoma, E., Tiainen, S., Tyrväinen, P. Integrated Domain Model for Digital Rights Management. Proceedings of the 2003 Information Resource Management Association International Conference. Idea Group Publishing, CD-ROM. [10] Means, G. & Schneider, D., Meta-Capitalism the e- business revolution and the design of 21st -century companies and markets. John Wiley & Sons, Inc. [11] Milosevic, Z., and Bond A. Electronic Commerce on the Internet: What Is Still Missing?, Proceedings of the 5th Annual Conference of the Internet Society, INET'95, Hawaii, [12] Pagani, M. The Critical Role of Digital Rights Management Processes in the Context of the Digital Media Management Value Chain. Proceedings of the 2003 Information Resource Management Association International Conference. Idea Group Publishing, CD-ROM. [13] Parolini C. The value net: A tool for competitive strategy. John Wiley Books, [14] Plassard, M.-F. Functional Requirements for Bibliographic Records. Final Report., [pdf]. IFLA Study Group on the Functional Requirements for Bibliographic Records, Available: [15] Rosenblatt, B., Trippe, B., & Mooney, S. Digital Rights Management: Business and Technology. New York: M&T Books, /04 $17.00 (C) 2004 IEEE 9

10 [16] Rust, G., & Bide, R. <indecs> metadata framework: principles, model and dictionary, [pdf]. Indecs Framework Ltd, Available: [17] The Information and Content Exchange. IDEAlliance, 2002 Available: [18] Tapscott D., Ticoll D. & Lowy A. Digital capital: Harnessing the power of business webs, Nicholas Brealey Publishing, 2000 [19] Thompson, J. Organizations in action, McGraw Hill, New York, NY, [20] Williamson O.E. The Economic Institutions of Capitalism; Firms, Markets, Relational Contracting, The Free Press, New York, /04 $17.00 (C) 2004 IEEE 10

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