Intellectual Property & Non-Fungible Tokens (NFTs)
Intellectual Property & Non-Fungible Tokens (NFTs)
NFTs and IP are related in the sense that NFTs can be used to represent and manage ownership of digital assets that are protected by intellectual property law. Let's explore this unique relationship.
Intellectual Property
Intellectual Property (IP) refers to creations of the mind, such as inventions, literary and artistic works, and symbols, names, and images used in commerce. IP is protected by law in order to allow creators to earn recognition and financial benefit from their creations, and to encourage creativity and innovation.
Non-Fungible Tokens (NFTs)
A non-fungible token is a type of digital asset that is unique and cannot be replaced by another identical asset. This is in contrast to fungible assets, which can be freely exchanged for other assets of the same type without any loss of value.
NFTs are digital assets that are verified on a blockchain and can be bought and sold like physical assets. NFTs are commonly used to represent unique digital items, such as art, collectibles, and in-game assets.
While NFTs and IP are not the same thing, they are related in the sense that NFTs can be used to represent and manage digital assets that are protected by IP law.
NFTs and IP are related in the sense that NFTs can be used to represent and manage ownership of digital assets that are protected by IP law.
This NFT can then be bought and sold like any other digital asset, allowing the artist to earn financial benefit from their work and giving the buyer proof of ownership of the artwork.
Bored Ape Yacht Club (BAYC) is a collection of 10,000 Bored Ape NFTs—unique digital collectibles living on the Ethereum blockchain.
Every ape in the BAYC comes with a unique number and can then be used by the owner of the NFT on merchandise, for example.
NFTs could potentially be used to protect and manage IP rights in digital assets. For example, an artist could use NFTs to create digital copies of their artwork and use the blockchain to manage ownership and licensing of these assets.
However, the use of NFTs in this way is still in its early stages, and it's not clear how they will be used or how they will impact IP law in the future.
Fractional Licenses of Intellectual Property (FLIPs)
The world of art, books, movies, and music can be very unfair to creators!
The copyright market for creative works involves a complex web of licensing transactions and exorbitant transaction costs. Creators barely get 15% of the revenues and even this can be delayed.
The HYFI project enables creators to launch crowdfunding campaigns by inviting fans to securely finance creative works in return for a share of copyright ownership. This is done in the form of Fractional Licenses of Intellectual Property (FLIPs) - a smart asset that represents the whole or part of an Intellectual Property license.
Uses of FLIPs
As an author, you can sell translation rights in your books through FLIPs.
As a musician, you can issue FLIPs for crowdfunding your next album.
As an artist, you can allow FLIP holders to use your creations to brand their products.
As a film maker, you can crowdfund your next movie through FLIPs.