Why an NFT License Agreement is Not Enough
Amyli McDaniel, Esq.
Lawyer and Web3 founder with a mission to unlock the opportunity of intellectual property for creators, brands and entrepreneurs in the digital realm.
NFTs have revolutionized the way we think about, transfer and monetize intellectual property rights. However, simply having an NFT license agreement for an NFT that is located on a website or in another place creates risk when it comes to properly establishing and protecting rights effectively.
Traditionally, IP rights are licensed through known person-to-person transactions, with both parties signing a custom license agreement for transferring, protecting and monetizing IP works.
But with the advent of Web3 and NFTs, the NFT itself has become the transaction vehicle for granting IP rights to IP works.
This shift changes the standard licensing agreement model and brings new challenges:
1. Dealing with Unknown Parties
2. Changing Parties with each Sale
3. Creative Work Authenticity is Difficult to Assess
4. Most NFTs are forever assets but IP Rights related to them can change.
5. Tokenization adds an additional layer to the transaction creating confusion Owning the token does not automatically mean owning the IP.
Blockchain technology is involved and blockchain was not designed with IP in mind. A Web3 rights structure is needed to transfer IP.
Legitimate intellectual property and digital asset rights licensing and monetization is not a simple matter.
In addition to the License Agreement, an NFT project needs to ensure their NFTs are created with a proper IP Rights Web3 Structure which is a set of vital information organized and bound together properly onto the NFT.
Elements of an IP Rights Structure
Verified Licensor
Registered Creative Work
License Rights Terms
Declaration of Rights Terms
Digital Binding to an NFT of Licensor, Work, Rights, Declaration
Registry and One Click Lookup of Rights Accessible from NFT
By binding this proper IP Rights Structure, an NFT now comes with an “instruction” manual for what the owner can and cannot do with the IP. The NFT becomes a transferable package of IP use rights/terms.
Our MINTangible solution generates and binds a proper Web3 IP rights structure to NFTs in just 4 simple steps.
