Intellectual Property (IP) Law in the Era of NFTs: Structuring On-Chain Licensing
The Executive Verdict
1. The Core Definition: Is Code Law for Copyright?
The "Receipt vs. Rights" Fallacy. The Token is the Receipt (Chattel). The Art is the IP (Copyright). Unless the receipt explicitly grants rights, it conveys nothing but the receipt itself.
Split Graphic. Left: Token (Hex Code). Right: Art (Image). Bridge: Document Icon "License Agreement" connecting them.
2. The Legal Mechanics: Assignment vs. License
Path A: Full Assignment (Selling the House - Creator loses rights). Path B: Commercial License (Nike Model - Creator allows limited use). Path C: CC0 (No Rights Reserved - Public Domain).
3. On-Chain IP Licensing Frameworks: The "Metadata" Standard
How to attach the contract: The "LicenseURI" field in metadata pointing to IPFS. The "Hash-Check" Clause: Legal text includes the contract deployment hash.
4. Smart Contract Enforceability: The "E-Sign" Act Defense
Does a crypto signature count? Yes, under the E-SIGN Act. Implementation: UI must force a "Click-Wrap" agreement where user signs a message accepting terms before minting.
5. Royalty Enforcement: The "Code is Law" Failure
Marketplaces can bypass smart contract royalties. Legal Patch: The "Clawback" Clause. License is conditional on royalty payment. Non-payment = Copyright Infringement.
Switch Diagram. Royalty Paid = Switch ON (License Active). Royalty Bypassed = Switch OFF (Infringement).
6. Corporate Strategy: Tokenizing Patents and R&D
IP-NFTs for Biotech. IP-Holding SPV holds physical patent. Token represents revenue share or sub-license. Registry updates USPTO to reflect blockchain as source of truth.
7. Trademarks vs. Copyrights in Web3
Critical Distinction: Copyright protects the Image. Trademark protects the Brand (Logo). You can give user the Art rights, but exclude using the Nike Swoosh in their derivative movie.
8. Summary Checklist: The IP Validity Audit
1. Metadata Linkage (LicenseURI). 2. Scope Definition (Caps/Industries). 3. Terms of Service (Click-Wrap). 4. Trademark Exclusion. 5. Termination Clauses (Morals Clause).
š The "Empty Receipt" Check
F.A.Q // Logical Clarification
Can I copyright AI-generated NFTs?
"No. Lack of "Human Authorship" means they are likely Public Domain. You cannot promise commercial rights to what you don't own."
What if the NFT is stolen?
"The "Bona Fide Purchaser" dilemma. License should state: "Rights are not transferred in event of theft." This renders the stolen token commercially useless."
Can a DAO own a Copyright?
"Not without a wrapper. Unincorporated DAOs cannot hold property. A wrapper (LLC) must hold the assignment."
Module ActionsCW-MA-2026
Institutional Context
"This module has been cross-referenced with Legal & Regulatory / Intellectual Property standards for maximum operational reliability."