Ilaria Carli, IP Lawyer, RPLT
Luca Egitto, IP & Technology Lawyer, RPLT
Frank Pagano, Senior Partner, Jakala
In tech we trust
This is not another hagiographic piece on artificial intelligence (AI) and the infamous blockchains. However, these exponential technologies will change the way we trade, interact, love, and live our lives, more than we dare to imagine. They will especially change three pillars of our being together as national and global citizens, by making them more ‘liquid’, namely broader in scope, faster in their execution and capable of exploding, for better or for worse, our rights and responsibilities. Those are identity, ownership, and work. All of them are fundamental rights of ours, at least in the Western world.
Let’s step back for a second. Who we are, what we own and what we do for a living are all defined by a juridical infrastructure that was heavily finessed during the post-World-War-II era. We continuously updated public and private rights since then. We vote for our officials, in the name of the people and not of God, and always expect justice and law enforcement from the state, while we use shared legal frameworks to become public servants, managers or entrepreneurs, to chase any opportunity out there to turn labor into profit. So far, so good.
How would our world change so much with the adoption, in public and private arenas, of decentralized registries and intelligent computing, able to track, learn, reproduce, and serve a recommendation, if not an action, from a wealth of data, all of it in a fraction of a second?
Technology has always redefined us, expanding our powers. The enormous productivity gains realized with industrialization and then with computing have been the main driver of growth, natality increase, literacy, and wealth. We trust and love our being tech sapiens.
Who art thou?
When I was born, someone, armed with their own ID and a bunch of hospital papers, went to the local townhall to announce that a new ‘body’ had popped up into the world. I was given an identity, or – if you will – the formal approval of my being a part of a community. Not much has changed since then. Someone has always to verify who I am, for me to get my ID or passport, and then, for example, attend college, be hired, and benefit from a pension, when I retire. The nation state is the referee in case any controversy arises. Rightfully so, as international institutions are not as developed as we imagined them back in the fifties. We lost the opportunity of agreeing, as a global community, on a hard core of inalienable rights of every one of us, with very few exceptions (one of these being the European Union, with the European Court of Human Rights and the Charter of Fundamental Rights). The author Hannah Arendt stresses this missed opportunity in her book ‘Eichmann in Jerusalem: A Report on the Banality of Evil’ (1963). Future identity is like a play, which develops in two acts.
- Act I: one key for all
Identity checks are aimed at verifying physical identity, namely that the body in front of someone is, indeed, who they claim to be. Thanks to exponential technologies, my physical identity can or will be verified easily and quickly, thanks to a unique key (a wallet), protected on chain. It’s like having one ‘log-in’ for all public and private products & services out there. AI will crawl through my data and the apps that I gave AI permission to use on my behalf, and it will certify that I am who I say I am, faster than any authority, whose multiple databases are siloed and labor intensive to work with. The same will apply across all private businesses (or, interfaces, in the digital world), where I must log in repeatedly, as they don’t talk to each other, being, indeed, private turfs.
So, what, you would say? First, we will be able to disproportionally accelerate the traditional procedure to identify a person (in flesh). Without taking complex use-cases, let’s think of a passport renewal. In the West, it takes weeks to get a new one, and a few tens of dollars in administrative fees. What’s the hold-up? Human labor and checks across multiple databases, especially to go through the record of the requester. Technology can reduce the wait and cost of this process to zero. We could finally give an identity, thanks to the removal of time and cost barriers, to the roughly one billion people, who today have no identity whatsoever, according to the World Economic Forum (WEF). Secondly, digital identities of humans will be forged via a KYC (Know Your Customer) and an anti-money laundering protocol (AML), like it is already the case for some crypto exchanges or blockchain powered applications. One ‘log-in’, or key for everything opens new possibilities for our digital agency, expanding the speed and liquidity of our doing business together and contributing to our communities. Question: who owns that key?
- Act II: a digital ID for digital agents
Now, let’s double click on the concept of digital agency. If an independent companion, copilot, or avatar – whichever name we will give them in the future, of course powered by AI, acts online, they will need to be identified, and their actions tracked and disciplined. We now have the computing power to do that. To be clear, if I am talking to a machine, I do want to know.
We already have actors in our lives, who are not physically existent. Think of the state, which is completely intangible. Corporations are also a human invention. They don’t exist, and yet they carry responsibilities and worth, captured in their statute and financial reports. Tech will unleash new digital beings – totally independent from the physical world, who can help and support us. What if they say ‘no’ to me, from my passport approval to a job interview, from crossing country borders to the allocation of scarce resources? Who dictates criteria and priority lists for the allocation of a kidney, or the access to intensive care during the next Covid era? Rules need to be there to define what the machine ought to do, and who they are in the first place. Where are they based? Which principles and laws will they be judged by?
We need to agree on new identities, with rights and obligations, of digital agents, at a national, regional, and international level. We need transparency on everything they do. Decentralization of ledgers and ethics in the development of AI are essential features of any prototype of a new digital ID. Same question for that digital ID: who owns it?
Res digital
In today’s world it’s essential to track what we own, because our properties must be protected and, at the same time, proportionally taxed, in line with the law. This will not change in the future. What changes is the reach and speed, or liquidity, of this urgent mapping-out system. According to the WEF, approximately two billion people are completely detached from any financial network (bank accounts, for example): they own nothing, from an official standpoint. Moreover, land registration is not the standard for a large portion of the globe (the World Bank estimate is two thirds of the planet’s surface). Tech can solve for the time and cost of building a digital map of ownership rights, which can represent one of the most important revolutions in our history. In the intellectual property (IP) ecosystem, for instance, blockchain can securely create and maintain interconnected and distributed databases, both for registered rights, such as patents, trademarks, and industrial designs, and for unregistered IP rights, such as copyright, unregistered design rights or trade secrets. This would entail a reduction of the complexity and costs associated with the registration process, and it would enable right holders to have a better control over their IP, and even to produce smart contracts for potential future transactions concerning what they own. Several IP offices, including the European Union Intellectual Property Office (EUIPO), have already implemented certain kinds of blockchain powered IP registers. The revolution has already begun, bringing with it the need to make sure the data is correct and accurate, when registered on chain.
We will have transparency on identity and ownership, thanks to tech. We will know who’s who, and what they own. This is not enough. We need to get paid for the data that we own.
Pay per view
So, there is more. We will live in a world of digital agency and ownership first. For example, the acquisition cost of a new luxury fan, digitally, runs at above $100 per person, with the bill footed by any brand on the hunt for new users, and most of the benefits swallowed by the dominant platforms that manage billions of eyeballs, namely Meta, Google or Tik-Tok. Another example is all the AI large language models, which are being trained on massive sets of data points, which today are being harvested for free.
In the future, we will need to have a greater control over our online life. It’s a fundamental right of ours. Do we even have the tools to track every like that we leave behind on Facebook? We do, or, better, Facebook does. We do not have access to that information, and we don’t know especially how our agency is being valued and sold to the brands bidding for our attention. A new bill of rights should redefine who owns digital records, and the market should be let free to pay fairly owners and creators of the world. Blockchain has the fundamental feature to track every interaction between wallets on a public registry. AI can be queried on what has been used and when, for all my digital properties, with zero margin of error, given its ability to process large sets of data in fractions of a second. Private corporations do not have the incentives to modify the composition of the owners’ suite. We need to agree on new international standards and protocols, to allow digital property rights to circulate in a secure manner, all disintermediated but, at the same time, legally enforceable in any jurisdiction. Res digital is as important as any other private and public ‘res’. It’s pay-day.
How we work it
We don’t work because we have a natural passion or talent for something. This is the privilege of a niche. The intention of the next short statement is not to be rude: chances are you are not Elon Musk. I am not, I can confess.
We work because we get old. We trade labor for money with our employer. We trade youth for future security with our conscience. We trade taxes paid today for future retirement checks with governments and pension funds. We trade across generations, so that the taxes of the current generation can support the elderly, until a new generation kicks in, and we swap spots. This is the most common menu of social trade-off-s inside Western economies.
Labor is also rooted in our biological DNA, at least since the time when homo sapiens became sedentary, as explained so well by Professor Yuval Noah Harari, the author of ‘Sapiens: A Brief History of Humankind’ (2011). Labor is no less than a synonymous for human decency. Organized labor is one of the pillars of our society, and the main driver of economic value and technical knowledge sharing. With the world moving more and more towards digital jobs, not only do we need to update our bill of rights related to work, but also our entire design of how individuals and digital selves participate into society and expand our community’s GDP and skills’ set. It’s always hard to predict the future, but our way of working will most likely become like a perpetuity. My creations in the digital world will not perish and can be tracked forever, thus generating rights, benefits, and payments to the advantage of the digital log-in who owned them in the first place. Our contention here is not to burn down the current social security system, because it doesn’t work. It does work, if we keep having honest taxpayers and a healthy generational change. Our contention is that the current system may not survive demographic changes and the perishable nature of our physical being.
ID, IP & $
As a logical follow-up to the previous sections, if we can identify ‘who’s who’ and give full access to their properties to all digital selves out there, we are going to unlock enormous value for the global population. We will live in a liquid economy, faster, cheaper, and more efficient. But, the future – digital first – capitalism will have to be fully decentralized, with all transactions compensated fairly, across all players. Do we have the money to do that? There will be enough resources, and we have the tech to track and act against even the smallest transactions. The operative margin of Meta on every click is approximately 100%, according to the VC Fund a16z. Should we get our fair share of that pie?
Money needs to follow the work and go to the right worker or owner. We don’t need a new generational pact to protect our senior citizens, but we should rather strengthen the principles set forth in the latest round of copyright law reforms, that now allow creators to follow the money generated by the subsequent sales, and the use of their digital work beyond their first assignee. Again, tokenization can be the appropriate tool to implement this fundamental reward for digital work and make it a truly universal property right, stretching above the big four or five gate keepers dominating the digital marketplace of digital data (Alphabet, Meta, ByteDance, amazon, apple).
Digital workers have now the ability to trade their creations on distributed ledgers, track them, follow their circulation and collect payments for each subsequent ownership conveyance, instantly (thanks to smart contracts). This universal “droit de suite” may only be accomplished via blockchain, as any prior traditional collecting system failed to achieve a global reach.
Tech makes no sense
What’s the purpose of technology? Mainly generating efficiencies and enough productivity to stimulate growth. According to Gartner, a consultancy, a third of the US GDP is locked up in checks and balances, which are redundant in a world run by tech. We will be able to run the world, while consuming less of it, which is our number one priority for next ten years, according to the WEF’s Global Risk Report 2024.
Tech is as dull as its programming hand. We need a new bill of rights on who we are, what we own and how our work is recognized digitally, if we want to create a fair world. Tech will make the world faster, easier to navigate, with our personal and social capital becoming more liquid. Liquidity, without a solid bill of rights, will be a weapon in the hands of those who control this new ocean of value. The technological challenges are easy to solve. Blockchains will become the tech infrastructure of choice for all enterprises soon, without the need to use crypto and a fourteen-seed-phrase password for an account (today’s wallet). AI will progressively penetrate our enterprises, making them efficient and impactful. And then, what? Tech has no sense of what it does. Tech has no inherent logic as to what society must conform to. We should design technology to our goals. The EU is (over) regulating the digital realm and is at the forefront of AI laws. Rather than stockpiling tons of new rules, we might choose to rely on few, simple principles, captured in a new charter of fundamental digital rights (with corresponding duties and responsibilities). With a new Magna Charta of identity, property, and work, which includes and fairly compensates everyone playing in the digital arena, we will enjoy liquidity in full, without the aftertaste of the current oligopolistic digital system. Liquidity means that it will be easy to understand who we are, who we talk to, what we own and what we get. Good news is we have a choice. Liquid game is on.
