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NFTs & IP Rights - The FUTUREPROOF Web3 Special Report

NFTs & IP Rights - The FUTUREPROOF Web3 Special Report
By Futureproof • Issue #11 • View online
By @DepecheNode_

“Intellectual property (IP) refers to creations of the mind: inventions; literary and artistic works; and symbols, images, names and logos used in commerce…Your intellectual property is a valuable intangible asset that should be protected to enhance your competitive advantage in the marketplace.” - Trade.gov 
That’s right, we’re gonna talk about IP and how different projects are experimenting with rights & ownership for their holders. The goal? Encourage you to #1) Read the fine print before you buy an NFT & #2) Get creative with your own project! 
NFTs & The IP Spectrum
The advent of NFTs has created an amazing playground for creators to experiment with IP & ownership. Let’s break down some PFP & Music NFTs to learn how they approach IP rights:
PFPs:
Sorry, have to start with the classic from Adam Sacks
Sorry, have to start with the classic from Adam Sacks
For some PFP projects, Adam Sacks is 100% on point. You are nothing more than the registered owner, and that’s totally fine depending on the use case. However, some projects offer you more:
Bored Apes: BAYC was a pioneer in offering full IP rights to any holders of their NFTs.
What does this mean? It means Adidas gets to buy one and do whatever they want with it. Create a mascot for the metaverse? Check. Sell merch with their ape’s image all over it? Sure. Build an entire brand around it? Feel free. They could even decide to license the ape to another company.
Here I am using Hunter’s PFP without his permission
50% chance he doesn’t catch this*
50% chance he doesn’t catch this*
CloneX: CloneX went for a compromise. PFP’s with ‘Murakami’ traits have zero IP, while others have commercial rights up to $1M. This was greeted with mixed reviews by the community. Who’s gonna track the revenue generated from each CloneX? Why the limit? 
Cryptoadz: The toadz vibed their way to the extreme side of the spectrum- they waived commercial rights altogether. Neither the project itself nor the holders have any IP at all. It sounds insane at first, but such a radical concept has inspired an entire world around the toadz. It’s a beautiful experiment when you think about it. Like Ethereum, Cryptoadz allows for permissionless building, which may result in a thriving ecosystem someday. 
MUSIC NFTs
IP is a *massive* deal when it comes to the music industry. What’s fascinating about music NFTs is that they stand to benefit both the artist and the holder in a way that was previously unheard of. 
The Old Way:
Record Label is dictator. Revenue is split between the artist, the agent, the record label, distributors, retailers, and on and on. Not ideal for the musician. Now let’s take a look at the musician’s greatest fans.
Say you discover a new artist and you love their music. Their concerts are affordable, you get to meet them after their shows, and you share their music with everyone. Time goes on and they become popular. All your passion for sharing has now resulted in less accessibility and more expensive concerts. The more you promote their work, the more it costs you as a fan. 
The New Way:
The artist is in control. With NFTs, they can offer unique tiers of access and even split royalties WITH the fans. The fans that love the artist’s music are now rewarded for sharing. 
In case you missed my recent article on Music NFTs, here are two unique IP structures being used:
Nas: Just dropped two songs on royal.io. Each song has 3 different NFTs available for purchase, offering tiered levels for royalties and exclusive membership perks. This allows superfans to pay more for additional benefits while also receiving higher royalties. Nas still retains the IP, but shares the royalties with his believers. 
omgkirby: omgkirby is launching 3,000 generative LoFi music NFTs, accompanied by hand-drawn animated artwork for each. Owners of these NFTs will enjoy full IP rights. Holders can use the song in a movie, a video game, or an event at no additional cost. Think the song could be a hit? Owners could upload to a streaming service or license to another artist to get those sweet, sweet royalties. In addition to full IP, the omgkirby NFT owners will also be admitted to the omgkirby DAO, which will control how the treasury is used. This truly blurs the line between artist and fans, and turns music & marketing into a collaborative effort.
The actual piece is animated with music 🎶
The actual piece is animated with music 🎶
Web3 is all about ownership at the end of the day. It makes secure ownership available to all and eliminates the old bureaucracy that has stifled innovation and opportunity for so many. I’m excited to watch lives’ change as this new economy unfolds. There’s a good chance someone will retire because of music NFT royalties someday. 
🚨DISCLOSURE: I own NFTs! I own punk #2971 if you’d like to dig around.
*I did catch it… you’ll be hearing from my lawyer
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