Generally, when you hear the word intellectual property, you automatically think about your favorite TV shows, video game characters, and even the clothes on your back. But have you ever thought about digital assets such as NFTs?
The seemingly sudden explosion of NFTs has many wondering whether or not they are just a fad with little value, or perhaps something way bigger than one could fathom. Many brands and big-name influencers are biting at the opportunity to own and even create their own non-fungible tokens, but does that mean that NFTs are a new form of intellectual property?
NFTs can indeed be considered intellectual property and are the perfect foundation to build a business on. NFTs allow the creator to not only create but to also prove ownership of their ideas and designs via the blockchain. Remember, just because you own an NFT that includes underlying creations, doesn’t mean you own the IP rights to that creation.
Some of the most well-known brands in the NFT industry have some of the strongest and most significant IPs, such as:
The creators behind these IPs have been able to form a community, as well as high demand for their goods and services.
How Do NFTs Affect Intellectual Property?
Non-fungible tokens are basically digital assets at their core, so how do these digital assets affect the intellectual property?
NFTs act as a funding mechanism for brands to build intellectual property in a transparent and decentralized way. NFTs also provide frictionless transactions in combination with smart contract capabilities, enabling the consumer to support these brands safely and securely, and even display their IP assets in their own wallet for the world to see.
I believe this is one of the greatest perks to building IP using non-fungible tokens. As a business, you are able to produce added value via the use of smart contracts. This added value may appear in many different forms, from information to entertainment, and even different opportunities.
Not only are brands able to provide more value to their consumer in terms of utility, but also; they are able to accomplish a safe and secure environment to transact, trade, collect and invest in a company’s intellectual property. Think of it like stocks, except NFTs, are a lot more fun and can actually strengthen your customer relations!
Also, remember that as humans we enjoy communicating socially. Whether we are taking selfies at the beach, posting a pic of our new car, or simply wearing a certain brand, it is all a form of communication. Except with NFTs, there’s no need to post anything in order to communicate what your interests are, your recent purchases, or even your most recent investments.
Everything is displayed transparently on a digital public ledger for anyone to view. This exposure also helps brands gain more awareness, especially if a person of influence holds the IP in their own wallet. This digital flexing is the new form of brand awareness and enhances consumer relations to new levels.
In fact, NFTs compliment consumer relations in almost all aspects by being a near-perfect technology to build IP on top of. Let me explain how NFTs can affect the various types of consumer relationships.
Transactional
NFTs allow for literally anyone to be able to create a transactional kind of relationship with their consumers and with very little effort besides minting the NFT. This kind of transaction is done simply on the blockchain, with the click of a button.
Self-service
In today’s fast-paced world, the ability to offer a self-service type of relationship is crucial. People appreciate when a business is able to provide all the proper tools necessary so that the customer is able to help themselves to whatever it is they need.
Automated services
Perhaps one of the greatest aspects of consumer relations and NFTs is the ability to have a strict and trustworthy automated service. NFTs grant additional access and utility through the action of its smart contract. In short, a smart contract is able to yield both the business and the consumer instant, and long-term services.
These services can be things like monthly payouts and payments, NFT transformations (an NFT that changes over a period of time), and practically anything else you may expect from an automated service.
Apart from the fact that NFTs can be created to be completely automated, non-fungible tokens are also very efficient when it comes to making a transaction.
Blockchain technology has allowed us to create a marketplace that is open for business 24/7, 365 days a year. That means whether it’s late at night, or early in the morning, it just doesn’t matter anymore. The blockchain is open for business all the time.
Collaboration
When it comes to NFTs, co-collaboration has played a huge role in the success of some NFT projects and consumer relations. It’s common to see multiple artists and creators collaborate with each other on a piece of work, which in turn, adds instant value, particularly if either of the artists has a good reputation.
Furthermore, some of the more creative brands have turned to their community for collaborations and ideas on how to evolve their brand to the next level. Although this may be a good option for some, a community collaboration may not be the best way to curate stronger consumer relations if the business is not able to execute on the community’s request.
Community
I know for a fact that the word “community” is often used in the NFT space, and for a good reason. Community is one of the keys needed in order to unlock the door to success for practically any business. So, how are NFTs changing the way community affects consumer relations?
NFTs allow for a stronger community by increasing the brand’s online awareness via public wallets and digital ledgers, as well as offering their supporters access to exclusive clubs and numerous perks. These digital tokens give brands the ability to create trustworthy and transparent relationships with their community.
Something I want to emphasize is the fact that smart contracts allow the creator to implement almost any kind of utility they desire. Some examples of NFT utility include; personal meetings and mentorships from the founder of the company, throwing the first pitch at your favorite team’s game, or even having a physical gift sent directly to your address.
In other words, non-fungible tokens are an easy way to offer your community extreme value, a personal connection, and authenticity. This is the perfect equation for the success of a community in my opinion.
What Is NFT Intellectual Property?
When you hear NFT and intellectual property used in the same sentence, you may begin to have a lot of questions, don’t worry though, I am positive that I’ve had some of those same questions.
NFT IP can be described as the token itself which may contain smart contract terms written within; stating ownership of specific intellectual property rights. Additionally, businesses can use NFTs to their advantage by creating IP around the NFT itself. Consumers and businesses can both benefit from NFT IP.
To expand further on what I’m saying, NFT intellectual property can be viewed from two different perspectives. The consumer perspective and the business (creator) perspective. Let’s break the two down.
Consumer perspective
From a consumer perspective, intellectual property can be had in various forms. Sometimes when you purchase a non-fungible asset there are terms attached, these terms can include intellectual property rights, but ultimately it’s up to the creator of the asset to decide what the terms state.
Keep in mind, you don’t necessarily need to obtain the rights to a business’s IP to benefit from the IP. Owning just a piece of that IP—such as the original artwork digitalized into an NFT, by the creators themselves—could be a great addition to your NFT collection and even your investment portfolio.
Think if you owned the very first Walt Disney drawing, or the first album cover from your favorite artist, non-fungible tokens make all of this possible and readily available at any time of the day.
Business perspective
The business perspective of NFT IP is huge, and in my humble opinion, still very early. Startups and established businesses are able to both greatly benefit from leveraging NFTs to create a strong, trustworthy, and creative IP.
As a business creating an NFT based IP, you are able to offer your consumers a personal connection through partial and full ownership of your brand’s IP. Businesses may allow holders to own a small portion of the IP, or even own a portion of the actual business itself.
I know this sounds insane, but with the implementation of NFTs into brands and businesses, this all becomes very realistic and frictionless for both the business and the consumer. This is a new type of relationship which can be had between the business and the consumer. It is another opportunity entirely for both parties.
One of the coolest things (in my opinion) is the ability to use non-fungible tokens as a way to raise capital for your startup company. This has been done many, many, times in this space already.
From all the profile picture projects (PFP), to successful business startups (Gary Vee’s, VeeFriends is a great example) raising enough capital to start your own business and create your own brand can now be achieved through the creation and distribution of NFTs.
As NFTs become adopted by a larger percentage of society, the way consumers and businesses view and use non-fungible assets will evolve.
Keep an open mind, be intuitive, and stay curious, NFTs are changing the way we all create and invest in intellectual property.
NFT Intellectual Property Rights.
Okay, so you’ve purchased an NFT and now you are wondering if your token has any ownership rights connected to the intellectual property. Lucky for you, I know a few places you should search when looking for these terms.
To find an NFT’s terms regarding IP, locate the smart contract (may be written in the “description” section of your NFT.) Once you have located it, the terms should state how much IP you own, if any, as well as any other terms the creator wants to communicate. NOTE: Not all NFTs come with IP rights of any kind.
Another place I highly recommend you check in order to find the entirety of a business’s terms and conditions regarding any NFT is on the business’s official website. Here, you should be able to find anything that you are curious to know about the business and the specific NFT being offered.
Always do your own research and confirm that what you think is being offered, is actually going to be provided to you upon purchase. Understanding your rights as an NFT holder and creator is important, to attain further knowledge, please refer to my other article: Your Rights As An NFT Holder Explained.
Building IP Using Non-Fungible Tokens.
Possibly one of the most common questions when it comes to NFTs and IP is; how are you able to build intellectual property using non-fungible tokens? To better understand how people have been able to build strong IP using digital assets, I have studied numerous brands and their actions leading up to the creation of their IP, here’s everything that I have learned along the way.
Get Creative
Before you even begin thinking about creating your intellectual property using NFTs, you are going to need to get creative. The creative aspect is one of the biggest elements behind building a strong IP for your business.
Some ways to get creative are to only focus on yourself and not so much on the competition. Forget about them for a second and let’s focus on YOU, the creator. As the creator of your IP, you need to know what you want to create. Once you have decided what it is you want to offer, then you can focus more on how you are going to out-create the competition.
One other thing that I like to remind myself of is that perfection doesn’t exist. If you are struggling with the initial design of your IP, forget about it being “perfect”. You can always adjust later, focus on creating an IP that you are happy with, and worry about refining later after you have allowed the market to tell you if what you’re doing is good, or not so good.
NFTs enable the creator to be more creative than ever, offer more value than ever, and do it all in an honest and trustworthy way. With blockchain technology, the limits are endless and your community can interact and transact with your business day and night.
Businesses will need to decide how much; if any, IP they are going to offer to their consumers. Once that has been decided, the business can begin building a strong and ultra-creative IP.
Grow your community
Growing a community will benefit businesses in many ways, but growing a community using non-fungible tokens have the ability to benefit your business even more.
NFTs allow your business to grow a strong, authentic, and more personal relationship with the consumer. The blockchain provides a transparent and permanent digital ledger, while the smart contracts allow for the instant utility to be had, in addition to the NFT itself.
I believe that the sooner businesses understand that NFTs are a form of social “flexing”, or “showing-off”, the easier it will be to grab the consumers’ attention, create demand, and supply extreme value like never before.
Not only are people showing off their latest purchases directly from their own wallets, but people are actually gaining real-world value, and reputation, by holding these digital assets and displaying them publicly in their wallets.
NFTs are also convenient for community growth because they are available to trade on Web3 non-stop. The blockchain never closes for business, and business is practically always booming.
Ensuring you build a happy community is one of the keys to solving the intellectual property puzzle.
Provide Value
Providing value to your consumers will ensure that your IP has a strong foundation to build upon. NFTs grant you the ability to give your consumers instant and long-term value via their smart contracts.
Value can come in the form of a physical good, access, entertainment, memberships, events, and even personal meetings and mentorships. Long-term value pertains more to the investment opportunity from collecting an NFT that has a reputable IP, and the potential to own a portion of that IP via a non-fungible token.
Here are some ways businesses may be able to provide value to their consumers using NFTs:
- Physical goods
Physical goods are a quick and easy solution to provide big value to anyone who buys your brand’s NFT. Offering a physical product alone isn’t anything new, but now with the addition of digital assets, real life items can be paired with a digital asset which proves ownership, and allows holders to share their assets with others for viewing pleasure. - VIP access
You can create VIP access by allowing only token holders to have access to whatever it is you want to offer to your consumers. This creates a sense of exclusivity, and offers businesses a new means for providing value to consumers and forming a deeper consumer relation. - Exclusive memberships
Similarly to a Costco membership, NFTs have the same ability to be used for memberships. These memberships are good for both the business and consumer. Considering they are easily accessible, tracked on an immutable digital ledger, and are able to be created so that the token can be edited if need be, allowing for different levels of memberships, all in a single NFT. - Recreational events
Imagine an NFT serving as your next concert ticket, except now with even more nostalgia incorporated and more control, as well as trust. Because NFTs are able to be traded on secondary marketplaces, this means that fans can trade tickets, prove where they have been, and make money even after using the NFT’s initial utility.
NFTs are the new form of digital ticket stubs, now you can hold onto your tickets forever and prove that your ticket is authentic. There will be no more back and forth about whether a ticket is authentic or not, and proving that you are the holder of a ticket is as easy as taking a look at someone’s public wallet. - Meetings and mentorships
Offering your audience access to unique meetings and mentorships is an excellent way to get creative and provide real world value for your consumers. Imagine if the CEO; or even the founder of a company set aside some time to chat with you and help you out with anything you need. Coaches, trainers, and teachers can all gain an advantage from offering their professional services to consumers through the use of non-fungible tokens.
Ultimately, non-fungible tokens have paved a new pathway for businesses to supply their consumers with additional value. This value can appear in many forms and will surely stimulate your business and your consumer’s growth as you continue to assemble a robust intellectual property.
Be unique and innovate
NFTs, give your business full reign to be as unique and innovative as possible. As a business, you are able to leverage your brand’s uniqueness by providing your consumers with trust, value, transparency, and a very personal relationship through the use of your digital assets.
Gary Vee’s NFT project built around IP serves as a perfect example of how businesses can benefit from the implementation of NFTs into their IP building strategy. The only limitation to how innovative a business can get when incorporating NFTs depends solely on the creative ability of the creator behind the IP.
So, get out there, be unique, and show the world how your business differs from all the other brands out there. Using NFTs as the building blocks of your intellectual property can make providing value to consumers that much easier, and much more personal.
Be forward thinking
The last thing I want to say regarding producing a strong IP for your business and consumers is this; with new technology such as NFTs, you should always remain forward-thinking. Being a forward thinker will allow you to innovate and remain unique, and yield the most creative value for your audience.
Furthermore, thinking about where you are able to innovate will ensure your business progresses accordingly. Businesses that invest in their future tend to do well and leave a positive impression on their consumers. Moreover, being ahead on the creative end of your business can allow leaders to see the future challenges and better prepare for potential problems that may occur.
If you are not a forward thinker when it comes to building an IP with non-fungible tokens, you may have a difficult time navigating this giant technological transformation.
Overall, non-fungible tokens will continue to play a large role in the creation and development of any business’s intellectual property. NFTs allow creators to supply value, grow a community, and promote brand awareness through the function of NFTs.
Additionally, NFTs create an opportunity that has never been had before for the consumers. There is a vast amount of utility that can be offered in digital form, directly to the consumer, any time of the day, and in a trustworthy and transparent manor.