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Facebook Buys Startup Source3 to Get Better at Catching Pirated Content

Facebook has acquired Source3, a small intellectual-property tracking company, aiming to improve how it flags unauthorized user-generated content uploaded to the service.

Source3’s approach is similar to YouTube’s Content ID content-flagging system, in being able to not only identify material that infringes copyright and trademark rights but also provide ways for content owners to make money from UGC instead of simply having it taken down.

Facebook last year launched a tool called Rights Manager to help content owners find and remove pirated content to address concerns over illegally copied video. But Facebook hasn’t offered the option to claim ownership of UGC in the way YouTube does.

The four founders of New York-based Source3 — Patrick F. Sullivan, Ben Cockerham, Scott Sellwood and Tom Simon — announced the company’s sale to Facebook in a post on their website Monday. “We’ve decided to continue our journey with Facebook,” the Source3 team wrote. “We’re excited to bring our IP, trademark and copyright expertise to the team at Facebook and serve their global community of 2 billion people, who consume content, music, videos and other IP every day.”

Facebook confirmed the acquisition but declined to disclose financial details. “We’re excited to work with the Source3 team and learn from the expertise they’ve built in intellectual property, trademarks and copyright,” Facebook spokeswoman Vanessa Chan said.

Sullivan and Cockerham previously founded RightsFlow, a music-rights management platform that Google acquired in 2011. Google has since integrated RightsFlow into YouTube’s Content ID system for music licensing. “Source3 replicates what YouTube did for IP and what RightsFlow did for YouTube,” Sullivan, Source3’s CEO, said in an interview last fall with Engineering.com.

According to Source3, its system is able to recognize and analyze branded intellectual property in user-generated content across multiple areas including sports, music, entertainment and fashion. It also provides licensing and rights administration services “to connect creators, marketplaces and brands and enable monetization of user content across physical and digital products,” according to Source3’s company description.

Founded in 2014, Source3 had raised about $4 million in funding led by Contour Venture Partners.

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