#145 Riley McComrack: Digimarc's CEO on Digital Watermarking in the Age of AI

31:16It's on our website too. Although we have a lot of lawyers in-house and we have some excellent legal scholars that we've consulted with. But for those really interested in understanding the ramifications of DMCA 1202B, we encourage people to go to our site because there's a lot of great information there. Yeah. Yeah. Okay. So can you give us some of the the big use cases that you guys have handled in the digital domain or digital across all of our business yeah so we launched yeah so we launched digimark validate uh a week ago we could go today um and again are the initial uh value profit that our customers are getting immediately is is copyright protection by availing themselves of the protection available under uh dmca 1202b and similar laws.

32:12There is some authenticity benefits. So we also offer a web crawler. So one can go out, a customer can go out, use our web crawler and find where their digital assets are. We have extensions, web extensions, browser extensions, so they can see whether it's theirs. But again, looking for that identifier. The authenticity, the widespread authenticity conveyance is going to come with a partnership. So I've mentioned C2PA. We're talking to other, we call them nodes, as we're thinking about where the detection sits out in the internet. Other big node providers, whether they're social media companies, whether they're e-com providers, whether they're device manufacturers.

32:59The way we look at this is there is a real crisis on this copyright. And it's not just the content creators themselves. I mean, taken to the extreme, and I'm going to say this, but I need to preface this. We are big believers in the power of Gen AI. We think this is going to be the most important productivity tool since the internet. So we are fans of Gen AI, but it's just important. Whenever there is a change in technology, you can't just look at the benefits. You got to look at the risks. And the risks of not respecting copyrights. It goes beyond just the copyright owners themselves. It impacts all of us.

33:39So we're seeing this with the strikes today and with some of these lawsuits where if I'm a content creator, and this could be musician, this could be a movie producer, this could be a podcast host, um you know it could be a company's creative um whatever if i'm creating content and that content is allowed to be used without my consent or without my compensation what is my motivation to continue to create content um and you know what is the single probably if you were to put a a thematic bar chart of all the sci-fi dystopian horror movies, it's machines taking over. And that's exactly the path we are on when it comes to content creation.

34:37If human content creators aren't incentivized to create content, but machines can do it untethered with any human contact just based on the exponentially increasing processing power and algorithmic power that's being thrown here, we're going to cede content creation to a handful of big tech companies and some state-sponsored bad actors. That's the path we're on. Now, again, I didn't mean to get dark there. I am a wildly optimistic human being. We believe in the power of Gen AI. We think this is going to be a wonderful productivity tool. We just got to address the risk. And so this this idea of, well, I'm not a, I'm not a artist.

35:18Why should I care about copyright law? Cause it's going to impact all of it. We are giving control to a handful of tech companies and state sponsored bad actors, unless we protect people's copyrights. That, that is the, that is a conclusion that it's hard to escape. Fortunately, there is a solution and, and, and, you know, going back to my natural sunny positive side, because it, you know, we, I get excited when I talk about this stuff. I get excited when I talk about tech. What's really cool about this is the reason we're having this conversation today is because of the internet. Why did the internet came around?

35:50How was it invented, right? The 1960s, during the Cold War, we needed a bomb-proof way to communicate. That was the crisis. How can we, with this specter of nuclear global war, how can we make sure we have communications up? the outcome of solving that crisis led to the 973 billion ways we use the internet today that we couldn't have fathomed back then. Same thing with Digimark Validate. The crisis of solving for copyright protection, and it is a crisis, is going to lead to something that the internet's needed for a while, and this is the catalyst, which is an ecosystem of trust, authenticity, and security.

36:30Because again, by solving for this copyright issue, now we can start to address the issues of authenticity that also need to be addressed. Yeah. Well, that was going to be my next question. But before that, if you have this watermarked asset and it's in a Gen AI training data set. Does any of the water markings survive the ingestion by the large model? And the reason I ask is, and I'm sure you're very familiar with this, but if you use a lot of the image generation models, mid-journey or stable diffusion or these, oftentimes uh the output has uh the artifact of an artist signature in the corner uh i mean it's no longer rendered in as a recognizable signature but it was in the training data so uh does any of the water markings survive uh in in uh in a large model Yeah.

37:49So the short answer is every engine is different. Every engine is constantly changing. It's impossible to give a universal truth to that, but I would go back to this, which is if they're altering, which I go back to digital watermark is a form of CMI, of copyright management information. If it's altered or removed, it's violation. So it's not the fact that a digitally watermarked asset is in the training data that's a breach of law. It's the generation. Alteration or removal. It's the alteration or removal of CMI. Copyright management information of which digital watermarking is a legally recognized case, you know, precedent example of CMI.

38:40Right. But I would guess then that deciding whether or not a generative AI image is altering or removing is a question for the courts, right? Altering or removing the CMI? Well, let's say I have a song that I've digitally watermarked or a painting that I've digitally watermarked. And to make it more direct, a piece of digital art that I created that I've digitally watermarked. It's included in the training data for a big generative AI image generator. And then that image generator generates an image that has been influenced or includes elements of my original asset. Does that constitute a removal or mutation of the CMI?

39:53Yeah. So, again, I think maybe you're – this is a new avenue, so I get the confusion. I think what you're thinking about is like, I'm forgetting, blanking on the term now, but transformative use of, does it change? It doesn't matter what the output is. Digital watermark is CMI. Digimark validate gives you CMI, copyright management information. If that copyright management information is altered or removed, then it's a violation of DMCA 1202B and similar law. So it doesn't matter what the output of the engine is. If that watermark, and again, without, it's impossible to give a universal answer because there are a ton of engines and the algorithms change almost every day.

40:42So, but, you know, it would be, I will give you a very high level. It is very hard to imagine an ingestion of a bunch of content with the purpose of creating other content where our digital watermarks would survive that whole process in totality. all they need to be is altered and they're definitely going to be altered right so um that doesn't mean they can't read i mean this is one of the wonderful things about our digital watermarks if you go back to the benefits right because of both the ubiquity meaning that they cover the totality of a of a digital asset uh but also the redundancy brought by that ubiquity as well as the code itself it can survive a lot of damage and still read but if that that damage if it's done um uh by a machine is an alteration of the watermark it's still damaged so it's it's um it it almost doesn't matter if it comes out at the end and reads or not it's the alteration or removal of it okay uh then on authentication uh which as you said is becoming a huge issue.

41:48First of all, does this apply to video as well? Can you digitally watermark video? We can. We haven't commercialized it yet to the point where we can have our customers do it. So stay tuned on that. So again, what we have today is image protection, audio protection, coming soon, video protection, and document protection. Right. So in an ideal world from your point of view, certainly every piece of digital content produced would be processed with a digital watermark. So if I, you know, gave an interview, or let's say that President Biden gave an interview and that audio was digitally watermarked, then you could say that every place you find that audio, that it's authentic.

42:46And if that audio is altered, you'd be able to see that it's been altered. Is that right? Yeah. Yeah. You know, we talked about the, again, the two risks we see from Gen AI. And I really want to stress this because we are big fans of it. So there's a lot of benefits. You know, that's actually our journey. Quick, humor me with 30 second journey of how we got here. Sure. Which was about a year ago, like most companies, I hope. If not, I hope they're doing it now. Most companies, our R &D team had been aware of Gen AI and looking at it and doing some stuff with it. But as a business, we sat down about a year ago when it really became clear it was a technology that could transform businesses.

43:31And so we took a look, what benefits could we get as a company from adoption? And what were the risks that would come from our adopting? And it's interesting, right? We found numerous and various ways we would benefit, but the risks really boil down to two. And we've touched on this, but I think it's important to go back to it to get to where to answer your question. The two risks all boil down to is how do we protect our brand equity, our IP, our copyright in a world where our digital assets are being consumed without our consent to create new content without our knowledge? So that was one bucket of risk.

44:11And the other one is how do we prove our authenticity? How do we let people know this is a Digimark asset as opposed to somebody pretending to be Digimark, right? We immediately realized the next step, which was, oh my gosh, this wasn't a risk of adoption. This was a risk of existence. Even people who weren't going to be aware of Gen AI, as quaint as that sounds now, we were actually having this conversation. what if people aren't aware of Gen.ai? What is their risk? I think now everybody is aware of Gen.ai. But it was going to affect all content creators, whether or not they opted in for the Gen.ai revolution.

44:49And because it was going to impact all content creators, whether or not they opted in for the Gen.ai revolution, it was going to impact all of us. And that's when we got to work because we knew that based on our history of being the pioneer and widely recognized leader in digital watermarking, our technology had a role to play. What's been wonderful since then is to see that become a universal acknowledgement. Case law, governments, big tech all realized that digital watermarking has a role to play. So that has been great. The second realization, the reason we got to work with urgency, as I was talking about earlier, was there isn't a moment to waste.

45:29Every time a new digital asset is released, you know, distributed or published without protection, that digital asset's gone forever. So we really wanted, I said, we raced to get it done, A, because we wanted to build this for ourselves, for our own digital assets. And we are a happy Digimark Validate customer ourselves. But also because we wanted to offer this to other people because of the risks. we've talked about the risk of copyright and how it doesn't just impact content producers it's going to impact all of us in this potentially dystopian computers take over the creation of content uh defined history uh way um but the other one was authenticity which i think is equally as scary we are spending more and more time in a digital world i mean i don't think um you probably don't need to tell a podcaster this that uh how much time people are spending in the digital world listening, consuming digital media.

46:25If there isn't a way to convey authenticity in this world, we're going to head down to one or two paths. Either people are going to believe everything they see, which is going to cause companies, news organizations, governments, individuals, societies, meaningful and irreparable harm because content creation is now fast, cheap, and easy. And anybody can do it and people will do it and they'll continue to do it for nefarious reasons. So that's one path. We're all going to believe everything we see and it's going to be really divisive. The other one, I think just as scary, people are just going to stop believing anything they see.

47:02People aren't going to tune into your podcast or be like, I don't know if this was Craig and Riley or it could have just been two machines talking. I don't care. And the Internet and all digital media, it's not just entertainment. It's being used to convey really important and legitimate information. Now, I think, I don't know which one of those is worse. Those are the two paths we're going down. To be clear, Jen and I didn't create this problem. Three years ago, we would have been talking about deep fakes. Right. So so this is a problem. This is a path we're going down anyway. What's really cool about this is that, again, for solving for the copyright protection issue, we can create we can solve for the authenticity.

47:41The solving of that crisis is going to be one step back with the crisis, one step forward solving the crisis, 500 steps forward by delivering on the promise of the internet, which is a safe, authentic, and trusted place. Digimark Validate is going to make it as difficult to counterfeit people, companies, and news as we've made it to counterfeit the world's currency. That's exciting. Yeah, absolutely. Another question. And so you watermark your assets, your digital assets, and then you were saying that there are ways to scan the Internet for instances of that asset. And if you find an unapproved use of that asset, then you get your lawyers involved, right?

48:34and that there's an infringement case or something like that. Is there a way or is there technology or are you considering this that nobody can copy a digitally watermarked asset or create a new instance of it without some permission on the owner's part. And if they try to, it won't work. It's a little bit like those PDFs that you get that are set so you can't block and copy the text. Yeah, so that would involve more than just a change of Internet protocol to fully containerize it. However, we can provide a lot of protection along the way. You know, Digimark Validate is multi-layer. What we mean by that is it's not just about digital watermarks.

49:35That is what people are most aware of. That is the conversation people are having because, again, governments and big tech realize digital watermarks have a role to play. One of the advantages we have of having done this for 30 years, we can see the next step a little bit. You know, we knew digital watermarks were going to have a role to play. the world is caught up to that truism. We understand the urgency to get this done now, because once a digital asset is released out into the wild for the first time unprotected, it's gone forever. We're starting to see that realization dawn on people. Maybe they're a little bit still behind on that.

50:12But the other one is that this has to be done through a multi-layer system. And that's what we have because digital watermarks are an important component of it, But it's the same reason, you know, you don't have one lock on your door. You probably have floodlights in front of the door. You got multiple locks on the door. And maybe you have a dog who barks if the door is open and you're in bed. Right. So it's the same thing here. It's going to be a multi-layer solve. Digimark Validate is multi-layer. If you go to our website, I don't want to sound too promotional, but because it's not a net, because it's Digimark with a C, I feel like I need to, if people are interested didn't go into the website, I got to spell it out, which is D-I-G-I-M-A-R-C.com.

50:54You'll see that we're launching early 2024 registry and they can click on there to be updated that registry launch. And that's going to be a big part of what you're talking about, Craig. Yeah. That's a distributed ledger registry? Doesn't have to be distributed ledger. We are interfaced with distributed ledgers. It doesn't have to be there's other ways to get security and um comfort besides the lt yeah uh and and so this idea of a mechanism that would prevent uh the reproduction of a digitally watermarked asset without some key or some permission well yeah so you would see without getting too far into the future and stuff we're not quite ready to talk about yet because we don't want to tip our hand too much.

51:45But there's a couple of layers, not to use layer in a different way. But for example, if there is CMI in an image and you alter it or remove it, it's illegal. It's not just for the Gen AI engines, that's for anybody. So that was not a law that was written in 1997, hey, Gen AI engines that won't be invented for 20 years that don't do this, right? Secondly, it will be very clear with Digimark Validate that an image has been altered or changed. Even, you know, let's say there's a picture of you and I, and I put a, I don't know, a knife in your hand. That would be, that would show up as an alteration.

52:31So one is there is protection under DMCA from people changing it. Two, we can make, we can show that that image has been altered, that it has been changed in multiple different ways. And so going back to the point of, you know, whether we, whether Digimark by itself can make an, any digital asset on multiple, that's a internet foundational technology change that we can do. What we can do is make it so that people know it's changed. They can see that this image is not what was intended by when Craig put this out, there was not a knife in his hand. It has been changed. And then it becomes, this is inauthentic.

53:14And so we can provide a layer for consumers to decide for themselves what's authentic. Well, here's a picture of Craig with a knife in his hand. And it's not from Craig. I can see that it's been changed from what Craig originally posted. It's probably not authentic. Right. But in order to, other than having seen the original image and seeing that it's been altered, you need this detection system, Digimart's detection system. Is that right? To see whether or not something's been altered? Yeah, and we're working with C2PA to get, there needs to be standards. This is exactly what C2PA, this is a wonderful organization.

53:58They came together for this reason. We're not, you know, we're having conversations with other, like I mentioned, important nodes. You are absolutely right in that there needs to be, going back to the definition of digital watermarking, it's hiding information and detecting it, discovering it. So there has to be that detection event. So this is where we started with the copyright management with Digimarkality. That's available immediate. There isn't a required network effect. It's going to be a journey of interested parties. And what's wonderful is the reception, the urgency that people are getting to have this.

54:31So that, yes, I'm not entirely sure if your question meant I would need to have seen that photo the first time. No, what it should be is you go on, pick your social media site or web browsers, right? W3C has a big role to play in this too, which is, I know this image has been altered. I know this wasn't what's intended. This is not an authentic image. Yeah. And that detection software would presumably eventually be embedded if it becomes the standard, if Digimark were the standard, would become embedded in search engines and maybe your operating system or I don't know. but so that you would immediately see when, as you scan digital assets.

55:18Yeah. I think, I think C2PA is going to set the standard, right? We're not, we're not going to set the standard. It's just not realistic, nor is it what we want. We want an ecosystem, an open, safe, authentic ecosystem. And we're, there's a real urgency to get there. We really, these risks are real. And so we're not, we just want to get there as a society because we're benefits you know my i have two kids they're on the digital world all the time i have to remind them that the www does not employ a fact checker um and and and uh they get sick of me saying that um but anyway the uh um so we're racing to get there with the group of with the uh you know we have multiple conversations going on with governments to provide uh our input to the uh regulation that's coming um in multiple geographies um we're working with c2pa um but yes there does need to be detection ubiquity um in order to get broad authenticity conveyance yeah and uh can you give me uh we're coming up to an hour uh a few of the big use cases that that you've worked on uh specifically with digital watermarking?

56:33Sure. So, you know, our work with the World Central Banks, unfortunately, I can't say that much about it because we're at Secret Service. We probably joined this call before it were over if I tried. But we work with the World Central Banks to protect the authenticity. This is a 24-year relationship. We just actually signed an extension of that through the end of this decade. We're extremely proud of this work. You know, we talk about our mission as a company is to promote a prosperous, safer, and more sustainable planet. When you talk about safe, trust in global currencies is right up there, right?

57:11I mean, we're talking about spending a lot of time living in a digital world. That is a massive area that we need to help add authenticity. But currency is foundational. If we lost faith in our currency as a society, all bets are off, right? So we're really, really proud of that work. We have another product, Digimark Recycle, where we can transform the sortation of plastics. And really excited to make great progress there in multiple geographies as well. Fulfilling our more sustainable part of our mission. So this is, as I mentioned, you know, there was a business. We've since sold this business.

57:51But Digimark at one point secured more than half of the driver's licenses in the U.S. and multiple secure credentials overseas. So this is what we've done. For almost 30 years, we have built massive, multi-stakeholder, multinational, mission-critical systems of trust and authenticity. So this is just applying it in the digital domain, and we're really excited to be on this journey. Yeah, but in the digital domain, is there a big use case that you can point to? I mean, currency, presumably you're looking at watermarking physical currency. And yeah, are there some use cases in the digital domain?

58:32Yeah, so we've been part, our innovations and inventions have been part of the, as I mentioned earlier, the Blu-ray anti-piracy and the digital cinema initiative by Arbitron and Nielsen for their people measurement systems. And we do have customers that are using our technology in the image space today to track some of their assets. And as I mentioned, this is all things old or new again. This is how the company was started. A brilliant and wonderful human being named Jeff Rhodes started Digimark almost 30 years ago to protect his images. because he was a photographer as well as an astrophysicist and looking out and saying, I really want to share my images on this brand new thing called the WWW and how do I do it and keep attribution, right?

59:28So this is back to our roots. This is back to our origin story. Yeah. Pretty cool. Yeah, well, that's fascinating. And just going back on the standard, The standard, you're sort of standard agnostic. Is that right? I mean, you have the process, and I don't know what the standard would be, but if there was a certain standard for watermarking and reading or detection of watermark, your tech would adapt to that? or are you a proprietary standard that the world has to adopt to in order for your products to be useful? We're not going to change the world by ourselves. We're not intending to change the world by ourselves, even if we wanted to.

1:00:19We don't think the world has enough time. I don't know if... It's funny. I was thinking about the DMCA and some of the regulation outside of DMCA. DMCA is great, but if you think about when DMCA was written, And I don't know this to be true, and I should probably look into it before I say it publicly on a podcast. But there is an argument to be made that some of these Gen AI engines have as much processing power as the whole Internet did back then, right? I mean, it's possible. It's at least an order of magnitude probably right, right? And so I don't think people understand how quickly this is changing.

1:00:52I think this is your tagline, right? Your world's changing. AI's going to change the world. So you get it. So you get it. But so we don't want to do this alone. And we don't think the world has time to wait because it's unfathomably large how quickly things are changing and how permanently things are changing every day. So, like I said, we're in discussions with government officials. We are proud partners of standard-setting organizations such as C2PA because this is going to be an ecosystem. And what we want to be is we want to be a tool provider in that. We want to educate people on the power of digital watermarks because, again, what's been wonderful is seeing people really coalesce around the view that, yeah, digital watermarks have a real fundamental foundational role to play in addressing the risks of Gen AI.

1:01:36That part of the debate's over, which sometimes takes a long time in these ecosystem and these standard setting things. People get it, so we're past that. Now let's figure out how we can all work together. And again, we're a mission-driven company, and our mission is to make the world a prosperous, safer, and more sustainable planet. And this is a wonderful way to help. Yeah. Okay. I keep on thinking of new questions. So, so I'll try and make this the last one, but this applies to PDF documents as well. Yeah. Yes. So we will, again, not, not yet the technology there, we haven't commercialized it yet.

1:02:11And we know, but yes, it'll be documents, PDF documents as well. That's one of the subset of, of areas of, I don't want to get too far into that because we haven't released it yet, but that will be part of it. Yeah. Okay, Riley. Well, that's all fascinating. And just finally, how do you price this and is it affordable? Yeah, well, I love that question because it lets me end with what I wanted to end with, visit us at digimark.com, www.digimark.com, and you can see our pricing on our website. There's many packages available just for web sales to get going. And then we do have enterprise offerings that are beyond that.

1:02:54But there's great starter packs for any of your listeners who are interested in protecting their digital assets today. And before you go, give Shopify a try. It's only a dollar a month for their trial period. And you can sign up at shopify.com slash I on AI, E-Y-E-O-N-A-I, all run together. all lowercase. Go to shopify.com slash IonAI to take your business to the next level today. That's it for this episode. I want to thank Riley for his time. If you want to read a transcript of the conversation today, you can find one as always on our website, IonAI, that's E-Y-E hyphen on.ai. And remember, the singularity may not be near, but AI is already changing your world.

1:03:49So pay attention.