Licensing Of Characters To Create New NFT Digital Product

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Rouse

Contributor

Rouse is an IP services business focused on emerging markets. We operate as a closely integrated network to provide the full range of intellectual property services, from patent and trade mark protection and management to commercialisation, global enforcement and anti-counterfeiting.
License characters to a third party to create an NFT to be sold in exchange for royalty payments. NFTs are being used by innovative brands in China to boost their brand value and engagement with consumers.
China Technology
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License characters to a third party to create an NFT to be sold in exchange for royalty payments.

NFTs are being used by innovative brands in China to boost their brand value and engagement with consumers. Our client wanted to license its characters to a third party to create an NFT to be sold in exchange for royalty payments. They approached us to draft the NFT Cooperation Agreement and understand how to mitigate the new regulatory and IP risks created by this new digital asset.

From a regulatory perspective, we advised on the contractual arrangements to receive royalties and to restrict the sale and usage of NFTs inline with regulation. When managing IP, we advised on mechanisms to control IP ownership and avoid mis-use and abuse by third parties, including end consumers. In order to protect our client's brand reputation, we supported due diligence IP clearance for the new NFT artwork. We also advised on content censorship and ensured cultural sensitivities were not breached. As a result, our client was able to enter into the agreement with the licensee, knowing that their royalties revenue was secured whilst their reputation and IP was protected.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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