WO2005065026A2

WO2005065026A2 - Digital content distribution and trading system

Info

Publication number: WO2005065026A2
Application number: PCT/IL2004/000931
Authority: WO
Inventors: Ronen Leipziger; Billie Leipziger; Elon Kaplan
Original assignee: Ronen Leipziger; Billie Leipziger; Elon Kaplan
Priority date: 2003-10-02
Filing date: 2004-10-10
Publication date: 2005-07-21
Also published as: WO2005065026A3

Abstract

A method and apparatus for facilitating distribution of digital content over a network, comprises: providing a distribution infrastructure and within said infrastructure: a) marking or tracing digital content distribution via peer to peer connections over said network, b) charging receiving parties for receipt of respective digital content, and c) enabling said receiving parties to become secondary distributors of respective digital content using said marking in the sense of enabling charging of further receiving parties of said digital content. By encouraging regular users to benefit from the distribution of digital content the users are discouraged from using the illegitimate peer-to-peer content distribution systems.

Description

Digital Content Distribution and Trading System

FIELD AND BACKGROUND OF THE INVENTION The present invention relates to a digital conte'nt distribution and trading system or method, and, more particularly, but not exclusively to such a system or method that involves multiple users around a network such as the Internet in the distribution process. Technological development has led to change of the medium used to preserve or distribute works of art, from analog media (vinyl records, magnetic tapes or photographic films) to digital media (CD and DND records). The same developments have involved the development of the computer from a business calculator to a multimedia machine, capable of running audio and video applications, and have led many software houses to develop dedicated applications for this burgeoning market, including applications for copying and editing digital content. These developments and the far-ranging improvement in the accessibility and in the connectivity capabilities among computers over the world-wide web, among other benefits, have led to changes in the consumer approach to copyright-protected works and works of content in general. In the past, consumers acquired such works at stores having well-defined physical locations, whereas today many of these works may be acquired on-line from a limited number of commercial bodies, by downloading them from distant servers to the consumer's personal computer. The fee required is also paid on-line using a variety of means of payment, so that the acquisition process has now become simple and fast - it is just several mouse-clicks away. The market derived from that distribution method is "a sellers' market" allowing but limited competition, in which there is hardly any "price flexibility" nor "product flexibility", i.e., each distributor determines a uniform price for a work of art offered to consumers at large, and the work of art itself is offered carrying one single quality attribute, which precludes offering it at different prices under various quality attributes. The variation in prices fixed by the various distributors of works of art offered for sale is limited and adjusted by agreements between them and the copyright owners and also depends on the latter' s business model. Furthermore, each distributor has a limited number of works of art which he offers for sale, which limits the market volume at bis disposal. All this leads to lack of real competition among the various distributors so that there is little to favor any of them over another. Other commercial enterprises use a different method for extracting profits from digital contents, by means of enabling users to listen to and/or view such contents on-line, without enabling them to be downloaded. The user is then required to pay a set price for this use of the work which is deteπnined in accordance with the kind of use, i.e., we have here a kind of "usage flexibility". The allowed possibilities of use of the work amount mostly to restricted operation in terms of quantity, time or place. The fee may be fixed independent of the particular work, but may be associated with the nature of use of all works offered, under restriction of quantity, time or place. In that case also we have a "sellers' market" with limited competition, in which there is hardly any "price flexibility" nor "product flexibility". Side-by-side with the technological development and on-line trading in works of art, the new technology has been also put to use in acts of piracy whereby Internet users can down-load works of art from servers at distant sites, or transfer them among themselves by means of file-sharing software, without paving anything to the copyright owners. This use is not considered legal in most countries, where there are laws regulating the rights of authors (or copyright owners). The many studies which have been carried out are divided in their conclusions concerning the effect of such piracy on the incomes of copyright owners, but it is clear that the rights of copyright owners are being hurt in that they are deprived of their right to decide on the manner and timing in which their works are to be released to the public at large. At present, various organizations such as the RIAA, representing copyright owners, are trying to apply three basically different approaches in order to put an end to the phenomenon of pirated file-sharing on the Internet. These approaches are the following: • Demanding the originators of file-sharing software or of the providers of access service to the Internet, to stop sharing works of art protected by copyright, or alternatively demanding payment in consideration of such activity. These claims usually reach the courts, but the verdicts sometimes favor one side and sometimes the other for various reasons. • Attempts to trace users of file-sharing software and bring them to court. At the time of writing, these attempts have been realized and a small number of users have been arraigned. New programs are being developed in order to hide the identity of the user and make it difficult to track him down. • Development of means which will not allow conversion of protected works of art recorded on compact disks to computer files, and thus prevent their unauthorized distribution over the web. The various means which have been developed to date have been cracked or circumvented, and today there is no means capable of absolutely protecting works of art. • It is noted that overall worldwide P2P usage remains steady at approximately 9.5 million active file-traders. That represents an increase of over 30% from August 2003. • It is additionally noted that music still represents the lion share of files traded, being around 57.4% of total files swapped. Movies continuously edge closer to that mark with 31.9% of the pie. (Most recent data recorded March, 2004). The demand for music is strong, and the Internet is proving to be a popular medium to access it - especially for younger consumers. The prospect of converting unauthorized online music distribution into legal music downloads represents an important commercial opportunity. An IFPI survey conducted in Australia, Germany,

UK, USA and Canada showed that total music consumption (legitimate physical formats plus all digital downloads) actually increased by 30% between 1997 and 2002. Total online consumption of music - the vast bulk of it unlicensed - amounted to approximately eight billion tracks in those countries alone - one third of all songs consumed. Surveys nevertheless show that an increasing number of people are using or willing to use pay-for music services. In September 2002, a study (Jupiter Research - Online Music in Europe, 2002.) of online music fans concluded that 36% of peer-to- peer users across Germany, France, Sweden, Spain and Italy, were willing to pay for music. In a study of visitors to its online sites in Europe about downloading, MTV discovered in summer 2003 that a third of online music fans - mostly under 25' s - were willing to purchase downloads. The uptake of broadband services has demonstrated that consumers are willing to pay a premium to improve their access to the internet. As broadband penetration expands, ISPs are increasingly looking to content such as music to attract and retain customers. In Europe, Tiscali, MSN, TDC and BT- Yahoo have all pursued this strategy.

In the US, AOL (through MusicNet on AOL, Sessions@AOL and First Listen) has done the same - with considerable success. As of today, there are wide gaps in the expectations of interested parties in works of art protected by copyright. On the one hand, the authors, producers and organizations representing them are interested in preserving the existing structure of artwork, production, trading, revenue model and division of revenues. On the other hand, the consumer public is interested in changing the existing structure, adducing reasons and various claims of which the most outstanding are the following: • The price of works of art contents is too high - a business model must be found to reduce their cost. • Anti-establishment activity - the records/movies firms are rich, spendthrift and squeeze out money from the public. • The Internet belongs to the public - information must be free, including digital content. Another party which has no direct interest in works of art is the government, supposed to safeguard law and justice. Laws enacted in this matter in order to protect copyright owners are not enforced in sufficient measure to break down the phenomenon of their disregard, on account of the difficulty of identifying transgressors, the vast number of such transgressors and also because they are citizens of many different countries. Other reasons for that difficulty are the fact that copyright laws are not adapted to the new situation and the fact that the law must be tailored to the needs of government in various countries. Today, in view of the new situation formed in the wake of technological advances in personal computers and connectivity among computer users, the parties continue to struggle for the right to use works of art, whereby each party claims "it is mine". In this conflict all three sides come out damaged: • The owners of lawful copyrights lose income and invest efforts in order to minimize the damages of this phenomenon; • The public is threatened with legal proceedings intended to prevent it from making unlawful use of works of art; • The authorities do not succeed in enforcing the law and lose tax income. It is also important to understand that a very real threat hovers over the entire entertainment industry. A person who does not receive any remuneration for the fruit of his labors, loses the incentive to keep on working. The struggle between the sides scorches the very earth on which they stand. The presently offered solution enters into the gap formed between the sides and attempts to bridge over the misunderstandings between them. The truth behind the solution is collaboration between the sides, in which each side fairly accepts a slice of the total revenue pie of the entertainment industry. The sides in the controversy profit as a result of the realization such co- operation when: • The owners of legal copyrights receive part of the income at present considered as lost, (through file-sharing); • Part of the public receives income to which it has not been entitled until now (in addition to keeping works of art); • The authorities find it easier to enforce the law and receive an opening for taxation income. The solution here proposed is not intended to change the structure of companies producing content, their relations with authors, the existing distribution systems or the traditional trading methods (retail sales), but only to form a parallel/complementary system and add upon these another commercial tier which would actually increase their market slice and thus support them. The production companies are not required to do anything, apart from showing in an agreement with the system operator that they permit works of art to be used as described in this invention. It is desirable to use an original and legitimate compact disc for entering digital content into the system serves all sides, seeing that: • Copyright owners may receive additional income from sale of compact discs as a result of the increase in market volume; whereas the public would have an increased incentive to buy compact discs using the trading system (retail) hereinafter described in order to trade them further by means of the system. • The public holding original compact discs acquired in the past, could upon realization of the system make profit for themselves by entering of them for trading in the system and offering them for sale, something which cannot be done today. • The authorities would increase their income from taxes as a result of the increase of the quantity of compact discs purchased using the present embodiments. There is thus a widely recognized need for, and it would be highly advantageous to have, a distribution system devoid of the above limitations and able to realize the above-mentioned advantages.

SUMMARY OF THE INVENTION According to one aspect of the present invention there is provided apparatus for distribution of digital content over peer-to-peer connections between network users, comprising: a registration unit for registering network users located in association with a plurality of network nodes, said users able to connect using peer to peer connections, at least one of said network nodes being a source for digital content, and said peer to peer connections being able to transfer said digital content between respective nodes; and a transaction unit comprising: a) a digital content exchange detector for detecting instances of transfer of digital content between nodes in said system and b) a remuneration apportioning unit to apportion remuneration from a receiver of said digital content to at least one other party associated with ownership of said digital content. The apparatus preferably comprises a transaction control mechanism for setting a minimum transaction level for said remuneration according to conditions associated with an instance of said distribution. The apparatus preferably comprises a transaction layering mechanism for marking distribution of respective digital content, which: c) according to said marking, categorizing users as being primary sources or subsequent digital content sources, d) according to said categorizing, assigning digital content offered for distribution on said system to a transaction layer having a predetermined minimum price, wherein respective minimum prices for transaction layers fall as the layer becomes more distant from said primary content sources. The apparatus preferably comprises a condition unit for applying conditions to respective instances of digital content distribution. Preferably, said condition unit is configured to apply said condition by applying settings to a digital rights management mechanism associated with respective digital content. Preferably, said conditions comprise at least one of usage conditions and further distribution conditions. The apparatus is preferably configured to prevent distribution of digital content that is not in accordance with said further distribution conditions. The apparatus is preferably configured to disable digital content at an instance of distribution that is not in accordance with said further distribution conditions. Preferably, said digital content is located at a respective source node. The apparatus preferably comprises a sellers' noticeboard, available through said network, for indicating offering parties of respective digital content. The apparatus preferably comprises an indicator for providing a relative reliability indicator for a respective one of said offering parties. The apparatus preferably comprises a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content. The apparatus preferably comprises a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content, and a matching unit for matching between compatible parties on said sellers' and buyer's noticeboard. Preferably, said transaction unit is configured to allow a transaction to involve a user who has a right to a respective item of digital content from a given source wherein distribution is from said source. Preferably, the mechanism is operable to ensure that a respective digital content item is constrained to be distributed once from a primary source but multiple times from said subsequent sources. Preferably, said condition unit is operable to constrain distribution attributes to be reduced with increase of distance from a respective primary source. The apparatus preferably comprises a user client for downloading to users via respective nodes of said network, said user client providing an interface for a respective user to offer content over said network, to receive content over said network and to browse content available over said network. Preferably, said digital content is any one of a group comprising a digital music track, a plurality of digital music tracks in an album, digital audio, digital video, an electronic book, an electronic magazine, an electronic newspaper, a computer program, a computer game, and a data file. According to a second aspect of the present invention there is provided a method of facilitating distribution of digital content over a network, comprising: providing a distribution infrastructure and within said infrastructure: a) marking digital content distribution via peer to peer connections over said network, b) charging receiving parties for receipt of respective digital content, c) enabling said receiving parties to become secondary distributors of respective digital content using said marking to enable charging of further receiving parties of said digital content. The method within said infrastructure preferably comprises layering said distribution by setting a minimum distribution price, which minimum distribution price falls with distance from an original source of said content. The method within said infrastructure preferably comprises setting distribution conditions along with distribution of said digital content. Preferably, said distribution conditions comprise at least one of usage conditions and subsequent distribution conditions. The method within said infrastructure preferably comprises defining a maximum number of times a receiving party is permitted to use said digital content. Preferably, said distribution conditions comprise a limitation on the number of subsequent distributions of said content from said receiving party further through said network. The method within said infrastructure preferably comprises setting a transaction price for a respective distribution instance according to required distribution conditions. The method within said infrastructure preferably comprises setting a minimum transaction price for a respective distribution instance according to required distribution conditions. The method within said infrastructure preferably comprises setting a transaction price range for a respective distribution instance according to required distribution conditions. The method within said infrastructure preferably comprises setting a transaction price for a respective distribution instance according to said distance. The method within said infrastructure preferably comprises setting a maximum transaction price for a respective distribution instance according to said distance. The method within said infrastructure preferably comprises setting a transaction price range for a respective distribution instance according to said distance. The method within said infrastructure preferably comprises: registering network users for said distribution, and apportioning remuneration from a receiver of said digital content to at least one other party associated with ownership of said digital content. The method within said infrastructure preferably comprises applying said distribution conditions by applying settings to a digital rights management mechanism associated with respective digital content. The method within said infrastructure preferably comprises preventing distribution of digital content that is not in accordance with said further distribution conditions. The method within said infrastructure preferably comprises disabling respective digital content upon an instance of distribution that is not in accordance with said further distribution conditions. Preferably, said digital content is located at a respective source node. The method within said infrastructure preferably comprises providing a sellers' noticeboard, available through said network, for indicating offering parties of respective digital content. The method within said infrastructure preferably comprises within said sellers' noticeboard providing a relative reliability indication for said respective offering parties. The method within said infrastructure preferably comprises providing a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content. The method within said infrastructure preferably comprises providing a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content, and matching between compatible parties on said sellers' and buyer's noticeboard. The method within said infrastructure preferably comprises providing a user client for downloading to users via respective nodes of said network, said user client providing an interface for a respective user to offer content over said network, to receive content over said network and to browse content available over said network. Preferably, said digital content is any one of a group comprising a digital music track, a plurality of digital music tracks in an album, digital audio, digital video, an electronic book, an electronic magazine, an electronic newspaper, a computer program, a computer game, and a data file. The method within said infrastructure preferably comprises setting a new larger trading distance for distribution of a respective item of digital content within said infrastructure whenever there is demand for said item at a preceding smaller trading distance. According to a third aspect of the present invention there is provided a system for content distribution over a network comprising: a primary source of a given content item, subsequent sources of said given content item, each subsequent source having a degree of distance from said primary source in accordance with a number of intervening sources; a distribution management system for controlling distribution of said content such that a minimum distribution cost is set to fall as said degree of distance becomes greater, and as redistribution conditions set upon a recipient of said content at each of a plurality of distribution stages become more onerous. The system preferably comprises a sellers' distribution board for providing potential buyers of said given content item with an indication of where it is on sale under what conditions and at what price. The system preferably further provides an indicator for indicating relative reliability levels of different sources. The system preferably comprises a buyers' distribution board allowing potential buyers to indicate their interest in a given content item. Unless otherwise defined, all technical and scientific terms used herein have the same meaning as commonly understood by one of ordinary skill in the art to which this invention belongs. The materials, methods, and examples provided herein are illustrative only and not intended to be limiting. Implementation of the method and system of the present invention involves performing or completing certain selected tasks or steps manually, automatically, or a combination thereof. Moreover, according to actual instrumentation and equipment of preferred embodiments of the method and system of the present invention, several selected steps could be implemented by hardware or by software on any operating system of any firmware or a combination thereof. For example, as hardware, selected steps of the invention could be implemented as a chip or a circuit. As software, selected steps of the invention could be implemented as at* plurality of software instructions being executed by a computer using any suitable operating system. In any case, selected steps of the method and system of the invention could be described as being performed by a data processor, such as a computing platform for executing a plurality of instructions. BRIEF DESCRIPTION OF THE DRAWINGS The invention is herein described, by way of example only, with reference to the accompanying drawings. With specific reference now to the drawings in detail, it is stressed that the particulars shown are by way of example and for purposes of illustrative discussion of the preferred embodiments of the present invention only, and are presented in order to provide what is believed to be the most useful and readily understood description of the principles and conceptual aspects of the invention. In this regard, no attempt is made to show structural details of the invention in more detail than is necessary for a fundamental understanding of the invention, the description taken with the drawings making apparent to those skilled in the art how the several forms of the invention may be embodied in practice. In the drawings: FIG. 1 is a simplified diagram illustrating a generalized embodiment of the present invention. FIG. 2 A is a simplified conceptual schematic diagram of the exchange of digital content, payments and receipts among users during the various trading cycles. The figure shows trading moves and summarizes system operation. Fig. 2B is a simplified diagram showing price ranges and their dependence on trading cycles, maximum and minimum prices and their variation as trading cycles develop. Fig. 3 is a simplified diagram showing a procedure for income division between system users, digital content copyright owners and a marketplace service provider and their dependence on trading cycle. Fig. 4 is a simplified diagram showing an initial registration process of a user received into the system and data verification upon his reconnection with the system. Fig. 5 is a simplified diagram showing a process for entering original digital content into the system, its identification, determination of its attributes and its packaging and deposition in the user's computer in preparation for trading in it. Fig. 6 is a simplified diagram showing an analysis of the demand, supply and transaction marketplace shown in cross-sections of digital content, quality attributes, usage attributes, commerce attributes, trading cycles and price. Fig. 7 is a simplified diagram showing an analysis of system users in a cross- section of quality attributes, usage attributes and commerce attributes. Fig. 8 is a simplified diagram showing a process of offering original/copied digital content (sellers bulletin boards) by system users interested in selling such digital content. Fig. 9 is a simplified diagram showing a process of solicitation for original/copied digital content (buyers bulletin boards) by system users interested in buying such digital content. Fig. 10 is a simplified diagram showing a process of selling/buying original/copied digital content by system users. Fig. 11 is a simplified diagram showing a business rules engine in the system - analytical use of market analysis module and of user's analysis module by the system. Fig. 12 is a simplified diagram showing a conceptual schematic of network components in the system, including servers and users computers. Fig. 13 is a simplified diagram illustrating six stages in the use of a system according to the present embodiments starting with user registration and ending with distribution of the money generated by an ensuing transaction; Figs. 14 and 15 are simplified diagrams illustrating prototype screen shots of stage la and lb of the system of Fig. 13; Figs 16-20 are simplified prototype screen shots of stage 2 of the system of Fig. 13; Figs 21 and 22 are simplified prototype screen shots of stage 3 of the system of Fig. 13; Fig. 23 is a simplified prototype screen shot of stage 4 of the system of Fig. 13; Fig. 24 is a simplified prototype screen shot of stage 5 of the system of Fig.

13; and Fig. 25 is a simplified prototype screen shots of stage 6 of the system of Fig. 13.

DESCRIPTION OF THE PREFERRED EMBODIMENTS The present embodiments comprise a digital content multi-cycle trading system, in which there is the potential for an unlimited number of distributors, who can all represent the copyright owners, enabling the owners to offer their works to the consumer public directly, without directly facing the users. Since the system does not require super-distributors, the system users can offer a wider variety of works (out of the total number of works at any time recorded and marketed on compact disks) in multiple trading cycles, to fix the price to be paid for them (subject to the business rules of the system), to decide the quality levels of the works (under the technical limitations of the system) and to determine the nature of use and further trading of the work (subject to the business rules of the system). The market derived from this trading method is a competitive "buyer's market", in which "price flexibility", "product flexibility", "usage flexibility" as well as "commerce flexibility" are all realized. In addition, the system supports indices which assist in user assessment (such as availability, bandwidth, reliability, etc.) which can add to competitiveness between users, and encourage users to upgrade their connections and equipment, thus benefiting the Internet infrastructure and the computer hardware industry. The present embodiments thus create a situation whereby on the one hand it provides income to the copyright owners, and on the other hand provides an incentive to its users to avoid illegitimate distribution means, the incentive being the opportunity of creating income for themselves by becoming part of the distribution process. Thus in fact the system bridges over between the two opposite camps existing today: copyright owners on the one hand and users on the other hand. It should be noted at this juncture that whereas in the present situation the computer revolution and the web are utilized by copyright owners (or distributors on their behalf) to develop the consumer market of the works concerned, no essential change in the products nor in their manner of distribution are proposed here, but only in the means of distribution and payment. The traditional business model of business- to-customer (B2C) is here preserved, i.e.: the supplier-distributor is the system operator through which he offers his products for sale, and the customer is the system user, who uses it in order to acquire the product. The flow of money is unilateral: from customer to the supplier/distributor. In the trading system of the present embodiments there is a change in the manner of product distribution and in the product itself in terms of the usage and further distribution rights that are transferred without changing any of the existing distribution systems or traditional trading methods of retail sales, so that in the business model considered in the present system, differences between supplier and customer become indistinct. The system user can be any person holding original digital content (or copied digital content acquired through the system), he can offer it for sale or acquire other content from another user. This business model is called customer-to-customer (C2C), i.e., the user may sell or buy digital contents as he sees fit, according to the money and the works at his disposal. The money flow is bidirectional, from one customer to another. The present embodiments are based on a system embodying a method for digital content multi-cycle trading among Internet users. The system creates a market in which digital contents can be traded. The trading method involves a multipUcity of concatenated markets. System operation is defined by business rules which determine the various trading moves. The digital content multi-cycle trading starts in a primary market by a user who offers for sale original digital content at a certain price, within the price ranges laid down for the primary market. Other users can buy this digital content for the price quoted. The transaction includes transfer of the digital content to the buying user against payment to the selling user. In the next stage the users who have bought the digital content may go on to sell it in the secondary markets. The price at which the system user may offer the digital content for sale depends on the trading cycle in which this content is offered. Each trading cycle has a price range defined in the system, whereby the quoted price may not exceed the upper limit nor fall below the lower limit. The general rule is that the lower limit of the price range keeps decreasing as new trading cycles are created. Other factors affecting the price at which the digital content is offered are the attributes of that content, the quoting user's attributes and the market forces (supply and demand). The price at which the digital content is offered for sale equals the sum of money collected from the buying user, from which charges are deducted and transferred to the copyright owners, to the marketplace service provider and to other users who participated in the sale process. The balance is transferred as income to the selling user. When a new system user is registered or when an existing user connects to the system, data verification tests as well as other tests are carried out in order to verify authorization in accordance with system rules or to block a certain user if found unauthorized. The items examined are user data, data concerning the means of payment and other data, in sequence. Before a user can sell an original digital content, he must enter it into the system. This operation is carried out by transfer of the content from the physical medium (compact disc) to the computer memory. The next operations are identification of the content, the choice of its components, establishment of its quality attributes, usage attributes and commerce attributes. After these stages are carried out by the user, the system generates usage and commerce licenses for the original digital content, packages this content and stores it in the user's computer. The system provides the user with statistical tools for market analysis

(demand, supply and transactions) to establish characteristics of the digital contents, usage attributes, commerce attributes and trading trends. In addition, statistical tools are provided for analyzing system users to characterize their individual data, their usage and commerce attributes pertaining to the digital contents. These analysis tools help the users utilize the system to best advantage. The multi-cycle trading system uses seller bulletin boards (supply) and buyer bulletin boards (demand) in which users can offer for sale or offer to purchase digital contents. These two bulletin boards are available to all system users who can peruse them before offering to sell or buy any digital content. The selling and buying processes of digital content are reciprocal and both together constitute a transaction between two system users. The preliminary stages necessary for carrying out such transactions are the offer of the digital content for sale on the sellers bulletin board or an offer to buy it on the buyers bulletin board. A transaction in the system can be either initiated by the user interested in selling digital content by means of the sellers bulletin board, or by the user interested in buying digital content by means of the buyers bulletin board, or by the system itself, by means of a process of correlation undertaken between the two boards. The system includes an engine for the definition of business rules which enables control of all business activities in the system, with adaptation to the changes taking place in the various components which define trading activity in the system. The idea of multi-cycle trading and the progressive reduction of price as trading cycles develop leads to refinement of the market competition and provides "price flexibility", whereby everybody can choose the price he would be prepared to pay in order to acquire a certain work of art. This situation leaves a wider range for decision for user's purchase possibilities. On the one hand - the user will have the option of reduced price (lower risk); this is associated with reduction of the chance of re-sale in order to obtain income for that user (low chance). On the other hand, the rising price (higher risk) will increase the chance of re-sale in order to produce income for the user (high chance). Other factors further raising the level of competition improvement on the market are "product flexibility", "usage flexibility" and "commerce flexibility". These factors provide additional dimensions affecting user decision to purchase a given work of art in a given trading cycle and for a given price. To sum up, it may be said that the provision of an infrastructure for user trading in digital contents makes use of the Internet medium in a manner allowing a person to trade with any other person in assets at his disposal, despite the fact that he does not own or have possession of them, and to be rewarded for his efforts and contribution to the dissemination of such works of art, as well as for the increase of market volume and the furthering of the entertainment market generally. The range of public-held works of art to be offered for sale is inordinately larger than the range of works of art which any single body can offer (or any limited number of such bodies). The system proposed would create commercial communities and new ties among users having common areas of interest, under the wider roof of the entertainment business. The principles and operation of a multi-cycle trading system according to the present invention may be better understood with reference to the drawings and accompanying description. Before explaining at least one embodiment of the invention in detail, it is to be understood that the invention is not limited in its application to the details of construction and the arrangement of the components set forth in the following description or illustrated in the drawings. The invention is capable of other embodiments or of being practiced or carried out in various ways. Also, it is to be understood that the phraseology and terminology employed herein is for the purpose of description and should not be regarded as limiting. Reference is now made to Fig. 1, which illustrates apparatus for distribution of digital content over peer-to-peer connections between network users according to a first preferred embodiment of the present invention. Apparatus 10 comprises a plurality of network nodes 12.1...12.n able to connect using peer to peer connections.

Typically one of the network nodes is a source for digital content, and the peer to peer connections are able to transfer the digital content between respective nodes. In addition there is provided a registration unit 14, which allows for registration of network users. Registration includes initial registration of a new user and subsequent re-registration of existing users. There is further provided a transaction unit 16 which comprises a digital content exchange detector 18 to detect that a transfer of digital content has occurred between nodes in said system and, a remuneration apportioning unit 20 to apportion remuneration from a receiver of the digital content to one or more other parties associated with ownership of said digital content. Preferably, transaction unit 16 includes a transaction control mechanism for setting a minimum transaction level for the remuneration according to conditions associated with an instance of said distribution, that is to say according to a current transaction involving some digital content. The nature of this control is discussed in greater detail hereinbelow. There is preferably provided a transaction layering mechanism 22, which involves first of all the marking of the distribution of respective digital content. Then, according to the marking, categorizing users as being primary sources or subsequent digital content sources at one of a plurality of layers. Then according to the category, the digital content may be offered for distribution on the system at a transaction layer having a predetermined minimum price. In a preferred embodiment, the mimmum prices for transaction layers fall as the layer becomes more distant from said primary content sources, as discussed in more detail below with respect to Fig. 2B. The transaction unit may include a condition unit 24 for applying conditions to respective instances of digital content distribution. The condition unit may apply different conditions via settings to a digital rights management (DRM) mechanism associated with respective digital content, or by settings applied to the digital content which can be read by the DRM system. One preferred way of doing this is to supply a media player tied to the DRM system, and restrict content transferred over the system to playback only on the system media player. The conditions involved may include usage conditions, thus for a certain price the content may be available for listening once, at another price for listening five times and at another price for indefinite listening. The conditions may likewise involve further distribution conditions. For one price the content may not be further distributed. For another price it may be freely distributed. The digital content preferably originates at a source node, from which it is sold in a primary market. From then on it is traded in ever more distant layers of a secondary market, as will be explained in greater detail below. One of the system tools is a sellers' noticeboard, available through the network, for indicating offering parties and respective digital content. Likewise there is provided a buyer's noticeboard available through the network for indicating parties wishing to obtain respective digital content. The system preferably supplies a user client for downloading to users via respective nodes of the network. The user client provides an interface for a respective user to offer content over the network, to receive content over the network and to browse content available over the network. The digital content may include a digital music track, a plurality of digital music tracks in an album, digital audio, digital video, an electronic book, an electronic magazine, an electronic newspaper, a computer program, a computer game, and a data file. Reference is now made to Fig. 2A, which illustrates a system embodying a method for the multi-cycle trading of digital contents among Internet users. The system serves as an intermediary among users, in order to carry out frading in digital contents. The trading method sustains a multiplicity of markets cyclically following one another which form the chain of frading in digital content. System operation is defined by business rules which cover the various possible trading scenarios. Figure 2A describes the concept of user trading in digital contents. Digital content trading is initiated when a user in an innermost circle (C001) offers for sale an original digital content on the primary market (Trading Cycle 0) at a certain price, and at a limited quantity and/or for a limited time, that is restricted by system business rules and/or characterized by quality, usage and commerce attributes and further subject to any relevant system technical limitations. Other system users (C101, C102, C103, etc.) can buy the original digital content from that user for the price quoted. Once the sale is effected, buying and selling orders are recorded by the system. Then the digital content is preferably directly transferred from the selling user, or for that matter from other sources, to the buying user via a peer to peer connection. When the transfer of digital content to the buying user's computer is concluded, the sum of money calculated according to various parameters to be described hereinbelow is transferred from the buying user's account to the selling user's account, again pursuant to system business rules. Usage and commerce licenses may also be transferred to the buying user. Any one of the users (C101, C102, C103, etc.) who has bought original digital content on the primary market (Trading Cycle 0) may now offer for sale that copied digital content on the secondary market (Trading Cycle 1) at a certain price, in limited quantity and/or for a limited time, according to the restriction of system business rules, but he cannot upgrade the quality, usage and commerce attributes over their values defined for the original digital content bought on the primary market (Trading Cycle O). That is to say the maximum product he is able to sell is the product he received and no more. Other system users (C201, C202, C203, etc.) may buy the copied digital content from the selling user (C101 in this example) for the price quoted. As soon as the sale is effected, buying and selling orders are recorded in the system, the digital content is directly transferred from the selling user, or from other sources, to the buying user via peer to peer connection. When the digital content is finally transferred to the buying user's computer, the sum of money calculated according to various parameters (see Fig. 3) may be transferred from the buying user's account to the selling user's account, again pursuant to system business rules. Furthermore, usage and commerce licenses may be transferred to the buying user. Each of the users (C201, C202, C203, etc.) who has bought copied digital content on the secondary market (Trading Cycle 1) may now offer for sale the copied digital content on the next secondary market (Trading Cycle 2) for a certain price, in limited quantity and/or for a limited time, pursuant to the business rules of the system but he may not upgrade the quality, usage and commerce attributes over the values defined in the copied digital content bought on the secondary market (Trading Cycle 1). In accordance with market economy and the restrictions imposed by system business rules, new trading cycles will keep being generated as long as the digital content is offered for sale in the last trading cycle (Trading Cycle x), provided that there is a demand for it and it is sold in that cycle. The maximum number of trading cycles will be determined in accordance with system business rules. Despite the halt in the generation of new trading cycles at some stage in the life of the digital content, trading may continue in the existing trading cycles until demand for that particular digital content runs out. Users' accounts may be debited or credited in correspondence to their activities. Such activities may be recorded in the system as buying, selling or file sharing orders which are translated into debit and credit orders, and this may be carried out on-line or off-line, depending on the means of payment used and the debit/credit times practiced in it. The buying or selling order may be considered finalized when the digital content and the usage and commerce licenses are properly transferred to the buying user. When this stage is reached, the transaction may no longer be cancelled and payment has to be effected. Notwithstanding the foregoing, in the implementation of this process a condition is possible in which the user is allowed to exclusively offer digital content by quantity or for a period of time, during which no other user is permitted to offer that same digital content. Digital content does not necessarily have to be transferred to the buying user's computer from the selling user's computer. The selling user need not be continuously on-line, or alternatively a short sale may be carried out, i.e., the user may offer digital content for sale even before he has completed its acquisition. The sale process may be carried out provided that particular digital content resides with other system users and can be downloaded from them. An extensive discussion of everything involved in such a short sale is given in the following, in the context of the descriptions of the offer, the sale, the solicitation for and the purchase of digital content by system users. Fig. 2B shows how the price for which the system user may offer the digital content for sale depends on the trading cycle, or trading distance, that is the distance from the original content source, in which_, it is offered. For each trading cycle the system defines, within its business rules a price range, i.e., an upper and a lower limit, whereby the price at which the digital content is offered for sale cannot exceed the upper limit and cannot fall below the lower limit. This price range for each trading cycle does not necessarily span equal intervals, and may change from time to time in response to market fluctuations. The general rule is that the lower limit of the price range keeps falling as new trading cycles are generated, i.e., as trading of the digital content develops, it becomes possible to sell the digital content at a lower price than that for which it was bought. The upper limit of the price range is not necessarily defined for any trading cycle. Apart from the price range, which is a rigid system parameter and thus out of user control, which affects the price for which the digital content may be offered for sale, there are other factors which may affect the price (within the limitation of the price range) and which are under user control. These factors fall into three main groups: • Digital content attributes — the higher the quality attributes and/or the less restricted and the wider licensed are the usage attributes and/or the less restricted and the wider licensed are the commerce attributes, the higher the price at which the user may offer the digital content (restricted by the upper limit of the price range, if at all). • User's attributes — the higher the quality attributes, the higher the price at which the user can offer the digital content (restricted by the upper limit of the price range, if at all). • Market forces (demand and supply) - when demand exceeds supply, it is possible to get a higher price (restricted by the upper limit of the price range, if at all) in an offer for sale of the digital content. As may be understood from the aforesaid, a user wishing to sell digital content may do so in the trading cycle following the cycle on which he bought it and at a price lower than the buying price. A user wishing to buy digital content can do so in any trading cycle whatever. The upshot therefore is that a given digital content may be offered for sale at any trading cycle and for any price (provided it is not lower than the lower limit of the price range of the last trading cycle). Fig. 3 shows the process of division of income among users of the multi-cycle trading system, the copyright owners to the digital content and the marketplace service provider. A system user (TC0) offers for sale a certain original digital content for a certain price (PT0). The offer takes place in the primary market, in Trading Cycle 0. Another system user (TCI) is interested in buying the original digital content for that price (BP1). This is the place to emphasize that the selling price equals the buying price (PTO = BP1). After the purchase, that digital content may be traded on the secondary market (the following trading cycle) in Trading Cycle 1. The sum of money (BP1) collected from the buying user (TCI) does not yet constitute income (SR0) for the selling user (TC0) but passes now to the income division calculation (RDO) on behalf of the selling user (TC0). Part of the sum (UFO) is transferred to the owners of copyright on the digital content (or their representatives) as usage license fees. Another part of the sum (CF0) is passed over to the marketplace service provider, as commerce license fees. These sums of money (UFO, CF0) are calculated from the purchase price (BP1), with a fixed component and a variable component, all this in accordance with system business rules. Another part of the money (SF0) is divided among various users who have given their generic approval to download from them parts of the digital content for a file-sharing fee. This sum of money (SF0) is calculated from the amount of data passed over from the sharing user to the buying user (TCI), including a fixed component as well as a variable component, all subject to system business rules. The income of the selling user (TC0) is therefore the purchase price (BP1) less the usage license fees and less the trading license fees, and less the file-sharing fee (SF0) if applicable. Sale of original digital content on the primary market by the selling user (TC0) can go on, involving other users of the system (pursuant to system business rules) so that the process described above may be repeated again and again. The selling user (TC0) may change from time to time the quoted price (PTO) of the digital content (or desist from his sale offer) as he sees fit, in response to market forces. The user may also introduce changes in the attributes of the digital content, but this will then be considered as an offer of another digital content. The buying user (TCI) who has bought from the selling user (TC0) the original digital content on the primary market, may now offer it for sale in the secondary market, in Trading Cycle 1 as copied digital content, for a certain price (PTl) which is lower than the price for which it was bought (PTO). Another system user (TC2) may now wish to buy the copied digital content at that price (BP2). We should note here that the sales price equals the purchase price (PTl = BP2). After the purchase, the digital content may be traded on the secondary market (in the next trading cycle) in Trading Cycle 2. The sum of money (BP2) collected from the buying user (TC2) does not yet constitute income (SRI) for the selling user (TCI) and passes now to the income division calculation (RD1) for the selling user (TCI). Part of the sum of money (UF1) is transferred to the owners of copyright to the digital content (or their representatives) as usage license fees. Another part of that sum (CF1) is transferred to the marketplace service provider, as commerce license fees. In addition, another part of the sum (SCl- 0) is transferred as sales commission to the user (TCO) who sold to the user (TCI) the aforesaid digital content. These sums of money (UF1, CF1, SCl- 0) are all calculated based on the purchase price (BP2) including a fixed and a variable component, everything subject to the system business rules. Another part of the money (SFl) is divided among various system users who have given their generic approval to download from them parts of the digital content for a file-sharing fee. That sum (SFl) is calculated based on the amount of data passed over from the sharing user to the buying user (TC2), having a fixed as well as a variable component, all in keeping with system business rules. The income of the selling user (TCI) is therefore the purchase price (BP2) from which the following are deducted: usage license fees, commerce license fees, sales commission (SCl->0) and also deducting the file-sharing fee (SFl), again if applicable. The selling user's income (TCO) thus grows by (SCl- 0), his commission on the sale of the digital content to the user (TC2). The copied digital content sold on the secondary market by the selling user (TCI) can be sold again to other system users (pursuant to system business rules) and the above-described process may be repeated again and again. The selling user (TCI) may, from time to time, change the offering price (PTl) of the digital contents (or desist from his sale offer) as he sees fit, in response to market forces. The user is also entitled to introduce changes in the attributes of the digital contents, but in that case it will be considered as an offer of another digital content. The buying user (TC2) who has bought from the selling user (TCI) copied digital contents on the secondary market, may offer it now for sale on the secondary market, in Trading Cycle 2 as copied digital content, for a certain price (PT2) which must be lower than the price for which it was bought (PTl). Another system user (TC3) may then wish to buy the copied digital content at that price (BP3). It should be emphasized at this point that the sale price equals the purchase price (PT2 = BP3). Following the purchase, that digital content may be traded over the secondary market (in the next trading cycle) in Trading Cycle No. 3. The sum of money (BP3) collected from the buying user (TC3) does not yet constitute income (SR2) for the selling user (TC2) and now passes to a calculation of the income division (RD2) on behalf of the selling user (TC2). Part of the sum of money (UF2) is transferred to the owners of copyright to the digital content (or their representatives) as usage license fees. Another part of the sum (CF2) is transferred to the marketplace service provider, as commerce license fees. In addition, another part of the money (SC2- 0) is transferred as sales commission to the user (TCO) who has sold to the user (TCI) the digital content. Another part of the sum (SC2- ) is transferred as sales commission to the user (TCI) who sold to the user (TC2) the digital content. These sums of money (UF2, CF2, SC2- 0, SC2- ) are calculated from the purchase price (BP3), including a fixed as well as a variable component, all subject to the system business rules. Another part of the sum of money (SF2) is divided among various system users who have given their generic permission to download from them parts of the digital content as a file-sharing fee. The latter sum (SF2) is calculated from the amount of data transferred from the file-sharing user to the buying user (TC3), having a fixed as well as a variable component, all subject to system business rules. The income of the selling user (TC2) is therefore the buying price (BP3) from which are deducted the usage license fees, the commerce license fees, the sale commission (SC2- 0), as well as the sales commission (SC2- 1) and less the file-sharing fee (SF2). This means that the income of the selling user (TCO) is incremented by a sale commission amounting to (SC2- 0) whereas the income of the selling user (TCI) is incremented by a sales commission amounting to (SC2- 1) as a result of the sale of the digital content to the user (TC3). The sale of copied digital content over the secondary market by the selling user (TC2) can go on and it may be sold again to other system users (pursuant to system business rules) so that the above-described process may be repeated again and again. The selling user (TC2) may change from time to time the quoted price (PT2) of the digital content (or desist from his sale offer) as he sees fit, in response to market forces. The user may also introduce changes in the attributes of the digital content, but then this will be considered as an offer of another digital content. At this juncture it should be noted that the costing does not include tax components on the sale and purchase of digital content by system users. Taxing of Internet trading has not yet reached maturity to the point of introduction in the laws of the various countries in which system users are located. When taxation of Internet trading is implemented, then the tax component in the various forms thereof will be included in the costing of selling, buying and file-sharing users incomes. In addition, the costing does not include commission components to financial organizations (third parties) the extent and manner of collection of which are subject to business agreement between the marketplace service provider and the latter financial bodies. Fig. 4 describes the initial registration of a system user and the verification of data upon his repeated connection with the system. The process is divided into stages which are consecutively carried out, whereby success in a certain stage will lead to the initiation of the next stage. Failure in any stage will cause stoppage of the process and issue of a suitable notice to the user. These stages will be described in the following, for the initial registration process as well as for data verification upon repeated connection to the system. This description does not purport to list the process in full, but only the principles according to which it is carried out. In stage 1 of the registration process, the user enters personal identification data, including among others: user name and password, first name, family name, address, town, country, etc. The user also enters identification details of the means of payment by means of which the user intends to carry out payments or accept receipts as a result of his activities. The means of payment recognized by the system are multifarious and known to be acceptable in electronic commerce. Some of them may be registered by means of the system and for others there is need to register outside the system (e.g., credit cards). In stage 2 of the registration process, the user personal data (as entered by himself) are checked as well as additional data, against a blacklist of users who for various reasons were rejected. At the end of this stage the result of the user data check is returned to the system. Success in that stage (i.e., the user's personal data do not appear on the black list) will lead to the initiation of the next stage. Failure at the blacklist stage, that is to say if the user's personal data does appear on the black list, halts the process and a suitable notice may then be issued to the prospective user. In stage 3 of the registration process, the user's personal data and his means of payment are examined, as entered by himself, plus additional data, against the system user's data record, containing details of users having been approved for system use as well as other acceptance tests. At the end of that stage the user data and means of payment check result is returned to the system. Success in the stage of entering the user's personal data and/or details of the means of payment, meaning that the data does not already appear on the list of system user data - no redundancy, initiates the next stage. Failure at the redundancy stage halts the process and causes a suitable notice to be issued to the prospective user. In stage 4 of the registration process, the acceptability of the means of payment is examined by means of which the user purports to effect payments or obtain receipts for bis activities, as entered by himself, against an accounts blacklist containing details of means of payment which for various reasons have been rejected. That list is produced by the financial organization (third party) rurining the means of payment and is passed over once in each suitable period of time to the marketplace service provider for the purpose of that examination. At the end of this stage the result of the means of payment examination is returned to the system. Success in this stage the means of payment does not appear on the black list, initiates the next stage. Failure halts the process and cause a suitable notice to be issued to the prospective user. In stage 5 of the registration process, the means of payment are examined by means of which the user intends to make payments or obtain receipts for his activities in the system, as entered by himself, whereby these are checked by the financial organization (third party) running the use of the means of payment. At the end of this stage the result of examination of acceptability of the means of payment is returned to the system. Success in this stage, that is to say the means of payment is acceptable and approved for use initiates the next stage. Failure at this stage, implying that the means of payment is not acceptable and not approved for use, typically halts the process at which time a suitable notice is issued to the user. In stage 6 of the registration process, all checking having been completed, user registration is finalized and his details are entered as an active system user. An individual exclusive character string is then provided to the user for his identification in the system to serve him upon subsequent connection. As with the the initial registration process, acceptability and data verification checks are also carried out for the user during subsequent connections to the system. The stages of this examination are listed below. In stage 1 of the data verification process, the user enters his personal identification details to the system, including user name and password. In addition to these details, the system preferably automatically obtains additional identification details. In stage 2 of the data verification process, the user personal identification data are examined as entered by himself plus additional data, against a user's blacklist including users who for various reasons were rejected. At the end of this stage the examination result of the user personal identification details are returned to the system. Success in this stage, meaning personal identification data of the user is not on the blacklist, typically triggers the next stage. Failure in this stage, meaning personal user data does appear on the blacklist, typically halts the process and causes a suitable notice to be issued to the user. In stage 3 of the process of data verification, the user personal identification data are examined, as entered by himself plus additional data, against the system user's connection log, in which data of users who have connected or are connected to the system are recorded as well as other acceptability tests. At the end of this stage the result of the personal identification data examination is returned to the system. Success in this stage, meaning personal identification data of the user does not appear on the system user's connection log already - no redundancy, may trigger the next stage. Failure in this stage, implying redundancy exists, preferably halts the process and causes a suitable notice to be issued to the user. Stage 4 is not carried out in the process of data verification but is run independently of a user's connection to the system. Upon production of an accounts blacklist by the financial organization (third party) which runs the use of the means of payment and its transfer to the marketplace service provider, an internal process is undertaken in the system whereby users utilizing means of payment on the blacklist are identified and accordingly included in the user's blacklist, so that they can already be identified in the foregoing stage 2. Stage 5 is not carried out during data verification. Checking the acceptability of means of payment intended by the user to effect payment or obtain receipts for his activities in the system is under the responsibility of the financial organization (third party) rurining the means of payment. In stage 6 of the data verification process, all stages of the examination having been completed, the process of user connection to the system is completed. The user can now undertake trading activities in the system. Fig. 5 shows the process of entering original digital content into the system. The figure and the description make use of a compact disc medium for the sake of simplicity, but any other medium can also be used if it is acceptable to the system. The concept of system as used in this explanation refers to the customer side, without involvement of the server side of the system or of other users. This figure and the description following it do not explain a situation in which the source of the original digital content is not a physical medium but a computer file held by the copyright owner or another party on his behalf, however the skilled person will be able to make the necessary extrapolation. In stage 1 a system user inserts a compact disc containing original digital content into the compact disc drive in his computer. The source for an original digital content can use other storage media (or not at all), as long as it is legitimized by the system. The description uses a compact disk merely as a convenient example but the skilled person will understand other sources of content. At that stage the identifying data of the digital content is copied from the physical medium (compact disc) into the computer memory in order to carry out computerized processing and to tailor the content to the needs of the user and of the system, as explained in the following stages. In stage 2 the user and the system identify the digital content. The user must choose the digital content he wishes to process and indicate the components of that content from any other content residing on the physical medium. For example the disc may be an album with multiple music tracks of which he only wishes to make a small number available. The choice and the detenriination of components varies according to the type of digital content (text, sound music, picture/film, computer game/program, combination thereof, etc.). In stage 3 the user determines the quality attributes of the digital content, subject to the technical limitations of the system. It is possible to generate several copies at different quality levels. The determination of quality attributes varies in accordance with the type of digital content, thus text, sound/music, picture/film, computer games, program, their combinations etc.. The quality attributes influence the generation of copy of the digital content, and thus determine its primary quality when it is run by any other user. Stage 4 packages the digital content by converting it into an encrypted file embodying a digital signature by using the definitions of quality attributes and the usage and trading licenses. The packaging process makes use of an encoding technology known in this field, which is typically provided as an internal procedure within certain DRM systems. In stage 5 the digital content is stored in the user's computer. This is the last stage in the process of entering original digital content into the system from an external physical medium. The storage configuration is not part of the present description and may be carried out in accordance with system application definitions. Fig. 6 describes the analysis of the demand, supply and transaction market in cross-sections of digital content, quality attributes, usage attributes, commerce attributes, trading cycle and price quoted by the user. This analysis helps the user to characterize market frends concerning the trading in digital contents, so that when he offers digital content for sale or asks to buy digital content (to resell it) he may possess the tools enabling him to decide on the digital content and/or its attributes and/or the trading cycle and the price which will give him the best prospect of a profitable transaction. In order to carry out market analysis, the digital content must be broken down to its various attributes, including identification of the digital content, quality attributes, usage attributes, commerce attributes, trading cycle and price. These attributes are used to put together the demand, supply and transaction records. The buyers bulletin board serves as a tool for measuring demand levels, whereas the sellers bulletin board is a tool for measuring supply levels. The transaction log is a tool for measuring the break-even points between demand and supply of the digital contents market. Comparisons and cross-sections of each of these boards or in cross-reference between them can give an idea on frequencies, averages, extreme values and other statistical indices. It is also possible in this way to locate demands which are not covered by market supply, or supply which is not supported by demand. Fig. 7 describes user analysis in cross-sections of bandwidth connection to the system, sharing level of digital contents downloaded and uploaded, user reliability in everything involving failures and interruptions, the availability of offered/sold contents and cancellations of sales and/or purchases. The user is also measured by his trading volumes, including the number of sales offers, the number of purchase requests and the number of digital contents sold and/or bought by him. This analysis helps the system user to grade the other user (who offers digital contents for sale) relative to other users, so that when he intends to buy some digital content, he will have the tools to decide who is the user from whom he stands the best chances to complete the purchase with highest reliability and as quickly as possible. The indices of sharing level and the frading volume indicate the level of contribution to the system on the part of the analyzed user. To carry out the analysis of a user, it is necessary to extract his system usage data from the demand, supply and transaction records. After receiving a grade for each such data item, the user can refine them as he sees fit and produce a refined grading of the users. Fig. 8 shows a procedure for offering for sale original/copied digital content.

The trading method makes use of a sellers bulleting board, on which users offer digital contents for sale at a certain quantity and/or for some period of time, as always subject to the restrictions of system business rules, with defined quality attributes, subject to system technical limitations, and with usage and trading attributes, subject to system business rules, so that other users can learn of these offers of digital content having the particular attributes concerned and buy it for the price quoted by the offering user. The user determines the usage attributes of the digital content, subject to system business rules. Several copies may be generated, subject to various restrictions and usage authorizations. The determination of the usage attributes varies in accordance with the type of digital content, thus text, sound/music, picture/video, computer games, computer programs, their combinations etc.. The usage attributes influence the generation of usage license of the digital content. It is noted that the attributes do not determine usage for the present (selling) user. On the contrary, such usage was already determined upon his purchase, but only for subsequent users who are going to buy the digital content and make use of it according to the license conditions. The user determines the commerce attributes of the digital content, subject to any system business rules. Different copies may be generated under different restrictions and sale authorizations. The determination of the commerce attributes does not vary in correspondence to the type of digital content, as in the above examples of text, sound/music, picture/film, computer games, program, their combinations etc.. The commerce attributes rather affect the generation of the commerce license of the digital content and, and as with usage above, they do not determine the nature of trading for the present (selling) user, but only for subsequent users who are going to buy the digital content and trade in it in accordance with the license conditions. The system generates a usage license and a trading license for the digital content. If a number of copies are made, usage and trading licenses may be issued for each copy separately. The licenses are encrypted computer files which are subjoined to the digital content and remain with it in any use or transaction by its prospective buyers. The user, at his discretion, can carry out a market analysis (see Fig. 6) before offering the digital content for sale on the seller's bulletin board. Such market analysis can help him increase the chances of engaging in more profitable transactions. Similarly, the user can change (downgrade) the attributes of the digital content (quality, usage and commerce) before offering it for sale on the sellers' bulletin board. The frading cycle in which the user can offer the digital content for sale depends on the origin of that content. Original digital content will be offered on the primary market at Trading Cycle 0. Copied digital content bought in Trading Cycle 0 may be offered on the secondary market in Trading Cycle 1, etc. Digital content can be offered for sale on the trading cycle one removed from the trading cycle in which it was bought. When digital content is offered for sale on the sellers bulletin board, the user need not necessarily keep in his computer a complete copy of the digital content, so that in fact the digital content is offered as a short sale. The conditions for making this kind of offer are the following: • The digital content may be thus offered on the secondary market only. • At least one complete copy of the offered digital content, having identical attributes, exists in the possession of another user connected to the system. That latter user has consented to share the content with users at large and he also holds usage and trading licenses covering the digital content concerned. • The offering user (before publishing the offer) has already started the process of buying the digital content (if the purchase of the digital content is cancelled by the offering user this will necessarily remove the offer). • The offering user was debited for buying the digital content at the price for which it was offered for sale by the user who had sold this content to him, even though the transfer of the digital content to the offering user's computer is not yet completed. That sum of money will be transferred to the user who had sold him the digital content, after deduction of the sale commission, the usage license fees, the trading license fees and the file-sharing charge, if file-sharing was involved, immediately upon the start of the process of short sale. When the digital content is offered for sale on the sellers bulletin board, the user need not necessarily be connected constantly to the system for approval and realization of the sale transaction; the digital content may then be transferred by other users holding the content or parts thereof on condition that it is identical in its attributes to the content being bought and that these other users have agreed to the transaction. Fig. 9 describes the process of soliciting for original/copied digital content. The frading method makes use here of the buyers bulletin board, on which users apply for digital content having defined quality attributes, subject to system technical limitations, and defined usage and commerce attributes, subject to system business rules, so that other users can locate the demand for the digital content having these particular attributes and sell it at the price quoted, or within the price range offered by the soliciting user. Solicitation for digital content need not be directly assigned to a particular trading cycle. The indirect connection between the solicitation and the frading cycle is by way of the price that the soliciting user is prepared to pay for the particular digital content concerned. The trading cycle in which another user can offer the digital content for sale to the soliciting user thus depends on that price. The connection between the price and the trading cycle is found in the definition of price ranges and their dependence on the different trading cycles in the system. Upon realization of the transaction, the trading cycle of the bought digital content will be determined so as to correspond to the price actually paid for that digital content. Continuation of trading in this digital content by the user who has just now bought it will be carried out in the trading cycle following the trading cycle in which it was bought. The user, at his discretion, can carry out a market analysis (see Fig. 6) before soliciting for digital content. Such market analysis can help him increase the chances of engaging in more profitable transactions when he offers the content for sale. After the solicitation for purchase of the digital content is posted on the buyers bulletin board, the user need not necessarily be constantly connected to the system. Upon receiving sales offers from other users, an offer caution will be transfened to the soliciting user when he reconnects in order to approve and realize the sale transaction. Fig. 10 shows the sale and purchase processes of original/copied digital content. The two processes of sale and purchase are reciprocal and they jointly constitute a deal carried out between two system users. The description provided below outlines this transaction from two viewpoints: once from the viewpoint of the buying user and again from the viewpoint of the selling user. The necessary preliminary stages of this transaction are the offer for sale of the digital content posted on the sellers bulletin board (see Fig 8) or the solicitation for the digital content posted on the buyers bulletin board (see Fig. 9). Possible preliminary activities to the transaction are analysis of the demand, supply and transaction market (see Fig. 6) or analysis of system users (see Fig. 7). A transaction can be initiated either by the user or by the system, in one of the following three modes: • The initiator is a user interested in selling digital content (Mode A) - the user scans the buyers bulletin board (or carries out a search for content having particular attributes) and locates another user wishing to buy the digital content (see Fig. 9). The initiating user enters a sales request which is translated in the system into a sales caution sent over to the user interested in buying the digital content. The latter must then approve (or reject) the offered fransaction. The response to the sales caution can be either automatic or manual, as decided by the user. • The initiator is a user interested in buying digital content (Mode B) - the user scans the sellers' bulletin board or carries out a search for content having particular attributes, and locates the user who offers for sale the digital content (see Fig. 8). The initiating user enters a buy request which is translated in the system into a buying caution sent over to the user offering to sell the digital content. The latter must then approve or reject the fransaction. The response to the purchase caution can be either automatic or manual, as decided by the user. • The system initiates the transaction (Mode C) - the system establishes correlation between a record of a digital content offered for sale on the sellers bulletin board and a record of solicitation for digital content on the buyers bulletin board. The system then sends two cautions to the users: a sales caution is sent to the user interested in buying the digital content and a purchase caution sent to the user wishing to sell the digital content. These two users must then approve the fransaction. A cancellation order on the part of one of these users annuls the transaction. The response to the aforesaid cautions may be automatic or manual, as decided by the user. Upon approval of the fransaction by the two users who are parties to it, the transaction conditions are indicated to them, including preferably, their personal data, the data pertaining to the digital content, its quality, usage and commerce attributes, and also the sums of money to their debit or to their credit as a result of the fransaction. From the moment of initiation of the transaction, whether by one of the users or by the system a series of events begins which are carried out consecutively, meaning an event only starts after the foregoing event has been successfully concluded, intended to bring the transaction to a successful conclusion. At any given moment, until the transaction is concluded, each of the users who are party to the transaction may call it off and cancel it completely. In stage 1 of the sale/purchase transaction, the personal data of the two users who are parties to the fransaction are checked out against a blacklist of system users, on which are recorded the data of users who for various reasons were ruled out after having connected to the system. At the end of that stage, the result of the check-up on the data of the two users who are parties to the transaction is returned to each of them. Success in that stage, meaning the personal data of the two parties to the transaction do not appear on the blacklist, leads to the start of the following stage. Failure in the aforesaid stage, meaning one of the parties is on the blacklist, typically halts the process and cause a suitable notice to be issued to the two users who are parties to the transaction. In stage 2 of the process of this sale/purchase fransaction, an examination is carried out of the compatibility of the personal data of the two parties to the fransaction, of the digital contents, the usage and trading licenses and other data, against the users' data records, listing users approved as system users as well as other suitability checks. At the end of that stage, the result of the compatibility check of the data of the two parties to the transaction, of the digital contents, the usage and trading licenses and the other data are returned to the system. Success in that stage, meaning there is compatibility, may lead to the start of the following stage. Failure in that stage (i.e., lack of compatibility of system data with the data of one of the parties to the fransaction) typically halts the process with suitable notice issued to the two parties to the fransaction. In stage 3 of the process of the sale/purchase transaction, sales and purchase orders are recorded in the transactions log, whereby to the debit of the buying user will be recorded a purchase order and to the credit of the selling user will be recorded a sales order. These orders are initial records and indicate the beginning of the transaction between the two users. The sales/purchase orders include the data of the parties to the transaction, data of the traded digital content, the trading cycle, the price and additional data. Stage 4 in this process of sales/purchase transaction may be split into two sub- stages (4a, 4b) which may be carried out in parallel or alternatively just one of them may be carried out. An explanation of these sub-stages is as follows: • In stage 4a the digital content is directly transferred from the selling user's computer to the buying user's computer by peer-to-peer communication. This stage can be carried out even when the selling user is not actually connected to the system, seeing that, as aforesaid, execution of the transaction does not depend on the selling user's connection, on condition that transfer of digital content is possible from other users to the buying user. • In stage 4b, fransfer of the digital content is carried out directly from the computer of any other system user who shares the digital content subject to the transaction, to the buying user's computer, using a peer- to-peer communication. Such a stage can be carried out when the selling user has allowed fransfer of digital content from other users to the buying user. The amount of data transferred from other users may be measured and recorded in a transaction log, in order to remunerate them with the file-sharing charge upon conclusion of the fransaction. As long as stage 4 has not been successfully concluded, that is to say the transfer of the digital content to the computer of the buying user is not complete, the selling and/or the buying user may call off the transaction and cancel it. In stage 5 of the sales/purchase transaction, a calculation of the sums of money involved in the purchase and in the sale is carried out, as well as of the sale commissions, the file-sharing charge, the usage and frading license fees, subject to the system business rules. This calculation is valid for the time of transaction initiation, except for the file-sharing charge, of which the maximum scope is known, and is carried out in accordance with the conditions approved beforehand by the parties to the transaction and which were current in the system at that time. In stage 6 of the sales/purchase transaction, the purchase and sales orders, the sale commissions, the file-sharing charge, the usage license fees and the trading license fees are all converted into debit and credit orders for all users who are parties to that fransaction. The technical process of conversion of these orders is carried out according to a specification compliant with the requirements of the financial organization handling the means of payment which the users utilize. In stage 7 the debit and credit orders are handed over for carrying out by the financial organization managing the means of payment. The transfer of these payment orders can be either made on-line or off-line, depending on the means of payment to be used and on the debit/credit times current in it. The financial organization takes care of debiting or crediting the users' accounts with amounts of money corresponding to the debit and credit orders passed over from the system. Stage 8 in the process of handling the sale/purchase fransaction may in one preferred embodiment begin even before stage 7 has been concluded, thus the debit and credit orders may not yet have been passed over to the financial organization online but may instead have been lined up for mass off-line transfer. This stage may be split into two sub-stages (8a, 8b) which may be carried out in parallel or alternatively just one of them may be carried out. These sub-stages are now explained: • In stage 8a the usage and frading licenses of the digital content are directly transferred from the selling user's computer to the buying user's computer by peer-to-peer communication. This stage can be carried out when the selling user is connected to the system, and it may be re-iterated here that execution of the fransaction does not depend on the selling user being connected, provided that he has allowed fransfer of digital content from other users to the buying user. • In stage 8b the usage and trading licenses of the digital content are directly transferred from the computer of other users in the system who share the digital content concerned to the buying user's computer by peer-to-peer communication. This stage can be carried out when the selling user has allowed transfer of digital content from other users to the buying user. When short sale is carried out, all the aforesaid stages are preferably executed, with one reservation: stage 4 in the process of the sale/purchase transaction (split into the sub-stages 4a, 4b) concerning the direct transfer of digital content from the selling user's computer to the buying user's computer by peer-to-peer communication is not carried out immediately following stage 3 (see description above) but only at the end of stage 7, when the order debiting the short-selling user is transferred (this is the user short-selling the digital content as he buys it) to be discharged by the financial organization handling the means of payment. That is to say, the user wishing to carry out a short sale is debited for the purchase of the digital content despite the fact that he has not yet completed the purchase process. Fig. 11 shows conceptually the engine used to define the business rules in the system. This engine enables control of all business activities in the system, taking account of the changes which the various components undergo that define the frading activity in the system. The business rules engine makes analytical use of the market analysis module, including its various components (see Fig. 6), of the user analysis module (see Fig. 7) as well as of the "meta-rules" defined in the system. This engine makes it possible for the market service provider to adjust system activity definitions and balance the system (whether manually or automatically) upon appearance of extreme cases which may foul up the trading moves and which cannot be resolved by market forces. The following table presents a sample list of the business rules in a cross- section of categories and applications, by means of which the computational activities are carried out in the system. This table does not purport to be a closed framework of definitions, and any additional definition to be applied which is not defined here is also included in the present invention. For simplicity of presentation, we are only going to list below the general uses constituting the definition of the default option for the entire system and for the digital contents. Applications could be defined for a particular digital content as and when needed.

In the following a more detailed description of the above is given which is intended to technically illustrate the main configuration of the system.

CONCEPTUAL SCHEMATIC OF SYSTEM WEB COMPONENTS Reference is now made to Fig. 12, which shows the conception of the structure and configuration of the network within the system. In each geographic region a regional server (or a server cluster) is preferably located. The choice of the physical location of the server may be based on the number of users and the region size. A user may be given access from his computer to the regional server to which he has subscribed, and by means of that server he is preferably able to transmit and receive vital data for operating system components and for carrying out any operation enabled by the system. After transfer of data between the user's computer and the regional server (and vice-versa) the user may connect to the computers of other users for downloading digital contents. The regional server thus forms the basic information and activity unit to which the user is connected. Regional servers have access to the system central server, by means of which vital information is fransmitted among the servers concerning users activity and server activity. User activity data are recorded in the regional servers and passed over to the cenfral server which serves as a gateway between them. In this manner users connected to different regional servers can obtain information about one another and connect to each other. The central server stores all user data and their activities in the system and monitors the activity of the regional servers. In case one of the regional servers crashes, the cenfral server can route the calling users to another regional server, in accordance with a pre-determined scenario pattern. The central server can also be used to distribute new software versions to the users. It can also be used to update system business rules when the need arises. The central server is the only server to carry out clearance of payments/receipts of the users through a third party (not shown in the figure). MSP Network Architecture • The network is based on a Hybrid Peer-to-Peer architecture in which the servers preferably act as proxies connected to a central server in the following manner: o In each geographic region, a regional server (or a server cluster or server farm) is preferably located. The choice of the physical location of the server will be based on the number of users and the region size. A user may be given access from his computer to the regional server to which he has subscribed, and by means of that server, he will be able to transmit and receive vital data for operating system components and for carrying out any operation enabled by the system. The regional server thus forms the basic information and activity unit to which the user is connected. After transfer of data between the user's computer and the regional server (and vice-versa), the user may connect to the computers of other users for downloading digital contents. o Regional servers preferably have access to the system cenfral server, by means of which vital information is transmitted among the servers concerning user activity and server activity. User activity data is preferably recorded in the regional servers and passed over to the central server who serves as a gateway between them. In this manner users connected to different regional servers can obtain information about one another and connect to each other. o The central server stores all user data and their activities in the system and monitors the activity of the regional servers. In case one of the regional servers crashes, the central server can route the calling users to another regional server, in accordance with a pre-determined scenario pattern. The central server can also be used to distribute new software versions to the users. It can also be used to update system business rules when the need arises, o The cenfral server is the only server to carry out clearance of payments/receipts of the users through a third party. The network may contain mechanisms for Redundancy, Availability,

Scalability and Network User Control. This is done by using protection against the following: o Failures of individual storage devices using techniques such as Redundant Array of Independent Disks (RAID). o Failures of one or more of the network element involved in its construction using network management and monitoring. o Failures of one or more of the network servers using well known and Proven IT practices or Clustering. o Overall load of the network or servers capabilities using Scaling up which involves increasing server resources or Scaling out which involves adding servers to meet demand. • The network servers is preferably protected against unauthorized access by using security mechanisms such as a firewall software/hardware. • The network communication protocol preferably uses encryption standards such as Secure Sockets Layer" (SSL).

Server Side Applications • The server side applications preferably support the Network Architecture. The main software components forming part of the system installed on system servers are listed below. By means of these software components, the system operator can confrol various aspects of system activity. These components make use of two main instruments: o Database - recording of data items concerning entities involved in the system. o Processes - execution of initiated machine activities or automatic activities to carry out modifications (addition/deletion/updating) of the data recorded concerning system entities and/or interface activity relating to entities external to the system. • The main software components are: o Network User Control - confrol for connection of existing users with the system and network load balancing, o Provisioning and system adminisfration - manage system data associated with the activity of the various processes of the system. o Client/server interface protocols - conduct the connection and data transfer among servers themselves and between the server and the client applications. • The access to the server side applications data is preferably given only to the authorized employees using various security measures. • The server side applications preferably support historical data and data change storage using central storage and backup facilities. • The server side applications preferably support standard and custom interfaces for the billing process which will be taken care of by a third party which specializes in clearance mechanisms.

Client Side Application • The client side application preferably supports various security measures to reduce the risk of software tampering and hacking/cracking. These measures includes: o Software code protection — the application may use watermarks and fingerprints to verify the authentically and the originality of the application files which have been installed on the user computer. o Digital content protection - the application may use watermarks and fingerprints to verify the authentically and the originality of the digital content files which were saved on the user computer. • The client side application preferably supports known p2p application protocols and services including the following: o Peer Discovery Protocol PDP) - Allows a peer to discover other peer advertisements (peer, group, service, or pipe). o Peer Resolver Protocol (PRP) - Allows a peer to send a search query to another peer. o Peer Information Protocol (PIP) - Allows a peer to learn about the status of another peer. o Peer Membership Protocol (PMP) - Allows a peer to join or leave a peer group. o Pipe Binding Protocol (PBP) - Is used to create the physical pipe endpoint to a physical peer. o Rendezvous Protocol (RNP) - The Rendezvous Protocol is responsible for propagating messages within groups. o Peer Endpoint Protocol (PEP) - Is used to create routes to route messages to another peer. • The client side application preferably checks and verifies the originality and authentically of a music CD that the user insert into the computer optical drive, using an algorithm which is able to distinguish between an original music CD (one that was bought from a legitimate music vendor/distributor) and a burned music CD (one that store content which was burned onto it from any inferior source, and pretended to be an original Music CD). Such an algorithm is a known feature in digital rights management (DRM) technology. • The client side application preferably uses any known DRM (Digital Rights Management) technology (such as Microsoft DRM, RealNetwork HELLX, Intertrust, ContentGuard, etc..) preferably with close links to the digital content file format (such as Microsoft, Real, MPEG, etc.). The DRM technology preferably supports the unique usage and commerce attributes used in the system. • The digital content player preferably supports the DRM technology used in the system. The digital content in the system can, in a preferred embodiment, only be used with an application integrated media player. • The client side application may preferably use a state of the art design regarding to MMI and GUI. The application interface may support customized "look and feel" in term of the information displayed to the user in a multi-layer fashion.

LIST OF SOFTWARE COMPONENTS INSTALLED ON SERNER COMPUTERS (REGIONAL/CENTRAL) The main software components forming part of the system installed on system servers are listed below. By means of these software components, the system operator can control various aspects of system activity. These components make use of two main instruments: • Data base — recording of data items concerning entities involved in the system. • Processes - execution of initiated machine activities or automatic activities to carry out modifications (addition/deletion/updating) of the data recorded concerning system entities and/or interface activity relating to entities external to the system. System Administration - SA The system adminisfration component is used to implement definitions and general activities not related to any particular entity in the system. Among these definitions are included the table of addresses of the central server and of the regional servers, code tables, timetables, scenario tables, meta-rules table, etc. The main administrative activities are confrol, monitoring and supervision of network activity and provision of solutions under various scenarios. Network activity relates to technical aspects (server crash, overloads, etc.) or operational aspects (frauds, breaches, etc.). Business Logic Engine - BLE A component known as the business logic engine preferably serves to generate business rules in the system either manually or automatically, which are of help in the administration of business and commercial activities of system users. These rules create frameworks of restrictions and authorizations for the user to carry out a variety of activities in the system. The business logic engine makes use of meta-rules defined in the system which serve as templates for the generation of business logic. Version Confrol - VC A software version control component in the system is used to monitor the current status of software components installed on system servers as well as on user computers. This component makes decisions about necessary updates or recommended updates and provides the means of carrying out this update (manual/automatic) and the timing thereof. The version confrol component is required for system maintenance and for carrying out software debugging or for adding software components to extend the scope of activity of the software concerned. System Reports - SR The system reports interface serves the system operators for analyzing and admmisfrating the main activities of the system, including control, monitoring and supervision of network and system activity (including activities of system users). Registration Management - RM The registration management component serves as a system confrol means governing the addition of new users to the system. Registration management carries out check-outs of the user personal details as well as the soundness of the means of payment that the user intends to use. Approval of registration allows the candidate to join in as a system user, whereas failure to obtain approval will rule out his candidacy. Connection Management - CM A component for connection management of users in the system serves as a means of confrol for connection of existing users with the system. The connection management carries out checks of user details including personal data, as well as of the soundness of the means of payment the user intends to use. Approval of the connection preferably leads to connection of the system user whereas disapproval may typically lead to cancellation of his ability to connect. Revenue Distribution Management - RDM A component for revenue distribution management in the system serves as a means for dividing the revenues from trading in digital contents among the users of the multi-cycle frading system, the owners of copyright to the digital content and the marketplace service provider. The division of revenues is carried out in accordance with the business rules defined in the system. Transaction Management - TM A transaction management component in the system serves as a means for recording and control of the trading activities of system users. This component takes care of soundness checks and verification of user data, usage and frading licenses as well as checks of trading stages generally. Transaction management includes recording of sales and purchase orders, fransfer of digital content and usage and trading licenses among users, calculation of revenue division in the system, generation of debit and credit orders and their fransfer to clearance/payment. User Management - UM The user management component in the system serves as a means for recording user data in the system and monitoring user activities. User identification is an information item serving as a key data item to each record containing information concerning user activity. The other user data are user name and password, first name, surname, address, city, country, etc. In addition, system users also have attached to them data describing the various characteristics relating to their system activity. These characteristics include quality attributes, usage atfributes and commerce attributes. Digital Content Management - CDM The digital content management component in the system serves as a means for recording the particular data of that content in the system and for monitoring the activity it undergoes. Identification of the digital content is an information item serving as a key data item in each record which contains information concerning the activity in which it was involved in the system. The other details of the digital content are: name, production year, author's names, etc. In addition, the digital content is associated in the system with quality, commerce and usage attributes, which describe the various attributes relating to activity in the system.

Financial Accounting - FA A financial accounting component in the system serves as a means for recording the accounting data of system users. Identification of the account is an information item serving as a key data item in each record which contains information concerning the commercial activity of system users. The user account may run one means of payment which the user has elected to employ. Payment Methods - PM A component for payment/receipt methods in the system serves as a means for recording the details of the payments and/or receipts data of system users. The system supports a wide range of payment means, including credit cards, pre-paid cards, etc., or else clearance mechanisms of firms specializing in this activity such as NewGenPay, Centipaid, PayPal, Verisign, etc. Users Black List - UBL A component for a users "black list" in the system serves as a means of recording users whose system activity was terminated on any ground. These users may be debaned from access to the system and their frading activity in it is typically discontinued. Accounts Black List - ABL A management component in the system is a "black list" of the payment/receipt means in the system serves for recording means which for some reason were decided to be no longer tenable in the system. Users who make use of these means will be granted access to the system, but their trading activity will be suspended. Bulletin Board - BB A component for managing sellers/buyers bulletin boards in the system serves as a means for recording data of digital contents offered/solicited for sale/purchase by system users, respectively. The main data involved are the date of offer/solicitation, the identification of the offering/soliciting user, identification of the digital content, quality atfributes, usage atfributes, commerce atfributes, the frading cycle and the price.

Transaction Log - TL A component for managing a fransaction log in the system serves as a means of recording fransaction data which has been carried out among system users. The main data here are the following: fransaction date, identification of the selling user, identification of the buying user, identification of the digital content, quality attributes, usage attributes, commerce attributes, trading cycle, price as well as additional data. Connections Log - TC A component for running a connections log in the system serves mainly as a means of record of the connection data of system users. The main data are the connection time, user identification, identification of the connection address, as well as additional data. Clearance System - CS The clearance system interface of the system serves as means for generating debit/credit orders for system users, in accordance with the purchase and sales orders, sales commissions, file-sharing charge, usage license fee and trading license fee.

These orders are passed over for payment to the financial organization running the means of payment, on-line or off-line, depending on the means of payment to be used and on the timing of debit/credit adopted in that means of payment.

LIST OF SOFTWARE COMPONENTS RESIDING IN THE CUSTOMER COMPUTER The following is a list of the main software components forming part of the software installed on the system user's computer. By means of these software components, the user can confrol various aspects of system activity. These components make use of two main instruments: • Local data base - recording of information items concerning the entities relevant for the system user. • Processes - execution of manually-initiated or automatic machine activities of modification (addition/deletion/updating) of the information as recorded for system entities and/or commercial activities, analysis and use of digital contents. Registration Wizard - RW A system user registration wizard serves as a means of helping the user in his initial regisfration in the system. The user enters his personal details and the data of the means of payment in response to system request. The registration wizard operates in parallel to the regisfration management installed on system servers in order to verify the user details and his personal data, as well as in order to verify soundness of the means of payment which the user intends to use. Original Digital Content Wizard - ODCW A component for entering original digital content to the system serves as a means for helping the user to prepare original digital content for trading use in the system. The origin of the digital content may be in a compact disc (or in any other medium acceptable in the system) which the user inserts into the compact disc drive on his computer. In the next stages the processes of content identification, choice of components, discrimination of quality attributes, usage and commerce attributes are carried out. Once these stages are carried out by the user, the system generates usage and frading licenses for the original digital content, and packages and stores that content in the user's computer. Digital Content Proposal Wizard - DCPW A digital content proposal wizard, which is provided in the system, serves as a means for the user to offer original/copied digital content for sale under the system business rules. When this process is concluded, the offer may be recorded on the sellers' bulletin board, so that other users can see it and purchase the offered digital content if they wish. By means of that Wizard the user may also offer digital content for short sale, provided the conditions laid down in the system for carrying out such operation have been completely fulfilled. Digital Content Request Wizard - DCPW A component known as a digital content request Wizard serves as a means for the user to request an original/copied digital content for purchase, subject to system business rules. Upon conclusion of this process the request may be recorded on the buyers bulletin board so that other users can see it and carry out a sale of the digital content requested if they wish. Market Analysis Wizard - MAW A component is preferably provided for market analysis. The component is preferably in the form of a market analysis Wizard and analyzes the demand, supply and transaction realization market over the system. Such information serves the user as a means for characterizing the market trends relative to trading in digital contents, so that when he offers a digital content for sale or solicits for a digital content to be bought (in order to re-sell it), he may have in hand the tools enabling him to decide what business prospects there are for the digital content and/or advisable characteristics or attributes and/or what would be the frading cycle and price for which his chances to make a profitable fransaction are the best. User Analysis Wizard - UAW A component known as the user's analysis Wizard serves the user as a means for grading another user (who offers digital contents for sale) relative to alternative sources, so that when he offers to buy a digital content, he may have in hand the tools to decide which is the user with whom he stands the maximum chance of completing the purchase at the highest reliability level and as soon as possible. Indices of cooperation level and frading volumes indicate the level of contribution to the system of the analyzed user. Media Player - MP A media player component serves as means for listening in/observing the digital content traded in the system. The media player must support all quality attributes of the digital content. The media player preferably operates under the restrictions of the usage license covering the digital content, and sees to it that it is updated as needed. User Reports - UR The user reports preferably interface with the system user to analyze trading activities in the system, including offers, solicitations, sales, and purchases of digital contents. The reports interface forms an integral part of the means of analysis of the marketplace of demand, supply, fransaction realization and users. Market Data - MD A component for managing market data in the system serves as a means for streamlining user operation as limited by network resources. Market data information is kept on the user's computer and is updated according to need, thus preventing repeated data fransfer in the system network. Digital Content Library - DCL A component for management of the digital content library serves as a means for helping the user to organize the digital content at his disposal in the system. The user can collect digital content by subject, such as artist's name, production year, genre etc., as he sees fit. Furthermore, the user can search for content by various subject headings.

APPLICATION FLOW The following description will demonstrate how the core of the invention can be implemented using six stage process. Reference is now made to Fig. 13, which is a simplified diagram showing computers of a buying user, a selling user, a marketplace service provider and a financial service provider all connected via the Internet. The diagram illustrates six stages or message flows in the use of a system according to the present embodiments starting with user registration, and more particularly seller regisfration la, buyer registration lb, stage 2 is insertion of the digital content into the selling user's computer, stage 3 is registration of the content at the selling noticeboard, stage 4 indicates the buying user finding information of the content on the selling noticeboard. Stage 5 indicates the buyer requesting the content from the seller and the carrying out of an ensuing transaction between buyer and seller, andstage 6 indicates distribution of the money generated by the fransaction of stage 5. Figs. 14 and 15 illustrate in greater detail stages la. and lb of Fig 13, namely user regisfration and connection to the system. Fig. 14 indicates a webform or dialog box in which the user enters his regisfration information and Fig. 15 shows the screen indicating that the regisfration is being processed and that the client part of the application is connecting to the server. Before using the client side application for the first time, the user must register on the system, after which the client side application connects to the MSP server. Reference is now made to Figs 16-20, which illustrate different user screens connected with Stage 2 of Fig. 13, namely Insertion of the original digital content (Compact Disk) into the user computer and saving the music tracks in the application content library. The user inserts a compact disk to his computer CD drive. The user can then browse through the CD content using the screen of Fig. 16 and choose the music track he wants to save to his computer disk. Before saving the music track, the user can determine the quality attributes of the digital content by means of changing the various quality factors. The user can play the music tracks using the CD browser or content library. Figs 21 and 22 illustrate user screens involved in Stage 3 of Fig. 13. In Figs 21 and 22, digital content is proposed for sale by the seller user. After saving the music tracks on his computer disk, the user can offer the content for sale by inserting a record in the "sellers" billboard" that can be seen by all other users in the system. The record in the "sellers' billboard" consists of the music track details, its quality attributes, its usage and commerce attributes, and the price requested by the seller user. Reference is now made to Fig 23 which is a screen shot illustrating Stage 4 of Fig. 13. In this stage, digital content is requested for purchase by the buyer user. The user, who is interested in buying digital content, can then browse through the "sellers" billboard" records, and find the content he is interested in. Reference is now made to Fig 24, which is a screen shot illustrating stage 5 of Fig. 13. In stage 5, a fransaction process occurs between the buying user and the selling user for fransfer of the digital content. After the user has decided to buy a specific content, it is downloaded from the seller user computer. Reference is now made to Fig 25, which illusfrates Stage 6 of Fig. 13. In stage 6 the money distribution part of the transaction process occurs. After the digital content download process has ended, the buyer user is charged for buying the content. The money is preferably distributed between the seller user, the content copyright holder and the MSP Operator. DEFINITIONS "Work of Art" - product of work in which physical and/or mental effort was invested and which did not arise in haphazard manner. "Copyright" - a right vested by law in the registered owner of the work of art entitling him to detemrine the manner of use of this work as well as to collect payment for use made of it according to his definition. "Digital Content" - a work of art in digital format, such as text, sound/music, picture/film, program/computer game, their combinations etc., packaged as computer files. The work of art may be protected by copyright or be freely released. The author of the content is entitled to demand payment for acquisition/use, or for any other activity involving the work of art in accordance with a license that the author has issued to the user, or he can let it be used free of charge to everybody. In this context a digital content may be defined as an individual work, or as several works packaged together. "Original Digital Content" - a work of art in digital format which may reside on either of the two following media: • Physical medium - a medium (such as a compact disc or a diskette) made by the copyright owner (or by someone on his behalf) which has not been copied in any way (save in the course of production). This medium is offered for sale to the public at large in markets outside the system. • Computer medium - on a computer or computers kept by the copyright owner (or by someone on his behalf). This medium is not accessible to the public at large outside the system. The original digital content is preferably traded on the primary market (see definition below). "Copied Digital Content" - a work of art in digital format which was purchased in the primary market of the system. The copy can reside on either of two media: • Physical medium — a medium (such as a compact disc or a diskette) produced in the system by the user, not copied from any medium outside the system. • Computer medium - storage in a computer kept by a system user. The latter medium is not accessible to the public at large outside the system. Copied digital content is traded in the secondary markets (see definition below). "Digital Content Attributes" - in addition to the natural attributes of digital content (identifying atfributes) including title, production year, authors' names etc., there are also additional atfributes definable by the system user. These atfributes fall into three main groups: • Quality Atfributes - These attributes determine the quality components of the digital content classified as sound and/or picture relative to the master record, and include the following: ♦ Audio Attributes: sample rate, sample size, bit rate, channels, etc. ♦ Video Attributes: frame rate, frame size, bit rate, etc. • Usage attributes — These attributes determine the manner of usage of the digital content and include the following: ♦ Usage restrictions: Unrestricted operation, operation restricted in quantity and/or in time and/or in place of the digital content. ♦ Usage authorizations: Modifications of the quality attributes and/or usage atfributes and/or commerce atfributes of the digital content. • Commerce atfributes - These atfributes determine the character of frading in digital content and include the following ♦ Commerce restrictions: unrestricted sale, sale restricted in quantity and/or in time of the digital content. ♦ Commerce authorizations: further fradability of a digital content (whether the digital content could be further traded by the user who purchased it). "Digital Rights Management" (DRM) - a technology enabling protection of copyright owners of digital content, by means of license registration and file encryption. In order to use files containing the works of art, one would need a key to decode the file and enable usage in accordance with the usage license. "Usage License" - a right given to a system user to make use of digital content as determined in the license conditions. The license conditions specify the usage attributes of the digital content (see definition above). The usage license makes use of digital rights management (DRM) technology. The user cannot make use of the digital content unless he holds a usage license. "Commerce License" - a right given to a system user to trade in digital content as determined in the license conditions. The license conditions include the digital content commerce attributes (see definition above). The commerce license makes use of digital rights management (DRM) technology. The user cannot trade digital content unless he holds a commerce license. "Internet" — a world-wide computer web enabling communications between personal computers and servers or among personal computers. Computers connect to the web by means of service providers. "Secure Sockets Layer" (SSL) - an encoding method enabling transfer of encrypted information between two computers connected to the web in protected manner. "Peer to Peer communication" - a format of communications and information transfer effected directly between computers over the web without the intermediary of a cenfral server. The role of the cenfral server (if any) in this kind of communication is only to give indication and direction but the information itself does not pass through the server. "System" — an assembly of means including hardware and software components and their interconnections, applied in the implementation of digital content multi-cycle frading. "Marketplace Service Provider" (MSP) - a person or legal entity who determines the manner of operation of the system, enables digital content multi-cycle trading through it and is responsible for its on-going operation. "User" - a person or legal entity authorized to make use of the system in accordance with rules laid down by the marketplace service provider. "User Atfributes" - in addition to the system user's personal attributes, which include system I.D., name, address etc., there are also additional atfributes which fall into three main groups: • Quality Attributes - by means of these atfributes it is possible to grade the quality level of the system user. The main attributes are connection bandwidth capacity, usage reliability (availability/interruptions/ cancellations), upload/download file sharing volume, usage volume, etc. • Usage Attributes - by means of these attributes it is possible to infer the manner of usage of digital contents by the users in order to carry out statistical analysis. • Commerce Attributes — from these attributes it is possible to infer the usage volume of digital content users in order to carry out statistical analysis. "Multi-Cycle Trading" (MCT) - a new frading method based on a multi-cycle model here presented for the first time. The method operates by creating frading markets in which digital contents are fraded, whereby in each trading cycle (see definition below) the price for which the digital content is offered for sale is lower than the price for which it was purchased in the last trading cycle. "Meta Rules" — an assembly of moves embodied in the system and determined by the system maker, intended to define the base of system operation. These moves are used for the definition of business logic. "Business Logic" — an assembly of rules determined by the marketplace service provider or by the system itself (engine), with a view to determine its manner of operation. These rules provide the user with a framework of restrictions and authorizations for carrying out various system activities, in a format determined by the marketplace service provider. "Primary Market" - the market in which the original digital content is fraded. The primary market is the initial stage in which the original digital content is fraded by the users. From the moment that the work of art is acquired on the primary market by another user, it will be defined as copied digital content and from then on it may be re-traded on the secondary market. "Secondary Markets" - the markets in which copied digital contents are fraded. The secondary market is the continuation of the multi-cycle process of frading in copied digital content. From the moment of acquisition of the work of art in the secondary market by another user, this work may be fraded again and again in the next frading cycle in a secondary market. "Trading Cycle" - any of the markets, the primary market and the secondary markets, are labeled as a frading cycle in accordance with their location in the frading sequence. The primary market is labeled Trading Cycle 0. The secondary markets are labeled Trading Cycle 1, Trading Cycle 2, etc. "Market Forces" - for each product it is possible to define two opposing forces according to which it is possible to indicate the bias which would affect the market value of that product. These forces are the demand and supply: • Market demand - the quantity of users soliciting for purchase of a particular digital content having a certain cross-section of quality attributes, usage atfributes, commerce attributes and price. The demand level can be assessed from the buyers bulletin boards. • Market supply - the quantity of users offering for sale a particular digital content having a certain cross-section of quality atfributes, usage attributes, commerce atfributes and price. The supply level may be assessed from the sellers bulletin boards. "Sellers' Bulletin Board" — a board on which data are recorded offering digital content for sale. The main data are: offer date, identification of the offering user, identification of the digital content, quality atfributes, usage atfributes, commerce atfributes, frading cycle and price. "Buyers' Bulletin Board" - a board on which data are recorded of digital content sought for purchase. The main data are: date of request, identification of the interested user, identification of the digital content, quality attributes, usage attributes, commerce attributes, frading cycle and price (or price range). "Transactions Log" - a log in which fransaction data effected between system users are recorded. The main data are: fransaction date, identification of seller, identification of buyer, identification of digital content, quality attributes, usage atfributes, commerce atfributes, trading cycle, price as well as additional data. "Connections Log" - a log in which the connections data of system users are recorded. The main data are: connection date, user identification, identification of the connection address and additional data. "Users Blacklist" - a list including details of users which for various reasons were rejected and are no longer allowed to use the system. "Accounts Blacklist" — a list of accounts or payment means which for various reasons were ruled out for use in the system. "Seller User" - a system user who carries out or is interested in carrying out the sale of digital content to another system user (the buying user) in return for a stated price. "Buyer User" - a system user who carries out or is interested in carrying out purchase of digital content from another system user (the seller user) in return for a stated price (or within a price range). "Digital Content Sale" - the handing over of a copy of original or copied digital content, its rights of use (compliant with the usage license) and trading rights

(in accordance with the frading license) by the selling user to the buying user, all this without derogating from the usage rights of the selling user, complaint with the frading license of the selling user and for a consideration determined in the transaction conditions between the selling user and the buying user. "Digital Content Buy" - transfer of a copy of a copied digital content, its usage rights (compliant with the usage license) as well as the frading rights (compliant with the frading license) from the selling user to the buying user, all this without derogating from the usage rights of the selling user, in compliance with the usage license of the selling user and for a consideration determined in the fransaction conditions between the selling user and the buying user. "Short Sale" - a condition in which digital content is offered for sale by a user who does not keep a complete copy of the digital content on his computer and has not yet completed the process of its purchase. "Sale Commission" - a sum of money received by a system user after having sold digital content to other users, this sum being derived from their income through continued sale by them of the digital content in following frading cycles. The sale commission is calculated as made up of a fixed component plus a variable component, all in accordance with the business rules of the system. "Usage License Fee" - a sum of money calculated on the base of the sale price and deducted therefrom, in return for the right given to the buying user to make use of the digital content in accordance with the conditions of the usage license. The usage license fees are calculated as made up of a fixed component plus a variable component, all in accordance with the system business rules and paid to the holders of copyright on the work of art which was converted to digital content. "Commerce License Fee" - a sum of money calculated according to the sale price and deducted therefrom, in return for the right given to the buying user to carry out trading in the digital content as determined in the conditions of the usage license. The commerce license fees are calculated as made up of a fixed component plus a variable component, these being all subject to the business rules of the system and paid to the marketplace service provider. "File-Sharing Fee" - a sum of money calculated from the quantity of data passed over from the sharing user to the buying user and deducted from the sale price, in return for the use of his resources (computer, web etc.). The file-sharing fee is calculated as made up of a fixed component plus a variable component, all in keeping with the system business rules, and these are paid to the users whose computers were involved in the transfer of digital content to the buying user.

CONCLUSION Speaking generally, the embodiments of the present invention apply a method for digital content multi-cycle frading among Internet users. The system serves as a means of mediation among users for transferring protected digital content from the selling user to the buying user as well as for fransferring encrypted payment for the digital content from the buying user to the selling user. The method envisages primary markets in which users trade original digital contents, and secondary markets in which users trade copied digital contents which originated in the primary market (or in another secondary market). The price at which the digital content is offered for sale in each frading cycle is lower than the price for which it was purchased in the previous cycle. This multi-cycle frading method is based on a set of business logic rules defined in the system which provide an answer to any possible frading scenario. The concepts used in the above description are defined non-exclusively in the preceding definitions section. The solution of the present embodiments preferably leverages on the growing trend to purchase music files; adds to it the strong presence of P2P community ; adds to it the option to give the users the option to sell files they rightfully acquired; and benefits all involved, including the copyright owners and the users themselves. The system preferably encourages the end users to sell their digital-legitimate content for a profit, under authorizations from the intellectual property owners and sharing the revenues with them. This will create a currently non-existing alliance between the music companies and their consumers, while expanding the business opportunities for all involved. The present solution puts the end users, for the first time, as the cenfral piece of the equation of participants that benefit from the legal trade of file sharing; furthermore, it gets the end users into the "selling game", thus reducing their incentive to exchange illegal files and increasing their sense of empathy with the artists. The participation of the users, through personal financial gain, is intended to drive the whole fransaction system towards new business models. Getting the users to sell the music they rightfully acquired may create a huge secondary market. The system of the present embodiments is based on the client application network, managed through a hybrid P2P network. The user application will enable users to offer tracks from a CD rightfully acquired, using a P2P communication, while the server ensures the legitimacy of the transaction and procedurally manage it, to ensure proper reporting and collection of payments. The content fransferring is between and among users. This creates the infrastructure of legal, profitable, friendly and efficient business for exchange of media through P2P. The P2P phenomenon generated unique sub-networks of users of the applications - the network will not require any huge centralized databases to store the music exchanged; the metadata as well as the content itself is preferably stored on the user's computer, and creates a vast resource of endless and constantly self-renewing content. The platform of the present embodiments may provide a clearing house that will include the required licenses and access permits to enable transactions in a legitimate and fully regulated manner. The present solution can be applied to all digital content that can be exchanged over a network, including music, games, video, digitized pictures and paintings, software, eBooks, electronic newspapers and magazines, audio content including talking books, and any other legitimate proprietary content. For the first time, users have the opportunity to regain their costs and even profit themselves from music which they have acquired legitimately. In the climate of today's online music market the commercial services are driven by a specific product or specific added value solution platform, forcing the end users to reduce the scope of consumption into the implementation enabled by the service provider. The aim of those services is not necessarily to leverage the use and consumption of music content but mostly to create a competitive edge to the vendor that offers the service. As opposed to the existing online music services, the concept of the present embodiments is to focus on the end users as a distribution channel, thereby to create a library which is essentially endless, and the system thus enables its users to obtain benefit currently enjoyed by users of the free but non-legitimate environment networks, without any of its downsides. The users would have no dependency on a specific vendor, and would be able to purchase music from whoever they wish. Pricing of music makes sense, as the cost equation will be reduced through the creation of a secondary music market, combined with the option to regain expenses. The users may have the chance to appeal to their sense of justice. For as long as the price of CD's is high, users will be motivated to use pirate networks; however once the present system offers its alternative solution by considering the users as a factor in the value chain, the users will have the notion of a reasonable prices to pay, it will be justified to purchase content rather than steal it. It is a matter of common agreement between experts who cover the online music space, that the approach that will most likely have to be part of a successful business model, is that which manages to create a sense of community among buyers or subscribers, in stark contrast to the underground sense of the original Napster, and the more recent Kazaa and Morpheus systems. The present solution is a community environment by its very nature, and the effect of an online community applies thereto. The community development around the present embodiments will be by definition encouraged and the activities within the community may be supported by the platform of the present embodiments. Ultimately, the limitations of pirate networks are significant. Songs obtained through them are often truncated, either at the beginning or at the end, because the person offering it has inexpertly copied them from a non digital recording device to the hard drive; furthermore, many of those songs are hoaxed, and the title is either not synched with the actual content, or, as has been suggested the record companies are placing hoaxed versions and frying to create a detrimental effect on the user experience. Furthermore the non regulated environment often provides a focus for pornography and like sensitive content, forcing parents to act as cyber cops in order to prevent their children from exposure. An increasing number of pirate network users find that while downloading music, especially through Kazaa, they are also downloading malicious code—perhaps a virus that destroys their data, a worm that uses their computer to launch itself to hundreds of other PCs, a Trojan horse that uses their machine to spawn spam, or spyware that subjects them to marketing pitches and interferes with the efficiency of their PCs. Other users who use the pirate networks find themselves facing law suits since legal liability lies upon their shoulders. Music industry providers will benefit from a new, secondary, market, extended life and profitability from existing sales channels (CDs) and significant improvement of their position promoting legitimate trade on the P2P Web environment (while decreasing the usage of the pirate networks). The present solution supports third party collaboration and remuneration.

ISP's, as a strategic partner, will be able to reduce the misusage of bandwidth for downloading illegal content, while enjoying additional revenue sourced from the legitimate activities of the present system (such as advertising, billing etc.) It is expected that during the life of this patent many relevant distribution devices, systems and networks will be developed and the scope of corresponding terms herein, and particularly of the terms "peer to peer" and "DRM", is intended to include all such new technologies a priori. It is appreciated that certain features of the invention, which are, for clarity, described in the context of separate embodiments, may also be provided in combination in a single embodiment. Conversely, various features of the invention, which are, for brevity, described in the context of a single embodiment, may also be provided separately or in any suitable subcombination. Although the invention has been described in conjunction with specific embodiments thereof, it is evident that many alternatives, modifications and variations will be apparent to those skilled in the art. Accordingly, it is intended to embrace all such alternatives, modifications and variations that fall within the spirit and broad scope of the appended claims. All publications, patents and patent applications mentioned in this specification are herein incorporated in their entirety by reference into the specification, to the same extent as if each individual publication, patent or patent application was specifically and individually indicated to be incorporated herein by reference. In addition, citation or identification of any reference in this application shall not be construed as an admission that such reference is available as prior art to the present invention.

Claims

WHAT IS CLAIMED IS:

1. Apparatus for distribution of digital content over peer-to-peer connections between network users, comprising: a registration unit for registering network users located in association with a plurality of network nodes, said users able to connect using peer to peer connections, at least one of said network nodes being a source for digital content, and said peer to peer connections being able to transfer said digital content between respective nodes; and a fransaction unit comprising: a) a digital content exchange detector for detecting instances of fransfer of digital content between nodes in said system and b) a remuneration apportioning unit associated with said digital content exchange detector to apportion remuneration from a receiver of said digital content to one party associated with distribution of said digital content and at least one other party associated with ownership of said digital content.

2. Apparatus according to claim 1, comprising a fransaction confrol mechamsm for setting a minimum transaction level for said remuneration according to conditions associated with an instance of said distribution.

3. Apparatus according to claim 1, wherein said transaction unit is configured to allow a fransaction to involve a user who has a right to a respective item of digital content from a given source wherein distribution is from said source.

4. Apparatus according to claim 1, further comprising a fransaction layering mechanism for marking distribution of respective digital content and: c) according to said marking, categorizing users as being primary sources or subsequent digital content sources, d) according to said categorizing, assigning digital content offered for distribution on said system to a fransaction layer having a predetermined minimum price, wherein respective minimum prices for fransaction layers fall as the layer becomes more distant from said primary content sources.

5. Apparatus according to claim 4, wherein said fransaction layering mechanism is operable to ensure that a respective digital content item is constrained to be distributed once from a primary source but multiple times from said subsequent sources.

6. Apparatus according to claim 1, further comprising a condition unit for applying conditions to respective instances of digital content distribution.

7. Apparatus according to claim 6, wherein said condition unit is operable to constrain distribution attributes to be reduced with increase of distance from a respective primary source.

8. Apparatus according to claim 6, wherein said condition unit is configured to apply said condition by applying settings to a digital rights management mechanism associated with respective digital content.

9. Apparatus according to claim 6, wherein said conditions comprise at least one of usage conditions and further distribution conditions.

10. Apparatus according to claim 9, configured to prevent distribution of digital content that is not in accordance with said further distribution conditions.

11. Apparatus according to claim 9, configured to disable digital content at an instance of distribution that is not in accordance with said further distribution conditions.

12. Apparatus according to claim 1, wherein said digital content is located at a respective source node.

13. Apparatus according to claim 1, further comprising a sellers' noticeboard, available through said network, for indicating offering parties of respective digital content.

14. Apparatus according to claim 13, further comprising an indicator for providing a relative reliability indicator for a respective one of said offering parties.

15. Apparatus according to claim 1, further comprising a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content.

16. Apparatus according to claim 13, further comprising: a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content, and a matching unit for matching between compatible parties on said sellers' and buyer's noticeboard.

17. Apparatus according to claim 1, further comprising a user client for downloading to users via respective nodes of said network, said user client providing an interface for a respective user to: offer content over said network, receive content over said network and browse content available over said network.

18. Apparatus according to claim 1, wherein said digital content is any one of a group comprising a digital music track, a plurality of digital music tracks in an album, digital audio, digital video, an electronic book, an elecfronic magazine, an elecfronic newspaper, a computer program, a computer game, and a data file.

19. A method of facilitating distribution of digital content over a network, comprising: providing a distribution infrastructure and within said infrastructure: a) marking digital content distribution via peer to peer connections over said network, b) charging receiving parties for receipt of respective digital content, c) enabling said receiving parties to become secondary distributors of respective digital content using said marking to enable charging of further receiving parties of said digital content.

20. The method of claim 19, further comprising within said infrastructure layering said distribution by setting a minimum distribution price, which minimum distribution price falls with distance from an original source of said content.

21. The method of claim 20, further comprising within said infrastructure setting distribution conditions along with distribution of said digital content.

22. The method of claim 21, wherein said distribution conditions comprise at least one of usage conditions and subsequent distribution conditions.

23. The method of claim 22, wherein said usage conditions comprise a maximum number of times a receiving party is permitted to use said digital content.

24. The method of claim 22, wherein said distribution conditions comprise a limitation on the number of subsequent distributions of said content from said receiving party further through said network.

25. The method of claim 21, further comprising within said infrastructure setting a transaction price for a respective distribution instance according to required distribution conditions.

26. The method of claim 21 , further comprising within said infrastructure setting a πύnimum fransaction price for a respective distribution instance according to required distribution conditions.

27. The method of claim 21, further comprising within said infrastructure setting a fransaction price range for a respective distribution instance according to required distribution conditions.

28. The method of claim 20, further comprising within said infrastructure setting a fransaction price for a respective distribution instance according to said distance.

29. The method of claim 20, further comprising within said infrastructure setting a maximum fransaction price for a respective distribution instance according to said distance.

30. The method of claim 20, further comprising within said infrastructure setting a fransaction price range for a respective distribution instance according to said distance.

31. The method of claim 19, further comprising within said infrastructure: registering network users for said distribution, and apportioning remuneration from a receiver of said digital content to at least one other party associated with ownership of said digital content.

32. The method of claim 21, further comprising within said infrastructure applying said distribution conditions by applying settings to a digital rights management mechanism associated with respective digital content.

33. The method of claim 32, further comprising within said infrastructure preventing distribution of digital content that is not in accordance with said further distribution conditions.

34. The method of claim 32 comprising within said infrastructure disabling respective digital content upon an instance of distribution that is not in accordance with said further distribution conditions.

35. The method of claim 19, wherein said digital content is located at a respective source node.

36. The method of claim 19, comprising within said infrastructure providing a sellers' noticeboard, available through said network, for indicating offering parties of respective digital content.

37. The method of claim 36, further comprising withing said sellers' noticeboard providing a relative reliability indication for said respective offering parties.

38. The method of claim 19, further comprising within said infrastructure providing a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content.

39. The method of claim 38, further comprising within said infrastructure providing a buyer's noticeboard available through said network for indicating parties wishing to obtain respective digital content, and matching between compatible parties on said sellers' and buyer's noticeboard.

40. The method of claim 19, further comprising within said infrastructure providing a user client for downloading to users via respective nodes of said network, said user client providing an interface for a respective user to: offer content over said network, receive content over said network and browse content available over said network.

41. The method of claim 19, wherein said digital content is any one of a group comprising a digital music track, a plurality of digital music tracks in an album, digital audio, digital video, an elecfronic book, an electronic magazine, an elecfronic newspaper, a computer program, a computer game, and a data file.

42. The method of claim 20, further comprising setting a new larger trading distance for distribution of a respective item of digital content within said infrastructure whenever there is demand for said item at a preceding smaller trading distance.

43. System for content distribution over a network comprising: a primary source of a given content item, subsequent sources of said given content item, each subsequent source having a degree of distance from said primary source in accordance with a number of intervening sources; a disfribution management system for controlling disfribution of said content such that a minimum distribution cost is set to fall as said degree of distance becomes greater, and as redistribution conditions set upon a recipient of said content at each of a plurality of distribution stages become more onerous.

44. The system of claim 43, further comprising a sellers' distribution board for providing potential buyers of said given content item with an indication, of where it is on sale under what conditions and at what price.

45. The system of claim 44, further providing an indicator for indicating relative reliability levels of different sources.

46. The system of claim 44, further comprising a buyers' distribution board allowing potential buyers to indicate their interest in a given content item.