Many things are being tokenized, but the growth of NFTs for digital art is booming. This, in part, is due to the recent headline news that Beeple's iconic digital art work was sold at auction by Christie's for $69 million. Other digital art is being created to leverage pre-exiting IP and physical art. This boom is creating great opportunities for IP owners who want to license their IP for use in NFTs. However, for those just entering the space, there are many things to consider given some of the unique aspects NFTs and digital art.
The IP owners that may capitalize on this NFT boom can include:
- brands that have famous trademarks, logos, and other brand identifiers;
- game companies that have unique characters or game art
- book, movie and other publishers that have unique characters and other IP;
- artists who created have physical or digital works;
- other IP owners
When IP licensing rights for use in digital art and other NFTs, it is important to be clear what is and what is not being licensed. The scope of the license should be limited to particular purposes. Various other limitations may also be appropriate. For example, a creator may grant rights to create a specified number of NFTs associated with a copyrighted work, in order to maintain the scarcity (and associated value) of the NFT based on such work.
Other examples to consider include imposing limitations on:
- modifications of the IP or the art in which it is included;
- what can be combined with the IP-based art; and
- where and how the NFTs are distributed.
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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.